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Measuring Business Excellence

THE FIFTH DISCIPLINE


Peter M Senge

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Peter M Senge, (1997),"THE FIFTH DISCIPLINE", Measuring Business Excellence, Vol. 1 Iss 3 pp. 46 - 51
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Peter M. Senge, (1992),"Mental models", Planning Review, Vol. 20 Iss 2 pp. 4-44 http://dx.doi.org/10.1108/eb054349
Anders rtenblad, (2001),"On differences between organizational learning and learning organization", The Learning
Organization, Vol. 8 Iss 3 pp. 125-133 http://dx.doi.org/10.1108/09696470110391211
Catherine L. Wang, Pervaiz K. Ahmed, (2003),"Organisational learning: a critical review", The Learning Organization, Vol. 10
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MILESTONES

n The Fifth Discipline Peter


Senge was one of the first to
address what is now acknowl-

edged as a basic obstacle to the success of


business in an era of constant change and

THE

intensifying competition: its reluctance


or inability to learn. "It is not merely
enough to survive," he wrote in 1990.
"'Survival learning' or what is more often

FIFTH

termed 'adaptive learning' is important indeed it is necessary. But for a learning


organization, 'adaptive learning' must be
joined by 'generative learning', learning

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that enhances our capacity to create."

DISCIPLINE

T h e root of the problem was the traditional internal structure - the 'chain of
command'. Self-reinforcing and stifling
creativity at source, it discourages unauthorized invention in favour of clearly
defined individual responsibility.
Senge's own learning curve began to
rise after he entered the Massachusetts
Institute of Technology (MIT) in 1970.
There, he was drawn to the work of Jay
Forrester, a computer pioneer who had
changed fields to develop what he called
'system dynamics'. Forrester argued that
underlying many public issues, from
urban decay to the global ecological
threat, is policy makers' inability to distinguish between individual events and
the systems of which they are components. Consequently, leaders are lured

Learning is now widely accepted as the currency of survival in an era


of constant change. Many businesses, however, are struggling to learn
how to learn. The cultural and structural issues they need to confront
in order to acquire the flexibility and responsiveness to learn were
articulated in 1990 in The Fifth Discipline by Peter M Senge of
Massachusetts

of

Technology.

Measuring

Business

Excellence revisits this now landmark work to review its continuing

into making decisions that alleviate

relevance to the aspirant learning organization.

short-term symptoms but ignore, even


exacerbate, the long-term problem.

Institute

The Fifth Discipline. "It also has a clear

rience - is not always enough to ensure

Focusing initially on the public sec-

'bottom line', so that experiments can be

survival. A survey found that the average

tor as a tool for addressing these prob-

evaluated, at least in principle, by objec-

lifetime of even the largest industrial

lems, Senge gradually became more

tive criteria."

enterprise is less than 40 years. T h e failure of these businesses could be avoided

interested in the implications of his ideas


for business. "Despite whatever hold past

LEARNING D I S A B I L I T I E S

thinking may have on the business mind,

Research

business has a freedom to experiment

Dutch/Shell in 1983 indicated that even

argues that such corporate

missing in the public sector," he stated in

'adaptive learning' - learning from expe-

derives from readily identifiable, and

46 MEASURING BUSINESS EXCELLENCE VOLUME 1 NUMBER 3

conducted

at

if companies were able to recognize and


Royal

respond to impending threats. Senge


myopia

MILESTONES

reversible, 'learning disabilities'.

or 'fickle consumers'.

"When asked what they do for a liv-

generally

assumptions, it was the early 1980s and

assumed to mean the opposite of 'reac-

the Japanese share had risen to 2 1 % . To

perform every day, not the purpose of

tive' - tackling problems before they

systems students this is known as the

the greater enterprise in which they take

grow into crises. But proactivity as it is

'boiled frog' syndrome. A frog placed in

part," Senge says. Consequently, they

commonly practised can be counter-pro-

a pan of cold water will not react as the

concentrate on their own 'niche' activity

ductive. By simply shifting the point of

water is slowly heated. Unable to detect

with no overall vision of what that activ-

reaction further forward in time, proac-

the minute changes of temperature, it

ity is designed to achieve. The result can

tivity can result in the same emotional

will remain in the pan and boil. Likewise,

ing, most people describe the tasks they

'proactive'

is

only be apathy and disillusionment for

response without time for reflection.

a fascination with short-term indicators

the individual and reduced productivity

Alternatively, it can lead to a philosophy

and 'snap-shot' analyses prevented the

for the organization.

