Is past performance a guarantee for current results? The influence of learning on business performance in manufacturing

Abstract

Purpose This paper investigates the relationship between past performance and the development of operational capabilities in manufacturing firms, focusing on the role of intra- and inter-organisational learning mechanisms. Design/methodology/approach This study is based on a survey database collected in 208 manufacturing plants in 15 countries from three industries: electronics, machinery and transport components. The authors developed a model and tested the study hypotheses using the structural equation modelling technique with two-stage analytical procedures. Findings In the analysis of the overall sample, the study findings support prior literature by suggesting that firms with successful experiences may become complacent and less motivated to engage in learning, leading to a decline in performance. However, high-performance firms overcome the “success trap” by engaging supply chain partners. In contrast, low-performance firms exhibit limited learning from past poor performance, leading to organisational inertia and further declines in their current performance. Practical implications This research provides practical guidance for managers in developing operational capabilities, highlighting collaboration with suppliers as an essential element for high-performance firms. Originality/value This study focuses on the little-researched topic of how past performance influences the development of operational capabilities in manufacturing firms. The authors highlight the path for developing capabilities in high- and low-performance firms based on intra- and inter-organisational learning mechanisms.