Error Management Culture and its impact on organizational performance: A moderated mediation model

Abstract

Errors are ubiquitous in organizational life and have both positive and negative consequences for organizational performance. Given its importance, we have developed a moderated mediated model to analyze the impact of organizational error management culture on organizational performance by extending error management and share cognition theory. The newly developed model was tested in the service industry of Pakistan. The sample size of the study was 300 employees with a response rate of 96%. The data was collected through a web-based questionnaire. The constructs used in the study were adapted from earlier established scales and measures. Smart PLS was used to test the structural model. Consistent with our hypotheses, the results show that error management culture is positively related to organizational performance and this relationship is mediated by organizational learning from errors and innovative work behavior. The results further demonstrated that perceived psychological safety moderated the direct relationship between organizational learning from errors and error management culture in such a way that relationship is stronger when perceived psychological safety is high. The current study extends the relevant literature and has significant implications for management, theory, and research. For instance, perceived psychological safety in earlier studies has been used as a mediator while we have used it as a moderator. In addition, we tested multi mediation (i.e., organizational learning from errors and innovative work behavior) to empirically validate the relationship of error management culture and organizational performance