Levitt 1988 - Organizational Learning

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Levitt, B., & March, J. G. (1988). Organizational learning. Annual review of sociology, 319-340.

Summary

Routines form the basis for behavior in an organization. These routines are based more on the past than they are future expectations. Organizations seek certain targets, and their behavior is based on observed outcomes and their target aspirations. Organizations learn from direct experience and from the experience of others. They additionally develop “frameworks or paradigms” for understanding these experiences.

Organizational learning resulting from direct experience happens from either trial-and-error experimentation or organizational search. In trial and error, outputs are obtained increasingly as a curvilinear output of experience. Over time, these experimental routines become fixed and lead to specialization. This can lead to a competency trap, in which success with an inferior procedure stops the experimentation / search process. Competency traps limit organizational evolution and innovation. Organizational search, looking at a pool of alternative resources, can also result in organizational learning. Organizational search is dependent on the resources available and the urgency of the search. An organization can observe the outcomes obtained by other organizations as well as itself. Stories are used to frame organizational learning and outputs. Stories survive due to many subjective factors (frames), rather than objective factors (history).

Organizational knowledge can disappear. One way organizations fight this is through the recording of experience, but because of limited resources, not all experience can be recorded. Certain learning is more “available for retrieval than others.” Frequency used learning stays available, while less frequently used learning can fade to obscurity.

Application

Organizational learning is not a given. Organizations must “learn to learn.” Learning can results in frequent, small changes that, taken in aggregate, can determine the future evolution of an organization.