Knowledge exchange and learning from failures in distributedenvironments: The role of contractor relationship managementand work characteristics

Leif Jarle Gressgård n, Kåre Hansen 1

International Research Institute of Stavanger (IRIS), Department of Social Science, Thormøhlensgt. 55, N-5008 Bergen, Norway

a r t i c l e i n f o

Article history:Received 10 July 2013Received in revised form1 August 2014Accepted 1 September 2014Available online 16 September 2014

Keywords:Failure-based learningKnowledge exchangeContractor relationship managementRole clarityLeadership involvementEmpowerment

a b s t r a c t

Learning from failures is vital for improvement of safety performance, reliability, and resilience inorganizations. In order for such learning to take place in distributed environments, knowledge has to beshared among organizational members at different locations and units. This paper reports on a studyconducted in the context of drilling and well operations on the Norwegian Continental Shelf, whichrepresents a high-risk distributed organizational environment. The study investigates the relationshipsbetween organizations' abilities to learn from failures, knowledge exchange within and betweenorganizational units, quality of contractor relationship management, and work characteristics. Theresults show that knowledge exchange between units is the most important predictor of perceivedability to learn from failures. Contractor relationship management, leadership involvement, role clarity,and empowerment are also important factors for failure-based learning, both directly and throughincreased knowledge exchange. The results of the study enhance our understanding of how abilities tolearn from failures can be improved in distributed environments where similar work processes takeplace at different locations and involve employees from several companies. Theoretical contributionsand practical implications are discussed.

& 2014 Elsevier Ltd. All rights reserved.

1. Introduction

Learning from failures is a key organizational process toimproving levels of performance and ensuring safe work conduct[1–4]. Strong abilities to learn from failures are in this respectfound to be a significant characteristic of high reliability organiza-tions (HROs), referring to organizations operating under demand-ing conditions yet manage to avoid major accidents [5]. Thisunderscores that gaining insights from past experiences and usingthis knowledge to design more reliable and effective systems areimportant facilitators for preparedness for both present andprospective crises [6–8].

Learning from failures requires sharing of information and knowl-edge about error experiences [1]. Efficient knowledge exchangebetween organizational members and units is thus regarded asfundamental for this type of organizational learning to occur, anddesigning a work climate that supports this objective is thereforeimportant [9]. In this paper we argue that knowledge exchange is

particularly important in distributed interorganizational settings,where similar activities take place at different locations and involveemployees from multiple companies. Supporting this argument,Wang and Wang [10] claim that knowledge exchange is of particularimportance in emerging distributed organizations, as efforts ofimprovement like transfer of best practices [11,12] in these organiza-tional settings are highly dependent on how well knowledge isshared between individuals in different units and at differentlocations.

Despite the growing acknowledgement that learning fromfailures is fundamental to organizational life, particularly inhigh-risk distributed environments [13], there is a scarcity ofstudies in this domain [14]. Investigations of antecedents oforganizations' abilities to learn from past experiences and mis-takes, and what conditions best facilitate such learning in dis-tributed environments are therefore needed. In this respect,Carmeli and Gittell [15], argue that research focusing on relationalfoundations of failure-based learning is particularly important asinteraction and knowledge exchange between organizationalmembers are central in learning processes. In a work contextcharacterized by diversity regarding organizational affiliations,emphasizing the interorganizational dimension is importantwhen considering the relational foundations of learning. Factors

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Reliability Engineering and System Safety

http://dx.doi.org/10.1016/j.ress.2014.09.0100951-8320/& 2014 Elsevier Ltd. All rights reserved.

n Corresponding author. Tel.: þ47 55543866.E-mail addresses: ljg@iris.no (L.J. Gressgård), kaare.hansen@iris.no (K. Hansen).1 Tel.: þ47 55543864.

Reliability Engineering and System Safety 133 (2015) 167–175

concerning management of suppliers and contractors shouldtherefore be emphasized in addition to internal work character-istics. Addressing this research gap, this paper seeks to throw lighton how management of contractor relationships and work char-acteristics influence the degree of knowledge exchange in theorganizational system, which again impacts on organizations'abilities to learn from failures.

The context of the study is drilling and well activities on theNorwegian Continental Shelf (NCS), which is a setting character-ized by distributed interorganizational work. This means thatsimilar work processes take place at different geographical loca-tions and organizational units, and that employees from severalcompanies are involved in the operations. Knowledge exchangewithin and between various units (e.g. offshore installations) istherefore important. Further, as it is a setting that involves high-risk operations [16,17], failure-based learning is highly relevant.The remainder of the paper is organized as follows: The theoreticalbackground and hypotheses are presented first, followed by adescription of the research methodology. The results are thenpresented and discussed, including theoretical contributions andimplications for practitioners. The paper is ended with studylimitations and directions for future research.

