Journal of Air Transport Management 58 (2017) 135e143

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Journal of Air Transport Management

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How airlines learn from airline accidents: An empirical study of how attributed errors and performance feedback affect learning from failure

* Euisin Kim a, , Mooweon Rhee b a Kyung Hee Cyber University, School of Business, 26 KyungHee Dae-ro, DongDaeMoon-gu, Seoul, 130-739, Republic of Korea b Yonsei University, School of Business, 50 Yonsei-ro, Seodaemun-gu, Seoul, 120-749, Republic of Korea article info abstract

Article history: This research examined organizational learning factors by asking whether airlines learn more from Received 28 February 2016 internally or externally attributed causes of airline accidents. Our dependent variable, organizational Received in revised form learning, was defined as a decrease in subsequent airline accident rates. To test the moderating effect of 10 October 2016 performance feedback, we predicted that performance relative to aspiration level would negatively Accepted 18 October 2016 moderate the relationship between the attribution of airline accidents and the subsequent accident rate. Overall, the findings of this research revealed that the greater the proportion of internally attributed causes is, the more likely it is that an airline will learn from its accidents and will experience a lower Keywords: fi Organizational learning subsequent accident rate. In addition, our ndings regarding the moderating effect of performance Learning from airline accidents feedback showed that airlines performing below their aspiration levels are more likely to learn from Learning from failure internally attributed causes of accidents and will therefore experience a lower subsequent accident rate. Attribution theory We conducted this investigation by collecting data from the U.S. National Transportation Safety Board Performance feedback (NTSB) database for all of the accidents (accidents and incidents) experienced by U.S. commercial airlines Internal attribution during the 1990e2014 period. Our research findings provide implications for future studies that discuss Performance relative to aspiration level the factors affecting organizational learning. © 2016 Elsevier Ltd. All rights reserved.

