Drawing on categorization theory, semiotics, and labeling theory, we a
rgue that categories and labels are widely utilized by individuals in
organizational settings to help structure and simplify the social envi
ronment, primarily for reasons of understanding, consensus, and contro
l. Based largely on such situational criteria as role and rank, people
are sorted into various categories and are perceived and treated as e
xemplars or prototypes of the category. The labels attached to these c
ategories coalesce when individuals triangulate their perceptions of c
ategory members with the perceptions that credible peers and powerhold
ers have of category members. Labels distill a complex and perhaps con
tradictory array of data into concise and coherent packages, and thus
provide a potent means of interpreting, representing, and conveying or
ganizational experience and cuing action. However, labels are inherent
ly arbitrary, labels cause individual category members to lose their i
ndividuality and assume the affective tone of the category, and labels
tend to become reified as objective and normative accounts of social
reality. The ubiquity and potency of labeling processes are illustrate
d with applications to individual-level (service encounters), group-le
vel (intergroup conflict), and organization-level (identity, image, an
d reputation) phenomena. We speculate that both the process of labelin
g and the content of labels are similar across levels.