How Firms Learn From Their Experience

Stanford University, Stanford CA

Investigators

Abstract

Abstract: Our purpose is to explore how organizations and their managers learn from their experience. In particular, we are interested in how organizations learn dynamic capabilities. Much research on organizational experience suggests that firms learn as they gain more experience or engage in similar activities. Strikingly however, most of this research on organizational experience does not study or measure the process of learning directly, but instead infers its occurrence based on performance outcomes. Largely unexplored is an understanding of how this learning occurs (e.g., who learns, what is learned, by what processes such as improvisation and experimentation does learning occur). In addition, this research rarely considers how learning occurs from less frequent, relatively heterogeneous events. In this study, we address this gap. Given the lack of prior research on how firms and their managers learn from heterogeneous events, we use an inductive grounded theory-building approach. Specifically, our research design is an in-depth, nested, comparative case study of the processes for learning a dynamic capability. The setting is twelve entrepreneurial firms (4 firms headquartered in each of 3 continents). The study offers several contributions to the entrepreneurship and international business literatures. Most significant, it should help to open the "black box" of learning, and thus fill a significant gap in the organizational learning literature on understanding how firms actually learn.