Social identity and self-categorization theories also relate to the formation of ingroups and outgroups within organizations (Hogg & Terry, 2000). These theories are largely based on the assumption that to make social comparisons in their environments, individuals must first define themselves along some social criterion (or criteria). From a social-psychological perspective, this involves defining oneself and being defined by others as a member of some type of group (Tajfel & Turner, 1979). This can be accomplished by using salient characteristics in the immediate environment for differentiation purposes. Such social categorizations can facilitate the classification and ordering of the social environment in which one exists.
The characteristics by which social categorization is accomplished can include many factors, such as demographics, values, personality, attitudes, organizational and other group memberships. Perceptions of social groups based on these categorizations provide individuals with the means for forming their own social identities. For example, a Caucasian female may define or identify herself based on the characteristics she uses for social categorization: I am a female in my thirties, I am Caucasian, and I have a masters degree (Ashforth & Mael, 1989; Riordan, 2000). "These identifications are to a very large extent (inherently) relational and comparative: they define the individual as similar to or different from, as 'better' or 'worse' than, members of other groups" (Tajfel & Turner, 1979, p. 40).
Relational demography research, which is based on such comparative differences, often uses the concepts related to social identity as a theoretical foundation. In Ely's (1994) study of women's proportional representation as partners in law firms, it was concluded "social identity (theory) may link an organization's demographic composition with an individuals' workplace experiences" (p. 203). She found that women partners in firms with fewer senior women were less likely to experience positive outcomes, such as support from women peers and perceptions about advancement opportunities.
According to social identity and self-categorization theory, individuals categorize themselves and similar others as comprising the ingroup and categorize dissimilar others into the outgroup(s). Individuals' reactions to others are driven by needs to reduce uncertainty and to maintain or enhance their self-esteem (social identity needs). In an effort to favorably differentiate the ingroup from a relevant outgroup, dissimilarity or "otherness" is seen as a deficiency and is often the basis for derogation, stereotypes, and polarization directed toward outgroup members (Hogg & Terry, 2000; Tajfel & Turner, 1979; Williams & O'Reilly, 1998).
In an experiment designed to test the basic propositions behind social identity theory, Turner, Brown, and Tajfel (1979) expected that subjects would be willing to sacrifice monetary rewards to achieve positive group distinctiveness. In addition, they hypothesized that ingroup favoritism would be greater when rewards were higher and when the outgroup was more relevant, or had a more salient comparative meaning. Results of their study supported these hypotheses. Subjects sacrificed both group and personal incentives in favor of intergroup differences that put ingroups at an advantage relative to outgroups (Turner et al., 1979). In addition, ingroup treatment toward outgroup members (in terms of fairness and discrimination) was more derogatory when the outgroup was particularly relevant to ingroup members, in a social comparison sense.
In the work environment, demographic characteristics, such as age, gender, race, and education, may be particularly salient and will therefore likely be used for making ingroup/outgroup differentiations. Demographic characteristics are highly visible, and, thus, offer employees simple cues for making distinctions among other coworkers (Flynn, Chatman, & Spataro, 2001). In fact, social categorizations and ingroup/outgroup distinctions, based on demographics, are likely to take place even when formal workgroups or other divisions within the organization have already been established (Chatman, Polzer, Barsade, & Neale, 1998; Flynn et al., 2001). As a result, relational demography theories assert that within workgroups, social comparison processes based on demographics are likely to take place. Workgroup members who are demographically dissimilar to the rest of the group are expected to experience the unfavorable outcomes associated with being categorized in the outgroup.
Much of the relational demography research has drawn on social identity and self-categorization theories in an attempt to explain the effects of dissimilarity on various work-related outcomes (e.g., Chatman et al., 1998; Chatman & Flynn, 2001; Harrison, Price, & Bell, 1998; Harrison, Price, Gavin, & Florey, 2002; Jehn, Northcraft, & Neale, 1999; Tsui et al., 1992). For example, Pelled (1996) examined how dissimilarity with respect to race, gender, and tenure would affect one's perceptions of group conflict and performance. Consistent with social identity theory, she found that gender and tenure dissimilarity were related to higher levels of perceived conflict, ostensibly as a function of differences and difficulties in communicating and establishing effective norms across these subgroups (gender and tenure subgroups), and that these perceptions, in turn, were related to lower ratings of group performance. She did not find support for the effects of race dissimilarity.
Some researchers used a combined perspective from both the similarity-attraction paradigm and social identity and self-categorization theories to examine relational demography processes (e.g., Zenger & Lawrence, 1989). For example, Tsui et al. (1992) noted that such theories should be treated as complimentary. In their study of organizational attachment, they suggested that for an employee who is demographically different from others, "lower organizational attachment may be a consequence of two possible processes: (1) social isolation and lower interpersonal attraction due to attitudinal differences associated with demographic dissimilarity, and (2) incongruence stemming from one's self-categorization of the group and its actual demographic composition" (p. 554). Their results showed that race and age dissimilarity were both negatively related to organizational attachment (lower intentions to stay in the organization). They also found that race dissimilarity was negatively related to organizational commitment.
Harrison and colleagues (1998, 2002) and Chatman and Flynn (2001) extended and integrated research on the similarity-attraction hypothesis and social identity theory by considering the effects of time. These studies found that early in workgroup formation (or newcomer entry) dissimilar members experienced lower levels of affect toward the groups, and heterogeneous groups displayed less effective norms, attributable to similarity-attraction processes. Over time, however, and as per social identity theory, contact among workgroup members facilitated recategorization among group members, yielding greater group cohesiveness and more cooperative norms. In other words, as a function of shared and firsthand experience, group members had increasingly individuated information upon which to base their perceptions of each other rather than general and often negative stereotypes. Dissimilar group members reported improved perceptions of and identification with their workgroups over time, and workgroups exhibited more effective norms.
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