While previous research on vicarious learning assumes that managers pay adequate attention to any event in an environment, boundedly rational managers can only pay selective attention to salient events. This study proposes the hypothesis that managers pay disproportionately less attention to and learn less from an external event if it has attributes almost identical to those that they have encountered in the past in either a direct or an indirect manner. An analysis of errors by Japanese firms operating nuclear power plants supports this theory and presents an explanation about why an organization repeats an error that others have made in the past.
ASJC Scopus subject areas
- Economics and Econometrics