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Matthew S. Bothner, Young-Kyu Kim, and Edward Bishop Smith

Two competing predictions about the effect of status on performance appear in the organizational theory and sociological literatures. On one hand, various researchers have asserted that status improves performance. This line of work emphasizes tangible and intangible resources that accrue to occupants of high-status positions and therefore pictures status as an asset. On the other hand, a second stream of research argues that status instead diminishes performance. This alternative line of work emphasizes complacency and distraction as deleterious processes that plague occupants of high-status positions and thus portrays status as a liability. Which of these two perspectives best characterizes the actual performance of individuals in a competitive setting? And are they in any way reconcilable? In this paper, we summarize these two perspectives and test them in two empirical settings: the Professional Golf Association (PGA) and the National Association for Stock Car Auto Racing (NASCAR). Using panel data on the PGA Tour, we model golfers’ strokes from par in each competition as a function of their status in the sport. Using similar data on NASCAR’s Winston Cup Series, we model drivers’ speed in the qualifying round as a function of their status in the sport. We find curvilinear effects of status in both contexts. Performance improves with status until a very high level of status is reached, after which performance wanes. This result not only concurs with the view that status brings tangible and intangible resources but also provides empirical support for the contention that status fosters dispositions and behaviors that ultimately erode performance.

Organization Science, 23 (2012): 416-433

Matthew S. Bothner, Joel M. Podolny, and Edward Bishop Smith

What is the best way to design tournaments for status, in which individuals labor primarily for the esteem of their peers? What process, in other words, should organizers of status-based contests impose upon those who covet peer recognition? We propose a formal model of status-based competition that contrasts two competing alternatives. The first, following Merton, is the “Matthew Effect,” according to which a tournament’s architect directs slack resources to elite actors and thus widens the distribution of rewards by favoring cumulative advantage. The second is the “Mark Effect,” under which a tournament’s designer instead pushes slack resources to marginal actors and thus tightens the distribution of rewards. Our results suggest that although the Mark Effect is better for the social welfare of most tournaments, the Matthew Effect is preferable in two distinct contexts: in small tournaments where variation in underlying ability translates into acute advantages for the most capable contestants; and in large tournaments whose contestants face constant, rather than rising, marginal costs—a condition we relate to contestants’ perception of their work as intrinsically valuable. Our contributions are twofold: We find, counter to the thrust of Merton’s work, that cumulative advantage is not invariably optimal for the functioning of status contests; and we identify circumstances in which the production of superstars is likely to make contests for status better off in aggregate. Implications for future research on status and management are discussed.

Management Science, 57 (2011): 439-457