Partners in Crime: Code Violation and Preservation Between Category Insiders and Outsiders

How do insiders respond to the threat of change from outsiders of their category? Whereas many scholars have looked at exit options, we focus on members who stay in their category. In particular, we study the dynamics of code preservation and code violation changes amongst insiders and outsiders within a single category. Whereas code violation seeks to challenge status quo norms in the category, code preservation seeks to defend it. When insiders respond to code violation by outsiders, there exists a trade-off between authenticity segregation and competitive threat. Authenticity segregation refrains insiders from participating in outsider code violation, discounting the efforts as impure. On the other hand, competitive threat motivates insiders to participate in code violation. Thus, the probability of insiders to pursue code-violating changes exhibits a u-shaped relationship to the pervasiveness of code-violation …