Optimal Distinctiveness and Matching in a Labor Market

Strategy & Business Policy

Speaker: Ozgecan Kocak

Associate Professor - Emory University

Conference  Jouy-en-Josas T004

ABSTRACT:

How should organizations position their identities in labor markets to gain an advantage in the competition for talent? Theories of optimal distinctiveness within psychology and strategy suggest that organizations that are neither too similar to nor too dissimilar from others in their market will be most appealing to potential employees. We note that a test of this hypothesis requires researchers to determine appropriate vantage points and measures for assessing distinctiveness, which is particularly challenging in labor markets, where employees are known to seek congruence of their own personal identities with that of their organizations’ identity. We tackle this problem through three studies. Using in-depth interviews with bankers in Turkey, Study 1 finds that individuals rely on identity categories to evaluate target organizations as potential employers. Their preference for organizations that have similar identities to their current employers leads the search for identity congruence to create a preference for ‘categorical fit’. The interviews also suggest that both categorical distinctiveness of a target organization’s identity and its categorytypicality might strengthen individuals’ attraction to similar targets. Study 2 tests hypotheses informed by Study 1, using a structured survey of a separate pool of bank employees. Study 3 uses archival data on interorganizational transitions in the same industry to examine how the effects found in Studies 1 and 2 impact organizations’ ability to hire individuals from different organizations. Together, the studies reveal several new insights on how organizations’ positions in labor markets impact their appeal to potential employees and how particular positions can generate ‘optimal’ distinctiveness.