The impact of norm‐conforming behaviors on firm reputation

Abstract

Abstract Deviance from social norms has been extensively examined in recent strategy research, leaving the strategic implications of conformity largely unexplored. In this article, we argue that firms can elect to conform to a norm along two dimensions: compliance with the goal and level of commitment to the procedures. We then produce a typology of four norm‐conforming behaviors, which allows us to isolate differentiated effects of conformity on firm reputation. We examine the corporate environmental disclosures of 90 U.S. firms and find that firms derive different reputational rewards depending on whether they conform to the goal or procedure dimension of the environmental transparency norm. In addition, the relationship between conformity and reputation is moderated by the firm's prior reputation and the stringency of the normative environment. Copyright © 2011 John Wiley & Sons, Ltd.