The Effects of Local versus Global Information for Organizational Learning

• In Event: 161 - Section on Organizations, Occupation and Work Roundtable Session (one-hour).
  In Refereed Roundtable: Table 10. Organization Learning and Change

Abstract

Identifying individual expertise is critical to organizational learning, particularly when organizations grapple with complex problems. Yet identifying experts who are willing to help poses a challenge for many organizational members. Based on where it resides in organization, we categorize information into two types - local and global. Local information resides only within organizational members, whereas global information is retained within organizational repositories. These two categories of information pose a trade-off between the likelihood of knowledge transfer and the quality of the transferred solutions, which in turn, affect organizational performance. This paper investigates the effects of local versus global information on organization learning efficiency (the speed at which organizational members reach a consensus on solution) and effectiveness (the quality of the solution) conditional on various social structures. We find that in organizations with close-knit social networks, local information improves efficiency of solution transfer. By contrast, in organizations with tenuously connected networks, global information improves the efficiency of knowledge transfer. Coupling local and global information, regardless of the network’s structure, most improves learning efficiency. Nevertheless, the presence of global information reduces the proactive experimentation in pursuit of organizational effectiveness.

Authors

• Evelyn Zhang, Carnegie Mellon University

• Brandy Lee Aven, Carnegie Mellon University