Beyond Learning from Failure: Failure Management

Abstract

This study is to explore a new way of strategic management by building the theoretical frameworks of Failure Management (FM). It is a common experience for anyone or any management/policy to encounter two types of paradoxical situation. The first one is “positive policy paradox” through which we experience an unexpected benefit from a failure. The second one is “negative policy paradox” in which a success can prevent us from improving mental model by blinding us through overconfidence. Such paradoxical situations can be managed by new management tools which can be called Failure Management (FM) and Success Management (SM), and this paper focused on Failure Management. Literature review in this study shows that this new management tool is significantly different from the existing management tools - such as risk management and crisis management - which also deal with failure, and implies that Failure Management can be used as additional management tool at both individual and organizational level; in order to help guarantee a sustainable success in system by providing the reliable heuristic frameworks. Lastly, this paper can provide a base framework which helps future empirical studies on the practical application of Failure Management.