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‘Standing up for organisational principles’ in the face of stigma

‘Stigma’ if handled properly can bring positive outcomes for organisations by reinforcing identity and purpose, finds new academic study co-authored at Cambridge Judge Business School.

Unique Yellow ladybird

“Stigma” is a word commonly associated with ostracism, shunning or shame, a connotation that most organisations strive to avoid.

Professor Paul Tracey

Professor Paul Tracey

A new study published in the Academy of Management Journal finds, however, that stigmatism – if handled properly by an organisation – can bring unexpected positive outcomes by reinforcing their sense of identity and purpose, enhancing their visibility and bringing fresh financial resources.

The study focuses on a very timely issue in light of the recent UK referendum on European Union (EU) membership, in which immigration was a major issue: how a social enterprise supporting Eastern European migrants in the east of England responds to stigmatisation and hostility caused by resentment toward recent migrants from longer-term residents of the community.

“The study shows how standing up for organisational principles in the face of fierce opposition can help unite an organisation and reinforce its mission to deal with controversial issues,” said co-author Paul Tracey, Professor of Innovation and Organisation at Cambridge Judge Business School. “The study examines how organisations manage the effects of stigma on their identities in a positive way.”

The study – “Managing the consequences of organisational stigmatisation: identity work in a social enterprise” – is co-authored by Professor Paul Tracey of Cambridge Judge Business School and Nelson Phillips of Imperial College Business School.

The study looks at the Keystone Development Trust, a social enterprise located in Thetford in the English county of Norfolk, which includes some of the least affluent areas of England with many low-paid jobs in agriculture and meat packing. The town’s population swelled following the accession of eight Eastern European countries to the EU in 2004, growing from around 22,000 in 2001 to about 32,000 in 2011.

Longer-term residents complained that migrants were taking jobs and housing, and stigmatised the new migrants. As a social enterprise that helped the new migrants as well as longer-term residents, Keystone also became stigmatised by the long-term residents who were “deeply unhappy that Keystone was supporting an ‘unwelcome’ group,” according the study – and this sparked an organisational crisis within Keystone.

The study focuses on how Keystone, a “hybrid” organisation (both a registered charity and a limited company) designed to address poverty and inequality through enterprise, turned that crisis to its advantage. In conducting his research, Professor Paul Tracey spent three days a week at Keystone for a nine-month period in 2011, interviewing people from Keystone and every aspect of the community.

The study’s findings: Rather than backing down in the face of opposition, Keystone, led by then-Chief Executive Dr Neil Stott, decided that helping the recent migrants was essential to Keystone’s identity and long-term future. The issue posed an “existential threat” to Keystone, so the organisation needed to “knock this on the head” in order to have a viable future, the study quotes Stott as saying at the time. (Dr Neil Stott stepped down as Keystone CEO in 2015, and is now Executive Director of the Centre for Social Innovation at Cambridge Judge.)

So Keystone “progressively deepened rather than diluted its association with the migrant population” – emphasising migrants’ benefits to the economy and essential role in providing public services. The organisation decided that celebrating its role in helping migrants would “embed into the organisation’s identity the idea that Keystone was designed to tackle difficult social issues.”

The stance taken by Keystone strengthened the organisation both internally and externally, the study found.

Internally, a “clearer sense of purpose appeared to have instilled many organisational members with a sense of confidence in their ability to tackle difficult issues, which facilitated Keystone’s engagement with other stigmatised groups.”

Externally, Keystone’s role helped attract press attention and a “significant augmentation” in financial resources through new contracts to deliver a range of community projects and services, many of them unconnected to the migrant support. “Keystone benefited from a kind of positive image transfer or spillover” in which other organisations publicised Keystone’s work “in order to share in a small way in its success and show that they were aligned with Keystone’s values,” the study found.

Keystone’s work with migrants also drew praise from high-profile organisations such as the Commission for Rural Communities and the Audit Commission – which “generated significantly greater attention than might be expected of a small social enterprise in rural England.”