Falling in the same predicament again? A network embeddedness perspective of organizational failure recidivism in special treatment firms
ISSN: 0025-1747
Article publication date: 7 October 2022
Issue publication date: 17 March 2023
Abstract
Purpose
Studies on organizational failure learning have focused on whether and how organizations learn from failures but have paid limited attention on the persistence of failure learning. This study centers on failure recidivism and answers why organizations would fall into repeated failures after learning from them.
Design/methodology/approach
Based on a sample of Chinese publicly listed firms that once recovered from special treatment status, the authors use event history technique and Cox proportional hazards regression model.
Findings
The authors find that reviviscent firms with higher interlock centrality are less likely to decline again, and underperforming partners can strengthen the role of interlock tie in failure recidivism. By contrast, politically connected reviviscent firms are more likely to decline again, and this effect attenuates for firms located in more market-oriented regions.
Research limitations/implications
The authors’ contribution comes from the close integration of literature on failure learning and network embeddedness perspective to examine how social networks affect the learning process of failure recidivism.
Practical implications
The study provides important practical implications for organizations, especially those that once experienced failures or are experiencing failures.
Originality/value
Combining organizational learning theory and network embeddedness perspective, the study provides novel insights into answering how firms embedded in different types of social networks affect failure learning persistence differently.
Keywords
Acknowledgements
The authors are grateful to acknowledge the support of the National Natural Science Foundation of China (72102035), the Fundamental Research Funds for the Central Universities (2232018H-09) and the Initial Research Funds for Young Teachers of Donghua University.
Citation
Cheng, W. and Jiang, Y. (2023), "Falling in the same predicament again? A network embeddedness perspective of organizational failure recidivism in special treatment firms", Management Decision, Vol. 61 No. 3, pp. 815-837. https://doi.org/10.1108/MD-11-2021-1426
Publisher
:Emerald Publishing Limited
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