2. Theory and hypotheses

2.1. Knowledge exchange and learning from failures

Organizational learning represents an important mechanismthrough which organizations prosper [18], and learning fromfailures is recognized as vital for improvement of safety perfor-mance, reliability, and resilience [1,3,5,13,19–21]. A key theoreticaland empirical question is therefore how such learning is enabled[8,15]. According to Tjosvold et al. [22], learning from mistakesinvolves recognizing undesired effects and reflecting on conse-quences of actions in order to reduce the probability of their futureoccurrence. Likewise, Hirak et al. [7], posit that “learning fromfailures occurs when unit members reflect on a failed experience,openly discuss why it occurred, and identify the work patternsthat need be modified or changed in order to eliminate the rootcause of the problem” (p.108). Knowledge in organizations is inthis way continuously created, altered and discarded as organiza-tional members gain experience and update their understandingsof reality to reflect the lessons that can be drawn [4].

This understanding of learning from failures implies thatcollaboration and interaction among individuals and organizationsare fundamental conditions. Argote and Miron-Spektor [23] arguein this regard that the processes of knowledge acquisition, knowl-edge sharing and knowledge combination are central, whileEdmondson [24] claims that organizational learning is a processof change and improvement in organizational actions throughbetter knowledge and understanding. In addition to the profi-ciency of individual employees, the exchange of knowledge withinand across units is thus a significant condition for experience-based learning to occur, and is related to the abilities of individualsto benefit from knowledge accumulated by others, and alsoinfluences coordination of activities in the organizational system[18]. Exchange of knowledge can in this respect be understood asthe provision or receipt of task information, know-how, or feed-back regarding a product or procedure [25,26], and may occurthrough formal and informal personal interaction or knowledgemanagement systems. Further, the construct encompasses boththe processes of knowledge sharing (i.e. employees providingknowledge to others), and knowledge seeking (i.e. employeessearching for knowledge from others) [27].

Knowledge exchange thus appears to be critical for the abilityof organizational members to reflect on their experiences, andcan be a significant factor in explaining why organizations varydramatically in the rate at which they learn from mistakes [18,28].Supporting this assumption, studies and investigations of acci-dents have identified knowledge exchange processes as funda-mental factors. According to Pasman et al. [29], major accidentsrecent years have occurred because of a lack of abilities to absorbunwanted and unforeseen disturbances, and in a study of howinvestigations of incidents and accidents in a high-hazard settingwere analyzed by the involved companies, Doytchev and Hibberd[30] found that there was limited communication flow betweenkey stakeholders in various parts of the work processes. Researchon HROs also emphasizes that cognitive and organizational sys-tems that promote situational awareness and knowledge sharingin complex environments can prevent the occurrence of dangeroussituations. Knowledge exchange by use of incident reportingsystems may be of particular importance as this may improvethe processes of detection, reduction and mitigation of failure insafety-critical systems [31]. Weick and Sutcliffe [5] argue in thisrespect that “HROs encourage reporting errors, they elaborateexperiences of near miss for what can be learned, and they arewary of the potential liabilities of success, including complacency,the temptation to reduce margins of safety, and the drift intoautomatic processing” (p. 9).

In distributed work environments, different units of the sameorganization may represent valuable knowledge sources. That is,geographically distributed units of the same company are likely tohave similar problems, and exchanging solutions is therefore likelyto benefit both the individual units as well as the larger organiza-tion [32]. Collection, storage and access to experiential knowledgeacquired at one work site can thus be beneficial to other sites [33].This underscores the importance of knowledge exchange bothwithin and between units and work locations for organizationallearning to occur. We therefore hypothesize that:

H1. Firms' abilities to learn from failures are positively related toknowledge exchange (a) within units and (b) between units.

According to Catino and Patriotta [1], failures often stem fromsequential action chains concealed in habitual behavior. Likewise,Pasman et al. [29] claim that organizational erosive drift is shown tobe responsible for complacent behavior and degradation of safetyattitude. This implies that external knowledge (i.e. knowledgeoriginating from outside the respective organizational units) maybe necessary in order to enlighten local practices, and facilitatecritical reviews of local work conduct. Knowledge exchange acrossorganizational units may thus be of particular importance in orderto avoid drift into failure and facilitate corrections of work. Wetherefore expect that:

H2. Firms' abilities to learn from failures are more strongly positi-vely related to knowledge exchange between units than knowl-edge exchange within units.

