Why Do Business Fads Form?

Many regard business fads as creations of their advocates, and adopters who waste resources on fads as innocent, if foolish, victims. While this view does contain some truth, it isn't entirely correct. Both adopters and advocates play roles in creating and sustaining fads.

Most business fads are indeed constructed by advocates. The instructions to advocates for creating and sustaining fads were written long ago by Edward Bernays, who summarized them in his 1928 book, Propaganda. In describing the role of a publicist, he writes:

He studies the groups which must be reached, and the leaders through whom he may approach these groups. Social groups, economic groups, geographical groups, age groups, doctrinal groups, language groups, cultural groups, all these represent the divisions through which, on behalf of his client, he may talk to the public.

In short, creating or sustaining business fads entails artful manipulation of the opinion-making organs of the subculture targeted for the fad.

For business fads, this means publishing books, journal articles, magazine articles, newsletters, Web sites, and tweets, while speaking at conferences and trade associations, appearing on business broadcasts, being interviewed by journalists, securing endorsements of opinion leaders, and, of course, advertising.

But advocacy would have little effect if people weren't susceptible to these means of influence. That susceptibility arises from multiple sources, many of which can be understood as components of what James G. March calls the logic of appropriateness. The term denotes the set of rules that apply to a specific kind of person in a specific kind of situation. This logic prescribes appropriate actions, including, perhaps, adopting a fad. Here are three components of the logic.

Normative standards

Normative standards are formal or informal expectations that decision makers must meet. Their supervisors expect them to behave in ways similar to the behavior of others in analogous positions.

If your subordinates have wasted resources on fads, perhaps you've been communicating expectations that might have contributed to their adoption decisions.

The fear of doing nothing

When a fad is ascendant, failure to adopt it, To insulate oneself from the pressure
to adopt fads, doing nothing
has to be acceptableor to at least be conversant in its concepts, can be interpreted as being ignorant, indolent or worse.

To insulate oneself from the pressure to adopt fads, doing nothing has to be acceptable.

The need for justification

When decision makers need to justify their actions, there is no easier or more convenient "justification" than everyone-is-doing-it. It isn't actually a justification of anything, but supervisors often take it as such.

To control fad adoption, start by noticing that everyone-is-doing-it justifies nothing.

Saving an organization from wasteful fads might require defying the logic of appropriateness. It might at the same time be both perilously unconventional and the right thing to do. Do you have the courage to do the right thing?   First issue in this series   Top    Next Issue

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Edward Bernays, author of Propaganda, is regarded as the founder of the field of public relations.

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