I want to break free! On the general importance, cognitive mechanisms, and field strategies behind category avoidance

• Applicant: Professor Dr. Oliver Alexy
• Subject Area: Accounting and Finance
• Term: from 2019 to 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 421554614

People categorize (things, other people, and firms) in order to simplify complex information and cope with their environment. Yet, this also implies that people expect that things can be categorized. As stated in Zuckerman’s categorical imperative, when firms cannot be seen as clearly belonging to one industry (because they engage in unrelated activities), they receive less money and support on the capital market. Other researchers found similar effects for restaurants spanning different cuisines or movie actors spanning different genres.At the same time, innovation always means doing new things or recombining old ones in a new way. Hence, innovators will often need to battle the categorical imperative to attain competitive advantage – for example, Uber can only reap its full potential when it is not categorized as a taxi company.In this project, I thus want to take a closer look at how economic actors may strategically avoid being categorized for as long as possible or necessary. To do so, I propose three subprojects.First, I will ensure that the categorial imperative (and the punishment it may bring) still applies in this day and age to see whether it is actually a worthwhile effort to think about how to avoid being categorized in the first place. To this end, I will replicate a study from the movie industry from the beginning of this century and look at whether the effect of the categorical imperative may have waned since. For example, we know that millennials are more tolerant of hopping between different kind of project work themselves – potentially, they may also be more tolerant of others doing so.Second, I want to study some of the mechanisms that may allow category avoidance strategies may work. In a large-scale study in the movie industry, I will look at the effects of movie actors that are clearly assigned to a category (such as Jennifer Aniston to "rom-coms") joining the cast of a movie in a different genre. I expect that the degree of punishment will vary conditional on just how much a specific person needs categorization to simplify complex information, and how much information they are aware of more generally. On one hand, I expect that the general public (captured by the box office), will only punish category avoidance of actors they know. On the other hand, movie critics should also know how less-known actors should be categorized. At the same time, movie critics may appreciate tasteful and well-executed divergence efforts (such as when Charlize Theron received the Oscar for best actress for her role in "Monster").Finally, using public records (e.g. newspaper articles, court documents) and supported by interviews, I will enquire how category avoidance is done in the field. Looking in particular at Uber (and/or other global shared economy firms), I want to scrutinize their efforts and the surrounding environmental conditions which lead to their category avoidance efforts being successful in some, but not in all case.

• DFG Programme: Research Grants
• International Connection: France, Spain
• Cooperation Partners: Dr. Dilan Aksoy-Yurdagul, Ph.D.; Professor Hamid Mazloomi, Ph.D.