Organizational learning from failures: double moderating impact of organizational trust and owner-manager interest in human resource development

Abstract

ABSTRACT This study examines how organisational learning processes, such as learning stocks, learning flows, and external learning affect Korean small- and medium-sized enterprises’ (SMEs) perceived recovery and organisational performance through learning from failure. The double moderated mediation impact of organisational trust and owner-managers’ interest in human resource development (HRD) in these relationships has been tested. About 400 SMEs were selected and a self-reported online survey was administered. Among them, 296 SMEs were analysed based on their experience in employee development. All three organisational learning activities have an impact on perceived failure recovery and organisational performance through learning from failure. Additionally, organisational trust and owner-managers’ interest in HRD moderates the relationship between organisational learning activities. However, owner-managers’ interest in HRD has a negative moderating effect, indicating that power-political relationships impede learning from failure. Using the method of self-reporting to identify the role of organisational learning from failure, this study addresses the lack of empirical research with an integrated approach on this topic. The findings have several academic and practical implications. Owner-managers must engage in various developmental activities to build trust among members and should create space and time where employees feel free to share ideas and reflect on their opinions.