Policy Seminars
| Speaker: Marvin Lieberman |
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| Topic: Why Do Firms Imitate Each Other? |
| Date/Place/Time: Dec. 6, 2002 / Cornell Hall, D-313 / 10:30-11:50 am |
| Abstract: Imitation takes place within many business domains: introduction of new products and processes; adoption of managerial methods and organizational forms; market entry and the timing of investment. Within each of these domains, imitation may lead to positive or negative outcomes for individual firms and society as a whole. Business scholars have proposed numerous theories of imitation; however, the body of research on imitation processes remains fragmented. This study organizes the theories of imitation into two broad categories: (1) information-based theories, where firms follow others that are perceived as having superior information, and (2) rivalry-based theories, where firms imitate others to maintain competitive parity or limit rivalry. Using data on the Japanese soft drink industry, we find evidence of information-based imitation of major product introductions (where uncertainty is high), and rivalry-based imitation of incremental product changes (where uncertainty is low). Thus, the two categories of imitation can apply within different contexts of the same industry |
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