Can Busy Organizations Learn to Get Better? Distinguishing Between the Competing Effects of Constrained Capacity on the Organizational Learning Process

Organizations are getting busier, but can they still learn to get better? This question has urgent practical importance, since competitive pressures in a wide variety of industries have resulted in organizations that increasingly strain their operating limits. This question is deeply connected with organizational learning theory, since organizations operating with constrained capacity may gain experience but lose the ability to digest it—challenging the overall organization’s ability to learn and improve. Some research, though, suggests a seemingly contradictory perspective, with constrained capacity perhaps motivating organizations to adopt more flexible approaches and learn out of necessity. This study integrates the perspectives to examine how constrained capacity impacts organizational learning. To explore this question, the study develops separate theory regarding the amount and timing of capacity crises, suggesting that increasingly constrained capacity tends to detract from learning, but, uniquely, that consistently constrained capacity, rather than periodic spikes, may instead lead to better learning. Hypothesis tests provide support for several of the study’s arguments.