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Title: The two sides of the coin : learning and inertia among Italian automobile producers, 1896-1981
Authors: Kim, Tai-Young
Dobrev, Stanislav D.
Solari, Luca
Keywords: Organizational learning
Automobile industry
Issue Date: May-2001
Abstract: Based on the premise that organizational learning and structural inertia are both rooted in prior organizational experiences, this paper examines under what conditions adaptation or selection will take place. We find that implementing a core change generates negative repercussions for survival but this effect can be countered by leveraging relevant core competencies. But we also argue that which of the two outcomes occurs is generally beyond the control of the organization. Instead, environmental transformations render what firms have learned relevant or obsolete, thereby facilitating learning-based adaptation or inertia-based selection. The direction in which organizational learning evolves is a combined function of organizational demographics and the structure of the competitive environment. We propose relevant hypotheses and test them in the analysis of data from the Italian Automobile Industry, 1896-1981. We report results of hazard rate models of failure and position change and discuss general implications.
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