Handbook of Research on Entrepreneurship in Professional Services
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Handbook of Research on Entrepreneurship in Professional Services

Edited by Markus Reihlen and Andreas Werr

The expert contributors discuss entrepreneurship and innovation from a number of different perspectives, including the entrepreneurial professional team, the entrepreneurial firm and the institutional environment. The first part of the book looks at the challenges of entrepreneurship specific to the professional service firm while the second explores the creation and exploitation of entrepreneurial opportunities in the professional service team. Part III turns to the organization and Part IV to the management and growth of the entrepreneurial professional service firm. The final part discusses the interplay between professions, firms and the institutional environment.
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Chapter 3: Dealing with errors in professional service firms

Martin Stollfuß, Jost Sieweke, Michael Mohe and Hans Gruber


It is unlikely for employees to commit no errors. This can be ascribed to human characteristics such as opportunistic behavior and limited skills and knowledge, as well as to latent conditions within organizations (Reason, 1990). Organizations are therefore forced to deal with errors in order to reduce potentially negative outcomes. Effective error management involves minimizing the negative potential of errors (e.g. van Dyck, Frese, Baer, & Sonnentag, 2005) and deriving positive effects such as learning (Argyris, 1976, 1993; Edmondson, 1999; Festner et al., 2005; Gartmeier, Bauer, Gruber, & Heid, 2008; Nordstrom, Wendland, & Williams, 1998). The literature identifies several constituents of effective error management, including quick error detection, communication about errors, sharing of error knowledge, and quick error handling (van Dyck et al., 2005). For analytical reasons, these aspects of effective error management are often discussed separately in the literature. Nevertheless, the literature on learning from errors (Bauer, 2008: 33) and error management (van Dyck et al., 2005) indicates that successful error management should be understood as a process whose starting point is closely related to the detection of errors (Figure 3.1). In particular, error handling, error detection, and communication about errors are regarded as the hallmarks of effective error management (van Dyck et al., 2005). Error handling is related to damage control, which directly affects profit and important mediators like reputation, while error detection and communication are closely related to organizational learning, an important mediator of firms’ performance. The creation and distribution of knowledge about errors is also believed to influence a firm’s performance. Van Dyck et al. (2005), for instance, found a substantial correlation between effective error management and organizational performance. Similarly, Cannon and Edmondson (2001) revealed that work groups in which errors are communicated and discussed perform better than groups in which errors lead to blaming.

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