The Effect of Own and Vicarious Learning in the Adoption and Abandonment of Innovative Practices

When a new and innovative practice can be easily adopted or abandoned and its performance effects can be easily observed, the wider diffusion of that practice forces managers to decide whether and when to (re-)adopt or abandon it. Contrary to practices which cannot be repeatedly adopted or abandoned, such practices lend themselves to organizational experimentation. The traditional diffusion literature has largely overlooked such practices and the relevance of learning with respect to performance experiences from such experimentation. This paper theorizes and empirically tests when in such innovative practice’s wider diffusion process an organization relies on its own previous as opposed to its rivals’ performance experiences to decide whether to (re-)adopt or abandon that practice. We argue that organizations typically rely on their rivals’ practices early and their own experiences later in the diffusion process. We use the diffusion of an innovative defensive football (soccer) system, the chain-defense, in the German Bundesliga to test this argument. The results demonstrate that rivals’ positive experiences with the practice reduce the likelihood of its abandonment by a typical team early in its wider diffusion process. A team’s own positive experience with the practice additionally discourages its abandonment later on. Rivals’ positive experiences also increase typical teams’ adoption risk early in the process. Their own direct experiences with it never do. These findings contribute to the literature on innovative practice diffusion.