Small but Influent

Corporations increasingly face conflicting demands (e.g., meet their bottom line, be sustainable), presented by more or less powerful stakeholders. Why would they positively respond to minority players? In Jules or Jim: Alternative Conformity to Minority Logics (Academy of Management Journal, Vol. 55. No. 6, December 2012, Pages. 1295-1315, doi: 10.5465/amj.2011-0345) Julien Jourdan (Department of Management and Technology) and Rodolphe Durand (HEC Paris) find evidence that firms may conform to the expectations of minority stakeholders –engaging in alternative conformity– as a way to counter the influence of dominant players, alter the social structure of resource suppliers, and promote new logics of action in their industry. In doing so, they engage in soft control strategies that can significantly affect the behaviour of established organizations, and may eventually influence the evolution of entire industries.

The authors shed light on this process by examining the changes in French filmmakers behaviour following the introduction of specialized investment funds (soficas) into the industry. Funded by bankers and accountable to market investors, soficas operate under a strict financial logic, previously unknown to the industry. Opposing traditional views in the industry, soficas largely support the take-the-money–and-run model of blockbusters, i.e. the maximization of early revenues through wide releases and large advertising campaigns.

Using exhaustive data on the industry over 15 years (1994-2008), the researchers find evidence that filmmakers did respond positively to the demands of soficas, despite their status of marginal players in the industry (less than 10% of movie financing). Controlling for a large range of market and industry factors and accounting for sofica's selection biases, the econometrical models show a positive relationship between sofica's investments and organizational conformity to the blockbuster model. The impact was not trivial: results suggest that, in the absence of sofica money, the average release size of the related movies would have dropped from 166 to 71 screens. Sofica also contributed to a significant evolution at the industry level: the proportion of feature films that earned more than 40%of their admissions in their opening week increased from less than a third of the production slate in 1994 (31%) to two-thirds in 2008 (67%).

Jourdan and Durand single out three factors affecting alternative conformity. The more filmmakers were anchored in the dominant logic of the industry, as evidenced by the number of prior art house movies they had made, the more central the soficas were in the network of film financiers, and the more the finance logic of soficas had gained ground in the market, the less filmmaking organizations conformed to a blockbuster model in response to soficas' investment.

Overall, the findings of this study suggest that conforming to various types of logics (e.g., financial, social, cultural) is not just an isolated organizational choice. Rather, conformity decisions can affect the entire competitive dynamics in the market: when endorsing the financial logic of soficas, French filmmakers contributed to shift accepted norms, values and beliefs, reshaping the landscape in which all industry players compete.