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Organizational Identity and Firm Performance: What Happens When Leaders Disagree About "Who We Are?"

Fuqua School of Business, Theater Studies, Duke University, Box 90680, Durham, North Carolina 27708, and Euromed Marseille School of Management
Kenan Flagler Business School, University of North Carolina at Chapel Hill, Campus Box 3490, Chapel Hill, North Carolina 27599-3490
Department of Business Management, College of Management, North Carolina State University, Campus Box 7229, 2324 Nelson Hall, Raleigh, North Carolina 27695-7229
zannie{at}duke.edu
dan_cable{at}unc.edu
gvoss{at}ncsu.edu

This study examines how the organizational success of 113 nonprofit professional theatres was affected when two top leaders responsible for different parts of the organization held divergent views about organizational identity. Focusing on five values that differentiate theatres, we find that leaders’ disagreement about organizational identity was related to lower ticket revenues and lower net income, and that organizational performance was lowest when disagreement about identity was extreme. Although some findings suggest that minor identity disagreement between leaders may not hurt organizations, results generally support the perspective that leaders should actively promote a single identity.

Key Words: conflict management; organizational identity; organizational values; nonprofit arts industry

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