What are the pitfalls of analogical reasoning?

Read the Lycos mini-case. Do you buy the analogy to traditional media Lycos’s management team used to arrive at their decision? Does this analogy provide Lycos’s managers with valid guidance?

Analogy alludes to the comparison of two objects, systems, or approaches that are deemed to be similar. In this light, analogical reasoning is an approach to come up with solutions that are based on analogy. According to Gavetti and Rivkin (2003, p. 11) analogies used in the business context are pervasive due to their strong influence. They facilitate the transfer of entire business processes from one context to another. Subsequently, they offer solutions in settings that can be relatively unformed and ambiguous. Despite the impact of analogies to allow a business to use new and creative ways, there are shortcomings that emerge when they are used. Gavetti and Rivkin (2003, p. 2) state that the key pitfall in the use of analogical reasoning emerges when the association between the source and the target are on a superficial similarity rather than focus on the deep causal traits. In this light, problems might emerge when the analogy used does not replicate efficiently to the business processes employed in the other business. Consequently, the approach can lead to failure of businesses…

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