diff --git a/components/org.wso2.carbon.identity.organization.management.service/src/main/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImpl.java b/components/org.wso2.carbon.identity.organization.management.service/src/main/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImpl.java
index 107168cb..4d043862 100644
--- a/components/org.wso2.carbon.identity.organization.management.service/src/main/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImpl.java
+++ b/components/org.wso2.carbon.identity.organization.management.service/src/main/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImpl.java
@@ -20,6 +20,8 @@
 
 import org.apache.commons.collections.CollectionUtils;
 import org.apache.commons.lang.StringUtils;
+import org.apache.commons.logging.Log;
+import org.apache.commons.logging.LogFactory;
 import org.wso2.carbon.context.PrivilegedCarbonContext;
 import org.wso2.carbon.identity.organization.management.service.constant.OrganizationManagementConstants;
 import org.wso2.carbon.identity.organization.management.service.dao.OrganizationManagementDAO;
@@ -155,6 +157,8 @@
  */
 public class OrganizationManagerImpl implements OrganizationManager {
 
+    private static final Log LOG = LogFactory.getLog(OrganizationManagerImpl.class);
+
     private final OrganizationManagementDAO organizationManagementDAO =
             new CacheBackedOrganizationManagementDAO(new OrganizationManagementDAOImpl());
 
@@ -178,7 +182,12 @@ public Organization addOrganization(Organization organization) throws Organizati
             getListener().postAddOrganization(organization);
         } catch (OrganizationManagementException e) {
             // Rollback created organization.
-            deleteOrganization(organization.getId());
+            try {
+                deleteOrganization(organization.getId());
+            } catch (OrganizationManagementException exception) {
+                LOG.error("The server encountered an error while deleting the organization due to a rollback " +
+                        "after a failed organization creation.", exception);
+            }
             throw e;
         }
         return organization;
diff --git a/components/org.wso2.carbon.identity.organization.management.service/src/test/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImplTest.java b/components/org.wso2.carbon.identity.organization.management.service/src/test/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImplTest.java
index c3d1f73e..8397570c 100644
--- a/components/org.wso2.carbon.identity.organization.management.service/src/test/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImplTest.java
+++ b/components/org.wso2.carbon.identity.organization.management.service/src/test/java/org/wso2/carbon/identity/organization/management/service/OrganizationManagerImplTest.java
@@ -671,6 +671,22 @@ public void testGetParentOrganizationId() throws OrganizationManagementException
         Assert.assertEquals(organizationManager.getParentOrganizationId(ORG2_ID), ORG1_ID);
     }
 
+    @Test(expectedExceptions = OrganizationManagementException.class,
+            expectedExceptionsMessageRegExp = ".*Server encountered error while executing post listeners.*")
+    public void testAddOrganizationFailWhileRoleBack() throws Exception {
+
+        Organization sampleOrganization = getOrganization(UUID.randomUUID().toString(), NEW_ORG_NAME, ORG_DESCRIPTION,
+                SUPER_ORG_ID, STRUCTURAL.toString());
+        TestUtils.mockCarbonContext(SUPER_ORG_ID);
+        OrganizationManagerListener mockOrgMgtListener = OrganizationManagementDataHolder.getInstance()
+                .getOrganizationManagerListener();
+        Mockito.doThrow(new OrganizationManagementException("Server encountered error while executing post listeners."))
+                .when(mockOrgMgtListener).postAddOrganization(sampleOrganization);
+        Mockito.doThrow(new OrganizationManagementException("Server encountered error while deleting organization."))
+                .when(mockOrgMgtListener).preDeleteOrganization(sampleOrganization.getId());
+        organizationManager.addOrganization(sampleOrganization);
+    }
+
     private void setOrganizationAttributes(Organization organization, String key, String value) {
 
         OrganizationAttribute organizationAttribute = new OrganizationAttribute(key, value);