Coevolution in Management Fashion: An Agent-Based Model of Consultant-Driven Innovation

Authors: David Strang, Robert J. David, and Saeed Akhlaghpour

Publication: American Journal of Sociology

Abstract:

The rise of management consultancy has been accompanied by increasingly marked faddish cycles in management techniques, but the mechanisms that underlie this relationship are not well understood. The authors develop a simple agent-based framework that models innovation adoption and abandonment on both the supply and demand sides. In opposition to conceptions of consultants as rhetorical wizards who engineer waves of management fashion, firms and consultants are treated as boundedly rational actors who chase the secrets of success by mimicking their highest-performing peers. Computational experiments demonstrate that consultant-driven versions of this dynamic in which the outcomes of firms are strongly conditioned by their choice of consultant are robustly faddish. The invasion of boom markets by low-quality consultants undercuts popular innovations while simultaneously restarting the fashion cycle by prompting the flight of high-quality consultants into less densely occupied niches. Computational experiments also indicate conditions involving consultant mobility, aspiration levels, mimic probabilities, and client-provider matching that attenuate faddishness.

Read paper: American Journal of Sociology, January 24, 2015