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Falling Fortunes: Te Contingent and Asymmetric Effect of Rankings on


WYATT LEE ASSISTANT PROFESSOR


Cornell Peter and Stephanie Nolan School of Hotel Administration


Cornell SC Johnson College of Business Cornell University


Author • Wyatt Lee


Assistant Professor, Cornell Peter and Stephanie Nolan School of Hotel Administration, Cornell SC Johnson College of Business, Cornell University Summary


Today, virtually all types of organizations are ranked: firms are ranked on sales, hospitals on the treatment of patients, universities on research and teaching, and schools on student performance. Teir use has proliferated in recent decades with the rise of an evaluative culture in which methods and principles of quantification are applied to the governance of organizations and people. Accordingly, many organizations devote considerable time and resources to maintaining a favorable position in rankings, and organization- al scholars have recognized this. A common theme in the literature is that changes in rank affect organizational outcomes, but accumulating evidence indicates that this is not always so.


In this paper, Wyatt Lee calls into question the power of rankings. Instead of asking whether rankings matter, he adopts a contingency approach and inves- tigates when rankings matter. Lee examines the contextual and organizational factors that shape the salience and information value of shifts in rankings: the direction of the change, the availability of information from other intermedi- aries, the sophistication of the audience, and the focal organization’s previ- ous ranking position. Tis theory is supported by panel data analysis and a natural experiment focused on the Fortune 500 rankings. Tis article provides a framework to help scholars understand the contingent and asymmetric consequences of rankings on organizational outcomes, with implications for research on evaluation systems.


Organizational Outcomes Administrative Science Quarterly, 69, 4, December 2024 LINK TO PAPER


CONTENTS TO MAIN


| RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2024 EDITION


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