How Much to Copy? Determinants of Effective Imitation Breadth

Abstract

It is a common and frequently implicit assumption in the literature on knowledge transfer and organizational learning that imitating practices from high-performing firms has a positive impact on the imitating firm. Although a large body of research has identified obstacles to successful imitation, not much is known about what breadth of imitation is most effective. In this paper, we use a simulation model to explore how context and firm similarity, interdependence among practices, context and firm similarity, and time horizon interact in nontrivial ways to determine the payoffs that arise from different breadths of imitation. The results of the model allow us to qualify and refine predictions of the extant literature on imitation. In particular, the results shed light on the conditions under which increases in imitation breadth, and hence investments that facilitate the faithful copying of more practices, are valuable. In addition, the results of the model highlight that imitation can serve two different functions—mimicking high performers, and generating search by dislodging a firm from its current set of practices—each requiring different organizational routines for its successful implementation.