Abstract

Accurate forecasts often result in above average returns and contribute to a long-term success of organizations (Durand, 2003; Makadok & Walker, 2000). Can organizations improve the accuracy of forecasts as they gain experience? Organizational learning theory views experience as a critical antecedent of organizational knowledge and capabilities, yet, such experience does not shield individuals from cognitive biases and making errors when predicting the future (Andreassen & Kraus, 1990; Harvey, 1988). It, therefore, remains unclear if the organizational experience will inform their cognitive forecasts in any significant way. In this study, we take several steps in addressing this oversight and examine the influence of organizations’ success and failure experiences on the accuracy of forecasts. We also examine the moderating effect of the size of organizations on learning from experience.

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