1. Introduction with the organization as an openly shared asset. Consequently, individual and organizational learning should be viewed as distinct Earlier studies have identified the causes of airline accidents as concepts. Previous studies have found that organizational learning individual societal and psychological level crises; for example, pilot is not just the sum of the individual learning of each organizational health issues (Broach et al., 2003; Phillips and Talley, 1992; Smith member (Fiol and Lyles, 1985; Hedberg, 1981). According to and Golden, 1987). To solve these issues, it is important to Hedberg (1981), organizations tend to pass on what they have manage the pilots, occasionally follow up on the crews' health, obtained and learned to others, including non-members, via develop a sense of teamwork among the crew, and perform regular established norms and company histories (Fiol and Lyles, 1985; mechanical safety checks. If we assume that the causes of airline Lawrence and Dyer, 1983). In addition, Hedberg (1981) revealed accidents stem from the problems of individuals, we may posit that that “Organizations do not have brains, but they have cognitive individual level studies are the only possible solutions, which systems and memories. As individuals develop their personalities, would lead to the view that organizational learning is simply the personal habits, and beliefs over time, organizations develop world sum of individual learning. However, in many cases, an organiza- views and ideologies. Members come and go, and leadership tion continues to exist longer than the individuals' roles in the changes, but organizations' memories preserve certain behaviors, company, and the content of individual learning tends to remain mental maps, norms, and values over time” (Kim and Kim, 2014). Hence, it is reasonable to conclude that learning from airline acci- dents occurs at the organizational level rather than through the aggregation of individual members' learning. * Corresponding author. The U.S. National Transportation Safety Board (NTSB, 2015) de- E-mail addresses: [email protected] (E. Kim), [email protected] fi “ (M. Rhee). nes an aircraft accident as an occurrence associated with the http://dx.doi.org/10.1016/j.jairtraman.2016.10.007 0969-6997/© 2016 Elsevier Ltd. All rights reserved. 136 E. Kim, M. Rhee / Journal of Air Transport Management 58 (2017) 135e143 operation of an aircraft which takes place between the time any weather-turbulence, equipment malfunction, passenger error, person boards the aircraft with the intention of flight and all such ground crew error, air traffic control error and flight into terrain persons have disembarked, and in which any person suffers death (National Transportation Safety Board). Investigators carefully and or serious injury, or in which the aircraft receives substantial thoroughly investigate the causes of airline accidents because the damage” (National Transportation Safety Board). Additionally, the results of an investigation determine responsibility for the accident. NTSB defines an incident as “an occurrence other than an accident For example, a Korean Air Flight 801 accident occurred in Guam on that affects or could affect the safety of operations” (National August 6, 1997. The NTSB performed an investigation of the acci- Transportation Safety Board). In the organizational learning liter- dent and concluded that the probable causes were internal: the ature (Baum and Dahlin, 2007), accidents have been identified as captain's fatigue, Korean Air's improper flight crew training, and errors and acknowledged as failures. Learning from these failures is the intentional outage of the Guam ILS Glide slope due to a main- considered critical since this learning aids in avoiding the repetition tenance problem (Kim and Kim, 2014; N. T. S. B. National of similar accidents in the future; learning from and avoiding future Transportation Safety Board, 2009). Based on these findings, mistakes are abilities that are directly connected to organizational Korean Air was involved in a lawsuit in 2000, which was settled for survival and growth. The literature that relates to learning from $70,000,000 US dollars in compensation on behalf of 54 families failure reveals that learning occurs among organizations based on (Krause, 2000). As a consequence of this major accident, Korean Air their own experiences or the experience of others (vicarious completely redesigned its safety system by 1999. In terms of learning) and that organizations adjust their behavior according to learning from the internally attributed errors, Korean Air endeav- what they learn (Levitt & March 1988). Although vicarious learning ored to transform its cockpit culture, which involved a strict top- has been emphasized as an important phenomenon by organiza- down communication system between senior and junior level pi- tional theorists (Levitt & March 1988), one study that analyzed a lots. To reduce captain fatigue and resolve cultural issues, many hotel database found that organizations are less likely to learn from foreign pilots were hired (Koeing and Mendoza, 2013). the experiences of others (Baum and Ingram, 1998). More recently, Focusing on learning from accidents or failures is recognized as organizational learning studies have focused on organizations' important issue, as promoting safety is the primary concern of the experiential learning from their own failures (Denrell, 2003; transportation industry (Perrow, 2011). Frequent accidents lead to Haunschild and Rhee, 2004; Haunschild and Sullivan, 2002). negative publicity and may drive losses in the stock market or even Haunschild and Sullivan (2002) applied this notion in an airline the cessation of an airline's operations (Borenstein and industry setting and found that airlines learn from their own ac- Zimmerman, 1988; Chalk, 1987), and studies have examined cident experiences and are more likely to avoid future accidents. whether consumers refuse to choose airlines that have experienced Transportation companies such as railroads and airlines encounter an accident (Mitchell and Maloney, 1989). Due to frequent acci- accidents and learn from their experiences and then adjust their dents, one of which is recorded as the deadliest single-aircraft ac- existing routines and invest in new facilities to prevent similar cident in historydthe crash of Japan Airlines Flight 123 that killed accidents. Connecting attribution and motivation at an individual 520 peopledJapan Airlines suffered great financial losses level, Weiner (1985) argued that causal attribution is closely related (Bhaskhara, 2013; Hongo, 2015; Reason, 1997). Due to the emphasis to expectations and that this connection tends to affect future on safety, many researchers have begun to study learning from performance. Internal attributions of error to unstable and organizational accidents (Reason, 1997, 2016) in various industries manageable conditions, such as attributing an accident to care- such as railroads (Baum and Dahlin, 2007; Desai, 2016), airlines lessness or the inadequacy of response efforts, result in more (Haunschild and Sullivan, 2002), and hospitals (Desai, 2015) and consistent performance in the future. On the other hand, external learning from product recalls in the automobile industry attributions, such as attributing an accident to misfortune or to the (Haunschild and Rhee, 2004; Rhee and Haunschild, 2006) to reduce faults of others, and internal stable attributions, such as admitting errors. Researchers have not only focused on individual accidents the accident was the fault of an incompetent employee, result in a but also started to explore what actually caused the accidents, and lack of incentive to grow or progress (Weiner, 1985). they are looking for ways to improve or learn from these causes Beyond the individual level, organizations are also interested in (Haunschild and Sullivan, 2002). Building on this work, various whether their failures can be attributed to internal or external forms of accident causes have been categorized and modeled into causes, as the type of cause influences performance in the future simple or complex causes of accidents. Haunschild and Sullivan (Heider, 1958;Weiner, 1985). At the organizational level, organiza- (2002) examined whether airlines learn more from errors with tions adapt based on their experiences of failure such as accidents; heterogeneous or homogeneous causes. They found that errors these experiences require distinction regarding whether the causes with heterogeneous causes result in better learning among airlines should be internally or externally attributed (Reason, 1997). Using because those causes led to a more profound and intense search for attribution theory (Burger, 1981; Ford, 1985), researchers examined causality than accidents with homogeneous causes. In addition to how decision makers at airlines assign causal responsibility for investigating the heterogeneous or homogeneous categories, particular organizational errors. In an organizational-level study, exploring the internal or external attributions of error is considered March and Olsen (1975) stated that organizational choices are important because the effects of controllable (internal) or uncon- typically viewed as a derivative of individual actions. At the orga- trollable (external) causes of accidents on learning can be observed. nizational level, attribution decisions have important implications Because all organizations such as airline companies have limited for motivation (Bandura, 1977; Weiner, 1974). If the decision resources, particularly when the airline industry is suffering from makers at a firm decide to attribute the cause of an accident financial losses (Done et al., 2009; IATA, 2008), not all airlines can internally, to causes that are under their control, they will be focus on both the internal and external causes of accidents when motivated to learn from the failure, to improve, and to reduce the they allocate resources (Reason, 1990) to reduce accident rates. As a likelihood of future failure. However, if the decision makers at a strategic response to resource limitations and financial losses, it is firm attribute an accident to external causes, they are less likely to important to investigate whether organizations learn more from be motivated because these causes are outside of the organization's internal or external attributions of error. Airlines that are in poor control; the organization's decision makers will perceive this fail- shape financially tend to neglect safety issues more than financially ure as an area from which they cannot learn and in which they stable airlines. Therefore, for financially poor performing airlines, it cannot improve. The various causes of airline accidents include is important to strategically explore the most efficient methods of