Stigmatized Categories and Public Disapproval of Organizations: A Mixed-Methods Study of the Global Arms Industry, 1996–2007

Using qualitative and quantitative methods, I draw on the categorization and stigmatization literatures to predict the amount of negative social evaluations—that is, disapproval—received by firms. Association with a stigmatized category does not automatically result in disapproval, because straddling multiple categories dilutes stakeholder attention to the stigma. In addition, category saliency moderates the effect of category straddling on disapproval. Findings from the global arms industry highlight how managers can modify categorical associations at the industry and customer levels to decrease disapproval, and I discuss implications for diversification and internationalization strategies. Results also highlight how an exogenous shock (the 9/11 terrorist attacks) modified the saliency of the categories used by arms industry stakeholders. Finally, this study shows that category straddling results in more neutral social evaluations for firms, making positive evaluations less positive, and negative ones less negative.