Painted with the Same Brush: The Negative Effects of Stigma Diffusion

In this paper we develop and test predictions regarding the impact of stigmatization on the economic futures of top management team members. Using data from the NCAA Division I Football Bowl Subdivision coaching staffs, where head coaches are viewed as CEOs and assistant coaches as non-CEO TMT members, we found that assistant coaches who move to new teams receive lower pay when they worked for head coaches who had experienced involuntary turnover as a result of failure. Our analysis suggests a diffusion of stigma from the top executive to the other top managers, resulting in diminished market values in subsequent employments. In testing the moderating effects of proximity and tenure of the assistant coaches on their subsequent economic values, the results showed no relationship between proximity or tenure on the stigmatization.