Journal
ORGANIZATION SCIENCE
Volume 27, Issue 4, Pages 1029-1048Publisher
INFORMS
DOI: 10.1287/orsc.2016.1069
Keywords
analogy; behavioral strategy; financialization; financial markets; online advertising; performativity; business models
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Funding
- Lloyd Greif Center for Entrepreneurial Studies at the University of Southern California (USC) Marshall School of Business
- USC Provost's Ph.D. Fellowship
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Analogies to financial markets have proven powerful in establishing novel or potentially controversial business concepts, even in contexts that deviate significantly from financial markets. This phenomenon challenges theory that suggests analogies work best when elements from a source and target domain map closely to each other. To develop a theory that explains how organizations make initially imperfect analogies work, we use a case study of online advertising exchanges, a market-inspired model for buying and selling online advertising space. We find that as organizations stretch an initially misfitting exchange analogy from financial markets to online advertising, they iteratively bend their activities in superficial, structural, and generative ways to match the analogy and position themselves for advantage in the new space being created. Whereas prior studies emphasize shared cognition about familiar domains as the reason why analogies work, our study offers a dynamic account in which stretching, bending, and positioning combine to not only establish the financial market analogy but also subtly change the understanding of markets.
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