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A learning organization is the business term given to a company that facilitates the learning
of its members and continuously transforms itself.The concept was coined through the work
and research of Peter Sense and his colleagues.
Learning organizations develop as a result of the pressures facing modern organizations and
enables them to remain competitive in the business environment.
There is a multitude of definitions of a learning organization as well as their typologies.
Peter Senge stated in an interview that a learning organization is a group of people working
together collectively to enhance their capacities to create results they really care about.[4]
Senge popularized the concept of the learning organization through his book The Fifth
Discipline. In the book, he proposed the following five characteristics:
Systems thinking. The idea of the learning organization developed from a body of work called
systems thinking.[7] This is a conceptual framework that allows people to study businesses
as bounded objects.[6] 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.[7] Systems thinking states that all the
characteristics must be apparent at once in an organization for it to be a learning
organization.[6] If some of these characteristics are missing then the organization will fall
short of its goal. However, OKeeffe[3] believes that the characteristics of a learning
organization are factors that are gradually acquired, rather than developed simultaneously.
Personal mastery. The commitment by an individual to the process of learning is known as
personal mastery.[6] There is a competitive advantage for an organization whose workforce
can learn more quickly than the workforce of other organizations.[8] Individual learning is
acquired through staff training, development and continuous self-improvement;[9] however,
learning cannot be forced upon an individual who is not receptive to learning.[6] Research
shows that most learning in the workplace is incidental, rather than the product of formal
training,[3] therefore it is important to develop a culture where personal mastery is practiced
in daily life.[6] 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
Mental models. The assumptions held by individuals and organizations are called mental
models.[6] To become a learning organization, these models must be challenged. Individuals
tend to espouse theories, which are what they intend to follow, and theories-in-use, which are
what they actually do.[6][7] Similarly, organizations tend to have memories which preserve
certain behaviours, norms and values.[10] In creating a learning environment it is important
to replace confrontational attitudes with an open culture[9] that promotes inquiry and trust.
[3] To achieve this, the learning organization needs mechanisms for locating and assessing

organizational theories of action.[7] Unwanted values need to be discarded in a process

called unlearning.[10] Wang and Ahmed[8] refer to this as triple loop learning.
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.[6] The
most successful visions build on the individual visions of the employees at all levels of the
organization,[9] thus the creation of a shared vision can be hindered by traditional structures
where the company vision is imposed from above.[3] Therefore, learning organizations tend
to have flat, decentralized organizational structures.[7] The shared vision is often to succeed
against a competitor;[8] however, Senge[6] states that these are transitory goals and
suggests that there should also be long-term goals that are intrinsic within the company.
Team learning. The accumulation of individual learning constitutes Team learning.[3] The
benefit of team or shared learning is that staff grow more quickly[3] and the problem solving
capacity of the organization is improved through better access to knowledge and expertise.
[9] Learning organizations have structures that facilitate team learning with features such as
boundary crossing and openness.[7] Team learning requires individuals to engage in
dialogue and discussion;[3] therefore team members must develop open communication,
shared meaning, and shared understanding.[3] Learning organizations typically have
excellent knowledge management structures, allowing creation, acquisition, dissemination,
and implementation of this knowledge in the organization.[8]
This combination encourages organizations to shift to a more interconnected way of thinking.
Organizations should become more like communities that employees can feel a commitment
Organizations do not organically develop into learning organizations; there are factors
prompting their change. As organizations grow, they lose their capacity to learn as company
structures and individual thinking becomes rigid.[1] When problems arise, the proposed
solutions often turn out to be only short-term (single loop learning) and re-emerge in the
future.[6] To remain competitive, many organizations have restructured, with fewer people in
the company.[1] This means those who remain need to work more effectively.[3] To create a
competitive advantage, companies need to learn faster than their competitors and to develop
a customer responsive culture.[3][12] Argyris[7] identified that organizations need to
maintain knowledge about new products and processes, understand what is happening in the
outside environment and produce creative solutions using the knowledge and skills of all
within the organization. This requires co-operation between individuals and groups, free and
reliable communication, and a culture of trust.[7]
The main benefits are;
Maintaining levels of innovation and remaining competitive[9]

Being better placed to respond to external pressures[9]

