How Organizations Learn from Success and Failure

Abstract

This chapter analyzes the effects of successes and failures on organizational learning. The analysis contrasts behavioral and cognitive approaches, illustrating these with an example of technological development by an interorganizational coalition and an example of industry-wide development during a business cycle.

Behavioral approaches explain as much behavior as possible without allowing for conscious thought, so learning arises from automatic reactions to performance feedback. Because it is learners’ environments that generate this feedback, environments strongly influence what is learned. One advantage of behavioral approaches is that they can explain how effective learning can occur in spite of learners’ perceptual errors.

Cognitive approaches describe learners as being able to perceive, analyze, plan, and choose; learning modifies cognitive maps that guide action. Cognitive approaches make effective learning dependent upon realistic perceptions, so these theories have difficulty explaining how learners can improve even though they misunderstand their environments. On the other hand, cognitive approaches can explain how people and organizations suddenly act in dramatically novel ways.

These two approaches coexist because they can explain different phenomena and neither is adequate by itself. Most studies of learning by individual organizations have taken a cognitive approach; most studies of learning by populations of organizations have taken a behavioral approach. However, the distinction between behavior and cognition may be an abstraction that does not exist in the realities of daily life.

Keywords: learning, success, failure, organizations