Making Sense of Stigmatized Organizations: Labelling Contests and Power Dynamics in Social Evaluation Processes

How do social audiences negotiate and handle stigmatized organizations? What role do their heterogenous values, norms and power play in this process? Addressing these questions is important from a business ethics perspective to improve our understanding of the ethical standards against which organizations are judged as well as the involved prosecutorial incentives. Moreover, it illuminates ethical concerns about when and how (the exploitation of) power imbalances may induce inequity in the burdens imposed by such social evaluations. We address these questions building on two event-based case studies involving Hells Angels Motorcycle Club Norway, and contribute to organizational stigma theory in three ways. First, social evaluations of a stigmatized organization by multiple audiences are found to interact, collide and combine in a labelling contest. Second, we show that labels employed in this contest are pushed to either negative extremes (‘moral panic’) or positive extremes (‘moral patronage’). Finally, we show when and how power represents a double-edged sword in social evaluation processes, which can be wielded either to the benefit or to the detriment of the actors under evaluation.