Insights from Social Identity Theory
Social Identity Theory (SIT) provides some insight into how organizational identity influences organizational effectiveness. SIT holds that individuals organize into social categories that allow them to define themselves and others relative to the social environment (Ashforth & Mael, 1989). Social identification is the perception that an individual belongs to a particular group. Individuals can have multiple social identities but tend to associate themselves more closely with the groups that they positively value or that they perceive bring them greatest esteem. When an individual asserts, "I am a member of this group," he or she socially identifies with that group. When socially identified, an individual shares the success and failures of the group, which can affect his or her sense of worth. Organizational identification is "a form of social identification" (Ashforth & Mael, 1989, p. 20) through which members integrate into their own identity the distinctiveness, prestige, and homogeneity of the organization. Ashforth and Mael (1989) identify three essential consequences of organizational identity related to organizational effectiveness: commitment, conformity, and loyalty.
Regarding commitment, members who identify with an organization tend to support and commit to the organization and choose activities that align with their own identity. Regarding conformity, the more members see themselves as similar to other group members, the more likely they are to conform to group norms. Regarding loyalty, the more an individual identifies with an organization, the greater their loyalty will be to that organization.
Social identity also influences the process that leads to effective group dynamics within an organization, specifically: socialization, role conflict, and intergroup relations. New members overcome insecurity and gain confidence by internalizing the values, beliefs, and norms of the organization. When managers properly manage the assimilation process, they can influence the loyalty and commitment of new members (Ashforth & Mael, 1989).
Integrating disparate beliefs, values, and identities into an organizational identity can cause conflict among members influence performance. Ashfort and Mael (1989) argue that this conflict must be resolved by ordering, separating, and acting on needs as they arise. However, this seems to be reactive while ignoring the importance of introducing and managing the conflict necessary for an effective group process. Intergroup conflict arises not only from competition for limited resources but also from a need to establish and maintain social identities through intergroup comparisons. Ashroth and Mael (1989) recommend that managers mitigate the differing status between competing groups. However, they still ignore the value of managing conflict for effective outcomes.