2.2. Contractor relationship management and knowledge exchange

Organizational systems where multiple actors are involved inclosely-knit work processes are common in several industries, andimply that tasks conducted by employees of one organizationhave to be synchronized with tasks wholly or partly executed byexternal actors [34,35]. In such organizational systems, exchangeof knowledge across organizational borders is fundamental inan organizational safety perspective [36]. Scholars argue in thisregard that communication and collaboration among supply-chainmembers can foster interorganizational learning [37], especially byexchange of tacit and critical knowledge [38–40].

L.J. Gressgård, K. Hansen / Reliability Engineering and System Safety 133 (2015) 167–175168

Offshore drilling and well operations represent one example of aclosely-knit organizational system as almost 70 percent of alloffshore personnel are employed by contractors, while the overallresponsibility for operations rests with the operating company [41].The contractors are often multinational and have experience withcontract work for multiple companies at different locations, and thuspossess valuable knowledge on identifying and managing riskfactors and handle challenges that occur during operations. Researchhas in this respect shown that effective operator–contractor coordi-nation is associated with lower accident rates [16] and increasedsafety compliance [42]. However, attaining well-functioning knowl-edge exchange processes in such organizational settings is notunproblematic. Companies do not always provide sufficient infor-mation on their activities, and the informal contact between theinterdependent milieus is often negligible [41].

Empirical research results show that firms successful in sup-plier development efforts share information frequently and ina timely manner with their suppliers [43–45]. According toRebolledo and Nollet [46], suppliers can be major providers ofknowledge for improvement initiatives and production of goodsand services, but valuable inter-firm knowledge exchange andlearning is a complex process better achieved under specificconditions rather than haphazardly. This means that there is aneed to identify the characteristics of interorganizational relation-ships that could foster the transfer and application of knowledgebetween partners, as not all relationships have the same ability topromote learning across organizational borders [47].

In a study of the effects of relational coordination withinorganizational borders, Carmeli and Gitell [15] found that goalcongruency, shared knowledge and mutual respect resulted in anorganizational climate that enabled organizational members toengage in learning from failures, and concluded that high-qualityrelationships within organizations increase information proces-sing capacity by connecting employees who play distinct butinterdependent roles. In an interorganizational setting, Carr andKaynak [48] found that inter-firm information sharing and sup-plier development are significant factors for firm performance.Relational variables like trust have in this respect been identifiedas significant in order for knowledge exchange across organiza-tional borders to take place and prevent potential leakage ofproprietary knowledge [49–52]. Collaboration and socializationat different levels are also expected to support inter-firm learningas close and frequent interaction between employees of differentorganizations represents an important mechanism for transfer ofknowledge across the organizational interface [46,51]. The qualityof relationships management can in other words influence thelevel of interaction and knowledge exchange [15,53] and be anenabler of inter-firm learning [54].

In distributed environments like offshore drilling and welloperations, knowledge exchange occurs both within and betweenunits (offshore installations). As organizational units may havelimited task interdependencies and interpersonal ties, they mayfocus their attention at local unit activities [32]. Efficient manage-ment of contractor relations may therefore represent a means forproviding external input to local activities. Further, the work ofcontractors and suppliers is in general based on contracts with alimited duration [42]. These employees therefore represent a typeof contingent workforce subject to changes of work locationsbased on requests and demands of the client. Hence, the degreeof unit affiliation and identification of contractor employees islower compared to permanent employees of the client. In thecontext of the present study, this means that contractor employeesare more mobile than operator employees (i.e. a larger number ofcontractor employees work at several installations compared tooperator employees), and may therefore represent an importantsource for cross-unit knowledge exchange [55]. The importance of

contractor employees for knowledge exchange across borders issupported by research showing that employees are less likely toshare and seek knowledge beyond their work unit to the extentthey identify more strongly with the subunit relative to theorganization as a whole [56–58]. We therefore hypothesize that:

H3. Quality of contractor management is positively related toknowledge exchange (a) within units and (b) between units.

