Smeal Research: Companies Exploit Celebrity Status For Competitive Advantage

UNIVERSITY PARK, PA (November 15, 2004)—Companies—like pop divas, sports superstars, and Hollywood A-listers -- benefit from the economic rewards that come with celebrity status according to research co-authored by Timothy G. Pollock, associate professor of management at Penn State’s Smeal College of Business.

“Celebrity Firms: The Social Construction of Market Popularity,” which is forthcoming in the journal Academy of Management Review , extends the concept of celebrity from the individual- to the firm-level to explain the sources and implications of heightened public attention and excitement.

According to co-authors Pollock, Violina P. Rindova of the University of Maryland, and Mathew L.A. Hayward of the University of Colorado, many top companies consciously build their personas by taking non-conforming actions (i.e. unveiling unique business plans that defy industry norms, being run by flamboyant leaders, etc.) that are viewed positively by the public.

Dramatized media coverage featuring these firms as protagonist-heroes further fuels the celebrity-creation process. Companies such as Apple, Starbucks, and Yahoo, for example, continue to benefit from their dramatized portrayals in the press as industry trailblazers - single-handedly overturning the computing paradigm, elevating the coffee experience, winning the corporate search-engine race to go public.

The authors suggest that firm celebrity is an important intangible asset on par with other qualities such as reputation, status, and legitimacy. Each asset uniquely influences stakeholders’ perceptions of and willingness to exchange resources with a firm.

“Firm celebrity can be an important tool enabling a company to distinguish itself from competitors in a crowded field, especially when performance differences are small or difficult to evaluate,” the authors conclude. “Thus, pursuing celebrity status may be a highly rational and beneficial strategic choice for a firm. At the same time, we caution managers to treat celebrity as a means to an end, and to resist the temptation of pursuing celebrity as an end unto itself.”

About the Co-Author
Pollock’s research focuses on understanding how individual and institutional actors acquire, interpret, and act on information in uncertain and ambiguous circumstances. In particular, he explores the role social forces such as reputation, celebrity, social capital, legitimacy, and power play in shaping corporate governance activities. Pollock teaches the core strategy course in the full-time Smeal MBA program and an MBA elective on power and influence in organizations. Prior to joining Smeal, he was an assistant professor at the Robert H. Smith School of Business of the University of Maryland and the School of Business at the University of Wisconsin-Madison.