BUS 374 Lecture 2: Bus 374
4 May 2016
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Document Summary
Two assets matter in how organizations are evaluated. Quality expectations based on accumulated evidence of past demonstration of quality. Quality expectations based on network of affiliations in an exchange network. Reputation for quality and status are related but not the same. Both reputation and status matter in audience evaluation. But it is often easier to observe status signals than it is to verify reputation for quality. Even if reputation for quality is verifiable, audience have limited attention to scan every offering. Audience allocate their limited attention to high status organizations. Hence, return to reputation for quality tend to be higher for high status actors. Quality improvements of low status actors go largely unnoticed. But as return to quality is higher for high status organizations, they tend to invest more in quality. Low status organizations don"t see value in improving their quality, so they do not aim to improve quality.
