High-tech hidebound: Case studies of information technologies that inhibited organizational learning

Using case studies, the paper demonstrates that heavy reliance on information technology can impair a firm's capacity for organizational learning. After defining organizational learning, recent findings in the theory of complex systems are explored. In a complex environment, it is concluded, firms must simultaneously (a) structure their operational activities to ensure efficient self-regulation, and (b) engage in ill-structured scanning to ensure organizational learning.

Cases studies of two firms, Batterymarch Financial Management and Mrs. Fields' Cookies, are then presented. Both firms experienced explosive growth, and, through innovative use of information technology, enjoyed substantial productivity advantages over their competitors. Both firms, however, entered unexpected periods of decline in the mid- to late-1980s, from which they never emerged. The declines are explained as failures of organizational learning, precipitated by information systems that inadvertently sacrificed important environmental scanning activities in order to achieve efficient self-regulation.