Effects of human capital and learning rate: When organizations meet with information distortion and environmental dynamism

Abstract

AbstractThis study systematically evaluates the effects of human capital and learning rate under typical organizational contexts with information distortion (i.e., no distortion, individual forgetting, and information misrepresentation) and environmental conditions (i.e., personnel turnover and environmental turbulence). The multi‐agent simulation model reveals that keeping an appropriate learning rate is an efficient way to balance exploration and exploitation. Slow learning outperforms only under the contexts of both no distortion and rare personnel turnover, whereas intermediate and high learning rates are more valuable in other organizational contexts. Moreover, we find that human capital generally has a positive effect on learning performance, with an exception that when an organization faces environmental turbulence, human capital has an inverted U‐shaped relation with learning performance. This study draws implications for managing organizational learning and guiding organizations with different human capital on how to influence learning under various organizational contexts.