Loyal after the end: Understanding organizational identification in the wake of failure

Abstract

Prestige has traditionally been viewed as a primary explanation for individuals’ identification with organizations. Yet there are clues in the literature that some individuals identify with organizations that have lost their prestige owing to failure. We use data from a survey of former employees of a defunct technology firm to test a proposed model of identification with failed organizations. We find that the extent to which the perceived identity of a failed organization fulfills former members’ self-enhancement and belongingness motives has a positive relationship with their identification with it. Identification, in turn, inclines former members to socially interact with each other and participate in alumni associations. Further qualitative analysis reveals the organizational identity work practices by which former members recast a failed organization’s identity in positive terms. These findings suggest the merit of relaxing assumptions about prestige as a necessary precursor to organizational identification, and augment scholarly understanding of the cognitive and relational mechanisms that facilitate individuals’ identification with organizations in the wake of events that injure their reputations.