Chapter 2 - Organizational Learning in the Context of Institutional Voids: Government Interventionism and Business Networks in Asia

Abstract

This chapter adopts a social constructivist perspective to consider the organizational learning process as an adaptation through interactions with changing social and economic contexts. The exponential growth of Asian markets has resulted in noninstitutionalized structures, which have in turn led to the distinctive feature of institutional voids. Institutional voids are generated in the absence of market intermediaries, and they give rise to higher transaction costs and the risk of market failure. Organisational learning occurs when corporations recognise and respond to institutional voids. Since Asian countries lack stable legal, regulatory and institutional arrangements, government intervention acts complementarily. Therefore, the social and economic environment is largely influenced by government intervention, and organisational learning of Asian corporations also occurs when the corporations adjust their operations and systems in response to this changing environment. Additionally, in order to respond to institutional voids and environmental uncertainty, business enterprises typically engage in forming business networks to facilitate organizational learning. Overall, in order to understand organizational learning in Asia, scholars should recognize the distinct feature of institutional voids and examine how firms co-operate with governments and in various forms of business networks to mitigate the associated risks.