2.3. Work characteristics and knowledge exchange

Knowledge exchange within and between organizational unitsis always ultimately rooted in individual behaviors [59], and isinfluenced by both ability and motivational factors [60–62].Research has in this regard found that characteristics of the workand work environment are important drivers for knowledgeexchange processes. A number of empirical studies have focusedon the influence of various HRM practices on firm-level knowledgesharing and creation [60,63], and scholars have argued that jobcharacteristics structure the nature and content of the interrela-tionships between workers by configuring particular patterns ofinteraction, cooperation, and collaboration [64–66]. Characteristicsof the work situation may thus influence the extent of knowledgeexchange in the organizational system. In this study we focus onthe roles of three factors that previous studies have highlighted asimportant for organizational safety in an interorganizational dis-tributed high-risk work environment [42,67,68]: Leadership invol-vement, role clarity, and empowerment.

2.3.1. Leadership involvementBarriers may exist that prevent employees from openly and

freely share knowledge about their experiences and mistakes theyhave made [69,70]. According to Edmondson [71], a work climatethat inhibits employees from speaking up with questions, con-cerns and challenges, and also advice and potential solutions toproblems that the organization faces, is detrimental for failure-based learning. In contrast, a well-functioning safety culture of anorganization provides a supportive context for error reporting andencourages sharing of information and knowledge about experi-ences [1]. Research has in this respect shown that leadership is acentral variable that may support expression of views at theworkplace [9]. In the context of organizational safety, Hirak et al.[7] found that leader inclusiveness is positively associated withperceptions of psychological safety climate, which again facilitatefailure-based learning. In a meta-analytic study, Nahrgang et al.[72] showed that a supportive work environment is an importantfactor for both work engagement and safety. Research has alsoshown that leadership involvement in work operations has posi-tive effects on safety compliance [42] and assessments of overallworkplace safety [68]. In line with this, O'Dea and Flin [73] arguethat good safety leadership involves high involvement in safetyinitiatives as well as involvement in work operations and frequentinteraction between workers and managers. On this basis, weexpect that leadership involvement may facilitate knowledgeexchange by means of enhancing work engagement and support-ing a collaborative and open work climate, and hypothesize that:

H4a. Leadership involvement is positively related to knowledgeexchange (a) within units and (b) between units.

2.3.2. Role clarityA central element of job design is to identify the relevant tasks

and activities of a job [59]. Role clarity, encompassing the aspectsof responsibilities, authority, and competence requirements, istherefore a relevant job design factor. It may help employeesseeing their roles in the larger organizational system, and therebyrepresent a mechanism for increasing shared meaning among

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employees. Several scholars have acknowledged that a sharedcontext or knowledge base represents a significant condition forthe abilities of individuals to recognize, understand, and sharecompetencies and resources [74]. Clearly defined competencerequirements may also result in employees knowing what to lookfor and thus enhance knowledge seeking behavior [75,76]. Roleclarity may in other words influence employees' abilities to locate,understand, interpret, and absorb knowledge, and thereby lead toimproved absorptive capacity [77]. Further, by facilitating thedevelopment of shared meaning among employees, role clarity isalso likely to influence knowledge contribution processes. A clearunderstanding of the wider organizational systems that their jobsare part of may imply that employees more easily understand thevalue of their knowledge, and are better able to frame theirknowledge in a way that makes sense to potential acquirers[61,78]. Thus, the extent of role clarity of a job may influence theabilities of employees to engage in knowledge exchange processesthrough increased absorptive capacity and quality of own con-tributions, leading to the following hypothesis:

H4b. Role clarity is positively related to knowledge exchange(a) within units and (b) between units.

2.3.3. EmpowermentFactors that influence the experienced meaningfulness and

perceived responsibility of work, as well as knowledge of theresults of own work, may be important for knowledge sharingmotivation [59,79]. Employee empowerment is a central factorin this respect. Work systems that are based on employeeinvolvement and empowerment are often referred to as high-performance work systems [80,81], and research has shown thatthe job characteristics associated with such systems are positivelyrelated to satisfaction because employees experience meaningful-ness in their work, greater responsibilities and control over taskcompletion, and better use of knowledge and skills [80,82,83].According to Tomer [84], employees are also more cooperative inhigh-involvement work systems, and this is supported by Srivas-tava et al. [85], who found that empowering leadership fostersknowledge sharing among team members. In the context oforganizational safety, research has shown that involvement ofemployees, including empowerment and delegation of responsi-bility for safety, positively influence safety performance [16] andperceptions of workplace safety [68]. Barling et al. [80] also arguethat increased work involvement promotes learning and enablesproactive problem-solving and preventive action. On basis ofexisting research we therefore expect that employee empower-ment represents a significant factor for knowledge exchange:

H4c. Empowerment is positively related to knowledge exchange(a) within units and (b) between units.

