Vicarious Learning from the Failures and Near-Failures of Others: Evidence from the U.S. Commercial Banking Industry

Ji-Yub (Jay) Kim, Anne S. Miner
2007 Academy of Management Journal  
We examine whether organizations vicariously learn from near-failures and failures of others. We propose that the impact of such failure-related experience depends on the geographic market and industry origin of the experience. Our findings indicate that the local failure-related experience of both banks and thrifts have higher survival-enhancing learning value for banks than nonlocal experience, supporting the value of accessibility and applicability for useful learning. Bank near-failure
more » ... k near-failure experience had more value than bank failure experience, but thrift failure and near-failure experience had equivalent impact, suggesting that the learning impact of types of failure-related experience varies with its industry origin. Give me a fruitful error any time, full of seeds, bursting with its own corrections. You can keep your sterile truth for yourself. -Vilfredo Pareto
doi:10.5465/amj.2007.25529755 fatcat:hx6tcual7jey3cglpcvkfh62tm