International audienceWe advocate for more tolerance in the manner we collectively address categories and categorization in our research. Drawing on the prototype view, organizational scholars have provided a 'disciplining' framework to explain how category membership shapes, impacts, and limits organizational success. By stretching the existing straightjacket of scholarship on categories, we point to other useful conceptualizations of categories - i.e. the causal-model and the goal-based approaches of categorization - and propose that depending on situational circumstances, and beyond a disciplining exercise, categories involve a cognitive test of congruence and a goal satisfying calculus. Unsettling the current consensus about categorical imperatives and market discipline, we suggest also that audiences may tolerate more often than previously thought organizations that blend, span, and stretch categories. We derive implications for research about multi-category membership and mediation in markets, and suggest ways in which work on the theme of categories in the strategy, entrepreneurship, and managerial cognition literatures can be enriched

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Existing scholarship on categories frequently highlights how some category members may violate codes that others diligently abide by. In this paper, we take into account the differences in identity across category members, and ask how these relative differences determine their response to a code-violating change. Taking a case where category members are identified as 'insiders' and 'outsiders', we argue that insiders' reaction to a code violation depends upon the extent to which they believe their identity to be distinct from the code violator's, who might be an insider or an outsider. Specifically, we suggest that it is the presence or absence of an 'identity buffer'i.e., a relative identity advantage-which determines insiders' reaction. We hypothesize that when a fellow category insider introduces a code violation, the focal insider will be more likely to refrain from the practice. When it is an outsider who introduces the code violation, insiders will be more likely to adopt the code violation as long as they can retain an identity buffer. We further posit that when outsiders adopt a code-preserving behavior, thus narrowing the identity buffer between insiders and outsiders, it will mitigate insiders' likelihood of code violation adoption. We test and find support for our hypotheses using data on Islamic banking industry in 12 countries (2003-2014).

Categories that become taken-for-granted tend to acquire rule-like standing. That is, people begin to strongly expect certain behaviors from entities that have claimed affiliation with them, and these expectations tend to induce conformity. However, conformity does not always ensue, and we lack an explanation of why the effects of category taken-for-grantedness might diverge. In this paper, we propose that the effects of increasing category taken-for-grantedness hinge upon an organization’s identity. We first argue that the relationship between organizational identity and the likelihood of conformity is U-shaped, with insiders and outsiders being more likely to conform relative to those with middling identities. We then propose that greater category taken-for-grantedness should reduce scrutiny for those whose identities mark them as more of insiders, subsequently making them less likely to conform. In contrast, outsiders become more likely to conform as taken-for-grantedness increases. We test our arguments in the empirical context of Islamic banking, using data on 118 Islamic banks worldwide between 2001 and 2014. We examine the likelihood that banks in the sector make what are known as zakat payments as a function of category taken-for-grantedness and the extent to which a bank’s identity is Islamic. We discuss implications for the literatures on categories and identity.