Sweden experienced a severe crisis in the real estate market between 1990 and 1994. After nearly a decade of success, the industry was severely struck. The obvious questions to rise are: what happened and how could it happen so suddenly? Were there no warning signals or where they overlooked by the speed blindness of the real estate industry? The research question is raised if theories about organisational learning can explain the slowness of adaptation. The study raises the question about the companies’ ability to learn and unlearn when their business conditions changes. The focus lies on the construction- and real estate companies listed at the Swedish Stock Exchange 1990. They were major actors during the boom and the bust on the real estate market. The analysis of these companies covers the period between 1982 and 1992. Their ability to adapt themselves to changes in the environment is explained by the existence and degree of organisational inertia, which is divided into insight inertia and action inertia. The research focuses on the finding and identification of industry recipes, which denote the shared knowledge base that the companies within the industry took as familiar.

The study shows that a number of warning signals did exist during 1987 and 1988. These warning signals were reinforced over time as new ones emerged in 1989 and 1990.

The companies investments culminated in 1989 and 1990. The analysis of the companies investments during these years shows that the warning signals did not have any significant effect on investment volumes. A conclusion is that the companies’ strategies between 1985-1990 could be characterised as "more of the same recipe". The companies gradually achieved an insight about the nature of the changes in the environment but it occurred first during 1991 and 1992. The study can give a better understanding of the companies’ ability to leam and unlearn when their business conditions changed during the crisis.