Scandals and Organization Name Change

An organization’s name is the most representative symbol of the organization that encodes the core features of the organizational identity(Glynn & Abzug, 2002). Members of organizations can distinguish their organizations from other organizations through organization name, and present their organization to external audiences using the name(Corley & Gioia, 2004). Since organization name embodies the core of the organizational identity, organizations seldom attempt to change the name without a good cause. However, in this study, we suggest that organizations may choose to change their names when they are under serious identity threats. A scandal regarding an organization can be one of the most dangerous events that threatens the organizational identity. As the news of an organization’s transgression is covered and amplified by the media, the scandal internally damages the organization members’ beliefs in the organization, and externally damages the reputation and images of the organization perceived by audiences. Thus, organizations search for cognitive means to protect the organizational identity from the threats, and one of the approaches managers can take is to change the name of the organization. This study examines the name change events undertaken by Korean universities and finds that organizations are likely to change their names when involved in corruption, embezzlement, or sex scandals covered by the media. We also argue that the tendency to change organization name is weaker in organizations with regional identity, and stronger in organizations with institutionalized identity and specialist identity.