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Homework answers / question archive / Organizational Identity in the Localism Movement Read the first article for this week's theme
Organizational Identity in the Localism Movement Read the first article for this week's theme. Its an article published in a peer reviewed journal, so you may find it a bit challenging at first. But do the best you can. After reading the article, what are three key take-aways about buying local that you learned from this article? Be sure you fully explain your points using examples from the article.
Abstract Localism is a social movement often associated with "buy local" food initiatives or the prevention of big-box retail expansion. At its core, however, localism is also about fostering local independence by encouraging businesses to opt for local alternatives when making purchasing decisions. In this article, we develop and test hypotheses that organizations with stronger communityoriented identities are more likely to source locally and that this relationship is moderated by the importance of the focal firm's purchasing decisions. Results support the strong influence of identity but the conditional effect is unconfirmed.
Keywords localism, organizational identity, social movements Localism is a social movement that supports economic practices oriented toward strengthening local economies and reducing reliance on nonlocal resources (Hess, 2009; Kurland, McCaffrey, & Hill, 2013; Kurland, McCaffrey, & Zell, 2012). Social movements are often conceptualized
as collectives acting with a degree of organization and continuity with the purpose of promoting or resisting change (Snow, Soule, & Kriesi, 2004). Often, social movement organizations (SMOs) spearhead social movements (Lounsbury, 2001). Three SMOs have spearheaded the proliferation of the localism movement in the United States and Canada: the American Independent Business Alliance (AMIBA), the Business Alliance for Local Living Economics (BALLE), and FoodRoutes Network (Kurland et al., 2012). Together, AMIBA and BALLE oversee more than 220 independent business associations throughout the United States (McCaffrey & Kurland, 2015).1 Although much of the public attention surrounding localism concerns "buy local" food initiatives or preventing big-box retailers from expanding (Gereffi & Christian, 2009), at its core, localism is about fostering local independence by encouraging all purchasing decisions to favor a local alternative. As such, an important element of this movement is the buying behaviors of local businesses themselves.
Little is known, however, about what could motivate a business to potentially act against its own economic interests in support of localism. In this article, we address this gap by examining certain factors that can influence an organization's decision to source locally. In doing so, we integrate social movement perspectives (de Bakker, den Hond, King, & Weber, 2013; Zald & Berger, 1978) with theories of organizational identity (Albert & Whetten, 1985; Brickson, 2005) to suggest that organizations with stronger community-oriented identities are more likely to source locally. We hypothesize that this tendency is attenuated by the importance of the purchasing decision. Thus, the present study contributes to a growing body of research that juxtaposes social movements with identity-based theories (den Hond & de Bakker, 2007; Marquis & Battilana, 2009; Rowley & Moldoveanu, 2003; Soule, 2012). Although much of this research examines the role that external activists play in shaping the behaviors or outcomes of a target organization (Weber, Heinze, & DeSoucey, 2008), the present study focuses on the role of organizations operating within the very system they would like to change. This perspective generates new insights regarding the mechanisms associated with emerging social movements. We also offer important practical considerations for SMO leaders in the localism movement. A key goal of SMO leaders is to influence local economic decisions of member organizations. In other words, they want them to not just talk the talk of buying locally but to walk the walk of actually doing it (Kurland & McCaffrey, 2016). Research shows, however, that SMOs have limited success in these efforts (Kurland & McCaffrey, 2016). The present research sheds light on why some member organizations are more likely than others to walk the talk.
The Localism Movement
For purposes of the present study, we use Hess's (2009) definition of localism as "the movement in support of governmental policies and economic practices oriented toward enhancing local democracy and local ownership of the economy" (p. 7). The movement advocates that consumers (individuals and firms) purchase from independent businesses in their local area (Kurland et al., 2013). Public outcries against large, national retail chains are not a recent phenomenon (Hess, 2009; Ingram & Rao, 2004; Kurland et al., 2012). However, in the late 1990s, "buy local" emerged as a strong rallying cry against big-box stores and is often spearheaded by independent business associations. As part of these campaigns, independent business associations encourage consumers to think of shopping as a civic duty rather than simply as an economic activity (Hess, 2009).
