Modes of Interorganizational Imitation: The Effects of Outcome Salience and Uncertainty

By Pamela Haunschild
1996| Working Paper No. 1403

Drawing primarily on neoinstitutional and learning theories, we distinguish three distinct modes of selective interorganizational imitation: frequent imitation, where organizations copy very common practices; trait imitation, where organizations copy practices executed by other organizations with certain features; and outcome imitation, where organizations imitate based on a practice’s apparent impact on others. We investigate whether these limitation modes occur independently, and whether they are affected by outcome salience and contextual uncertainty. We do this in the context of an important decision: which investment banker to use as advisor on an acquisition. Hypotheses are tested on 539 acquisitions that occurred during 1988-1993. We find that all three imitation modes occur independently, consistent with the idea that both social and technical indicators may drive imitation in a collectivity of organizations. Only highly salient outcomes, however, sustain outcome imitation, consistent with theories of imperfect learning. Uncertainty enhances frequency and some trait imitation, but does not enhance outcome imitation. The results contribute to neoinstitutional theory by highlighting the possible joint operation of social and technical indicators, and by suggesting that imitation can produce diversity in organizational practices. The study also enriches organizational learning theories by illuminating factors that moderate vicarious learning processes, and by showing asymmetries between learning from success and failure.