Knowledge gained from action and reaction learning in small and medium‐sized enterprises: Two sides of the same coin

Abstract

Editor's Summary In competitive business market systems, small to medium‐sized enterprises (SMEs) interact continually as leaders and followers. SMEs can engage in active learning, leading the way and learning from the consequences, or they can learn reactively by observing and imitating rivals in their competitive environment. Integrating a theory of action learning with a theory relating learning levels with organizational change leads to the concept of reaction learning. This theoretical view of learning fits the observed behavior of SMEs in a competitive environment. Recognizing both action and reaction learning promotes better understanding of how those in the business community make strategic decisions and learn from their own experiences and from their competitors.