Interdependence and adaptability: Organizational learning and the long-term effect of integration

Interdependence and adaptability: Organizational learning and the long-term effect of integration

0.00 Avg rating0 Votes
Article ID: iaor20032666
Country: United States
Volume: 49
Issue: 4
Start Page Number: 446
End Page Number: 463
Publication Date: Apr 2003
Journal: Management Science
Authors:
Keywords: organization
Abstract:

A growing body of research documents the role that organizational learning plays in improving firm performance over time. To date, however, this literature has given limited attention to the effect that the internal structure of the firm can have on generating differences in these learning rates. This paper focuses on the degree to which interdependence – and in particular one structural characteristic that generates interdependence, vertical integration – affects organisational learning. Firms face a trade-off. In stable environments, vertically integrating severely limits the organization's ability to learn by doing because boundedly rational managers find the optimization of operations difficult when making highly interdependent choices. As the volatility of the environment increases though, integration can facilitate learning-by-doing by buffering activities within the firm from instability in the external environment. Thus, firms with a high degree of interdependence suffer less in these environments. Tests of these hypotheses on the growth and exit rates of computer workstation manufacturers support this thesis.

Reviews

Required fields are marked *. Your email address will not be published.