This dissertation examines how firms strategically respond to failures and the role of stakeholders in these responses. I propose that learning from stakeholder cues results in substantive behavioral changes which not only exceed stakeholders' immediate expectations but also enable firms to avoid failures. Such failure-learning is contingent on whether failures are experienced directly or indirectly, and the degree of stakeholder involvement. Through two essays, I explore these ideas in novel and increasingly prevalent failure settings. In the first essay, I show that even without active direction by regulators, firms experiencing technological failures in the form of data breaches go beyond mandatory disclosure and strategically renew themselves through divestitures and top management turnover. Drawing on the failure-learning and strategic renewal literatures, I argue that technological failures occur possibly due to dysfunctional organizational and technical routines which stricken firms interpret broadly as problems of organizing. I test my hypotheses on unrelated subsidiary divestitures and Chief Technology Officer turnover undertaken by 6269 U.S. publicly traded firms of which 149 firms experienced data breaches during the period 2005-2016. I find that firms' size and diversification increase their vulnerability to failures. While firms respond through divestitures and management turnover, only divestitures reduce the recurrence of failures. Firms' responses are also independent of regulatory stringency. In the second essay, I invoke resource dependence and institutional arguments and examine how social divestments, which represent a breakdown (failure) in the relationship between a prominent institutional investor and a targeted firm, affect the social responsibility behaviors of the remaining portfolio firms. I argue that social divestments signal the potential for resource withdrawal and delegitimization. Accordingly, remaining portfolio firms incorporate their vicarious learning by improving their ESG practices. I test my hypotheses within the context of social divestments by Norway's sovereign wealth fund and changes in the ESG ratings of its U.S.-based portfolio firms over the period 1998-2011. I find that while larger equity holdings representing greater resource leverage enhances the positive effect of divestment of peers, complementary voice-based activism that exerts institutional pressures on portfolio firms is more effective in combination with the divestment tactic. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]