Anchors in Rough Seas: Understanding Category Spanning as a Source of Market Coordination

• Date: 01 June 2019
• Author: Martina Montauti
• DOI: http://doi.org/10.1111/joms.12437
• Published date: 01 June 2019

© 2019 Society for the Adv ancement of Management Stud ies and John Wiley & Son s, Ltd.

Anchors in Rough Seas: Understanding Category

Spanning as a Source of Market Coordination

Martina Montauti

IE Busine ss School, IE Universit y

ABST RACT Prior research ha s deemed products that span market categories a source of

cognitive and i nstitutional disruption. Port raying spanning products as pu rely disruptive

elements, however, does not consider their large presence in m arkets and, consequently, the

fact that producers and cons umers continue to coordinate their activ ities on established

categories despite perv asive spanning. Our paper addresses t his gap by focusing on commer-

cial success as a n important condition under which spann ing products, rather than being a

source of disrupt ion, sustain market coordination. From t he producer side, an increasi ng

number of commercially suc cessful products spanning a foca l category stimulates mim icry.

From the consumer side, this m imicry, net of the overall level of spanning ob served in the

category, improves consensus. We test these ar guments by focusing on the styles that map

electronic music as the est ablished categories of a market. Empirica l analyses lend support to

our hypot heses.

Keywo rds: category spann ing, commercial success, consensus, m arket coordination,

mimicry

INTRODUCTION

Categories represent the institutional res idues of routine interactions between producers

and consumers engaged in a market ( White, 1981). Like the regions of a map that out-

line a mariti me area and ease navigat ion, categories define the ma rket and establish the

standards of value based on which producers and consumers coordinate their activities

(Hannan et a l., 2007; Vergne and Wry, 2014). For this reason, anythi ng that undermines

the cognitive and normative function of categories also impairs market coordination

(Zuckerman, 1999). Similar to sea farers looking at a confusing nautical cha rt, producers

and consumers that rely on a mercuria l map of the market face considerable uncertainty

Journal of Man agement Studi es 56:4 June 2019

doi: 10. 1111/jo ms .124 37

Address for re prints : Martina Montaut i, IE Business School, I E University, Madrid , Spain (marti na.mon-

tauti@ie.edu).

824 M. Montauti

© 2019 Society for the Adv ancement of Management Stud ies and John Wiley & Son s, Ltd.

because they fail to converge on standards of value, allowing producers to estimate the

expectations of consumers and consumers to agree upon the worth of producers’ offer-

ings (Hsu et al., 2012b; Velthuis, 2013).

Scholars in organization and management theory have pointed to products spanning

multiple categories – e.g., movies that bridge different genres (Hsu, 2006), dishes that

straddle various cuisines (Rao et al., 2005), etc. – as the main disrupters of a market’s

map. First, an increasing number of spanning products blurs categorical boundaries and

generates confusion on both the producer and consumer sides of the market (Hsu et al.,

2009); a nautical chart with unclear coastlines well represents a market with categories

that are greatly spanned. Second, spanning products can lead to the emergence of new

categories (Durand and Khaire, 2017) and challenge the established standards of value

(Khaire and Wadhwani, 2010). A market in which emerging categories continuously re-

shuffle with the existing ones is as difficult to chart as waters with tides and currents that

are always changing.

The emphasis on spanning products as a source of disruption has moved scholars from

considering not only that a vast majority of categories in markets host spanning products,

and thus exhibit blurred boundaries (Hannan, 2010; Pontikes and Hannan, 2014), but

also that the emergence of new categories from spanning often encounters ‘stiff resis-

tance’ (Jones et al., 2012). If widespread spanning blurs categorical boundaries but does

not easily lead to the emergence of new categories, how do market participants continue

to coordinate their activities on established categories that appear utterly confusing? Our

paper addresses this question by relaxing the association between spanning and disrup-

tion (Durand and Paolella, 2013; Wry et al., 2014) and by advancing commercial success

– i.e., positive market reception (see Delmestri et al., 2005) – as a condition under which

spanning products neither create confusion nor necessarily spawn new categories. In fact,

maintaining that spanning products are less successful than focused products (Hsu et al.,

2009) should not prevent us from acknowledging that, among spanning products, some

might enjoy commercial success (Zhao et al., 2013, 2018). We thus propose commercial

success as a signal that compensates for the confusion inherent to widespread spanning,

and we discuss how the commercial success of spanning products helps producers and

consumers to coordinate their market activities.

From the producer side, we argue that the commercial success of spanning products

boosts mimicry . In facing market uncertainty, producers avoid oversights by drawing on

the success of competitors (Banerjee, 1992; Haveman, 1993; Lieberman and Asaba,

2006; Ozalp and Kretschmer, 2018; Strang and Macy, 2001), even when doing so implies

spanning. Consequently, producers release offerings that also imitate spanning products

when they appear successful. At a macro level, this process leads to more frequent com-

bination of the categories spanned by an increasing number of successful products. From

the consumer side, we argue that the commercial success of spanning products improves

consensus . A proliferation of successful offerings spanning a focal category not only in-

creases the frequency of specific combinations involving the category but also contributes

to augmenting their taken-for-grantedness in the eyes of consumers (Ruef and Patterson,

2009). While this process does not necessarily lead to the emergence of new categories, it

nevertheless ensures cognitive and institutional benchmarks for valuation (Phillips, 2013)