An organization must learn so that it can adapt to a changing environment. Historically, the life cycle of organizations typically spanned stable environments between major socioeconomic changes. Many Fortune 500 companies of two decades ago no longer exist. The ever accelerating rate of global scale change has made the organizational learning very critical and its adaptation by organizations has become very relevant for the success, and ultimate survival of the organization.
Organizational learning is based on applying knowledge for a purpose and learning from the process and from the outcome. It is the process of detection and correction of errors. The organization learns through its employees whose learning activities are facilitated by an environment in the organization that may be called an organizational learning system.
Organizations learn only through individuals who learn. However, individual learning does not guarantee organizational learning. But without it there is no organizational learning.
The concept of organizational learning has been borrowed and developed from the individual learning process which is normally believed to be a very sophisticated process and involves all aspects of the human nature and the interaction with the environment. Understanding the individual learning process is a good starting point to understand organizational learning, but it does not provide the entire picture. Organization is in a more complicated context than an individual to the environment. Organizational learning is not simply the collectivity of individual learning processes, but engages interaction between individuals in the organization and with the organization, interaction between organizations as an entity, and interaction between the organization and its contexts.
The history of organizational learning dates back to early 1950s when this concept was mentioned in reference to the birth and death of public administrations. During early 1960s, researchers became attracted by the idea of organizational learning. It was only in the late 1970s that a sparse, but regular stream of articles and books began to flow on the subject. During the 1980s and the 1990s there was wide spread interest in the area of organizational learning was visible globally.
Definitions of organizational learning
Organizational learning has been described in many ways by the management experts. Some of the definitions provided are given below.
- Organizational learning is the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine both successes and failures.
- Organizational learning denotes a change in organizational knowledge. It typically adds to, transforms, or reduces organizational knowledge.
- Organizational learning is an area of knowledge within organizational theory that studies models and theories about the way an organization learns and adapts.
- Organizational learning is the changes in the state of knowledge. It involves knowledge acquisition, dissemination, refinement, creation and implementation. It is the ability to acquire diverse information and to share common understanding so that this knowledge can be exploited for the ability to develop insights, knowledge, and to associate among past and future activities.
- Organizational learning is complementary to knowledge management. An early view of organizational learning was ‘…encoding inferences from history into routines that guide behaviour’. Organizational learning has to do with embedding what has been learned into the fabric of the organization.
- Organizational learning is adaptive behaviour of organizations over time.
- Organizational learning consists of a series of interactions between adaption at the individual, or subgroup level and adaption at the organization level.
- Organizational learning is the process by which organizational members detect errors or anomalies and correct them by restructuring organizational theory – in – use. The individuals’ learning activities, in turn, are facilitated or inhibited by an ecological system of factors that may be called an organizational learning system.
- Organizational learning is defined as the process within the organization by which knowledge about action – outcome relationships and the effect of the environment on these relationships is developed.
- Organizational learning means the process of improving actions through better knowledge and understanding.
- Organizations are seen as learning by encoding the inferences from history into routine behaviour.
- An organization learns if, through the processing of information, the range of its potential behaviours is changed. The organization learns if any of its units acquires knowledge that it recognizes as potentially useful to the organization.
- Organizational learning consists of interrelating actions of individuals, that is their ‘heedful interrelation’ which results in a ‘collective mind’.
- Organizational learning is ‘the bridge between working and innovating’.
- In the hyper dynamic business context, organization learning is the process by which the organization constantly questions existing product, process and system, identify strategic position, apply various modes of learning, and achieve sustained competitive advantage.
The theory of the organizational learning states that, in order to be competitive in a changing environment, organizations must change their goals and actions to reach those goals. In order for learning to occur, however, the firm must make a conscious decision to change actions in response to a change in circumstances, must consciously link action to outcome, and must remember the outcome. Organizational learning has many similarities to psychology and cognitive research because the initial learning takes place at the individual level: however, it does not become organizational learning until the information is shared, stored in organizational memory in such a way that it may be transmitted and accessed, and used for organizational goals.
Organizational learning is a social process, involving interactions among many individuals leading to well informed decision making. Thus, a culture that learns and adapts as part of everyday working practices is essential. Reuse must equal or exceed reinvent as a desirable behaviour. Adapting an idea must be rewarded along with its initial creation. Sharing to empower the organization must supersede controlling to empower an individual.
