Carnegie Mellon U. - Tepper School of Business, United States
Whether organizations learn from own failure depends on the cause (internal cause vs. external cause) and the level of accumulated failure experience. Drawing from the motivation, opportunity, and ability framework, this study argues that internal failures initially motivate learning but diminish it as failures mount, whereas external failures exhibit the reverse pattern. Using flight delay data from 33 U.S. airlines covering 51.2 million flights (2003–2017), we find that external failures lead to an inverted U-shaped relationship between delays and customer complaints, while the shape flips toward a U-shape with an increasing share of internal failures. These effects are more pronounced in specialist airlines with higher learning ability. The findings highlight that failure-induced learning hinges on the interplay between failure causes and experience, advancing our understanding of organizational learning, an important basis of firm performance.
