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Literature Review On Learning Organization

Literature Review


The Learning Organization

A learning organization is an organization skilled at creating, acquiring and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights (Garvin, 1993). A learning organization provides a stimulating climate for members to continually strive for new approaches in acquiring knowledge. Specifically, organizational learning can be defined as developing new knowledge that changes behavior to improve future performance (Simon, 1969; Argyris, 1977; Fiol & Lyles, 1985; Garvin, 1993; Sackmann, 1991; Putnam, 1983). Such learning is not simply about making better decisions but also about making sense of our perceptions and interpretations of our environment. Organizational learning may be either adaptive or generative. As Quinn (1992) suggests, "A unique characteristic of knowledge is that it is one of the few assets that grow most - usually exponentially - when shared" (p. 254). Moreover, Garvin (1998) suggests that it is time to move away from high aspirations and mystical advice to managers and move on to clearer guidelines for practices and operational advice. He argues that we need to inform managers how they can build a learning organization.

Furthermore, the organization structure of learning organizations has been described in the literature as organic, flat, and decentralized, with a minimum of formalized procedures in the work environment. Some research has supported this finding: organizations with a strong learning capability tend to have low scores on formalization in their organization structure. These research results clearly show a negative relationship between formalization and learning capability (Goh & Richards, 1997).

Other researchers (Mohrman and Mohrman, Jr., 1995) have also found that learning organizations generally have fewer controls on employees and have a flat organization structure that places work teams close to the ultimate decision-makers. The implication is that the core aspects of a learning environment can only operate effectively when the organization has a flat, nonhierarchical structure with minimal formalized controls over employee work processes. The literature on learning organizations frequently asserts that these organizations strongly emphasize the training and skill development of their employees. However, the training is not in the traditional mode of individual job-focused skills. Learning organizations invest in training experiences that develop entire teams or whole work units. The training also emphasizes the development of a common experience, framework, or theory of action for the team or work unit (Mohrman & Mohrman, Jr., 1995). Skill competencies also need to match some of the behavioral skill sets required in a learning organization, such as shared leadership, coaching behaviors, and providing feedback. Learning organizations also start their training of employees more toward behavioral skills and less toward technical skills that have a short shelf-life (Kiernan, 1993).

The Importance of Communication in a Learning Organization

What potentially makes the communication in learning organizations different from that in other organizations is the dissemination and shared interpretation of information. The amount, timing, and kinds of communication used are paramount to learning. For example, in new product development, cross-functional activities, discussions, and communication enable organizations to rapidly develop and launch new products (Cooper & Kleinschmidt, 1991; Wilson, 1992). While many organizations have attempted to become learning organizations, not all have been able to transform themselves and achieve the disciplines suggested by Senge or the kinds of communication presented above. Something else must take place for this philosophy to take hold. Our contention is that most organizations striving for this type of system fall short for many reasons. The learning organization does not just happen. Communication and conditions must be developed and nurtured prior to and during this new mode of operation if changes are to be effective. Perhaps successful learning organizations realize they undergo a developmental process requiring more than simply a new language. A learning organization engages in a new way of communicating and interacting. An organizational environment based on a social exchange approach could provide a basis for continual renewal and learning (Barker, Camarata, & Wen, 1997; Blau, 1964; Knapp, 1984; Huber, 1991).

With more and more time-sensitive information available to organizations, the acquisition, interpretation, distribution, and transformation of this information into market-demanded outcomes is vital for survival (Sinkula, 1994). Organizations need to answer many questions as the information is made available. As more information is presented ever more quickly, employees find that they must approach work differently. Continuous learning is needed to keep up with current and potential developments in their industry. Drucker (1994) indicates that workers have to change their underlying attitudes, values, and beliefs about work and lifelong learning. Knowledge-based work is totally different from the basic "hands-on" work of most industrial societies. Industrial work is being changed by global closeness and information technology. As post-industrial societies shift toward service, their chief product moves from the concrete toward the less tangible. The complexity and uncertainty of this shift changes the dominant question from "how do we communicate/manage what we have?" to "what and how will we need to communicate/manage" in the future? An organization that can meet these challenges has been referred to as a learning organization (Senge, 1990), characterized by knowledgeable, interdependent, human communication networks necessary to achieve the organization 's fundamental mission, goals, and objectives.