The hypothesized relationships are illustrated in Fig. 1.

3. Method

3.1. Description of survey

Data were collected through a web-based survey administeredto personnel involved with drilling and well operations in ninedifferent companies; one operator company and eight of its maincontactors (operating on the Norwegian Continental Shelf). Twodifferent sets of questionnaires were developed; one for theoperator employees and one for contractor employees. The ques-tionnaires consisted of a total of 105 items, covering variousaspects of the work situation like knowledge exchange, jobcharacteristics, perceptions of leadership, work compliance, etc.For some items, the wordings were adapted to the target groups(i.e. operator employees and contractor employees), althoughmeasuring the same aspects.

Invitation letters describing important details of the study weredistributed to the potential respondents via administrative per-sonnel in each company. Distribution lists were provided by therespective firms, but all survey administration and coordinationwas handled by the research team. The total population was 5856employees, of which 1398 were employees of the operator and4458 were employees of the contractors. The survey was openduring a period of 6 weeks in order to cover all work shiftsoffshore. During this period, two reminders were sent. The totalnumber of responses obtained from these two groups was 2653resulting in a response rate of 45% (880 responses from operatoremployees and 1773 responses from contractor employees, givingresponse rates of 63% and 40% respectively).

3.2. Measures

Measures of contractor relationship management and work char-acteristics were based on previous research [42,67], and adapted tothe context and requirements of this particular study. The followingitems were included: Leadership involvement: “My leader participatesactively in planning and preparing the work”; “My leader system-atically follows up the execution of the work”; “My leader contributesto a good cooperation between units/involved groups”. Role clarity:“The responsibilities of my position are unambiguously documen-ted”; “The authority of my position is unambiguously documented”;“The skill requirements for my present position are clearly documen-ted”. Empowerment: “I am able to utilize my expertise and abilities inmy present position”; “I am sufficiently involved in/have a say ondecision related to my work situation”; “I receive the necessarytraining to handle new work tasks and responsibilities”. As thesample involved employees of both the operator and contractors,two different sets of items were applied to measure the construct ofcontractor relationship management: Operator respondents: “In myunit we closely follow up contractors/suppliers we work with”; “Inmy unit we systematically follow up the feedback we receive from

Fig. 1. Research model with hypotheses.

L.J. Gressgård, K. Hansen / Reliability Engineering and System Safety 133 (2015) 167–175170

suppliers/contractors”; “The suppliers/contractors we work with havereceived the training they need to carry out their tasks in a safemanner”. Contractor respondents: “[Name of the operator]'s follow-up of the company I work for is good”; “Our feedback to [Name of theoperator] is systematically followed up”; “[Name of operator] makessure we get the training required to accomplish our tasks in a safemanner”. All items were measured by use of a 6-point scale rangingfrom totally disagree (1) to fully agree (6).

Factor analysis of the items resulted in a 4-factor solution thataccounted for 71% of the total variance. All items had sufficientloadings (above 0.40) on a single factor (no variables had factorloading above 0.40 on more than one factor). Cronbach's alphasfor the four constructs were 0.88 (leadership involvement), 0.81(role clarity), 0.68 (empowerment), and 0.79 (contractor relation-ship management). The alpha score for the empowerment scalewas 0.68, which is slightly lower than the suggested threshold of0.70 [86], but values down to 0.60 can be deemed acceptable [87].

Prior to the knowledge exchange questions, the respondentswere given the following information regarding this particulartopic: “We are interested in the exchange of advice and informa-tion, participation in transfer of experiences and other forms ofknowledge transfer. This concerns your daily accomplishment oftasks, questions about methods and choice of technology, etc.”.They were thereafter asked to rate the extent to which suchknowledge exchange occurs “in your entity/installation” and“between entities/installations” on a 6-point scale ranging from“none” to “very much”. The means and standard deviations were4.7/.89 and 4.2/.98 respectively. In order to measure organizations'abilities to learn from failures, the respondents were asked to ratethe extent to which they perceive their company to learn frommistakes being made (“In my company we learn from mistakes”).The mean and standard deviation of this measure were 4.47/1.0).

