Organizational reference groups: resolving the problem of the assumed group

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University of California Los Angeles

Anderson Graduate School of Management

110 Westwood Plaza, Box 951481
Los Angeles, California 90095-1481
Tel: (310) 825-1252

Fax: (310) 206-3337


August 8, 2003

© 2003. Barbara Lawrence



This paper introduces the concept of an organizational reference group, the set of people whom individuals perceive as belonging to their work environment and who define the social world of work in which they engage. This concept is proposed to resolve the problem of the assumed group, scholars' tendency to assume, rather than identify, individuals' perceived social context. Data from a large organization show that using organizational reference groups extends a social network explanation of career referent selection.

This paper introduces the concept of an organizational reference group, the set of people whom an individual perceives as belonging to his or her work environment and who define the social world of work in which he or she engages. An individual’s organizational reference group includes everyone he or she thinks of when answering the question: Who works here? It incorporates the individual’s co-workers, friends, enemies, and acquaintances as well as people with whom the individual has no direct contact, such as those he or she sees in the next building or knows only through stories, reputation, and email. These people constitute the social frame of reference (Merton, 1968) through which he or she receives information, interprets work-related experiences and makes decisions to act. An individual’s organizational reference group may not include the entire organization, but the people it does include largely generate his or her view of the organization as a whole.

In small organizations, an individual’s organizational reference group encompasses everyone – a complete population. It is difficult to imagine a start-up, for instance, in which anyone is unaware of everyone else. However, as organizations get larger, knowing everyone becomes problematic. Here, the individual perceives only a sample of possible others. Even in a single organization, these samples may vary a great deal. At one extreme, two individuals in a small, independent business unit of a large organization may have identical organizational reference groups. Similar to a start-up, everyone is aware of everyone else. At the opposite extreme, if one of the two individuals works in a different business unit of that organization, the members of their organizational reference groups may be completely distinct. Few of the employees of whom one individual is aware are known by the other.

It is the possible differences between individuals’ samples of perceived others that make organizational reference groups a potentially important concept. When two individuals have different organizational reference groups, the information to which they are exposed may vary. As a result, the meanings and interpretations they construe from that information and the opportunities they experience may vary as well. Research on social networks is consistent with these ideas. Close communication-based associations limit or facilitate an individual’s social capital (Burt, 1982), personal sources of scanning information (Aguilar, 1967), and power and status (Ely, 1994; Ibarra, 1992; 1995). The individual's organizational reference group includes all of these close associations, but it is largely populated by more distant associations, those delineated by little communication or only awareness. And, although we know a good bit about close associations, we know little about either the composition or effects of the distant ones.

The purpose of this paper is not to argue that an individual's organizational reference group is a new idea, but rather to draw attention to a phenomenon that has been largely assumed to exist rather than studied either empirically or theoretically. It has been many years since Shibutani (1955: 569) observed that “The concept of reference group summarizes differential associations and loyalties and thus facilitates the study of selective perception. It becomes, therefore, an indispensable tool for comprehending the diversity and dynamic character of the kind of society in which we live”. In similar fashion, organizational reference groups should be used to study the diverse perceptions and experiences of individuals at work, as well as the dynamic character of their lives in organizations. However, once organizational theories move beyond dyadic relationships and small groups, they tend to assume that all individuals experience a common social context. There is no level of analysis between a small group and an organization. There seems to be no organizational theory or research that examines the differential associations that constitute individuals' samples of perceived others in large organizations.

This paper addresses three questions. What is an organizational reference group? Why should organizational reference groups be studied? And, do the composition and effects of organizational reference groups differ from those of social networks, the most similar existing concept? These questions are addressed by focusing on organizational reference groups in large organizations. The organizational reference group definition is elaborated and contrasted with related concepts. Theoretical examples are used to explore the problem of the assumed group, which identifies a conceptual gap in the literature. One of these examples is examined empirically. Neither the theoretical discussion nor empirical data presented in this paper answer all questions about organizational reference groups, but they do suggest that this is a phenomenon worth further study.


The idea that individuals have a group of organizational referents originates from the study of reference groups. Reference groups, groups to which individuals orient themselves regardless of actual membership (Singer, 1981), have long been recognized as crucial ties between individuals, action, and social systems (Merton, 1968). Although referents are often thought of as similar others (Festinger, 1954), the criteria used to define a referent vary a great deal. Scholars have studied many kinds of referents, including groups to which individuals aspire, groups to which individuals belong, groups to which individuals have only the loosest of connections, and groups whose perspective the individual acquires (Siegel & Siegel, 1971). Perhaps the most rudimentary definition of reference, and the one that is used here, is information that one individual has about another. This information may be an association between several names on an email or a memory of the clothes someone wore in the annual report. It may be accurate or inaccurate and the individual may either believe or doubt its veracity. What is important is the individual’s awareness. Such interpersonal visibility is the basic condition for reference group behavior (Marsden & Friedkin, 1993).

Despite the diverse definitions of referent others, scholars generally agree on how reference groups work. All reference groups involve a group of people from whom individuals collect information that they use to interpret and act in everyday life. These interpretations and the actions they engender connect individuals with social systems and make reference groups a powerful social phenomenon.
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