Organizational Learning and Diversification

Abstract

Employing concepts of lateral and longitudinal learning, we examined the dissolution of 462 expansions of Dutch firms, both acquisitions and new ventures. We interpreted the endurance of an expansion as reflecting success. Results show that expansions were more persistent when related to a firm's core skills, fully owned, and the result of acquisition rather than internal development. Expansions were also likely to last longer if a firm's prior diversification activity level was high.