The Core of a Learning Organization

In essence, being a learning organization requires an understanding of the strategic internal drivers needed to build a learning capability (Stata, 1989). This paper synthesizes the description of management practices and policies alluded to in the literature about learning organizations. Only those mentioned repeatedly by many writers were considered as differentiating management practices of an effective learning organization. From this review, it is argued that learning organizations have the following core strategic building blocks. The first one is the Mission and Vision which is characterized as the clarity and employee support of the mission, strategy, and espoused values of the organization. A learning organization is one where employees are empowered to act based on the relevant knowledge and skills they have acquired and information about the priorities of the organization. According to Senge (1990), information about the mission of an organization is critical to empowering employees and developing innovative organizations. Without this, people will not extend themselves to take responsibilities or apply their creative energies. The second core aspect of a learning organization is the leadership. Leadership is perceived as empowering employees, encouraging an experimenting culture, and showing strong commitment to the organization. In a highly competitive environment, employees are encouraged to take calculated risks, to deal with uncertainty, and to innovate. Such an environment requires a shared leadership style in a nonhierarchical organization. Managers are seen as coaches, not controllers; level or rank is not as important as the ability of the individual to contribute to the organization's performance. Leaders need the skills to facilitate change. Leaders should also be able to provide useful feedback to employees and teams to help them identify problems and opportunities. Leadership in a learning organization means involving employees in decision-making. Leaders should also be willing to accept criticism without being overly defensive and to learn from it. This sends a powerful signal to employees of the nonhierarchical and shared participative leadership being practiced at Nortel. It also creates a common experience and the development of shared mental models about problems and issues in the organization (Senge, 1990). The third is a culture that encourages experimentation. An important if not essential part of a learning organization is its ability to create new knowledge and to use it to capitalize on new opportunities open to the organization. This requires questioning the current status quo and how things are done, which allows employees to bring new ideas into the organization. Managers should also be willing to encourage individuals and teams to continuously improve work processes and try new ideas. Obviously a system should be in place to reward innovative ideas that work. Furthermore, the transfer of knowledge is as well among the core of a learning organization. Skill and knowledge acquisition are obviously useless unless they can be transferred to the immediate job by the employee. It is even better if this knowledge can also be transferred to other parts of the organization to solve problems and energize creative new ideas. Learning from past failures and talking to other staff members about successful practices or experiences are all part of the transfer of knowledge. Learning organizations not only encourage these practices but also have mechanisms or systems that allow them to happen. Part of this knowledge transfer involves learning successful practices from other organizations and competitors as well. Finally, an emphasis on teamwork and group problem-solving as the mode of operation and for developing innovative ideas is also imperative in a learning organization. Although presented as separate dimensions, these building blocks are interdependent and mutually supportive conditions in a learning organization. It is further argued that an "organic" organization structure, where job formalization is low, as well as the acquisition of appropriate skills and knowledge by employees are also essential additional building blocks. These additional elements are the supporting foundation for the achievement of the core building blocks in the list.

Non-profit Non-Government Organizations

Non-government organizations (NGOs) operation historically has been dependent upon interstate organizations for the provision of channels of action. However, partly due to the limitations on participation and expression inherent when international arenas are controlled fundamentally by states, these NGOs have also devised new channels of action that allow them more freedom. International NGOs not only cross formal national boundaries - they also have created a direct and independent form of non-governmental diplomacy through networks of their own. (Sikkink, 1993) The economic, informational and intellectual resources of NGOs have garnered them enough expertise and influence to assume authority in matters that, traditionally, have been solely within the purview of state administration and responsibility. Further, many NGOs claim certain legitimacy for their causes by virtue of popular representation. Whether or not the influence and independent authority claimed by NGOs by virtue of their expertise and mandate of popular sovereignty amount to an erosion of formal state sovereignty is both a theoretical and empirical question.

