Response Paper
According to Chapter 1 of the Podolny reading, for status to flow through exchange, there is need for the actors to maintain their reputation when it comes to exchange. This means that if an actor in the hierarchy of exchange has earned a good reputation over time, it is not worth ruining for in order to make quick profits from an item whose hype may be short-lived. Maintaining one’s reputation for a service ensures that every actor is able to maintain his or her image and position thereby making sure that the exchange of services flow seamlessly within a market. According to Podolny, when economists refer to the term status informally, they indicate an expectation of behavior on the basis of a person’s previous conduct. An instance where Podolny demonstrates the importance of maintaining one’s status in a market is the depiction of the Lane Jewelers who decline to trade with the turquoise jewelry despite the jewels being in demand. Part of the reason the Lane Jewelers are not keen on trading in the turquoise jewels is the semiprecious reputation that this specific jewelry has had in the market (Podolny 13). In this regard, Lane Jewelers are not prepared to lose their reputation as a company that offers superior services by starting to offer semiprecious stones. Nevertheless, the company is willing to refer the clients seeking the Turquoise jewels to other places where they can obtain the product.
With regard to the aspect of status flowing through difference relations, it denotes when individuals or businesses that have acquired high status demonstrate deference to others. For instance, when a company with a higher status notifies certain groups of people that they should take a keen interest in the services of another company that commands less status, the status flows through difference from the high-status company causing the other low-status actor to gain a higher status. One of the important things to learn is that there is a greater impact when status flows through difference from a high-status actor to a low-status actor in that the former’s reputation is likely to drop while the latter’s reputation rises considerably depending on the difference in the reputation between the two actors (15). For instance, if there is bad bleed between a celebrated artist and a barely known upcoming artist and there are heated exchanges between the two, the reputation of the upcoming artist will rise dramatically while the reputation of the celebrity will decline. In the sociological perspective, if a politician seeking to be elected in a general election receives and endorsement from a celebrity, that endorsement is more effective because it is likely to draw more supporters to the politician than an endorsement from an ordinary small-scale farmer, but this does not mean that the status of the politician will decline. From the foregoing, it is important to note that that the understanding of reputation as an economic concept is quite different from status from the sociological perspective.
According to Benjamin and Podolny reading, wineries demonstrate status difference when making wine by ensuring production of quality wines and most importantly, developing high-level affiliations that consumers will be able to associate with specific wines. Benjamin and Podolny note that models of reputation in the economic sense show an under-socialized concept of identity, but believe that such criticism does not provide guidance regarding how markets can incorporate reputation considerations within the social structures. They observe that there is a reciprocal relationship existing between the quality that a winery achieves and their structural position. As such, it is apparent that differences in the structural positioning or differences in the quality of wine that wineries produce have considerable influence on their status. In this regard, wineries demonstrate their status differences depending on the quality of investment and establishment of affiliations. As such, wineries that have affiliations that are more prominent gain higher status as compared to the wineries that have affiliations consumers consider less prominent. Prominent affiliations give the impression that enables the wineries develop reputations for quality. Affiliations reflect the extent of investment that the wineries have devoted towards producing their wine and it is through observing the affiliations of every winery that one can decipher the status that the wineries have acquired. In this regard, a shift in the affiliations that a winery has causes a corresponding effect on the perceptions of quality and reputation such that if a winery increases its association with reputable affiliations, the perception of the quality of wine increases and so does its status ordering. As such, wineries have to align their quality of wine with status through establishing innovative activities that attract as many high-status affiliations as possible (Benjamin and Podolny 584). Higher status affiliations create a situation whereby consumers purchase certain wine because their consumption of the same is associated with higher social status. This means that people are more likely to get attracted to specific wine because the society will perceive them as belonging to a higher social status, and this can only happen when the wine is associated with high-status affiliates.
Work Cited
Benjamin, Beth and Joel Podolny. Status, Quality, and Social Order in the California Wine
Industry. Administrative Science Quarterly 44, 1999, 563-89.
Podolny, Joel. “Status, Reputation, and Quality” in Status Signals: A Sociological Study of
Market Competition by Joel Podolny. Princeton University Press, 2005, 9-21.
