Small Steps that Matter: Incremental Learning,Slack Resources and Organizational Performance

This paper examines the antecedents, consequences and moderators of incremental learning capabilities, understood as an organization's ability to gradually adapt and expand its knowledge base. Conceptualized as a dynamic capability, incremental learning is expected to be a vital driver of organizational adaptation. As dynamic capabilities consist of bundles of relatively stable routines, it is proposed that an organization's level of incremental learning capabilities will be highly persistent over time. It is also argued that building and exercising incremental learning capabilities is resource intensive and will as such tend to rely on the availability of sufficient slack resources. Last, it is suggested that incremental learning will be positively related to organizational performance, especially when the underlying business model is labour rather than capital intensive. To test these theoretical ideas, the authors draw on extensive panel data from all public non‐specialist hospitals in England and find broad support for their hypotheses.