Vol. 2. No. 1, February 1991
Primed in U.S.A.
LEARNING FROM SAMPLES OF ONE OR FEWER*
JAMES G. MARCH, LEE S. SPROULL AND M I C H A L
Stanford University, Stanford, California 94305
Boston University, Boston, Massachusetts 02215
Rutgers University, New Brunswicic, New Jersey 08903
Organizations learn from experience. Sometimes, however, history is not generous with experience. We explore how organizations convert infrequent events into interpretations of history, and how they balance the need to achieve agreement on interpretations with the need to interpret history correctly. We ask what methods are used, what problems are involved, and what improvements might be made. Although the methods we observe are not guaranteed to lead to consistent agreement on interpretations, valid knowledge, improved organizational performance, or organizational survival, they provide possible insights into the possibilities for and problems of learning from fragments of history. (ORGANIZATIONAL LEARNING; LEARNING FROM EXPERIENCE; SMALL SAMPLES)
Learning from Samples of One or Fewer
Organizations learn from experience, but learning seems problematic when history offers only meager samples of experience. Historical events are observed, and inferences about historical processes are formed, but the paucity of historical events conspires against effective learning. We consider situations in which organizations seek to learn from history on the basis of very small samples of experience. For example:
Ca.se L A military organization has rarely fought in a battle. Yet it wants to learn from its history how to improve its ability to engage in warfare. Case 2. A business firm has little experience with foreign acquisitions. Yet it wants to learn from its history whether and how to make such investments. Case 3. An airline rarely has fatal accidents. Yet it wants to learn from its history how to reduce the chances of such disasters.
Case 4. A business firm rarely makes major marketable discoveries. Yet it wants to learn from its history how to increase the chances of such innovations. Case 5. A power company rarely has nuclear accidents. Yet it wants to learn from its history how to minimize the chances of such catastrophes. In the next section, we examine how organizations convert meager experience into interpretations of history by experiencing infrequent events richly. In §2, we examine processes for simulating hypothetical histories. In §3, we examine some justifications for these two learning strategies and some of the problems involved.
* Accepted by Arie Y. Lewin; received August 24, 1989.
Copyright © 1991, The Institute of Management Sciences
JAMES G. MARCH, LEE S. SPROULL AND MICHAL TAMUZ
1. Experiencing History Richly
Historical events are unique enough to make accumulating knowledge difficult. Each event is a single, unrepeated data point, and accumulation seems to require pooling across diverse contexts. Organizations attempt such pooling, but they also seek to increase the information extracted from their own limited historical experience by treating unique historical incidents as detailed stories rather than single data points. They elaborate experience by discovering more aspects of experience, more interpretations of experience, and more preferences by which to evaluate experience. Experiencing more aspects of experience. Characterizing history as small samples of unique occurrences overlooks the wealth of experience that is represented in each historical event. The apparent stinginess of history is moderated by attending to more aspects of experience (Campbell 1979). For example, learning about a decision involves monitoring its outcomes. But long before an organization experiences many of the outcomes of a typical decision, it experiences a variety of collateral consequences associated with the making of the decision and its...