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Being

look critically at their own practices and

of 'looking for trouble', where none

US motor industry from detecting the

One demonstration of this occurred

actually exists. "True proactivity comes

greater risk.

when managers from a Detroit motor

from seeing how we contribute to our

A similar process may occur where

manufacturer stripped down a Japanese

own problems," Senge says. "It is a prod-

cause and effect are separated in time or

import. On the engine block they found

uct of our way of thinking, not our emo-

location. Human learning is based on

a standard type of bolt used three times

tional state."

personal experience, whereas collective

where, on the American car, the same

Adaptive learning is designed to

experience is the most important factor

assembly required three different bolts.

enable optimum reaction to events, or at

within an organization. Decisions in one

T h e reason was found to be that the

best

them.

department may have first-order conse-

design department used three engineer-

Generative learning, on the other hand,

quences for another, which are not

ing teams, each responsible for 'their

empowers the individual or the organiza-

directly experienced by the decision

component'.

tion to create events. This is contrary to

The

American

design

to

predict

and

avoid

required three different wrenches and

human evolutionary programming

three inventories of bolts, making the car

philosophical speculation was not as

more costly and slower to manufacture.

important to prehistoric man as "the

Yet each engineering team was satisfied

ability to see the sabre-toodied tiger over

with its input because its bolt and assem-

your left shoulder", Senge says. Yet

bly 'worked fine'.

humans, and organizations, no longer

A consequence of such egocentric

exist in a predatory environment. T h e

working practices is an inability to see

primary threats to survival come not

how the actions of the individual extend

from isolated events, but from slow,

beyond the boundary of his or her posi-

gradual processes, whether it be the arms

tion. Similarly, the individual assumes

race, environmental decay or a decline in

that all other components are subject to

product quality.

REFERENCE POINTS

Learning disabilities: how the survival


and failure of businesses is linked to
learning difficulties that are
identifiable and reversible.

Cause and effect: shared experience is


crucial to an organization but teambased methods for capturing it are
equally likely to reinforce barriers.

A shift of mind: redefining the


relationship of the individual to the

his preconceptions, and acts accordingly.

organization is a prerequisite of

When things go wrong, therefore, and

CAUSE AND EFFECT

the consequences of his actions rebound

In 1962, the Japanese share of the US

on him, the individual concludes that

automobile market was less than 4%, and

these 'new' problems are externally

Detroit's motor manufacturers saw no

caused. This may lead him to blame oth-

threat to their supremacy. They watched

ers within the organization, or simply to

impassively as Japan's share grew to

complain bitterly about 'grasping trade

almost 10% in 1967, then 15% in 1974.

unions', 'uncomprehending regulators'

By the time the US companies began to

allowing a business to learn.

Core disciplines: aspects of the


corporate culture that create the
optimal environment for learning.

Team learning: developing the


capacity of teams to create and build
on a shared vision.

VOLUME 1 NUMBER 3 MEASURING BUSINESS EXCELLENCE 47

MILESTONES

maker. Additionally, traditional organizational

structures

encourage

the

about current policies or processes

tionships rather than things, for seeing

becomes taboo.

patterns of change rather than static

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development of 'fiefdoms' which cut off

'snapshots'." It is also the 'fifth discipline'

communication between departments

A S H I F T OF M I N D

of his tide, the one among the five key

and make shared experience even scarcer.