Having the knowledge to better link resources to customer needs[1]
Improving quality of outputs at all levels[1]
Improving Corporate image by becoming more people oriented[1]
Increasing the pace of change within the organization[1]
Even within or without learning organization, problems can stall the process of learning or
cause it to regress. Most of them arise from an organization not fully embracing all the
necessary facets. Once these problems can be identified, work can begin on improving them.
Some organizations find it hard to embrace personal mastery because as a concept it is
intangible and the benefits cannot be quantified;,[6] personal mastery can even be seen as a
threat to the organization. This threat can be real, as Senge[6] points out, that to empower
people in an unaligned organization can be counterproductive. In other words, if
individuals do not engage with a shared vision, personal mastery could be used to advance
their own personal visions. In some organizations a lack of a learning culture can be a
barrier to learning. An environment must be created where individuals can share learning
without it being devalued and ignored, so more people can benefit from their knowledge and
the individuals becomes empowered.[3] A learning organization needs to fully accept the
removal of traditional hierarchical structures.[3]
Resistance to learning can occur within a learning organization if there is not sufficient buyin at an individual level. This is often encountered with people who feel threatened by change
or believe that they have the most to lose.[3] They are likely to have closed mind sets, and
are not willing to engage with mental models.[3] Unless implemented coherently across the
organization, learning can be viewed as elitist and restricted to senior levels. In that case,
learning will not be viewed as a shared vision.[9] If training and development is compulsory,
it can be viewed as a form of control, rather than as personal development.[9] Learning and
the pursuit of personal mastery needs to be an individual choice, therefore enforced take-up
will not work.[6]
In addition, organizational size may become the barrier to internal knowledge sharing. When
the number of employees exceeds 150, internal knowledge sharing dramatically decreases
because of higher complexity in the formal organizational structure, weaker inter-employee
relationships, lower trust, reduced connective efficacy, and less effective communication. As
such, as the size of an organizational unit increases, the effectiveness of internal knowledge
flows dramatically diminishes and the degree of intra-organizational knowledge sharing
Problems with Senge's vision include a failure to fully appreciate and incorporate the
imperatives that animate modern organizations; the relative sophistication of the thinking he

requires of managers (and whether many in practice are up to it); and questions regarding
his treatment of organizational politics. It is certainly difficult to find real-life examples of
learning organizations (Kerka 1995). There has also been a lack of critical analysis of the
theoretical framework.
Based on their study of attempts to reform the Swiss Postal Service, Matthias Finger and
Silvia Brgin Brand (1999) provide a useful listing of more important shortcomings of the
learning organization concept. They conclude that it is not possible to transform a
bureaucratic organization by learning initiatives alone. They believe that by referring to the
notion of the learning organization it was possible to make change less threatening and more
acceptable to participants. However, individual and collective learning, which has
undoubtedly taken place, has not really been connected to organizational change and
transformation. Part of the issue, they suggest, has to do with the concept of the learning
organization itself. They argue that the concept of the learning organization:
Focuses mainly on the cultural dimension and does not adequately take into account the
other dimensions of an organization. To transform an organization, it is necessary to attend
to structures and the organization of work as well as the culture and processes. Focussing
exclusively on training activities in order to foster learning favours this purely cultural
Favours individual and collective learning processes at all levels of the organization, but
does not connect them properly to the organizations strategic objectives. Popular models of
organizational learning (such as Dixon 1994) assume such a link. It is, therefore, imperative
that the link between individual and collective learning and the organizations strategic
objectives is made. This shortcoming, Finger and Brand argue, makes a case for some form
of measurement of organizational learning so that it is possible to assess the extent to
which such learning contributes or not towards strategic objectives.
Challenges in the transformation to a learning organization
The book The Dance of Change[14] states there are many reasons why an organization may
have trouble in transforming itself into a learning organization. The first is that an
organization does not have enough time.[15] Employees and management may have other
issues that take priority over trying to change the culture of their organization. The team may
not be able to commit the time an institution does not have the appropriate help or training.
For an organization to be able to change, it needs to know the steps necessary to solve the
problems it faces. As a solution, a mentor or coach who is well versed in the learning
organization concept may be necessary.
Also, the change may not be relevant to the organization's needs. Time should be spent on the
actual issues of the organization and its daily issues. To combat this challenge, a strategy
must be built. The organization should determine what its problems are before entering into
the transformation. Training should remain linked to business results so that it is easier for
employees to connect the training with everyday issues.

