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The concept of a “category” and the social process of “categorization” occupy a crucial place in current theories of organizations. In this introductory chapter to Research in the Sociology of Organization's volume on Categories in Markets: Origins and Evolution, we review published work in various streams of research and find that studies of organizational forms and identities, institutional logics, collective action frames, and product conceptual systems have key commonalities and predictable differences.

In markets, audiences generally discount offerings that fail to fit established product categories, but when misfit offerings change category meaning, the effects of conformity and deviation can reverse so that previously overlooked or unappealing offerings become popular while previously appealing products fall into disfavor. After introducing the idea of category currency to explain how the value of conformity changes with ongoing meaning construction, we use it to make sense of the emergence of nanotechnology. In conclusion, we argue that category currency is useful for explaining the changing value of conformity both in and beyond markets.

Recent research finds that producers assigned to multiple categories receive less attention and legitimacy and have lower chances of success and survival. We argue that the effect of category spanning on the reception from the audience depends on the fuzziness of the categories. When a set of categories lacks contrast (have very fuzzy boundaries), spanning them does not cause much additional confusion for the audience, thus the penalties associated with spanning ought to be slight. But, when the contrasts of the categories spanned are high, audience members will have difficulty interpreting the producer, so spanning categories will be devalued more. We study these processes using data from an online-review web site. Results show that audience members devalue organizations that span high-contrast categories more than those that span low-contrast categories. These effects are weaker for more active reviewers.

This study focuses on how the creation of a new market identity, defined here by the social categories that specify what to expect of products and organizations, helps legitimize normatively illegitimate products and thereby facilitate the formation of markets for these products. A product is given a legitimate market identity by recombining existing product and status categories in a way that is both isomorphic with and differentiated from these preexisting categories. I argue that the creation of a new market identity helped create a market for feature films that combined legitimate comedy and illegitimate pornography following the legalization of pornography in Denmark in 1969. Topological analyses of the cultural content of all the film posters used to promote Danish films between 1970 and 1978, and regression analyses of the status of the actors appearing in these films document the importance of market identity in legitimizing illegitimacy.

Understanding when new forms will emerge constitutes a core theoretical issue for organizational theory. The ecological theory of form emergence falls short of providing a full explanation because it treats legitimation as a primitive (unexplained) concept. Here, we use Hannan, Pólos, and Carroll's (2007) revised theory of organizational evolution to interpret and respecify the legitimation part of the density dependence model. Among other advantages, the respecification allows us to incorporate the insights of the “cultural-frame” institutional perspective. We study early Dutch accounting, an industry setting where form legitimation was fiercely contested by several professional associations in the period 1884–1939. We develop an analytical narrative about the historical legitimation process, and we also present systematic tests of the theory examining predictions about “fuzzy” density and population contrast. Estimated models of firm exit support the revised theory and reveal that fuzziness, induced from fragmented collective action, hampers it.