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Learning by Example

Learning by Example: Imitation and Innovation at a Global Bank

David Strang
Copyright Date: 2010
Pages: 304
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  • Book Info
    Learning by Example
    Book Description:

    In business, as in other aspects of life, we learn and grow from the examples set by others. Imitation can lead to innovation. But in order to grow innovatively, how do businesses decide what firms to imitate? And how do they choose what practices to follow?Learning by Exampletakes an unprecedented look at the benchmarking initiative of a major financial institution. David Strang closely follows twenty-one teams of managers sent out to observe the practices of other companies in order to develop recommendations for change in their own organization.

    Through extensive interviews, surveys, and archival materials, Strang reveals that benchmarking promotes a distinctive managerial regime with potential benefits and pitfalls. He explores the organizations treated as models of best practice, the networks that surround a bank and form its reference group, the ways managers craft calls for change, and the programs implemented in the wake of vicarious learning. Strang finds that imitation does not occur through mindless conformity. Instead, managers act creatively, combining what they see in external site visits with their bank's strategic objectives, interpreted in light of their understanding of rational and progressive management.

    Learning by Exampleopens the black box of interorganizational diffusion to show how managers interpret, advocate, and implement innovations

    eISBN: 978-1-4008-3519-5
    Subjects: Management & Organizational Behavior, Sociology, Finance

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xvi)
    (pp. 1-24)

    In good times, some academic and much popular discussion celebrates the rapid spread of bold new ideas across the business world. In bad times, much academic and some popular discussion decries the corporate community’s peculiar combination of conservatism and faddishness. The grounds for both celebration and critique are evident. But so is the need for a closer analysis.

    Organizational studies conceive of the diffusion of innovations in overly mechanical ways. It is often seen as driven by the lure of conformity: firms are portrayed as earning a legitimacy dividend when they join the herd. Choice-theoretic accounts develop an alternative logic...

  5. Section One: Setting the Scene:: Benchmarking and a Bank

    • CHAPTER 1 Benchmarking as a Management Technique
      (pp. 27-54)

      This chapter provides an overview of benchmarking as a management technique. I begin by sketching its underlying logic and typical elements. Xerox’s study of warehousing practices at L. L. Bean provides a concrete illustration. The second section of the chapter traces the emergence and diffusion of benchmarking within the business community.

      The terms “benchmark” and “benchmarking” are used in many ways. Honda benchmarks the Toyota Prius; compensation consultants benchmark CEO pay; organizations in receivership fail to meet certain benchmarks; an airline benchmarks an Indianapolis pit crew to learn about fast turnaround. The noun “benchmark” is used to describe almost any...

    • CHAPTER 2 Global Financial and Team Challenge
      (pp. 55-78)

      This chapter presents the organizational setting of this study. I sketch some of the main developments in banking over the last two decades and provide an overview of Global Financial itself. I describe the bank’s benchmarking program, Team Challenge, with an emphasis on its operational features and the topics that teams addressed. The chapter also details the main data sources utilized in this project.

      The portrayal of Global Financial essayed here, I should note, errs on the side of understatement. The bank has been the subject of much discussion in the business press and a number of monographs, and its...

  6. Section Two: The Process of Benchmarking:: How and Who?

    • CHAPTER 3 Practical Reasoning and the Case for Change
      (pp. 81-108)

      This chapter examines the way benchmarkers went about their work. What sources of information did teams rely upon heavily, and what did they find less useful? What kinds of evidence were viewed as capable of sustaining inferences about best practice? How did managers link the examples of external companies to the problems and challenges faced by the bank? Did the cognitive and rhetorical strategies of benchmarkers vary with characteristics of the innovation domain, and if so, in what way?

      Benchmarkers were confronted with an extreme case of a common problem: too little time. Global Financial provided Team Challenge participants with...

    • CHAPTER 4 The Construction of a Reference Group
      (pp. 109-141)

      One of Robert Merton’s many contributions to the language of social analysis is the idea of the reference group. Merton and Kitt (1950) distilled the concept through a review ofThe American Soldier, a sociological classic that repeatedly showed that morale rests on social comparison. Speaking of the drafted married man, Stouffer et al. (1949, 125) contended: “comparing himself with his unmarried associates in the Army, he could feel induction demanded greater sacrifice from him than them; and comparing himself with his married civilian friends, he could feel that he had been called on for sacrifices which they were escaping...

    • CHAPTER 5 Interorganizational Influence
      (pp. 142-170)

      This chapter investigates the influence of Global Financial’s benchmarking partners on the thinking and recommendations of benchmarking teams. What kinds of organizations were the participants in Team Challenge most aware of and attentive to? Which figured most prominently in proposals for change?

      The findings reinforce and sharpen those of chapter 4. To summarize the analyses that follow, two organizational attributes are robustly linked to influence: corporate prestige and linkages to Global Financial based on executive mobility. There is correspondingly little (and sometimes negative) evidence concerning the effects of geographic proximity, rivalry, other ties like board interlocks, and financial performance. The...

  7. Section Three: The Results of Benchmarking:: Proposals and Programs

    • CHAPTER 6 Common Moves in Organizational Reform
      (pp. 173-193)

      This chapter examines the proposals made by benchmarking teams at Global Financial. My concern here is with the characteristic ideas that appear across multiple teams, and that formed the vocabulary of organizational reform in Team Challenge. I begin by detailing some common types of benchmarking proposals that sought to modify organizational structures and roles, business strategies, internal routines, cultural change, and internal incentives at the bank. I then discuss the broader themes that emerge across team recommendations, and consider the sorts of proposals that were not offered by benchmarkers.

      The content of these proposals illuminates the character of Team Challenge...

    • CHAPTER 7 Personal and Programmatic Impact
      (pp. 194-214)

      Team Challenge had two overarching goals: to stimulate the professional growth of the managers who served as benchmarkers, and to help Global Financial grapple with some knotty organizational issues. This chapter provides an overview of the program’s effects in both areas. I begin with the impact on team members, which they described in glowing terms. I then review the programs that were enacted in the wake of Team Challenge, and consider the conditions that led to significant streams of activity in some areas but not in others. I emphasize that variation in the impact of benchmarking teams can largely be...

    • CHAPTER 8 Global Financial’s Corporate Quality Initiative
      (pp. 215-246)

      The last chapter provided an overview of the policies and programs that emerged under the umbrella of Team Challenge, and their relationship to the goals of top managers and the institutional and political structure of the bank. This chapter probes one of these programs in greater depth. I study Global Financial’s Corporate Quality Initiative, a process-improvement and customer-service initiative that grew out of the second round of benchmarking at the bank. I do so partly out of necessity, since the CQI is the program I know best. But the initiative is also a theoretically strategic case given the broader issues...

    • CHAPTER 9 Some Lessons from the Search for Best Practice
      (pp. 247-264)

      “We got the data. We learned from the data. Then we made our recommendations.” This is the way one participant described Team Challenge to his fellow Globalbankers. While his account is strategic as well as self-effacing, I have argued that learning from external models is more complex and more interesting. The data available to benchmarkers were limited—brief snapshots of a handful of organizations widely recognized as leaders of the business community. Team members combined these glimpses with an informed understanding of the challenges facing Global Financial and a mastery of managerial discourse, and succeeded in weaving together coherent and...

  8. Bibliography
    (pp. 265-280)
  9. Index
    (pp. 281-284)