WHEN GOOD NAMES GO BAD: SYMBOLIC ILLEGITIMACY IN ORGANIZATIONS

We empirically examine the institutional dynamics attending the process whereby legitimate organizational symbols become illegitimate. We conducted two studies, one historical and one comparative, of those firms that appended “dot-com” to their names during the period of “Internet euphoria,” 1998–1999. The first study analyzes the legitimacy over time for one case, that of Egghead software, the first organization to affix “dot-com” to its name. The second study compares the legitimacy of firms named “dot-com” in the wake of the “dot-com” crash, using both public perceptions and financial valuations. Results from the two studies indicate that good organization names can go bad rather quickly and illustrate how swift and definitive the process of deinstitutionalization can be.