Scandal, Ideology, and Stigma

Abstract

This study focuses on event-based organizational stigma during scandals through an inductive, multiple-case research design. Focusing empirically on the stigmatization by newspapers during scandals that occurred in the US, we theorize that event-based organizational stigma is an outcome of a competition between the newspapers to stigmatize or destigmatize an organization. Stigmatization of organizations does not take place primarily because of their culpability but rather due to their ideological characterization. Specifically, organizations are more likely to be stigmatized when they have a negative characterization based on the focal newspapers’ ideology. Conversely, organizations are more likely to be destigmatized when they have a positive or neutral characterization based on the newspapers’ ideology. By highlighting the role of ideology in determining organizational stigma during scandals, we advance the understanding of the sources of organizational stigma as well as demonstrate the role of audience heterogeneity in organizational social evaluations.