Marginal Learning: Uncovering the Hidden Side of the Learning Curve

Abstract Research on organizational learning curves widely finds that organizations learn and improve as they gain experience, albeit at a declining rate. We know surprisingly little about this decline and its determinants. Why do some experienced firms continue to learn, while learning and performance taper off at others? We develop new theory regarding these differences, beginning here with a central component of experience – its potentially routine nature – and we predict that simpler, more routine experiences will lead to more sustained learning than complex, nonroutine experiences. We arrive at this conclusion by theorizing that experienced organizations will take advantage of simpler events by using these as opportunities to learn and improve in more innovative ways, given the lower chances of failure. We test our theory in the setting of coronary artery bypass graft surgery and find supportive evidence for greater sustained learning following more routine procedures. We also find support for our proposed mechanism, as routine surgeries led to higher utilization rates of a riskier, more advanced surgical technique. The study contributes to organizational learning theory by revealing new differences in how learning diminishes and by uniquely suggesting that certain experiences may become more or less important as they accumulate.