Holier Than Thou? Identity Buffers and Adoption of Controversial Practices in the Islamic Banking Category

Academy of Management Journal, 2019, 62(4): 1252-1277

26 Pages Posted: 11 Nov 2018 Last revised: 27 Jul 2022

See all articles by Maima Aulia Syakhroza

Maima Aulia Syakhroza

University of Cambridge - Judge Business School

Lionel Paolella

University of Cambridge- Judge Business School

Kamal Munir

University of Cambridge - Judge Business School

Date Written: August 2019

Abstract

Existing scholarship on categories frequently highlights how some category members may violate codes that others diligently abide by. In this paper, we take into account the differences in identity across category members, and ask how these relative differences determine their response to a code-violating change. Taking a case where category members are identified as ‘insiders’ and ‘outsiders’, we argue that insiders’ reaction to a code violation depends upon the extent to which they believe their identity to be distinct from the code violator’s, who might be an insider or an outsider. Specifically, we suggest that it is the presence or absence of an ‘identity buffer’ – i.e., a relative identity advantage – which determines insiders’ reaction. We hypothesize that when a fellow category insider introduces a code violation, the focal insider will be more likely to refrain from the practice. When it is an outsider who introduces the code violation, insiders will be more likely to adopt the code violation as long as they can retain an identity buffer. We further posit that when outsiders adopt a code-preserving behavior, thus narrowing the identity buffer between insiders and outsiders, it will mitigate insiders’ likelihood of code violation adoption. We test and find support for our hypotheses using data on Islamic banking industry in 12 countries (2003-2014).

Keywords: identity, categories, code, insider, outsider

Suggested Citation

Syakhroza, Maima Aulia and Paolella, Lionel and Munir, Kamal, Holier Than Thou? Identity Buffers and Adoption of Controversial Practices in the Islamic Banking Category (August 2019). Academy of Management Journal, 2019, 62(4): 1252-1277, Available at SSRN: https://ssrn.com/abstract=3274934

Maima Aulia Syakhroza

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Lionel Paolella (Contact Author)

University of Cambridge- Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.jbs.cam.ac.uk/faculty-research/faculty-a-z/lionel-paolella/

Kamal Munir

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

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