The Role of Tacit Routines in Coordinating Activity

Abstract

We explore the influence of tacit routines in obtaining coordination. Our experiment uses simple laboratory firms, in which we interfere with one kind of firm's ability to develop tacit routines. Thus, our firms vary in the degree to which they rely on this kind of knowledge - instead of other, explicit, mechanisms - for obtaining coordination. We find that interfering with the development of tacit routines harms firms' ability to coordinate. We then explore the extent to which firms are able to transfer their ability to coordinate activity, either to a new domain or to new members. Our results indicate that tacit routines transfer more easily than other mechanisms to a new, but closely related, domain. However, routine-based firms perform slightly worse in their ability to incorporate new members.

Keywords: organizational coordination, experimental economics

JEL Classification: C7, C9