A LEARNING ORGANIZATION

A Learning Organization

A Learning Organization

What is central to the concept of a learning organisation is both organisational learning, defined as the intentional use of learning processes to continuously transform the organisation (Dixon, 1999) and the related concept of knowledge (Argyris and Schon, 1978; Pedler et al., 1997; Revans, 1982; Senge, 1995; Schein, 1993). Assuming that well-developed core competencies serve as a launch point for new products and services (Nevis et al., 1995), what underpins the general prescription that firms become learning organisations is the capability to create, integrate and apply knowledge. Such capability is critical to firms developing sustainable competitive advantage (Bierly et al., 2000).

Conversely, a criticism of the knowledge-based approach is the apparent disconnect between learning and performance. While knowledge and knowledge management processes should impact organisational performance, there is evidence that suggests something is lacking (Bierly et al., 2000; Cavaleri, 2004). Questions also remain about how senior managers might apply specific leadership actions in order to foster organisational learning (Johnson, 2002) or overcome barriers to organisational learning (Argyris, 1992).

Arguably, part of the problem is in the assumptions underlying the terms information and knowledge. These assumptions are hard to identify and difficult to test and therefore the link with organisational performance, not surprisingly, remains fuzzy. In this paper, the term information is defined as the flow of messages or data that can be codified in some explicit form, which when written down or depicted in some meaningful way can “inform” the recipient (Neef, 1999). Conversely, knowledge is that information placed in context by virtue of human interpretation, or as Nonaka and Takeuchi (1999) state, it (knowledge) is created by the anchoring of the beliefs and the commitment to that flow of information by its holder. Accordingly, knowledge is mainly embedded in people; it can be written down and made “explicit”, but rarely without losing a good deal of its richness and applicability. Consequently, explicit knowledge is often also relegated to the lowly title of information (Neef, 1999). More often, knowledge remains tacit and invaluable in terms of innovation.

Given the rate of change and the changing nature of work, organisations have come to view learning as a more critical variable than it might have been in the past. The landscape in which today's organisations must operate is characterised by continual and disruptive change (Senge, 1995; Kotter and Cohen, 2002). To remain relevant and competitive, organisations must continuously adapt and transform through the process of learning at all levels of the organisation (Senge, 1995). Moreover, making the transition from doing to knowing in business, from capacity of effort to capacity of insight, is both challenging and hazardous. To illustrate the downside risk, as Housel and Bell (2001) point out, the fact is that more than half of the companies listed as members of the Fortune 500 in 1993 are not on that list today.

For companies competing in the knowledge economy, the capacity to leverage knowledge is critical. Industry now faces a dramatically new competitive environment that ...