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The Role of Volition in Organizational Learning: The Case of Automotive Product Recalls

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  • Pamela R. Haunschild

    () (McCombs School of Business, University of Texas at Austin, Austin, Texas 78712-0210)

  • Mooweon Rhee

    () (Department of Management and Industrial Relations, College of Business Administration, University of Hawaii, Honolulu, Hawaii 96822)

Abstract

What is the role of volition in organizational learning? Do firms learn better in response to internal procedures or external mandates? Existing literature provides conflicting answers to this question, with some theories suggesting that volition is important for learning because autonomy increases commitment and problem analyses, whereas external mandates tend to produce defensive reactions that are not coupled to the organization in any useful way. Yet, other theories suggest that mandate is important for learning because external pressures act as jolts that help overcome organizational inertia, resulting in deep exploration of problems to prevent future surprises. We investigate this issue in the context of automakers learning from voluntary versus involuntary product recalls. Using data on all recalls experienced by automakers that sold passenger cars in the United States during the 1966--1999 period, we follow the learning-curve tradition in investigating the effects of voluntary and involuntary recalls on subsequent recall rates. We find that voluntary recalls result in more learning than mandated recalls when learning is measured as a reduction in subsequent involuntary recalls. This effect is at least partly because of shallower learning processes that result from involuntary recalls. The effect of volition, however, is different for generalist and specialist automakers. The results of this study suggest an important, yet understudied, determinant of the rate and effectiveness of learning---volition. The results also add to our knowledge of the different learning processes of generalist and specialist organizations.

Suggested Citation

  • Pamela R. Haunschild & Mooweon Rhee, 2004. "The Role of Volition in Organizational Learning: The Case of Automotive Product Recalls," Management Science, INFORMS, vol. 50(11), pages 1545-1560, November.
  • Handle: RePEc:inm:ormnsc:v:50:y:2004:i:11:p:1545-1560
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    File URL: http://dx.doi.org/10.1287/mnsc.1040.0219
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:eee:jomega:v:73:y:2017:i:c:p:29-36 is not listed on IDEAS
    2. repec:spr:custns:v:4:y:2017:i:1:d:10.1007_s40547-017-0074-y is not listed on IDEAS
    3. Mooweon Rhee & Young-Choon Kim & Joon Han, 2006. "Confidence in Imitation: Niche-Width Strategy in the UK Automobile Industry," Management Science, INFORMS, vol. 52(4), pages 501-513, April.
    4. Yan Dong & Kefeng Xu & Sining Song, 2014. "Can Product Recalls Be Profitable? Insights from Behavior Economics Models and Empirical Studies," Working Papers 0189mss, College of Business, University of Texas at San Antonio.
    5. Scott F. Rockart & Nilanjana Dutt, 2015. "The rate and potential of capability development trajectories," Strategic Management Journal, Wiley Blackwell, vol. 36(1), pages 53-75, January.
    6. Abhijith Anand & Rajeev Sharma & Rajiv Kohli, 2017. "What Influences Managerial Use of Business Analytic Systems? A Theory of Performance-Driven Search," Working Papers in Economics 17/12, University of Waikato.
    7. Mooweon Rhee, 2009. "Does Reputation Contribute to Reducing Organizational Errors? A Learning Approach," Journal of Management Studies, Wiley Blackwell, vol. 46(4), pages 676-703, June.
    8. Adam J. Wowak & Michael J. Mannor & Kaitlin D. Wowak, 2015. "Throwing caution to the wind: The effect of CEO stock option pay on the incidence of product safety problems," Strategic Management Journal, Wiley Blackwell, vol. 36(7), pages 1082-1092, July.
    9. repec:bla:jscmgt:v:53:y:2017:i:4:p:13-36 is not listed on IDEAS
    10. Chen, Yi-Su & Su, Hung-Chung & Ro, Young K., 2017. "The co-evolution of supplier relationship quality and product quality in the U.S. auto industry: A cultural perspective," International Journal of Production Economics, Elsevier, vol. 184(C), pages 245-255.
    11. Kim, Euisin & Rhee, Mooweon, 2017. "How airlines learn from airline accidents: An empirical study of how attributed errors and performance feedback affect learning from failure," Journal of Air Transport Management, Elsevier, vol. 58(C), pages 135-143.
    12. Zhao, Xiande & Li, Yina & Flynn, Barbara B., 2013. "The financial impact of product recall announcements in China," International Journal of Production Economics, Elsevier, vol. 142(1), pages 115-123.
    13. K. Sudhir & Nathan Yang, 2014. "Exploiting the Choice-Consumption Mismatch: A New Approach to Disentangle State Dependence and Heterogeneity," Cowles Foundation Discussion Papers 1941, Cowles Foundation for Research in Economics, Yale University.
    14. Leoncini, Riccardo, 2016. "Learning-by-failing. An empirical exercise on CIS data," Research Policy, Elsevier, vol. 45(2), pages 376-386.
    15. Sriram Thirumalai & Kingshuk K. Sinha, 2011. "Product Recalls in the Medical Device Industry: An Empirical Exploration of the Sources and Financial Consequences," Management Science, INFORMS, vol. 57(2), pages 376-392, February.

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