Organizational Error Management Culture and Its Impact on Performance: A Two-Study Replication.

Abstract

We argue that a high organizational error management culture, conceptualized to include norms and common practices in organizations (e.g., communicating about errors, detecting, analyzing, and correcting errors quickly), is pivotal to the reduction of negative and the promotion of positive error consequences. Organizational error management culture was positively related to firm performance across two studies conducted in two different European countries. Based on quantitative and qualitative cross-sectional data from 65 Dutch organizations, Study 1 revealed that organizational error management culture was significantly correlated with both organizational goal achievement and an objective indicator of economic performance. This finding was confirmed in Study 2, using change of profitability data from 47 German organizations. Our results suggest that organizations may want to introduce organizational error management as a way to boost firm performance.