Mimetic behavior as a response to social uncertainty: The rise of Internet advertising in manufacturing versus service industries

The concept and experience of uncertainty has a long history in the organizational literature but has found recent renewal through new psychological and sociological theory and research. My study utilizes these new approaches to provide newly defined concepts for social uncertainty as opposed to risk and ties them to a continuum of behavior from formal to procedural rationality. I use these concepts in an organizational setting and begin with the premise that service-providing firms are subject to higher levels of uncertainty in the valuation of their products than manufacturing firms because services are only loosely specified by written or implicit contract compared to the concrete form and testable specifications of manufactured goods. This premise is tested along with the theoretical conclusion that there will be more mimetic behavior in firms providing services than in firms providing manufactured goods. In addition, previous research has provided conflicting results as to who it is that is imitated. I propose that the level of uncertainty has a great deal to do with who is imitated. At moderate levels of uncertainty, the more formally rational behavior of imitating more successful/prestigious others will be at a maximum, but at highest levels of uncertainty this behavior will be replaced by imitation of merely similar others because of cognitive limitations.; I test these hypotheses with two sources of data: first, with data on mimetic behavior in Internet advertising use of 1406 firms, half manufacturing firms and half service-based firms, from the Standard Directory of Advertisers (The Advertising Redbook) 1997--2006; second, with data on uncertainty, measured with a telephone survey of the subjective uncertainty of advertising decision-makers. Using a logistic regression event-history survival analysis, my study supports the hypothesis that service firms (not manufacturing firms) will show frequency imitation and lends supports for a mechanism of normative isomorphism whereby organizations become more similar because of professionalization effects. In addition, it lends support for the proposition that service based firms will use different and potentially more expensive strategies to combat uncertainty. However, I find no evidence of direct effects of uncertainty on imitation in Internet advertising use.