Reproducing Knowledge: Inaccurate Replication and Failure in Franchise Organizations

Sidney Winter, Management, The Wharton School; Gabriel Szulanski, INSEAD; Dimo Ringov, ESADE; and Robert Jensen, Business Economics and Public Policy, The Wharton School

Abstract: The recognition that better use of existing knowledge can enhance performance has spawned substantial interest in the replication of productive knowledge within organizations. An enduring belief is that when expanding by replication, organizations can and should strive to adapt to fit the salient characteristics of new environments. Yet some have argued that the exploitation of an established template for doing business by replication can be more successful when the template is copied precisely. Using unique longitudinal data, we report a large-sample empirical investigation of the survival consequences of accurate replication versus local adaptation by examining the effect that deviation from the template has on the survival chances of franchise units within a large franchise organization.

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