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| Author: | Sorenson, O. |
| Title: | Interdependence and adaptability: Organizational learning and the long-term effect of integration |
| Journal: | Management Science
2003 : APR, VOL. 49:4, p. 446-463 |
| Index terms: | Vertical integration Organizational learning Growth Computers |
| Language: | eng |
| 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 organizational 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. |
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