Problems organizational learning addresses

Some of the issues that Learning Organizations wanted to address within Institutions is
fragmentation, competition and reactiveness.[11] Fragmentation is described as breaking a
problem into pieces. For example, each organization has an accounting department, finance,
operations, IT and marketing. Competition occurs when employees are trying to do better or
"beat" others in an assignment instead of collaborating. Reactiveness occurs when an
organization changes only in reaction to outside forces. Only doing an assignment because it
is assigned and not continually creating. These are deeply rooted in many of today's
organizations as a product of capitalism and the drive to generate more profit.
The change becoming a community and a learning organization is called a "Galilean Shift".
[16] The organization is compared[by whom?] to the Galileo Galilei heliocentric revolution
that changed the view that earth was the center of the universe.
Development of learning organizations
Learning organizations are organizations that actively work to optimize learning. Learning
organizations use the active process of knowledge management to design organizational
processes and systems that concretely facilitate knowledge creation, transfer, and retention.
Organizational metacognition is used to refer to the processes by which the organization
'knows what it knows'. The study of organizational learning and other fields of research such
as organizational development, System theory, and cognitive science provide the theoretical
basis for specifically prescribing these interventions.[84] An example of an organizational
process implemented to increase organizational learning is the U.S. Army's use of a formally
structured de-brief process called an after-action review (AAR) to analyze what happened,
why it happened, and how it could be improved immediately after a mission. Learning
laboratories are a type or learning organization dedicate to knowledge creation, collection,
and control.[85]
Learning organizations also address organizational climate by creating a supportive learning
environment and practicing leadership that reinforces learning.[86] Creating a supportive
learning environment and reinforcing learning depends on the leadership of the organization
and the culture it promotes. Leaders can create learning opportunities by facilitating
environments that include learning activities, establishing a culture of learning via norms,
behaviors, and rules, and lead processes of discourse by listening, asking questions, and
providing feedback. Leaders must practice the individual learning they advocate for by
remaining open to new perspectives, being aware of personal biases, seeking exposure to
unfiltered and contradictory sources of information, and developing a sense of humility.[87]
Knowledge management systems
While learning processes depend on the context for optimizing knowledge transfer, the
implementation of knowledge management systems incorporates technology into these
processes. Knowledge management systems are technologies that serve as a repository,
communication, or collaboration tool for transferring and retaining knowledge.[4]

Embedding knowledge in technology can prevent organizational forgetting[88] and allow

knowledge to transfer across barriers such as distance, organizational unit, and
specialization. Knowledge management systems alone are not necessarily successful, but as a
communication tool they tangibly reinforce individuals' ability to spread and reinforce their
Diffusion of innovation
Organizational learning is important to consider in relation to innovation, entrepreneurship,
technological change, and economic growth, specifically within the contexts of knowledge
sharing and inter organizational learning. As one of the key dynamics behind the knowledge
economy, organizational learning informs our understanding of knowledge transfer between
organizations. Heterogeneous experience yields better learning outcomes than homogenous
experience, and knowledge diffusion spreads heterogeneous experience across organizations.
[61][89] Diffusion of innovations theory explores how and why people adopt new ideas,
practices and products. It may be seen as a subset of the anthropological concept of diffusion
and can help to explain how ideas are spread by individuals, social networks, and
organizations. Innovation policy, economic development initiatives, educational program
endeavors, and entrepreneurial incubation and acceleration could all be informed by
organizational learning practices.
University of Management and Technology (Pakistan)
Learning Organization - Organizational Learning: What is difference?
What is the difference between 1. Learning Organization; and 2. Organizational Learning?
A Learning Organization (as coined by Peter Senge in his book "The Fifth Discipline") is a
term for an organization that continually develops and facilitates the learning and
development of its members. To a certain extent, learning organizations are action oriented,
and are geared towards using specific diagnostic and evaluative methodological tools which
can help to identify, promote and evaluate the quality of learning processes inside
organizations (Easterby-Smith and Araujo, 1999; Tsang, 1997). As companies naturally
grow, their line of thinking becomes rigid, and there is a need to develop these organizations
into Learning Organizations so as to continue their development, maintain new knowledge
about products or services outside their own that may compete with theirs, comprehend the
internal and external environment of the organization, and produce creative and innovative
solutions through and with the help of its members.
On the other hand, Organizational Learning (as coined by Argrys and Schon) is under
Organizational Theory which focuses and studies on the manners and ways organizations
adapt and learns. This is a facet of Organizational Development because Organizational
Learning is the interaction that takes place within the individual members of the company.
Finger and Brand (1999) stipulates that Organizational Learning is the activity and process
by which the organization eventually reaches the ideal Learning Organization. You can view

how an organization learns cognitively as a whole, or community based within specific