Through localism, advocates hope to maintain economic control of the business residing within a geographically defined community (Shuman, 2007). Their belief is that locally self-reliant economies are less susceptible to the economic whims of large corporations. Furthermore, some research suggests that communities with higher concentrations of small, locally owned firms experience higher economic growth (Fleming & Goetz, 2011).2
Kurland and colleagues (2013) identified 11 national SMOs associated with localism. Some of these, such as Slow Food and Slow Money, cater to specific business sectors. Others, such as AMIBA and BALLE, consist of local chapters that comprise independent businesses within the region. As of their writing, BALLE comprised 78 community networks across the United States and Canada, totaling more than 20,000 individual organizations (Kurland & McCaffrey, 2016). The research context for the present study involves a BALLE affiliate (hereafter referred to as the Buy Local Affiliate [BLA]) located in the Midwest United States.3
Social Movements and Organizational Identity
Social movements are the expressions of a preference for change among members of society (Zald & Berger, 1978). Although much of the study of social movements has taken place without an explicit interest in organizations, there have been recent efforts to bridge these two underlying frameworks (McAdam & Scott, 2005). For example, research has demonstrated the effects of anti-sweatshop campaigns on the supply chain practices of targeted organizations (Briscoe, Gupta, & Anner, 2015). In addition, movements may emerge from within organizations themselves (Zald & Berger, 1978). For example, Creed and Scully (2000) demonstrated how gay, lesbian, bisexual, and transgender employees used their identities as a basis for initiating change both within their own organizations and within larger society as well.
Within the localism movement, much of the focus is aimed toward business-to-consumer transactions. However, business-to-business transactions constitute a large share of the national economy (Lucking-Reiley & Spulber, 2001) and therefore can serve as a major catalyst toward achieving local economic independence. By restricting its purchasing set to only other organizations located in its geographic proximity, an organization may be acting against its own best economic interests. We argue that an organization with a more community-oriented identity will be more likely to initiate such an action.
An organization's identity consists of the central, enduring, and distinctive attributes and values that uniquely position it within a social system (Albert & Whetten, 1985). Identity serves as a lens through which the organization interprets and responds to its experiences (Elsbach & Kramer, 1996). Furthermore, an organization's identity orientation refers to the "assumed nature of association between an organization and stakeholders as perceived by members" (Brickson, 2007, p. 866). Within this framework, Brickson (2005, 2007), drawing on the individual-level work of Brewer and Gardner (1996), suggested that there are three distinct organizational identity orientations (which serve as the basis for motivation vis-à-vis stakeholders): individualistic (organizational self-interest), relational (particular others' benefit), and collectivistic (greater collective's welfare). From a geographic perspective, local communities serve as effective "greater collectives" around which members can orient themselves (Marquis & Battilana, 2009). In an effort to realize their collectivistic orientations, community members will take actions that they perceive as directly benefiting the community. One such action involves procuring needed resources. In other words, collectivistic-oriented organizations will align their purchasing decisions to best contribute to their local economies. Therefore, we hypothesize the following:
Hypothesis 1 (H1): Organizations with more collectivistic (community) identity orientations will be more likely to source locally.
Importance of the Purchasing Decision
Purchase importance is defined as the "perceived impact of a purchase on organizational profitability and productivity" (McQuiston, 1989, p. 70) and has been shown to affect firm behaviors. For example, Heide and Weiss (1995) found that organizations were more likely to use a closed consideration set (defined as staying with existing vendors) if they regarded the purchasing decision as less important. These same organizations were more likely to use an open consideration set (defined as considering both existing and new vendors) if they regarded the purchasing decision as more important. Importance, in Heide and Weiss's study, was measured through a reliable and validated four-item, 7-point scale originally developed by McQuiston (1989).
Under conditions of higher purchasing importance, purchasing decisions are more likely to be decoupled from other parts of the organization (Weick, 1976). The decoupling of these decisions results from added incentives to make more justifiable decisions (Johnston, 1981), as well as heightened sensitivity of the competitive consequences of the decision (Robertson & Gatignon, 1986). Looser coupling also impedes the development of uniform objectives, routines, and values (Waldron, 2011). In developing H1, we emphasized how a firm's community-orientated identity would exert a strong influence over an organization's sourcing decisions. However, as an organization begins to decouple important purchasing decisions from its standard operating procedures, the influence of the organization's identity on these decisions is likely weakened. For less important decisions, an organization might only consider a closed decision set; meanwhile, the same organization might include new options as the importance of the decision increases. Thus, an organization with a strong community-oriented identity that might only consider sourcing locally (because of the influence its identity exerts on its objectives, routines, and values) is likely to broaden its consideration set as the importance of the decision increases. The broader, open consideration set then makes it more likely that the organization may source from a nonlocal organization. This leads to our second hypothesis:
Hypothesis 2 (H2): The influence of having a community-oriented identity on local buying behavior will be negatively moderated by the importance of the purchasing decision
Method
Sample
Founded in 2004, BLA now has more than 500 members from a wide range of industry sectors and is one of the largest buy local organizations in the United States. BLA's membership criteria consist primarily of geographic requirements. To join this particular affiliate, an organization must be located in the local county (or one of the contiguous counties), the majority of the business's owners must reside in the county (or one of the contiguous counties), and the business must have discretion over its purchasing decisions. Benefits BLA provides to member organizations include displaying the member organization's profile on BLA's website, a listing in a membership guide, access to networking events, and advertising discounts with media partners. BLA promotes education and public awareness of localism through its foundation.
