Replication using templates: Does the unit learn from itself, the template, or both?

• Author: Megan Lawrence
• Date: 01 November 2020
• DOI: http://doi.org/10.1002/smj.3206
• Published date: 01 November 2020

RESEARCH ARTICLE

Replication using templates: Does the unit

learn from itself, the template, or both?

Megan Lawrence

Vanderbilt Owen Graduate School of

Management, Nashville, Tennessee

Correspondence

Megan Lawrence, Vanderbilt Owen

Graduate School of Management, 401

21st Ave South, Nashville, TN 37212,

USA.

Email: megan.lawrence@vanderbilt.edu

Abstract

Research Summary:

Replication of practices is an important value-creating

strategy for multi-unit firms, yet they often struggle to

share knowledge internally across locations. Drawing

on the replication and learning literatures and using

data from a Fortune 100 retail chain that implemented

a new restocking practice in 280 stores, I examine

whether and how templates influence unit learning

when replicating new practices. Stores were divided

into districts, each with one randomly chosen template

and 6–10 replicating stores. A replicating store's prior

performance relative to that of its template influences

the extent to which the store learns from the template

versus from its own experience. These findings suggest

that replication involves simultaneously and dynami-

cally learning from both transferred knowledge and

knowledge gained from experience.

Managerial Summary:

Transferring valuable practices within the firm is an

important yet difficult task for many firm types, espe-

cially multi-unit firms. One way that firms choose to

transfer practices is through the use of templates—

working examples of the new practice that act as

models. Using data from a Fortune 100 retail chain, I

show that the use of templates affects the way in which

units learn to implement the practice. Because man-

agers face tradeoffs when devoting attention to

implementing the new practice, they must balance

learning from the template with incorporating their

Received: 1 December 2017 Revised: 5 March 2020 Accepted: 9 March 2020 Published on: 8 July 2020

DOI: 10.1002/smj.3206

Strat Mgmt J. 2020;41:1955–1982. wileyonlinelibrary.com/journal/smj © 2020 John Wiley & Sons, Ltd. 1955

own local experience with the new practice. Overall,

my results suggest that choosing many templates is less

important than choosing a few templates with superior

performance for firms whose units or contexts are

similar.

KEYWORDS

knowledge transfer, learning process, organizational learning,

replication, template

1|INTRODUCTION

One of the main benefits of a chain is the economies of scale gained by replicating standardized

practices and specifications across locations (Chandler, 1977). Yet, chains still have a hard time

sharing knowledge internally across locations (Szulanski, 1996; Zander & Kogut, 1995) and

even across shifts in the same location (Epple, Argote, & Devadas, 1991; S. D. Levitt, List, &

Syverson, 2013). Anecdotally, we know that many chains try some variation of using templates

to implement a new practice. Much of the work on replication—in particular, on replication

using templates—has focused on transfer efficacy in terms of the extent of adoption (Jensen &

Szulanski, 2007) or on tensions between copying the template exactly and adapting it (Levinthal

& Marino, 2015; Szulanski & Jensen, 2008; Terwiesch & Xu, 2004; Williams, 2007; Winter,

Szulanski, Ringov, & Jensen, 2012; Zollo & Winter, 2002). Little work has examined whether

templates, as outside models guiding the desired behavior, actually do affect the process of

learning the practice being transferred and, if so, under what conditions. This article examines

the implementation of a new practice across units of a Fortune 100 retail chain to assess the

template's effect on how units learn a new practice.

Replication of a new practice offers two main sources of knowledge which may lead to

learning and improved performance. First, it is well-established in the organizational learning

literature that implementing a new practice triggers experiential learning (Argote, 2013) and

that performance related to the practice improves as employees learn what problems exist and

how to solve them (Cyert & March, 1963; March & Simon, 1958). Second, when a firm seeks to

replicate established practices across locations, knowledge about the practice is transferred from

its existing location to new locations (Winter & Szulanski, 2001, 2002). Some firms use a tem-

plate of the practice to accomplish this (Nelson & Winter, 1982).

In replication, both forms of knowledge accumulate simultaneously with experience.

Because managers can only devote so much attention to the search for and interpretation of

knowledge (Cyert & March, 1963; H. Simon, 1957), they cannot anticipate every problem and

its solution. Thus, direct experience leads to improvement. Similarly, when trying to incorporate

knowledge from the template, the unit must distinguish the replicable core of traits and infor-

mation from the idiosyncratic noise (Winter & Szulanski, 2001, 2002). Research on incorporat-

ing knowledge from an outside source (“vicarious learning”) has found it difficult to

disentangle such learning from learning-by-doing (“learning from own experience”). Therefore,

these two cases are treated as if only one type of learning can occur at once. Rather than consid-

ering learning from templates as an alternative to learning from a unit's own experience, I

1956 LAWRENCE