Bounded Rationality and Organizational Learning Based on Rule Changes

A basic problem of organizational learning is recombining members' knowledge into innovative solutions. This article shows that extant approaches tend to position this problem in the organizational members' minds, thereby neglecting the problem of limited rationality. In some approaches of this type, organizational learning is conceptualized as the result of members learning from each other. In contrast to these concepts, some authors are convinced that a mode of organizational learning that is dependent on cross-learning between specialists cannot be effective because of the limits of an individual's cognitive abilities. These authors therefore try to identify organizational mechanisms that partly substitute for or support cross-learning between specialists. This article builds on this approach by developing a concept of `transactive organizational learning', which takes organizational rules as repositories of knowledge and relies on organizational mechanisms that allow the direct transfer of specialists' knowledge into rules. Empirical support for this concept was found in case studies from two German companies.