Multilevel optimal distinctiveness: Examining the impact of within‐ and between‐organization distinctiveness of product design on market performance

Abstract

Research Summary This research develops a multilevel framework to study optimal distinctiveness (OD) at two levels. We distinguish between within‐organization distinctiveness and between‐organization distinctiveness of product design and examine how they independently and interactively influence performance. Analyzing a unique data set of 2,203 model‐year observations for automobiles sold in the U.S. market from 2001 to 2016, we found that while within‐organization distinctiveness of product design hurts market performance, between‐organization distinctiveness of product design increases market performance. Moreover, when between‐organization distinctiveness of product design is high, the negative impact of within‐organization distinctiveness of product design on performance is weakened. These findings contribute to OD research by improving the understanding of OD as a multilevel construct and elaborating on its contextual contingency. Managerial Summary How should multiproduct organizations design their products to achieve better performance? This article provides a multilevel perspective that encourages managers of multiproduct organizations to consider different frames of references when designing products. We suggest that a product's design should be consistent with the prototypical design of its organization, whereas the prototypical design of this organization should be different from the average design in the industry. We also found that an atypical design is more desirable if it is from an organization known for distinctive designs in its industry. Our findings help managers of multiproduct organizations achieve the optimal levels of design distinctiveness at both the product and organizational levels.

Categories and narratives as sources of distinctiveness: Cultural entrepreneurship within and across categories

“…Our theory and findings most directly contribute to cultural entrepreneurship theory and the burgeoning literature on optimal distinctiveness (Barlow et al, 2019;Bu et al, 2022;Haans, 2019;Taeuscher & Rothe, 2021;Zhao et al, 2017;Zhao et al, 2018). Specifically, we propose and demonstrate that the optimal level of distinctiveness within a given category is shaped by the category's distinctiveness vis-à-vis other categories within its category system.…”

“…By theorizing about how categories' distinctiveness shapes the optimal level of intra‐category distinctiveness, our study takes a first step toward a multilevel theorization of optimal distinctiveness. This is an important step since optimal distinctiveness theory essentially transcends across different levels of analysis (Zhao, 2022), but research engaging this multilevel conceptualization of optimal distinctiveness remains rare (see Bu et al, 2022 as an exception).…”

“…We thus propose that the distinctiveness of a category vis‐à‐vis other categories matters for the construction of an optimally distinctive narrative because category distinctiveness likely shapes how some audiences evaluate the distinctiveness of category members. By developing novel theory about the importance of category distinctiveness, a conceptual dimension that has been generally neglected in the literature, we aim to contribute to a richer, multilevel understanding of optimal distinctiveness (Bu, Zhao, Li, & Li, 2022; Zhao, 2022).…”

Going beyond optimal distinctiveness: Strategic positioning for gaining an audience composition premium

“…The premise of heterogeneous audience predispositions suggests instead that gaining an audience's attention may not necessarily benefit a firm but may actually harm it. Furthermore, research in this domain has often assumed that there are agreed‐upon categorical benchmarks against which firms adjust their positioning strategies (e.g., Bu, Zhao, Li, & Li, 2022; Taeuscher & Rothe, 2021; Zhao et al, 2018). Moreover, past studies have often assumed that audiences within a category utilize a homogeneous set of evaluative schemas when assessing firms.…”

Optimal Distinctiveness: On Being the Same and Different

“…First, most studies to date have assumed one benchmark (either explicitly or implicitly) in their conceptualization and measurement of optimal distinctiveness. However, the more interesting scenario is when multiple distinct benchmarks coexist and are equally relevant in audiences' evaluations (Bu et al, 2022). In this case, various questions arise: How do audiences pick which benchmark to use in attending to and evaluating an organization?…”