networks within the system.
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
Organizational learning happens as a function of experience within an organization and
allows the organization to stay competitive in an ever-changing environment. Organizational
learning is a process improvement that can increase efficiency, accuracy, and profits. A real
world example of organizational learning is how a new pizza store will reduce the cost per
pizza as the cumulative production of pizzas increases.[1] As the staff creates more pizza;
they begin to make pizzas faster, the staff learns how to work together, and the equipment is
placed in the most efficient location leading to cheaper costs of creation.
Organizational learning is an aspect of organizations and a subfield of organizational
studies. As an aspect of an organization, organizational learning is the process of creating,
retaining, and transferring knowledge. Knowledge creation, knowledge retention, and
knowledge transfer can be seen as adaptive processes that are functions of experience.[2]
Experience is the knowledge that contributes to the procedural understanding of a subject
through involvement or exposure. Research within organizational learning specifically
applies to the attributes and behavior of this knowledge and how it can produce changes in
the cognition, routines, and behaviors of an organization and its individuals.[3]
Individuals are predominantly seen as the functional mechanisms for organizational learning
by creating knowledge through experience.[4] However, individuals' knowledge only
facilitates learning within the organization as a whole if it is transferred. Individuals may
withhold their knowledge or exit the organization. Knowledge that is embedded into the
organization, in addition to its individuals, can be retained.[5] Organizations can retain
knowledge in other ways than just retaining individuals, including using knowledge
repositories such as communication tools, processes, routines, networks, and transactive
memory systems.[6][7]

As a subfield, organizational learning is the study of experience, knowledge, and the effects
of knowledge within an organizational context.[8] The study of organizational learning
directly contributes to the applied science of knowledge management (KM) and the concept
of the learning organization. Organizational learning is related to the studies of
organizational theory, organizational communication, organizational behavior,
organizational psychology, and organizational development. Organizational learning has
received contributions from the fields of educational psychology, sociology, economics,
anthropology, political science, and management science.[9]
Units of learning
Organizations gain knowledge in one of the four organizational units of Learning: individual,
team, organizational, and inter-organizational. Organizational learning "involves the process
through which organizational units (e.g. groups, departments, divisions) change as a result of
experience." An example of organizational learning is a hospital surgical team learning to
use new technology that will increase efficiency.[10]
Individual learning is the smallest unit at which learning can occur. An individual learns new
skills or ideas, and their productivity at work may increase as they gain expertise. The
individual can decide whether or not to share their knowledge with the rest of the group. If
the individual leaves the group and doesnt share their knowledge before leaving, the group
loses this knowledge.[11] In their study of software development, Boh, Slaughter and
Espinosa (2007) found that individuals were more productive the more specialized
experience they had with a certain system.[12]
Group learning is the next largest unit at which learning can occur. Group learning happens
when individuals within a group "acquire, share, and combine knowledge through experience
with one another".[13] There are conflicting definitions of group learning among researchers
studying it. One belief is that group learning is a process in which a group takes action, gets
feedback, and uses this feedback to modify their future action.[14] Another belief is that
group learning happens when a member shares their individual knowledge with other group
members. Once this happens, individual learning turns into group learning.[11] Reagans,
Argote, and Brooks (2005) studied group learning by examining joint-replacement surgery in
teaching hospitals. They concluded that "increased experience working together in a team
promoted better coordination and teamwork."[15] Working together in a team also allowed
members to share their knowledge with others and learn from other members.
Organizational learning is the way in which an organization creates and organizes
knowledge relating to their functions and culture. Organizational learning happens in all of
the organizations activities, and it happens in different speeds. The goal of organizational
learning is to successfully adapt to changing environments, to adjust under uncertain
conditions, and to increase efficiency.[16] According to Argote (1993), managers in
manufacturing plants saw organization learning occur when they found ways to make
individual workers more proficient, improve the organizations "technology, tooling, and
layout," improve the organizations structure, and determine the organizations strengths.[4]

Interorganizational learning is the way in which different organizations in an alliance

collaborate, share knowledge, and learn from one another. An organization is able to
improve its "processes and products by integrating new insights and knowledge" from
another organization.[17] By learning from another organization, an organization is able to
cut time costs, decrease the risks associated with problem solving, and learn faster. Learning
from another organization can mean either applying the same ideas used by that
organization or modifying these ideas, thereby creating innovation.[17] Inter-organizational
learning occurs frequently in fixed business models, such as franchising. The franchisee
looking to use the franchisors brand has to learn how to use the organizations business
model before starting a franchise.[18]