The constructs of knowledge sharing and failure-based learningmay involve different aspects depending on work situation andcontext. As described in section 2.1, exchange of knowledge mayinvolve provision or receipt of task information, know-how, or feed-back regarding a product or procedure [25,26], and may occurthrough formal and informal personal interaction or standardizedknowledge exchange systems. Failure-based learning refers to the useof relevant knowledge for improvement of work by identifying anddiscussing work patterns that need to be modified or changed [7].These constructs are therefore measured by global single-item ques-tions, as such measures allow a respondent to “consider all aspectsand individual preferences of the certain aspects of the constructbeing measured” [88], [p.79]. Asking single item-questions thusassumes that respondents automatically consider different aspectsof the construct, and thereby also ignore aspects that are not relevantto their situations and differentially weight the relevant aspects toprovide a single rating [89,90].

4. Results

Table 1 lists the correlation statistics of the variables includedin the study. From the table we find that all correlations are

moderate, which indicates that multicollinearity between theindependent variables is not a problem.

In order to test H1 and H2, multiple regression analysis withknowledge exchange within units and knowledge exchangebetween units as predictor variables, and ability to learn fromfailures as dependent variable was first conducted. The resultsshow that both predictors have significant effects on the depen-dent variable (t¼4.8, β¼0.12, p¼0.00 for knowledge exchangewithin units, and t¼11.5, β¼0.28, p¼0.00 for knowledge exchangebetween units. R2¼0.13). These results provide preliminary sup-port for the hypotheses. However, as the effects of these variablesmay depend on the other predictor variables in the model(illustrated by the dotted lines in Fig. 1), hierarchical multipleregression analysis including work characteristics and contractorrelationship management (as predictors) was conducted in orderto test whether knowledge exchange variables had significanteffects above and beyond the other predictors. Leadership involve-ment, role clarity, and empowerment were included in step (1),contractor relationship management was included in step (2), andknowledge exchange within and between units were included instep (3) in the regression. The results are presented in Table 2.

Table 2 shows that knowledge exchange between units is themost important predictor of perceived ability to learn from fail-ures (β¼0.18), and has a significant effect above and beyond theother predictor variables. Empowerment (β¼0.17) and role clarity(β¼0.16) are also important variables for firms' abilities to learnfrom failures. The total model explains 26% of the variance in thedependent variable, and we see that introduction of the knowl-edge exchange variables (in step (3) of the regression) leads to aslight but significant increase in explained variance (up from 23%in step (2)). We also see that knowledge exchange within unitsturns out insignificant when the other predictors are included inthe model. These results provide support for H1b and H2, while

Table 1Pearson's correlation matrix.

Variable Mean SD 1 2 3 4 5

1. Leadership involvement 4.58 0.952. Role clarity 4.53 0.92 0.44n

3. Empowerment 4.88 0.67 0.45n 0.53n

4. Contractor relationship management 4.43 0.82 0.35n 0.29n 0.45n

5. Knowledge exchange within units 4.65 0.89 0.28n 0.24n 0.32n 0.32n

6. Knowledge exchange between units 4.17 0.98 0.26n 0.26n 0.31n 0.30n 0.61n

n All correlations are significant at the po0.01 level.

Table 2Effects of knowledge exchange, contractor relationship management and workcharacteristics on firms' abilities to learn from failures.

Predictor variables Dependent variable: Ability to learnfrom failures

Step 1 Step 2 Step 3

t β t β t β

Leadership involvement 6.0 0.13n 4.7 0.11n 3.9 0.09n

Role clarity 7.8 0.19n 7.7 .18n 6.9 0.16n

Empowerment 10.3 .25n 8.0 .20n 6.9 .17n

Contractor rel. management 5.9 .13n 4.2 .09n

Knowledge exchange within units 1.2 .03Knowledge exchange between units 7.5 .18n

ΔR2 .02 .03ΔF 34.3n 45.7n

R2 0.21 0.23 0.26F 188.3n 152.1n 121.0n

n p o0.001. β represents standardized β coefficients

L.J. Gressgård, K. Hansen / Reliability Engineering and System Safety 133 (2015) 167–175 171

H1a is not supported. We should also notice that contractorrelationship management has a direct effect on perceived abilityto learn from failures (β¼0.09) in addition to the indirect effectthrough knowledge exchange between units (β¼0.17, see Table 3).

H3 and H4 were tested by use of two separate hierarchicalmultiple regression analyses with knowledge exchange withinunits and knowledge exchange between units as dependentvariables. In step (1) of the analyses, the work characteristics (i.e.leadership involvement, role clarity, and empowerment) wereincluded, while contractor relationship management was includedin step (2). The results of the analyses are shown in table 3.

