Scandal and Name Change: Organizational Identity and Transgressional Sources of Name Change

Since a name embodies the core of organizational identity, organizations seldom change their names without a compelling reason. This paper suggests that organizations may choose to change their names when they experience a serious threat to their identity, such as a scandal. As the news of an organization’s transgression is covered and amplified into a scandal by the media, the scandal damages the reputation and image of the organization as perceived by the public. Organizations employ various means to protect their organizational identity from this kind of threat, one of which is changing the name of the organization. Through organizational name change, organizations can signal to the public or their target consumers that they are genuinely trying to reform themselves, and also reconstruct their tainted organizational identity. This study examines all name-change events undertaken by Korean universities between 1997 and 2014. Our empirical analyses showed that universities involved in scandals were indeed more likely to change their names compared to universities without such experiences. However, the strength of the relationship between scandals and organizational name changes varied depending on the type of organizational identity. The results of our empirical study suggest that the tendency to change an organizational name is weaker in organizations with a regional identity, and stronger in organizations with a norm-based identity or a specialist identity. We discuss the implications of the findings with regard to organizational identity.