Keeping up with the Joneses: Industry rivalry, commitment to frames and sensemaking failures

Drawing on a qualitative study of the banking crisis in Ireland, we examine how a cognitive frame of environmental conditions that is shared among industry rivals constrains their ability to act on the cues of slowly incubating threats. We find that shared frames are reinforced through social compar...

Full description

Saved in:
Bibliographic Details
Published in:Human relations (New York) 2018-03, Vol.71 (3), p.427-455
Main Authors: Pazzaglia, Federica, Farrell, Maeve, Sonpar, Karan, Martin de Holan, Pablo
Format: Article
Language:English
Subjects:
Banking industry
Competition
Cues
Economic crisis
Enactment
Environmental conditions
Human relations
Imitation
Internal controls
Power
Qualitative research
Reinforcement
Sensemaking
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Drawing on a qualitative study of the banking crisis in Ireland, we examine how a cognitive frame of environmental conditions that is shared among industry rivals constrains their ability to act on the cues of slowly incubating threats. We find that shared frames are reinforced through social comparisons that prompt imitation and through their enactment that prompts a reconfiguration of internal control structures and power relationships. The reinforcement of a shared frame dulls the emerging cues of changing market conditions and weakens perception of the risks of staying the course. A core contribution of this study is to highlight the cognitive and political processes by which a shared frame solidifies within an industry, trapping organizations in their enacted environment and resulting in their collective failure.
ISSN:0018-7267
1741-282X
DOI:10.1177/0018726717719993