Senge argues that these problems are all

disciplines he formulates (see below, left)

T h e common method of dealing

caused by the complexity of modern

that integrates and fuses the others to

with a lack of shared experience is

organizations, which makes it impossible

exceed the sum of their parts.

through management teams, set up to

for any individual to perceive the intrica-

T h e key to seeing reality systemati-

learn on behalf of the organization as a

cies of the entire structure. Before disci-

cally is perceiving circles of influence

whole. Yet too often the team merely

plines and processes can be implemented

rather than straight lines. This can be

represents a microcosm of the company,

to allow a business to learn, the relation-

illustrated even in the simple activity of

subject to the same divisions and moti-

ship between the individual and the

filling a glass with water. A typical 'cause

vated by the same need to assign blame.

organization must be redefined. One way

and effect' explanation might read: 'My

T h e success of the team is of paramount

of doing this is to view companies as fluid

hand on the tap controls the flow of

importance, an approach that inevitably

systems, rather than collections of iso-

water into the glass'. In fact it is equally

leads to the stifling of dissent and the

lated components. "Systems thinking is a

true to say 'the water level in the glass

prevalence of compromises supported by

discipline for seeing wholes," Senge says.

controls my hand on the tap'. The com-

no single member. T h e 'blame' culture

"It is a framework for seeing interrela-

plete picture can only be seen by viewing

also means that most managers find collective enquiry inherently threatening.
Reward structures are designed to pro-

the whole activity as a system: 'My hand


THE 5 CORE D I S C I P L I N E S

turns the tap, which causes water to flow,


which causes the level to rise, which

mote those who excel in advocating their

Systems thinking

causes the gap between the current and

own views - and woe betide the manager

Personal mastery

desired levels to diminish, which causes

who admits that he does not know the

Mental models

my hand to turn the tap... and so on until


the glass is full.' (See figure 1)

answer. As a result, no team member

Shared vision

wishes to appear uncertain or ignorant

Team learning

for fear of losing face, and raising fears

48 MEASURING BUSINESS EXCELLENCE VOLUME 1 NUMBER 3

In this case my desired water level is a


limiting factor that regulates the system

MILESTONES

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good publicity, which boosts sales, which

The new company that expands

lead to even more satisfied customers.

rapidly, then falters under its own

Conversely, 'vicious circles' may amplify

weight, is an example of one such sys

small mistakes into major crises if not

tems archetype: the 'limits to growth'

detected early enough. The 'arms race' is

scenario. In generic terms, it consists of a

a classic example: a perceived threat leads

self-reinforcing

to

which

accelerates, but is then slowed by interac

amplify the threat to the other side. T h e

tion with a balancing process when a cer

inevitable result is an accelerating growth

tain limit is reached. Other examples

of arms stockpiles.

include an animal population that grows

extreme countermeasures,

system

that

initially

"The bottom line of systems thinking

rapidly when natural predators are

is leverage," Senge says. "Seeing where

removed, only to overgraze its range and

actions and changes in structures can

decline due to starvation (see figure 2).

to create a 'balancing process'. Such sys

lead to significant, enduring improve

The great benefit of systems arche

tems operate in organizations at many

ments." This takes the form of identify

types is that knowledge across all fields,

levels. For example, the production and

ing and, where appropriate, removing

from biology to economic theory, can be

materials ordering processes must con

limiting factors or predicting cases where

unified within them. In the area of man

stantly adjust to match incoming orders.

actions may influence the operation of

agement

In many cases the limiting factor may be

existing systems. Systems theory recog

archetypes allows managers to identify

an obstacle to be overcome, as in a

nizes a limited number - according to

the particular structure underlying a

rapidly expanding company that finds

Senge about 16 - of 'systems archetypes'.

problem. It may also suggest a solution,

that the increasing complexity of its

These are generic system structures to

but more importantly it allows managers

operations slows its rate of growth.

which all patterns of behaviour conform.

to address the thinking that created the

theory,

mastering

systems

Where no limiting factor exists, the

They can be likened to the nouns and

problem in the first place. "By using the

system will be self-reinforcing. This may

verbs of a sentence in that they are inher

archetypes, we start to see more and

result in a 'virtuous circle', where, for

ently simple, but interact to form more

more of the circles of causality that sur

example, satisfied customers generate

complex structures.

round our daily activity," Senge says.

act, you cannot consider yourself

The learning organization is easy

and chance occurrence from the

and encourage a shift away from

a learning organization. For

to understand in terms of the five

kind of variation which requires

continuous improvement towards

example, universities are

main activities that you need to

action and is a symptom of a

a commitment to learning. This

enormously skilled at creating and

perform: systematic problem

problem requiring a solution.