A current "general review of arrangements for consultations with non-governmental organizations" (NGOs) offers one opportunity to reflect on the role within the United Nations system of organizations of civil society and to discuss how they could become more active partners in shaping future UN policies. An illustration for this is the United Nations Children’s Fund. Being a non-profit NGO, it have acquired a voluntary form of delivering services. There is no uniform definition of the voluntary sector across countries and disciplines. A clarification of commonly used terms is therefore proposed, together with a fairly standard view of the contours of the sector. A variety of terms are used to refer to the voluntary sector or related parts of the economy, including "third sector", "independent sector", "charities", "non-governmental organizations" (NGOs), "non-profits" and "social economy". Usage is sometimes loose, but a fairly standard understanding of what the various terms represent runs as follows. "Third sector" is a helpful notion with which to start. Capitalist market economies can be thought of as comprising a state sector, a conventional private business sector and a third sector that is neither government nor standard private business. The state sector is composed of government and state-owned enterprises, and the private business sector of capitalist enterprises primarily oriented towards the pursuit of profit for their investors. The third sector can be defined as the set of "organizations where a category of agents other than investors are the explicit, intended beneficiaries of the organization's economic activity" (Gui, 1991, p. 552). This sector includes all private non-capitalist organizations such as cooperatives, mutual insurance funds, and credit unions; and non-profit organizations namely, associations, clubs, and charities, which may or may not sell goods and services. Third-sector organizations and non-profit organizations in particular, may be set up for the mutual benefit of their members, for example, sports clubs or trade associations, or for public benefit, for example, charities (Gui, 1991).

Non-profit or voluntary organization "do not seek to generate monetary profits for distribution to their owners or officers" (Ben-Ner, 1986, p. 4). This characteristic is often reflected in a legal constraint that they should not distribute profits to their members or owners. In practice, identifying the precise contours of the non-profit sector is not always easy and differences in national usage, tax laws and traditions complicate this task (Salamon and Achier, 1997). An international definition has been elaborated by the Johns Hopkins Comparative Nonprofit Sector Project (Salamon and Achier, 1997), according to which the non-profit sector includes private, self-governing organizations that have some degree of formal existence, do not distribute the profit they may generate to their owners or directors, and involve an element of voluntary participation.

Though many of the organizations concerned have a social purpose, others promote business interests or serve groups of individuals who share a hobby. Certain nonprofit organizations may even be quite exclusive such country clubs. Many voluntary organizations exist to further democracy and protect the rights of disadvantaged groups. However, unlike other third-sector organizations such as cooperatives, voluntary organizations are not necessarily run on a democratic basis. If the law of the country allows it, some may even advocate antidemocratic ideals or discriminatory practices (Rock and Kindest, 1992). Finally, together with small, volunteer-based associations, the non-profit sector also includes large, highly technical institutions such as hospitals, museums or universities. This diversity is inherent to the voluntary sector, and lies at the heart of its contribution to democracy.

Moreover, Gruenberg (1993) discusses three key elements of funding stability for nonprofit organizations: continuity, predictability and controllability. Continuity is the actual experience of stability in funding; predictability is the likelihood that funding will remain stable; and controllability is the extent to which the nonprofit can enforce future funding stability (Gruenberg, 1993). Nonprofit human service providers are likely to experience change in each element of funding stability under a newly implemented voucher system. Social service nonprofits experience greater stability through government funding than from other sources, but the movement away from a system of grants and contracts may alter its predictability. Under choice-oriented voucher programs, such as the child care system discussed above, it may be more difficult for human service nonprofits to estimate the degree of funds that vouchers may supply. Finally, providing choice to service recipients may change the degree of control over funding, because organizations are faced with a greater number of individual fenders and potential competition from other service agencies. Taken together, changes to the service and funding regimes may increase the financial risk and uncertainty for nonprofit human service providers.

Furthermore, theory suggests that the potential changes in continuity, predictability and control of funding, and the associated risk and uncertainty, will cause organizations to aggressively seek alternative sources of funding (Pfeiffer and Long, 1977; Aldrich, 1979; Pfeiffer and Salancik, 1978; Provan, Beyer, and Kruytbosch, 1980; Bielefeld, 1990). Nonprofit organizations may place more emphasis on attracting corporate or individual contributions, foundation support, commercial revenues and unsubsidized service fees paid by clients. With voucher program implementation changing the established exchange relationships, board members may be called upon to build new linkages to other fenders. In addition, nonprofit human service providers may adopt new internal strategies to minimize organizational risk. Human service nonprofits may diversify or redefine organizational missions, move into service areas that have greater resources or more stable sources of funding, and embrace marketing strategies to attract new clients.


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