Dr Frédéric Godart, INSEAD
Corporate names constitute a major element of the symbolic-strategic management of firms. However, the relevant literature to date has only considered parent firm names in isolation while ignoring cases where the plurality of subsidiary names, or “semantic constellations”, introduces added intricacy to the firm’s shared institutional space with audiences. Observing this gap, we explore evolving perceptual dynamics between the parent’s semantic constellation over time and its core-business creative performance. We identify two mutually exclusive and collectively exhaustive semantic strategies: semantic autonomy, which refers to disaffiliating names of the parent and its subsidiaries for intra-category differentiation; and semantic seeding, or affiliating these names for legitimacy spillover. Using unique panel data of high-end global fashion houses between 1998 and 2010, we find that semantic autonomy enhances the parent’s creativity perception when adopted in moderation (an inverted U curvilinear relationship), whereas semantic seeding consistently devaluates it. These main effects are also shown to be moderated by the parent’s prior social and financial standing in the market, namely its name awareness and affiliation to business groups.