The Follower's Dilemma: Innovation and Imitation in the Professional Services Industry

Abstract

Firm decision makers contemplating imitation of a competitor's innovation face a dilemma: Imitate a new, unproven offering, or forgo imitation and perhaps miss out on the “next big thing”? Approaching this underexplored area of research, we apply information-based imitation theory to evaluate organization- and offering-level characteristics influencing imitation under conditions of high environmental uncertainty and high information asymmetry. In analyzing the service mark filings of the 50 largest management consulting firms over 11 years, we find that although an innovator's organization-level characteristics increase imitation, offering-level characteristics decrease imitation. Furthermore, organization- and offering-level characteristics interact, resulting in different imitation outcomes.