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

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 dynamically 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, especially 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 managers face tradeoffs when devoting attention to implementing the new practice, they must balance learning from the template with incorporating their 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.