Not too far, not too close: Local imitation in new market entry decisions in the management consulting industry, 1977-2003

A major debate has revolved around the role of uncertainty in organizational imitation. One line of research has emphasized that uncertainty facilitates an organization's willingness to imitate prestigious leaders. The other has highlighted constraints that uncertainty imposes on an organization's ability to imitate. However, few studies have systematically examined how an organization actually responds to the discrepancy between willingness and constraints on ability triggered by uncertainty and how such organizational responses contribute to macro-changes in organizational forms and market structures. Focusing on the competing influences of uncertainty, our study offers a more nuanced conception of imitative behavior. Through a longitudinal study of mimetic entry into new markets in the management consulting industry from 1977 to 2003, this paper shows that under uncertainty, organizations tend to resolve the discrepancy problem by limiting the scope of their imitative behavior and that such local imitation, coupled with local competition, has a complex effect on mimetic changes in market positions. This study also finds that the scope of local imitation varies according to a firm's affiliation network, timing of market entry, and past search outcomes, each of which differentially affects the uncertainty surrounding an organization's decision to enter new markets. Theoretical and practical implications derived from our main argument about uncertainty and local imitation are discussed.