For the present study, BLA provided us with its proprietary member list as of late 2010 (453 members). We created an online survey that we sent to each of these members. Our final usable sample was 103, for a response rate of 23%. We tested for the presence of nonresponse bias by comparing survey responses from early and late responders (using a median date of response as the cutoff point) assuming that later responders more closely resemble nonresponders (Armstrong & Overton, 1977). This analysis resulted in no statistically different means (p > .05). We also tested for the possible presence of common methods bias by conducting Harman's one-factor test on the questionnaire measurement items. The principal components factor analysis yielded three factors with eigenvalues greater than 1.0 that accounted for 54% of the total variance, with the first factor accounting for only 21% of the variance. Based on these results, we concluded that the presence of common methods bias was unlikely.
Our sample consists of businesses from a range of industries, with the most frequently represented being food/beverage (13 organizations), home/ garden (11 organizations), and marketing/media (11 organizations). The median number of employees at sample firms is 3, and the median year founded is 2004. When asked on the survey why they joined BLA, respondents provided a range of answers, which generally fell into one of three categories. Some organizations expressed an interest in joining "a growing movement that will help rebuild the local economy." Others joined "to meet other local businesses for support and networking." Still others joined for "publicity." Respondents also indicated a pronounced tendency toward community action, with 33% sitting on the board of charities/nonprofits, 82% donating to charities/nonprofits, and 56% permitting their employees to perform volunteer work during business hours.
Dependent Variable
We captured whether or not the organization used a local company when purchasing office supplies. While developing our survey, we conducted pilot interviews with the founders of six local businesses that matched the criteria for BLA membership. These interviews began with descriptive questions concerning business-purchasing decisions made by the founders' companies. These "grand tour" questions were designed to help us identify a list of business-purchasing decisions "to keep the business running" (Spradley, 1979, pp. 85-86). Office supplies was the one common purchasing item mentioned during our pilot interviews.
We measured this item by asking respondents to name the organization from which they purchase the majority of their office supplies. We then coded these suppliers as local or nonlocal (dummy variable equal to "1" if local) based on the county in which the office supply company was located. All companies located in BLA's county and contiguous counties were treated as local. In total, 21 of the 103 (20%) companies indicated they use a local provider.
Theory Variables
Community-oriented identity. We followed Brickson (2005) by asking respondents to answer forced choice questions consisting of three separate stems. For example, the statement "My organization views itself primarily as . . ." was followed by three possible options that corresponded to collectivistic, relational, or individualistic identity orientations. Respondents were also asked to complete the sentence stem "My organization is ____" up to 10 times.
We used the following procedure to code the 1,671 individual 10-statement items. We instructed seven raters (who were undergraduate and PhD students) to classify each statement as collectivistic (community), relational, or individualistic. Each statement not only was placed into at least one of the identity orientations but could also be classified into any combination of the three as well. We instructed the raters that collectivistic statements are those that tie the organization to a larger whole or demonstrate a concern for the welfare of a larger collective, relational statements connect the organization to particular stakeholders or emphasize concern for a specific other entity's welfare, and individualistic statements are those that set the organization apart from others or imply a focus on maximizing organizational welfare. Overall, agreement among the raters was acceptable with intraclass correlations ICC(2,7) of .76 for collectivistic, .66 for relational, and .44 for individualistic statements. For each statement, we classified it as collectivistic, relational, or individualistic if four of the seven raters assigned it that particular identity type. Representative statements for each identity type are presented in Table 1.
We then constructed three separate composite identity orientation variables (collectivistic, relational, and individualistic) by taking the average percentage of the two variable types (forced choice, 10 statements) for each of the identity orientations. For example, if the respondent chose the collectivistic option for two of the three forced choice questions, and five of the 10 statements were coded collectivistic, then the organization's collectivistic score would be 0.585 ([0.5 + 0.67] / 2). Similar to Brickson (2005), we then created "purity" versions of each identity orientation variable based on z scores of each identity orientation's composite score. Purity indicators were created for each company's identity type if the z score for that identity type was in the top 25% of z scores, and the z scores for the other two identity types were below the median values.
Importance. We measured the importance of the purchasing decision using the scale developed by McQuiston (1989) and modified by Heide and Weiss (1995). The measure consists of three questions that ask respondents to evaluate the importance of office supplies to their business (α = .93). An example item is "How much do office supplies contribute to [member organization's] ability to compete?"
