Innovation drives markets. But when innovation is left unharnessed and spreads too fast, regulation can’t keep up and innovation implodes. Jo-Ellen Pozner studies organizational legitimacy and corporate governance and analyzed how the diffusion of innovative practices contributed to the 2008 financial crisis causing “terminal isomorphism” and the mortgage market meltdown.
http://newsroom.haas.berkeley.edu/research-news/lessons-financial-crisis-what%E2%80%99s-good-one-organization-can-topple-entire-industry