Opportunity and Constraint: Organization's learning from operating and competitive experiences of...

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Opportunity and Constraint: Organization's learning from operating and competitive experiences of industries. By Paul Ingram; Joel A. C. Baum by Mind Map: Opportunity and Constraint: Organization's learning from operating and competitive experiences of industries. By Paul Ingram; Joel A. C. Baum

1. The article investigates effects of the following on failure of US hotel chains (1896-1985): 1- Own experiences, 2- Operating Industry experience, 3- Competitive Industry Experience

1.1. Operating experience for hotel chains at organizational and industry level is the discounted sum of number of units (hotels & motels) operated in the past

1.2. Competitive experience is the discounted sum of number of hotel chain failures in the past

2. The Findings: (a) organizations initially benefit from their own experience, but are harmed in the long run, (b) generalist organizations are more weakly affected by their own experience than specialists, (c) organizations benefit from their industry's operating experience, accumulated both before and after the organization's entry, and (d) organizations benefit from their industry's competitive experience, but only after the organization's entry.

3. Hypotheses: 1- The relationship between an organization's own operating experience and its rate of failure will be U-shaped. (positive result/significant) 2- The influence of own experience on failure will be weaker for geographic generalists than for geographic specialists. (positive result/significant) 3- An organization's failure rate will decrease with its industry's operating experience since the organization's entry.(positive result/significant) 4-An organization's failure rate will decrease with its industry's competitive experience since the organization's entry. (positive result/significant) 5- An organization's failure rate will be lower as a function of the operating experience of its industry at the time of its entry. (positive result/significant) 6- An organization's failure rate will be lower as a function of the competitive experience of its industry at the time of its entry. (Negative result/not significant)

4. Core Result: Industry experience is better than own experience in long run because: 1- Own experience constraints an organization in the long run while industry experience benefit it. 2- Industry experience reflects interdependencies between competitors

5. Data: 1- Data collected from 1896-1985 2- Primary Source - Directory of American Hotel and Motel Systems by American Hotel & Motel Association 3- Secondary Source - The Hotel Redbook