Table 3 shows that contractor relationship management hassignificant positive effects on knowledge exchange within units(β¼0.18) and knowledge exchange between units (β¼0.17). H3aand H3b are thus supported. By introducing this variable in themodel, explained variance increases from 13% to 16% for knowl-edge exchange within units, and from 13% to 15% for knowledgeexchange between units. We further see that all work character-istics have significant effects on the dependent variables, exceptfor role clarity on knowledge exchange within units. This meansthat H4a–a, H4a–b, H4b–b, H4c–a, and H4c–b are supported, whileH4b–a should be rejected. Finally, the results show that contractorrelationship management is the most important predictor ofknowledge exchange both within and between units/installations.

As the arguments leading to the expected relationship betweencontractor relationship management and knowledge exchangebetween units (cf. discussion in section 2.2) to some extent werebased on the expectation of differences in mobility of contractorand operator employees, this represents an important premise forH3b. Our expectation is confirmed as descriptive statistics showthat 41% of operator employees/respondents work at one specificinstallation, while the corresponding number for contractoremployees is 31%. The remaining employees work at severalinstallations (or not at any specific installation). Contractoremployees thus move around (between locations) to a largerextent than operator employees, and may therefore representimportant sources for distribution of knowledge across borders.

In sum, the results of the tests of hypotheses show that onlyknowledge exchange between units has a positive significanteffect on firms' abilities to learn from failures, which leads torejection of H1a while H1b and H2 are supported. H3a and H3b arealso supported as contractor relationship management has posi-tive effects on knowledge exchange both within and betweenunits. Finally, the results provide support for the hypothesizedeffects of work characteristics (leadership support, role clarity, andempowerment), except for H4b–a (lack of significant relationshipbetween role clarity and knowledge exchange within units).

5. Discussion

The results of this study increase our understanding of varia-tions in firms' abilities to learn from failures, and thus make acontribution to answering the question how such learning isenabled [15]. The results show in this respect that knowledgeexchange between units is central in complex distributed inter-organizational systems. An explanation of this observation can berelated to the importance of diversity of opinions and perspectivesin order to build and maintain organizational resilience in complexsystems. According to Reason [91], organizations that experienceincidents and accidents often focus on active (human) failuresrather than trying to dig deeper and uncover problematic latentconditions. However, there is isomorphism between error com-plexity and technical/organizational complexity [92], and diversityin causes of failures (i.e. failures involving multiple factors andcomplex interactions) will therefore force organizations to avoidsuch simple explanations. With reference to this perspective,knowledge exchange between units may increase the heteroge-neity of perspectives and thereby force organizations to lookbeyond simple causes and responses. Diversity of knowledge basesand opinions thus reduce the tendency of organizations to focuson the surface when attempting to learn from failures, and maytherefore promote the organizational function logic instead ofindividual blame [93] when explaining the origins and dynamicsof failures. This is further consistent with the view that diverseinformation stimulates constructive conflict around issues, whichleads people to deliberate about appropriate action [92]. This againshould lead to a better understanding of the problem and tosolutions that reduce future failures. Knowledge diversity maythus reduce the likelihood of failures by increasing employees'abilities to adopt to changes and handle unplanned situations, andthereby promote resilience that “allow people to produce successwhen failure threatens” [94], [p.2].

Interpretation of the results along this line of thought isconsistent with Weick's [95] discussion of requisite variety andemphasis on the benefits of increasing system variety for reducingerrors. Such variety can be increased through several mechanisms,like promoting individual diversity, focus on face-to-face interactionmodes, reduction of bureaucratic rigidity, and promoting individualdiscretion over decisions [92]. Applying this theoretical lens, ourresults may indicate that contractor employees represent a sourcefor individual diversity, and that the heterogeneity of perspectivesthat result from efficient contractor relationship management ispositive for system variety. This argument should be related to theclaim of Goodman and Darr [32] that geographically distributedunits of the same company are likely to have similar problems and

Table 3Effects of contractor relationship management and work characteristics on knowledge exchange.

Predictor variables Dependent variable: Knowledge exchange…

…within units/installations …between units/installations

Step 1 Step 2 Step 1 Step 2

t β t β t β t β

Leadership involvement 6.9 0.16n 5.5 0.13n 5.2 0.12n 3.8 0.09n

Role clarity 1.8 0.04 1.6 0.04 4.5 0.11n 4.4 0.11n

Empowerment 9.1 .23n 6.2 0.16n 8.0 0.20n 5.3 0.14n

Contractor rel. management 8.1 0.18n 7.5 0.17n

ΔR2 0.03 0.02ΔF 65.3n 55.7n

R2 0.13 0.16 0.13 0.15F 106.8n 98.9n 102.8n 93.1n

n p o0.001. β represents standardized β coefficients.

