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Organizational Behavior | Peer-Reviewed Research

Story Time

Why The Stories Companies Tell Themselves Are Serious Business

Based on research by Scott Sonenshein, Eero Vaara and David Boje

Why The Stories Companies Tell Themselves Are Serious Business

  • Companies, like people, give themselves narratives that provide them with meaning.
  • Every company exists within a web of narratives, which are often contradictory. 
  • Narratives provide both individuals and companies what they need to compete, to accept failure and to grow.

A string of workers gets hurt on the job at a major energy firm. Though the company insists it’s dedicated to improving safety, many employees believe that it’s all talk and no action. Meanwhile, management is convinced that morale has never been better. It’s a tug-of-reality, and such simultaneous, contradictory narratives could apply to any number of big firms around the world. 

The urge to tell stories that justify our attitudes and behavior is part of what it means to be human. Big companies are agglomerations of humans, so they become a kind of universe of narratives. And like individuals, companies make sense of their behavior by using mere fragments of stories. 

In a recent literature survey, Rice Business professor Scott Sonenshein and colleagues Eero Vaara of Aalto University School of Business and David Boje of New Mexico State University looked closely at the ways corporations tell and perpetuate their stories. Analyzing a series of company narratives as a literary critic might study a novel, Sonenshein’s team noted that different companies, like individuals, explain their behavior with distinct narratives. Often, these narratives bang up against each other. 

Such contradictions can be a form of warfare, with high stakes attached. Imagine two companies at loggerheads, with one attempting a hostile takeover of the other. Naturally, the aggressor firm will spin a story about why the takeover will be good for the market, the firm and probably society at large. The target firm will likely cry foul, protesting that the move saps the economic and even cultural well-being of its workers, stakeholders and consumers in general.

This plurality of narratives can also exist within the universe of a single firm. In fact, an individual employee may authentically believe different storylines about the same workplace, depending on whom he or she is talking to. The nature of office politics guarantees different storylines for different audiences. These narratives can often be complex and ambiguous. 

In one experiment cited by Sonenshein and his colleagues, managers were told to write a note to themselves about the usefulness of a company product. They were then told to write an email to a superior about the same product. The result: Managers typically used moral language when writing about the product to themselves, and economic language when writing about the product to their superior. 

Similarly, entrepreneurs often use an array of narratives to explain their success or failure. Sonenshein groups these narratives into general types familiar from myths and literature. In each type, the story hinges on something different. There’s “catharsis,” where the story hinges on one person’s responsibility or revelation; in “hubris,” it’s venture-wide responsibility; “zeitgeist,” industry-wide responsibility; “betrayal,” one responsible agent inside the venture; “nemesis,” a responsible external agent; “mechanistic,” an uncontrollable non-human element within the venture; and, simply, “fate.”
These stories, Sonenshein notes, are more than just excuses. They’re mechanisms that help entrepreneurs cope with events.

At the same time, when there’s a crisis, some groups within an institution form narratives that blame others for corporate shortcomings. Organizational change unfolds with multiple narratives offered by different parties, each with their own agenda. 

For companies and individuals alike, narratives can provide a way to deal with setbacks and trauma. That’s because stories allow us to understand our identities even as they shift. In today’s fluid employment environment, the stories we tell ourselves can mean the difference between moving forward and giving up altogether.

There is still much that remains to be understood about how storytelling shapes organizational narratives. While corporate origin stories can influence the lives of individual workers, an individual’s story can also powerfully impact an organization. The narrative of Steve Jobs, for example, shaped the vision of Apple as a company. 

Similarly, companies need to better understand the voices that resist an accepted storyline. A 2013 Twitter Q&A by J.P. Morgan turned into a public relations meltdown when a discussion on the firm’s career opportunities launched a backlash of more than 18,000 comments from Twitter users still angry about the 2008 recession. One writer demanded, “Does the sleaze wash off with a regular shower, or do you have to use something special like babies tears? #AskJPM.”

These counter narratives can be irksome. But listening to them can form the basis for essential change. 

Counter narratives also abound within firms. At Microsoft, for example, more than 100 employees recently protested the company’s work with U.S. Immigration and Customs Enforcement (ICE), arguing that the agency’s policy of incarcerating child immigrants was immoral.

Between the current political polarization, and the many ways dissident voices can be heard via social media, companies will find it harder than ever to silence unofficial narratives. Sonenshein offers an alternative: Rather than stamping them out, follow these alternative storylines carefully, and embrace them as possible roadmaps to success.

Scott Sonenshein is the Henry Gardiner Symonds Professor of Management at Jones Graduate School of Business at Rice University.

To learn more, please see: Vaara, E., Sonenshein, S. & Boje, D. (2017). Narratives as sources of stability and change in organizations. Academy of Management Annals, 10(1), 495-560.

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