Understanding Inter-Organization Travail Variance during Organizational Identity Change Process

Abstract

Although we know much about organizational identity change process, few attentions are paid to unveil why some organizations experience greater travails than others during change process. Our discussion is based on TMT abnormal turnover, as one of the major organizational travail types, after lone-founder firm’s familization announcements, which is a firm life-cycle based identity change. Under institutionalist tradition, we argue top managers’ knowledge are biased to their own industries thus top managers understand comparable familization announcements in different ways. Decided by a materiality-legitimation paradox, industry-level family firm prevalence plays an inverse-U shaped moderation effect on the relation between familization announcement and TMT turnover. Such that, the main effect would be weaker in industries where family firm prevalence is low or high; while be stronger in industries with medium-level family firm prevalence. Our findings contribute to organizational identity change studies by add inter-firm comparison.