ADAPTIVE LEARNING IN ORGANIZATIONS - A SYSTEM DYNAMICS-BASED EXPLORATION

This paper employs a system dynamics-based framework To examine the li mitations of experiential learning as a guide for decisionmaking in or ganizations. This framework departs from the more traditional approach to modelling experiential learning processes in organizations by emph asizing the systematic interaction between decisionmaking agents and t heir environments, rather than the effects of varying degrees of noise on performance. We present the results of a series of computer simula tions that examined the consequences of adaptive learning in organizat ions by concentrating explicitly on the link between individual decisi ons and the system-level consequences generated by the interaction of individual choices. The results show that experience is a poor basis f or learning primarily because the understanding of structural relation s between individual actions and their aggregate consequences is confo unded by nonlinear dynamics, time delays, and misperception of feedbac k.