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solutions, but may focus on local unit activities due to their limitedtask interdependencies or interpersonal ties. In such work contexts,contractor employees may help increase cross-unit knowledge ex-change because of higher levels of mobility. The results thus providesupport for the view that the quality of inter-firm relationships is anenabler of learning [46,51,54].

The results also show that work characteristics are important forknowledge exchange and firms' abilities to learn from failures. Roleclarity and empowerment were the most significant factors in thisrespect, which indicates that knowledge exchange processes andorganizational learning to some extent depend on employees'understanding of their own position and work role in the widerorganizational system. It further provides support for the view thathigh-performance work systems represent supportive environ-ments for knowledge sharing, and that participative management[73] promotes failure-based learning. With reference to Weick's[95] emphasis on system variety, it can be argued that these workcharacteristics positively influence “individual discretion” throughbetter understanding of own capabilities and responsibilities, aswell as motivation and work involvement. Our study thus respondsto the call for research by Grant [64] and Foss et al. [59] that there isa need for studies that provide a deeper understanding of a widerset of job characteristics than the limited set defined largely byHackman and Oldham's [96] model.

On a practical level, the results of the study increase ourunderstanding of forces for and against knowledge exchange indistributed environments, and thereby also improve our knowl-edge of how organizational learning processes (particularly learn-ing from failures) in distributed environments can be supported.This is of particular importance in complex and high-risk systemslike offshore drilling, as the isomorphism between error complex-ity and technical complexity [92] makes it fundamental to imple-ment mechanisms to uncover problematic latent and interactingsystem components, and thereby prevent organizations frommaking simple conclusions regarding failure causes. The resultsshow in this respect that organizations should aim at developingefficient systems for follow-up of contractors, as well as designingwork environments that promote employees' empowerment andunderstanding of work roles. These factors thus represent impor-tant capabilities that enable organizations to extract, distribute,and apply useful information from failures made in various partsof the organizational system. Contractor relationship managementand work characteristics should therefore be emphasized inincident learning systems [13] and risk/hazard analyses [97,98]in order to increase our understanding of human and organiza-tional factors, as well as initiatives toward resilient collaboration[99] to promote cross-border knowledge exchange leading toimprovement of organizational performance.

6. Conclusions

Overall, the results show that firms' abilities to learn fromfailures in distributed environments are influenced by the degreeof knowledge exchange between units, and the quality of con-tractor relationship management and work characteristics (roleclarity, empowerment and leadership involvement). The studyunderscores that researchers and practitioners within the field ofsystem reliability and safety need to focus on these aspects.However, the conclusion should be considered together with theresearch limitations. First, the study was based on cross-sectionaldata, which means that causality between variables cannot betested statistically and is therefore solely based on theoreticalreasoning. Second, use of global indicators of knowledge exch-ange and firms' abilities to learn from failures also represents asignificant limitation, resulting in crude measures of the variables.

That is, both knowledge exchange and failure-based learningcan involve different aspects (i.e. types of knowledge that areexchanged and failures that are made), and the measures do notcapture this variation. Also, the measures applied assess therespondents' perceptions, rather than objective indicators. Futureresearch should therefore apply more rigorous (subjective andobjective) measures of both knowledge exchange and failure-based learning, and thereby focusing on various aspects of theconcepts. Consequences of such learning should also be studied,like changes in behavior, routines, etc. Building on the call forresearch by Grant [64] and Foss et al. [59], there is also need forstudies that investigate how knowledge exchange and failure-based learning in distributed environments are influenced by awider set of work characteristics (e.g. work autonomy, specializa-tion, task identity, etc.) and various aspects of contractor relation-ships (e.g. trust, power, opportunism, etc.). Finally, we should notethat knowledge exchange is measured by employees' assessments(perceptions) of the extent of knowledge exchange within andacross units. Future research should therefore more directlymeasure knowledge sharing behavior and investigate antecedentsand effects of this regarding learning from failures and safetybehavior (e.g. risk assessments).

Acknowledgments

The paper is based on data from a research project funded byan operator company in Norway. Representatives from the com-pany were involved in the questionnaire design process (indicatordevelopment).

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