The organizational learning is the effective processing, interpretation of, and response to, information both inside and outside the organization. This information may be quantitative or qualitative, but is generally explicit and in the public domain. The social perspective on organization learning focuses on the way employees of the organization make sense of their experiences at work. These experiences may derive from explicit sources such as financial information, or they may be derived from tacit sources, such as the ‘feel’ that the skilled workmen have, or the intuition possessed by a skilled strategist. From this view, learning is something that can emerge from social interactions, normally in the natural work setting. In the case of explicit information, it involves a joint process of making sense of data. The more tacit and ‘embodied’ forms of learning involve situated practices, observation and emulation of skilled practitioners and socialization into a community of practice.
One of the theories of organizational learning considers four constructs as integrally linked to organizational learning. They are (i) knowledge acquisition, (ii) information distribution, (iii) information interpretation, and (iv) organizational memory. As per this theory, learning need not be conscious or intentional. Further, learning does not always increase the learner’s effectiveness, or even potential effectiveness. Also, learning need not result in observable changes in the behaviour. Taking a behavioural perspective, this theory states that ‘An entity learns if, through its processing of information, the range of its potential behaviours is changed’.
A simplified model, based on the above theory has three main parts which are described below.
- The first part – This part of the learning process involves data acquisition. An organization acquires a ‘memory’ of valid action-outcome links, the environmental conditions under which they are valid, the probabilities of the outcomes, and the uncertainty around that probability. The links are continually updated overtime, either through additions, rejections based on new evidence, or strengthening/expanding the links from confirmatory evidence. There are many ways to acquire these links, including experiential, experimental, benchmarking, grafting, and so forth, but they must be of a conscious effort to discover, confirm, or utilize a cause and effect, or they are simply blind actions relying on chance for success. A critical point is that organizational actions must change in response to changes in the environment, as each action-outcome link must be specified in terms of applicable conditions. Successful organization, then, scans its environment for signs of change, real or anticipated, to determine when change is necessary. This presupposes that the organization has learned (i) the important indicators for scanning and (ii) what degree of change in environmental indicator does or does not require change in actions.
- The second part – This part of the process is interpretation. Organization continually compares actual to expected results to update or add to its ‘memory’. Unexpected results must be assessed for causation, actions adapted or new action-outcome links specified if necessary, and learning increased. This stage does not imply that any action is taken. This is also one of the major debates in this theory: some theorists insist that action is not necessary for learning to have taken place (all that is required is for expansion of the knowledge base or change in understanding) while others insist that unless actions change, there is no learning.
- The third part – This part is the stage of adaptation/action. This is when the organization takes the interpreted knowledge and uses it to select new action-outcome links appropriate to the new environmental conditions. The main point here is that this is a process of continual adaptation to environmental conditions (internal, external, competitors, and state of technology etc.) and is affected to a large extent by the complexity and dynamism the organization experiences. Once adaptation has occurred, the organization’s knowledge base is updated to include the new action-outcome link, probabilities, uncertainty, and applicable conditions and the process continues. This feedback is a continual and iterative process, and occurs at all stages of the process.
The simplified model is shown in Fig 1.
Fig 1 Simplified model for organizational learning
The implications to organization learning are three fold as given below.
- One is to understand how to create the ideal organizational learning environment
- One is to be aware of how and why something has been learned.
- One is to try to ensure that the learning that takes place is useful to the organization
Single, double and triple loop learning
Organizational learning can be characterized in terms of a three level evolutionary model consisting of single, double, and triple loop learning.
- Single loop learning – It is undertaken in line with explicit practices, policies and norms of behaviour. Single loop learning with its emphasis on the detection and correction of deviations and variations within a given set of governing variables is linked to incremental change in organizations.
- Double loop learning – It involves interrogating the governing variables themselves and often involves radical changes such as the wholesale revision of systems, alterations in strategy and so on. This approach addresses the basic aspects of the organization, such that the same things are not done in response to changing contexts.
- Triple loop learning – It represents the highest form of organizational self examination. It involves questioning the entire rationale of the organization, and can lead to radical transformations in internal structure, culture and practices, as well as in the external context.
Current organizational learning practices in many of the organizations are maintained at the single and double loop levels. Single loop learning is connected to error detection and correction, which is the main mechanism of quality control. The process involves knowledge accumulation, dissemination, and retention. Double loop learning moves to a higher level and demonstrates a certain degree of pro-activeness by focusing on error prevention and dedicating to zero defect quality. Double loop learning leads to total quality since it is coupled with knowledge refinement and knowledge creation through incremental changes. Quality control and total quality are main mechanisms to continuous improvement. Therefore, both single and double loop learning contribute to the continuous improvement approach to quality and innovation. Radical innovation can be achieved through accumulation of incremental changes. Single, double and triple loop organizational learning is shown in Fig 2.
Fig 2 Single, double, and triple loop organizational learning