ESMT - European School of Management and Technology - Berlin, Germany
Scholarship has focused on reference groups positively influencing business certification in quality-management standards (QMS). Such positive imitation parameters are attributed to both mimicry (where businesses seek legitimacy and status) and learning (where businesses seek information and efficiency). The literature has been unable to distinguish between these alternative interpretations due to difficulties in ascertaining motives and the fact that both interpretations predict an organization’s probability of adopting QMS increases with reference-group adoption. We observe that inferences can be made with respect to the strength of these alternative interpretations by analyzing reference-group benchmarking that contrasts initial-certification from recertification, early-stage from late-stage certification, and upward-reference from downward-reference certification. We compile panel data consisting of 6,458 premise-level observations of certification decisions by global businesses. Probit estimations controlling for three sets of fixed effects establish that positive imitation parameters manifest in initial-certification, early-stage, and downward-peer benchmarking, while not manifesting in recertification, late-stage, and upward-peer benchmarking. These results indicate the relative strength of the learning interpretation over the mimetic interpretation of peer effects. The evidence thus suggests that the presence of positive imitation parameters is best interpreted as a search for information and efficiency in contexts where the standard’s attributes are not well known.
