Organizational theorists have extensively documented the effects of status on deviance and social sanctions. Their approaches, however, hold a static view of the audiences’ expectations of and attention towards high-status actors. We theorize that when high-status actors enter a new domain they face higher expectations and more attention combined with lack of established priors, leading to intensive social sanctions on any early deviance; but once high-status actors have established a track record of expected behavior they become more shielded from the consequences of later deviance. Using a longitudinal dataset of loan guarantees among publicly listed Chinese firms, we find that higher-status firms receive more severe sanctions if they fail to meet the expectation to reciprocate their partners in the earlier involvement than in the later involvement of loan guarantees. We also show that this pattern of incentives translates into a positive linkage between status and norm compliance in the early stages but this linkage disappears in the later stages of involvement. This study adds a dynamic perspective of the relationship between status and potential social sanctions as well as the corresponding pattern of deviance following actors’ initial entry into a new field.
