The Lifecycle of Organizational Evaluation Systems: a Theory of Gaming and Decay
Organizational Evaluations Systems (OESs)—including rankings, ratings, accreditations, awards, certifications, and more—are crucial for reducing information asymmetry between organizations and their audiences, especially as they pertain to sustainability and social responsibility. However, prior studies have documented instances of these systems becoming susceptible to “gaming” where organizations artificially enhance their performance, leading to an overall “decay” in the OESs’ informativeness and effectiveness. We propose that an OES lifecycle (comprised of stages of emergence, expanded adoption, gaming and decay) is not an anomalous occurrence but is in fact an endemic feature of organizational evaluations, varying only in terms of pace. This temporal perspective, absent from prior literature, allows us to theorize the external and internal factors that facilitate or impede the pace of gaming within an OES’s lifecycle. Leveraging the literatures on neo-institutionalism and social evaluations, we develop a comprehensive model indicating how the pace of gaming is influenced by i) external pressures—normative, mimetic, and coercive isomorphism—and ii) internal attributes of the OESs themselves, namely evaluation frequency, transparency, format, and focus. Our work creates the groundwork for a theory of organizational evaluation gaming, while also contributing to the literatures on neo-institutionalism and social evaluation. We also provide practical implications for staving off gaming and decay.
Joel Bothello
Joel Bothello is an Associate Professor in Management at the John Molson School of Business of Concordia University and incoming Professor of Strategy at emlyon, France. He is also a visiting fellow of Wolfson College and the Judge Business School at the University of Cambridge. In his research, he examines a variety of business and society phenomena, including Corporate Social Responsibility, sustainability and informal economy entrepreneurship. His research has been published in leading management journals and has also appeared in practitioner outlets such as Harvard Business Review and Stanford Social Innovation Review. He is a co-founder of Organization Scientists 4 Future (OS4F) and a member of the steering committee of Accounting for Impact (AFI).