Organizational learning is the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge. This knowledge is broad, covering any topic that could better an organization. Examples may include ways to increase production efficiency or to develop beneficial investor relations. Knowledge is created at four different units: individual, group, organizational, and inter organizational.
The most common way to measure organizational learning is a learning curve. Learning curves are a relationship showing how as an organization produces more of a product or service, it increases its productivity, efficiency, reliability and/or quality of production with diminishing returns. Learning curves vary due to organizational learning rates. Organizational learning rates are affected by individual proficiency, improvements in an organization’s technology, and improvements in the structures, routines and methods of coordination.
Organizational Learning Theory: The Three Types of Learning
Argrys and Schon (1996) identify three levels of learning which may be present in the organization:
- Single loop learning: Consists of one feedback loop when strategy is modified in response to an unexpected result (error correction). E.g. when sales are down, marketing managers inquire into the cause, and tweak the strategy to try to bring sales back on track.
- Double loop learning: Learning that results in a change in theory-in-use. The values, strategies, and assumptions that govern action are changed to create a more efficient environment. In the above example, managers might rethink the entire marketing or sales process so that there will be no (or fewer) such fluctuations in the future.
- Deutero learning: Learning about improving the learning system itself. This is composed of structural and behavioral components which determine how learning takes place. Essentially deuterolearning is therefore “learning how to learn.”
This can be closely linked to Senge’s concept of the learning organization, particularly in regards to improving learning processes and understanding/modifying mental models.
Effective learning must therefore include all three, continuously improving the organization at all levels. However, while any organization will employ single loop learning, double loop and particularly deutero learning are a far greater challenge.
Benefits of Learning Organization
- Maintaining levels of innovation and remaining competitive.
- Improved efficiency.
- Having the knowledge to better link resources to customer needs.
- Improving quality of outputs at all levels.
- Improving corporate image by becoming more people oriented.
- Increasing the pace of change within the organization.
- Strengthening sense of community in the organization.
- Improving long term decision making.
- Improving knowledge sharing.
Characteristics of Learning Organization
1. Systems thinking
The idea of the learning organization developed from a body of work called systems thinking. This is a conceptual framework that allows people to study businesses as bounded objects. Learning organizations use this method of thinking when assessing their company and have information systems that measure the performance of the organization as a whole and of its various components. Systems thinking states that all the characteristics must be apparent at once in an organization for it to be a learning organization. If some of these characteristics are missing then the organization will fall short of its goal.
2. Personal mastery
The commitment by an individual to the process of learning is known as personal mastery. There is a competitive advantage for an organization whose workforce can learn more quickly than the workforce of other organizations. Learning is considered to be more than just acquiring information; it is expanding the ability to be more productive by learning how to apply our skills to our work in the most valuable way. Personal mastery appears also in a spiritual way as, for example, clarification of focus, personal vision and ability to see and interpret reality objectively. Individual learning is acquired through staff training, development and continuous self-improvement; however, learning cannot be forced upon an individual who is not receptive to learning. Research shows that most learning in the workplace is incidental, rather than the product of formal training, therefore it is important to develop a culture where personal mastery is practiced in daily life. A learning organization has been described as the sum of individual learning, but there must be mechanisms for individual learning to be transferred into organizational learning. Personal mastery makes possible many positive outcomes such as individual performance, self-efficacy, self-motivation, sense of responsibility, commitment, patience and focus on relevant matters as well as work-life balance and well-being.
3. Mental models
Assumptions and generalizations held by individuals and organizations are called mental models. Personal mental models describe what people can or cannot detect. Due to selective observation, mental models might limit peoples’ observations. To become a learning organization, these models must be identified and challenged. Individuals tend to espouse theories, which are what they intend to follow, and theories-in-use, which are what they actually do. Similarly, organizations tend to have ‘memories’ which preserve certain behaviours, norms and values. In creating a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust. To achieve this, the learning organization needs mechanisms for locating and assessing organizational theories of action.
4. Shared vision
The development of a shared vision is important in motivating the staff to learn, as it creates a common identity that provides focus and energy for learning. The most successful visions build on the individual visions of the employees at all levels of the organization, thus the creation of a shared vision can be hindered by traditional structures where the company vision is imposed from above. Therefore, learning organizations tend to have flat, decentralized organizational structures.
5. Team learning
The accumulation of individual learning constitutes team learning. The benefit of team or shared learning is that staff grow more quickly and the problem solving capacity of the organization is improved through better access to knowledge and expertise. Learning organizations have structures that facilitate team learning with features such as boundary crossing and openness. In team meetings members can learn better from each other by concentrating on listening, avoiding interruption, being interested in and responding. As a result of development, people don’t have to hide or overlook their disagreements. By those they make their collective understanding richer. Team learning is at its best: The ability to think insightfully about complex issues, the ability to take innovative, coordinated action and the ability to create a network that will allow other teams to take action as well. Team’s focus is on transferring both quiet and explicit information across the group and creating an environment where creativity can flourish. Team learn how to think together. Team learning is process of adapting and developing the team capacity to create the results that its members really want. Team learning requires individuals to engage in dialogue and discussion; therefore team members must develop open communication, shared meaning, and shared understanding. Learning organizations typically have excellent knowledge management structures, allowing creation, acquisition, dissemination, and implementation of this knowledge in the organization.