Keeping up with the Joneses: Industry rivalry, commitment to frames and sensemaking failures

Drawing on a qualitative study of the banking crisis in Ireland, we examine how a cognitive frame of environmental conditions that is shared among industry rivals constrains their ability to act on the cues of slowly incubating threats. We find that shared frames are reinforced through social comparisons that prompt imitation and through their enactment that prompts a reconfiguration of internal control structures and power relationships. The reinforcement of a shared frame dulls the emerging cues of changing market conditions and weakens perception of the risks of staying the course. A core contribution of this study is to highlight the cognitive and political processes by which a shared frame solidifies within an industry, trapping organizations in their enacted environment and resulting in their collective failure.