In This Article Expand or collapse the "in this article" section Learning by Doing in Organizational Activities

  • Introduction
  • Learning and Forgetting

Management Learning by Doing in Organizational Activities
Natarajan Balasubramanian, Yang Ye
  • LAST MODIFIED: 27 October 2021
  • DOI: 10.1093/obo/9780199846740-0208


Learning by doing (hereafter LBD) refers to the improvement in performance arising from accumulated experience. Such improvement has been observed for individual tasks (e.g., individuals playing the violin); organizational activities (e.g., building a product); and overall organizational performance. This review is largely limited to LBD in organizational activities and organizational performance outcomes, such as productivity, cost, and profitability. The LBD effect was first described by an aeronautical engineer, T. P. Wright, in the production of airframes. In 1936 he observed a reduction in labor cost as the cumulative number of airframes produced increased. A seminal paper “The Economic Implications of Learning by Doing,” formally modeled the economic implications of LBD and provided related assumptions and outcomes associated with it (Arrow 1962). The key idea of LBD is that repeated practice leads to perfection (“practice makes perfect”). Manufacturing tasks are often highly repetitive and routinized, and hence the earliest studies of LBD, especially in economics, examined learning curves in manufacturing and studied the association between accumulated production experience and production costs. More recent research, especially in the field of management, investigates whether LBD also exists in such complex and less repetitive tasks as innovation, alliances, and expansions. This literature appears to find LBD in such nonmanufacturing activities and highlights factors that matter for LBD in these activities. While traditional LBD has focused on learning as a byproduct of experience (first-order learning), there is a large related literature on managerial actions or factors that bring about such accumulation of learning (second-order learning). Studies have also extended LBD to other types of experience beyond the organization’s own production experience, including vicarious learning and learning from failure. Thus LBD today is a broader concept than traditional manufacturing-focused learning curves that have portrayed how cost is reduced with cumulative production output. LBD is a subset of the broader phenomenon of organizational learning, though the boundaries between the two are nebulous. While LBD relates cumulative experience directly to performance outcomes, organizational learning is more general and focuses on how knowledge is created, transferred, and retained among the individual, team, and organization levels. Apart from organizational learning, other theories are connected to or can be used to complement LBD research, including the behavior theory of the firm, the attribution theory in psychology, and the resource-based view.

Overview and Description

In this section, we provide an overview of LBD research. As LBD spans multiple disciplines, Handbooks and Reviews offers a good starting point for researchers who are interested in this topic. We include reviews of LBD in the economics and management literatures, and reviews of LBD at different levels in the first subsection. In the next two subsections, we discuss how LBD is associated with organizations’ own production experience, nonmanufacturing experience, and others’ experience (e.g., spillovers). As the key explanation for LBD is that organizations accumulate knowledge from experience, we also include a subsection to discuss the changes in knowledge and knowledge spillovers associated with LBD.

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