Control Variables
We controlled for whether the survey respondent was a founder, whether the respondent's company was in the business-to-business sector, whether the company was established after 2003 (BLA was founded in 2004), and the number of employees at the focal organization.
Model Specification
Because we have a dichotomous dependent variable, we conducted a logistic regression to test our hypotheses.
Results Table 2 includes summary statistics and the correlation matrix. None of the variables demonstrate more than moderate collinearity with each other. We also calculated variance inflation factors, none of which exceeded two, which is well below the levels in which multicollinearity could be problematic (Cohen, Cohen, West, & Aiken, 2003). Table 3 presents the results of our hypothesis tests. As evidenced in Model 2, the sign for the coefficient on pure community identity is significant (β = 2.36, p < .01). Therefore, H1 is supported. In substantive terms, with other variables at their means, a nonpure community-oriented firm has an 11% probability of sourcing locally compared with a 56% probability for a pure community-oriented firm. The coefficient on the community-orientated identity by importance interaction term is not statistically significant. Therefore, the interaction hypothesis is not supported. We address this issue in the following section.
Discussion
Much of the localism movement is geared toward influencing business-toconsumer purchasing decisions. However, for the movement to have a real impact, businesses also need to direct their purchases toward local providers. In the present study, we hypothesized and found that businesses with a more community-oriented identity are more likely to purchase their office supplies from a local provider. We expected that this impact would be moderated by the importance of the purchasing decision. We did not find support for this moderating impact. One possibility for this finding is that an organization's community identity is such a strong impetus for behaviors that it may not be affected by the importance of the purchasing decision, at least in this context. In other words, even when the purchase is perceived as being very important, organizations with high community identities operate within their "closed" purchasing set of local providers. Although we are unable to definitively say they are going against their own economic self-interest, the results suggest they may be. Of course, their efforts would also be in line with motivations to sustain local economies.
Overall, our research contributes to studies of social movements broadly and localism specifically. First, whereas much of the recent attention with studies of social movements and organizations has been on the role that certain activist organizations can play on shaping the behaviors of targeted organizations (Briscoe et al., 2015; Waldron, 2011), the present study highlights the role of organizations operating within the movement itself. Our results indicate that the success of movements may be contingent on the proliferation of value-congruent organizational identities (Bansal, 2003). In other words, although organizations can be instruments of change (Lounsbury, 2001), our research indicates that for change to occur, individual decision makers within the organization must align what they believe are the organization's values with those of the movement more broadly. Interestingly, pure relational identity did not drive purchasing decisions even though a local office supply company was a prominent BLA member.
Second, specifically related to localism, the present study found that at least within a particular community, this is a real and dynamic movement. However, we also highlight the challenges the movement faces. Every organization in our sample is a member of the BLA and respondents indicated they were active in nonprofit and charity activities. Yet only 20% of those organizations are currently purchasing their office supplies from a local provider. Part of the success of big-box retailers such as Staples and Office Depot is due to their widespread product offerings. However, the local providers also have significant offerings. Perhaps there is a lack of harmonizing around the "buy local" concept (McCaffrey & Kurland, 2014), or perhaps the "buy local" concept needs to be extended up the value chain to the actual source of the office supply products. More research is warranted on this topic.The present research has particular implications for SMOs within the localism movement. On one hand, SMOs focus on encouraging local purchasing at the retail level. But many organizations join SMOs to network and prospect potential business customers. Thus, goals of SMOs and member organizations may not always be fully aligned, a situation SMOs should consistently monitor. Importantly, our research suggests that SMOs can foster local economic sustainability by attracting and developing businesses with community identities. How they actually accomplish these tasks is an important issue and one that warrants much further research.Limitations Our study has several limitations. First, we focused on a specific sourcing decision, office products. Clearly, organizations make many sourcing decisions, and this is one they may not scrutinize too heavily. However, we wanted a sourcing decision that would be common to organizations across various industries, and we also wanted one in which a viable local alternative existed. Another limitation is that we rely on a single informant from each organization. As evidenced in our summary statistics, the organizations in our sample tend to be very small; thus, a single informant is appropriate. Moreover, we specifically targeted as a respondent the organization's BLA contact. Finally, our empirical results are based on the relationships between organizations in a particular geography and a single BLA. As mentioned, there are now approximately 150 BLAs across the United States. Therefore, we consider an especially promising avenue for future research is to develop and test theory across a range of these relationships.Conclusion Localism is a vibrant movement that hinges on internalizing certain norms and values among purchasing decision makers. Rightfully, much of the attention is on the retail customer. However, an equally important but often overlooked component of the movement centers on the purchasing behaviors of businesses within the community. The present research indicates that these organizations and their underlying identities play a pivotal role in the movement's success.