way, knowledge will move higher

acquiring knowledge, but

solving, experimentation with

Management must carefully

up the organizational agenda.

unusually cool on the idea of

new approaches, learning from

nurture attitudes over time. But

changing the way they act, in an

the past, learning from the best

there are some obvious steps

EXPERIMENTATION

administrative and business sense.

practices of others and

which anyone familiar with

You must move away from past

transferring knowledge.

quality processes will recognize -

experience and ask yourself: 'How

like using brainstorming

do we know this is true?' This calls

Definitions of learning have


tended to sweep past the gritty
details of practice and waft about

PROBLEM SOLVING

techniques, problem solving,

for constant experimentation.

on waves of philosophy and

You have to adopt a systematic

strategic reviews, benchmarking

There is a certain amount of

grand themes. The trick is to be

problem-solving approach. You

and systems audits to stimulate

mythology in the practices which

extremely 'nuts and bolts' about

cannot rely on assumptions. You

knowledge gathering. Make the

managers follow on a day-to-day

how learning is acknowledged.

need to distinguish unique events

process of learning important,

basis. Replace the statement

VOLUME 1 NUMBER 3 MEASURING BUSINESS EXCELLENCE 49

MILESTONES

"Over time, this leads naturally to


thinking and acting more systemically."
CORE D I S C I P L I N E S
Systems thinking is the principal, but not
the only, discipline of the learning orga
nization. For it to be successfully imple
mented requires a corporate culture
where employees have the facilities and
the desire to learn. 'Personal mastery'
embodies two complementary philoso

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phies: self awareness (the clarification of


personal goals and principles) and the

awareness of preconceptions and preju

most significant breakthrough is to

desire to see current reality more clearly.

dices. Just as objective knowledge is

acknowledge that they exist in the first

In practical terms, this requires a

arranged in 'systems archetypes', so

place and to avoid allowing unsubstanti

commitment to the truth incompatible

human perception conforms to 'mental

ated generalizations to dominate per

with a 'blame' culture. To foster personal

models' that govern the way we think the

sonal decision making. Similarly, a bal

mastery within an organization, a corpo

world works. "Mental models can be

ance should be struck between advocacy

rate culture must be established that

simple generalizations such as 'people are

and enquiry to ensure that no single

rewards investigation and enquiry and

untrustworthy'," Senge says. "Or they

mental model is allowed to dominate.

which empowers people to experiment.

can be complex theories, such as my

Traditionally, most managers are trained

Such a climate will reinforce the idea that

assumptions about why members of my

to advocate their own point of view,

personal growth is important to the

family interact as they do." Most impor

while enquiry skills have gone unre

organization and will encourage 'on the

tantly, they shape the way people, and

warded. Honesty and dialogue lead to an

job' training to enhance the skills base.

therefore organizations, act.

acknowledgement of mental models on

On a personal level, commitment to

Mental models cannot be discounted,

the truth requires a high degree of

but they can be managed. Usually the

'Of course we know what our

the data doesn't support the

both sides and a resulting position that is


more likely to reflect the true situation.

the past, the trick is to understand

to search for new sources of

customers want' with 'How do we

argument. You must relentlessly

it. There a great danger in

knowledge in all sorts of

know what our customers want?'

search for the facts.

accepting wholesale what

directions. Knowledge can be

happened rather than using

acquired by literally buying

managers are carrying around an

PAST E X P E R I E N C E

careful analysis to discriminate.

another organization, or

and see where it leads. Most

invented set of assumptions. The

George Santayana, the famous

Much examination of the past is

sometimes by benchmarking. The

way to break out is to keep asking

philosopher, says "Those who

distinguishing unique competitive

principle behind benchmarking

yourself: 'What is the basis for

cannot remember the past are

advantages that you cannot

and the learning organization is

this?' Doing so requires a

condemned to repeat it". All too

afford to lose from common skills

that you uncover best practices

combination of empiricism and

often we see companies with

that you happen to be good at.

