The Role of Tacit Routines in Coordinating Activity

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.  This research was supported by NSF grant SES-0095570 to Camerer and Weber and an NSF Graduate Research Fellowship to Rick. We thank participants at the 2003 ESA conference in Pittsburgh, the 2003 SITE conference in Stanford, the 2003 NBER conference on organizational economics in Boston, the 2004 BDRM meetings in Durham, the 2004 Strategy Research Forum in Toronto, and the 2004 ESA conference in Amsterdam, as well as seminar participants at Carnegie Mellon, UCLA, Caltech, and Duke for helpful comments and suggestions.