r Academy of Management Journal 2018, Vol. 61, No. 3, 1021–1049. https://doi.org/10.5465/amj.2015.0969 NOT IN THE SAME BOAT: HOW STATUS INCONSISTENCY AFFECTS RESEARCH PERFORMANCE IN BUSINESS SCHOOLS MICHAEL JENSEN University of Michigan PENGFEI WANG BI Norwegian Business School This study examines the consequences of status inconsistency for the performance of multi-unit organizations. Status inconsistency refers to the extent to which social actors occupy status positions accorded different amounts of social esteem and prestige in different social systems. Status inconsistency affects the performance of multi-unit or- ganizations by weakening the well-established positive effects of status on performance because it creates status ambiguity that makes external evaluations of the organization and its individual units more difficult. Distinguishing between high-status and low- status multi-unit organizations, we argue further that status inconsistency is par- ticularly problematic for high-status multi-unit organizations, whereas low-status multi-unit organizations may actually benefit from status inconsistency. We test our ar- guments using a longitudinal sample comprised of 109 international business schools and their finance, accounting, marketing, management, and operations departments from 2002 to 2013. Our study concludes with a discussion of the contributions our research makes to status theory and research, and the managerial relevance of our findings. Status is often defined by the hierarchical position them and how to evaluate them (Smith, 2013; Zhang, social actors occupy in a particular social system 2008). Despite the importance of status for organiza- (Gould, 2002; Jensen, Kim, & Kim, 2011), but most tions (Jensen et al., 2011), status inconsistency in social actors participate in multiple social systems organizations remains, with a few exceptions (Kang, simultaneously. When social actors participate in 2010; Zhao & Zhou, 2011), unexplored. The lack of different social systems, they may occupy unequal organizational status-inconsistency research is par- status positions in each social system, thus making ticularly unfortunate when it comes to understanding status inconsistency a concern for status theory the importance of status for multi-unit organizations. (Benoit-Smullyan, 1944; Hughes, 1945). Status in- Multi-unit organizations are both very common and, consistency shifts attention, accordingly, from how by virtue of operating in different industries or mar- status affects social actors within a single social kets simultaneously (Zuckerman, 1999), particularly system (Podolny, 1993) to the consequences of si- susceptible to status inconsistency, thus highlighting multaneously occupying unequal status positions in the importance of extending status inconsistency different social systems (Lenski, 1954). Status in- theory to multi-unit organizations. consistency poses a problem for social actors be- Status inconsistency can have negative conse- cause it creates ambiguity about their social identity, quences for multi-unit organizations because occu- which raises questions about what to expect from pying unequally ranked status positions in different industries or markets creates status ambiguity. We argue specifically that status inconsistency affects We thank Bo Kyung Kim, Heeyon Kim, and seminar multi-unit organizations primarily by weakening the participants at the National University of Singapore, commonly observed positive effect of status on orga- University of Lugano, University of Michigan, and the Academy of Management conference for their helpful nizational performance (Benjamin & Podolny, 1999; comments. Associate Editor Linus Dahlander and three Malter, 2014; Pollock, Chen, Jackson, & Hambrick, anonymous reviewers provided excellent guidance 2010). Focusing on how status inconsistency weakens throughout the review process. Please direct all corre- the effect of status on organizational performance, we spondence to Michael Jensen. emphasize the interaction between status and status 1021 Copyright of the Academy of Management, all rights reserved. Contents may not be copied, emailed, posted to a listserv, or otherwise transmitted without the copyright holder’s express written permission. Users may print, download, or email articles for individual use only. 1022 Academy of Management Journal June inconsistency, rather than the main effect of status positions are observable, status inconsistency can inconsistency. We identify two complementary create uncertainty about how to interpret and assign mechanisms that account for the negative inter- meaning to inconsistent status positions. Status action between status, status inconsistency, and inconsistency, in other words, allows the problem performance. By creating status ambiguity, status of uncertainty about product quality to reappear in inconsistency makes status a less effective signal of the form of uncertainty about status position. One perceived quality (Podolny, 1993) and a less effective previously unexplored implication for multi-unit tool for managing accountability pressures (Jensen, organizations is clear: “A potentially important 2006), both of which make status less useful for condition for successfully occupying multiple po- external audiences deciding with whom to form sitions is that the multiple positions across different exchange relationships. Specifically, status incon- horizontal categories are within the same vertical sistency creates ambiguity about the status of the status” (Jensen et al., 2011: 100). Our study begins to multi-unit organization, which, in turn, reduces the address this important aspect by theorizing and value of the status of the multi-unit organization empirically testing how and when status inconsis- and its units for each individual unit. We argue, tency affects multi-unit organizations. moreover, that status ambiguity stemming from We also contribute to status theory by focusing status inconsistency is particularly problematic for on how involuntary associations affect status be- high-status organizations and high-status units that liefs. Social-networks-based research on status has traditionally have benefitted most from their ad- focused mostly on voluntary relationships, such vantageous status position.1 as underwriting syndicates (Cowen, 2012; Jensen, Our study makes several contributions to status 2008; Podolny, 1993; Shipilov, Li, & Greve, 2011), research. We contribute directly to status in- strategic alliances (Ahuja, Polidoro, & Mitchell, consistency research by shifting focus from single- 2009; Gulati & Garguilo, 1999; Ozmel, Reuer, & unit organizations being ranked unequally on Gulati, 2013), venture capital financing (Hsu, 2004; different status dimensions to multi-unit organi- Petkova, Rindova, & Gupta, 2013; Pollock, Lee, Jin, & zations whose different units are ranked unequally Lashley, 2015), and accounting firm certification on the same status dimensions. Focusing on multi- (Greenwood & Suddaby, 2006; Jensen & Roy, 2008). unit organizations and how status inconsistency Voluntary relationships provide the structural foun- affects the positive association between status and dation of status hierarchies (Podolny, 1994) and af- performance contributes more broadly to status fect how external audiences view a particular social research, as well by identifying an important lim- actor (Stuart, Hoang, & Hybels, 1999). We add that itation to status theory. Specifically, a core claim in even though involuntary associations may not im- status theory is that status is most valuable when ply as strong a form of interorganizational endorse- product quality is uncertain because it allows de- ments as voluntary associations, they still have the cision makers to shift attention from unobservable potential to affect the status beliefs of external au- product quality to observable status positions diences. By extending status theory to involuntary (Podolny, 1994). We add that even when status associations, our study not only opens up for applying status consideration to hitherto unexplored research 1 Status ambiguity is different from status noise or areas, such as status inconsistency as a source of vagueness. Status ambiguity refers to situations in which the vertical diversification discount (Villalonga, 2004; status of a multi-unit organization cannot be definitely re- Zuckerman, 2000), but also emphasizes the impor- solved but specific and distinct interpretations are possible, tance of acknowledging that even involuntary asso- whereas status noise or vagueness precludes specific and ciation never intended to have status consequences distinct interpretations. For example, a multi-unit organi- may nevertheless create status ambiguity among zation with a high- and a low-status unit could, depending external audiences. on the context, be equally meaningfully interpreted as a We study the effect of status inconsistency on high- or a low-status multi-unit organization, whereas a the performance of multi-unit organizations in a multi-unit organization whose units operate in markets with sample of 109 U.S. and non-U.S. business schools poorly defined status hierarchies could not be given a spe- cific and distinct interpretation. We focus on how status and their accounting, finance, management, mar- ambiguity induced by status inconsistency weakens the ef- keting, and operations departments from 2002 to fect of status, rather than the effect of status inconsistency 2013. Most business schools are multi-unit