which theoretically make the

rigorous reason, and above all

exactly the same problems as they

whole business of selling things

diagnostic procedures. The danger

had in a previous cycle, repeating

BEST PRACTICES

in not having these is false

the strategies that failed them

New ideas do not come about

positives and false negatives -

before. As a learning

without hard work and

impossible to absorb someone

thinking you're right when in fact

organization, you don't discard

application. You need constantly

else's policies in a wholesale

50 MEASURING BUSINESS EXCELLENCE VOLUME 1 NUMBER 3

to customers easier - it is really


creative borrowing. It is almost

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MILESTONES

To apply these principles on a corpo

process of aligning and developing the

ment of mental models are in place

rate scale requires a redefinition also of

capacity of a team to create the results its

before this can occur.

the purpose of leadership. If personal

members desire, building on their shared

The final requirement for team

mastery requires the establishment of

vision. T h e discipline of team learning

learning to exist is the possibility of prac

clear goals, the same is true of the learn

involves mastering the practices of dia

tice and experimentation. Practice can

ing organization. 'Vision' is a familiar

logue and discussion, the purpose of

take two forms: the rehearsal of dialogue

concept in corporate leadership, but too

which is to create a level of group com

techniques, to ensure the internal consis

often this involves the imposition of one

prehension that goes beyond the under

tency of the team; and technical facilities

person's vision on the company as a

standing of any individual member. "In

for the team as a whole to experiment

whole. A true shared vision attracts the

dialogue, a group explores complex

with its ideas. The development of com

commitment of all participants. It may

issues from many points of view," Senge

plex computer modelling software has

emanate from senior management, but it

says. "Individuals suspend their assump

made this second requirement far more

is of sufficiently broad appeal to enlist

tions

their

achievable than previously. Computers

the support of all employees. "A vision

assumptions freely. T h e result is a free

are ideally suited to systems analysis, and

not consistent with values that people

exploration that brings to the surface the

allow situations to be analysed in safety.

live by will not only fail to inspire gen

full depth of people's experience and

Scenario modelling is common in many

uine enthusiasm, it will often foster out

thought, and yet can move beyond their

environments - from pilot training to

right cynicism," Senge says. A successful

individual views."

stock market simulation for trainee

but

they

communicate

corporate vision will include a coherent

In this context, conflict within the

traders. It is less common to find similar

picture of the future of the organization,

team becomes a source of dynamic

applications used to test the internal sys


temic operation of an organization.

a clear reason for wanting to reach this

energy rather than a stumbling block. A

goal, and the core values needed to

combination of advocacy and enquiry

achieve it.

will ensure that all points of view are

The Fifth Discipline: the art & practice

accorded equal importance while pre

of the learning organization

TEAM LEARNING

cluding a polarization of opinion. It is

By Peter M Senge

The final ingredient of the learning

essential that the discipline of systems

Century Business 12.99

organization,

thinking and the explicit acknowledge

ISBN 0-7126-56871

team

learning

is

the

manner, and this should not be

knowledge - what you want to do

learnt anything. You can move

an objective. You typically have to

is take advantage. One thing we

knowledge around by skilfully

beyond the technical aspects of

make some changes, and you

know is that participation gives

relocating the source of that

quality. Learning says: 'Forget the

cannot do that unless you first

the best results. So it is desirable

knowledge. Take the savvy first-

technology, are we getting

carefully study and understand

to make the process of spreading

level supervisor and send him or

better? Are there new ideas in

your own processes and problems.

TRANSFERRING
KNOWLEDGE

this new frame is that it gets you

knowledge, of compiling findings,

her to another factory. Move the

this organization? Here are the

and the business of discovery

division or brand manager to

five activities. Either we're doing

itself, a team effort.

another branch. Personnel

them or we're not.'

Companies can design

rotation, properly managed and

Once you have knowledge in

education and learning -you can

backed with a training and

David A Garvin is professor of

place, the hardest part is to spread

either apply what you've learnt

development programme, will

business administration at

it throughout the organization.

while you're taking the courses or

transfer the knowledge of one or

Harvard Business School. His

This is an area in which companies

immediately thereafter, and have

two outstanding workers to

remarks are taken from an

have the least creativity. There are

some feedback to make sure that

hundreds of others.

exclusive interview in European

tremendous opportunities for

people track whether you've

The reason for the appeal of

Quality, October 1994.

VOLUME 1 NUMBER 3 MEASURING BUSINESS EXCELLENCE

51

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