The persistence of a stigmatized practice: A study of competitive intelligence

Studies on the diffusion of practices provide valuable insights into how organizations adopt, adapt, sustain and abandon practices over time. However, few studies focus on how stigmatized practices diffuse and persist, even when they risk tainting the adopters. To address this issue and understand how firms manage stigmatized practices, we study US organizations associated with the practice of competitive intelligence (CI) between 1985 and 2012. CI includes legitimate information gathering practices that are sometimes also associated with infringements and espionage. Our findings suggest that CI became highly diffused and persisted despite the risk of stigmatizing its adopters. We identified three factors to explain CI's persistence: (1) keeping it opaque to avoid the negative effects of stigmatization, (2) ‘constructing’ usefulness to justify its ongoing use by leveraging accepted beliefs and invoking fear of unilateral abandonment and (3) adapting it by developing multiple versions to increase its zone of acceptability. These three factors contribute to practice persistence by allowing firms to dilute the potential stigma from use of the practice. Our contribution lies in explaining the adoption, diffusion and ongoing use of a stigmatized practice whose benefits cannot be overtly acknowledged or made public.