Professional Documents
Culture Documents
Organizational learning
With the emergence of the global economy and the accelerating dynamics of the
marketplace, firms everywhere have realized the need to improve constantly
their products and processes in order to create and retain competitive advantage
(cf. Flood and Olian, 1996). The current interest in organizational learning (OL)
among management scholars and practitioners reflects this new competitive
landscape.
Nevis, DiBella and Gould (1995) have defined organizational learning as the
capacity or processes within an organization to maintain or improve
performance based on experience (Nevis et al., 1995, p. 73). This definition is
similar to those advanced by Argyris and Schon (1978), Dodgson (1993), Senge
(1990) and Shrivastava and Grant (1985). According to Dodgson, Learning is a
dynamic concept, and its use in theory emphasizes the continually changing
nature of organizations (Dodgson, 1993, p. 376).
Within this broad conceptualization, theorists have recognized different
types, or levels, of learning. For example, Argyris and Schon (1978) have
emphasized the need for double-loop learning learning required to make
fundamental changes in basic assumptions about the competitive environment
in addition to single-loop learning, which relates to improvements in existing
organizational processes. Similarly, Senge (1990) contrasts generative with Journal of Organizational Change
adaptive learning. Both levels of learning are necessary to the pursuit of Management, Vol. 9 No. 6, 1996,
pp. 41-53. MCB University Press,
competitive advantage, as after periods of significant discontinuous change, 0953-4814
JOCM incremental or adaptive learning may be required to help consolidate
9,6 transformational learning (Nevis et al., 1995).
Importantly, organizational economists have begun viewing OL as an
organizational capability in and of itself (cf. Cohen and Levinthal, 1989). This
perspective is reflected in the management literature as well, in that attempts to
describe learning organizations have concluded that learning capability varies
42 widely among organizations. Thus, Nevis et al. (1995) suggest a diagnostic tool
to enable an organization to generate its learning profile as a basis for efforts to
improve its learning capability. In general, then, it has been suggested that OL
is a measurable organizational capability one that can be developed over time,
and one that can be directed towards the achievement of competitive advantage.
Resource-based theory
The quest for competitive advantage has long been a central tenet of the field of
strategic management (Porter, 1985). Within this field, resource-based theory
(RBT) has emerged as a promising new framework for analysing the sources
and sustainability of competitive advantage (cf. Barney, 1991; Dierickx and
Cool, 1989; Peteraf, 1993). According to RBT, competitive advantage
measured as economic rent (Castanias and Helfat, 1991) derives from strategic
resources. Such competitive advantage is sustainable to the extent that the
resources on which it is based are valuable, rare, inimitable, and non-
substitutable (Barney, 1991). Further, RBT rests on the premiss that resources
controlled by firms are heterogeneous and relatively immobile (Peteraf, 1993).
The imperfect mobility of resources (including inimitability and non-
substitutability) is due to a variety of isolation mechanisms (Rumelt, 1984)
which include co-specialization of assets (Teece, 1986), unique historical
conditions (Barney, 1991), causal ambiguity (Lippman and Rumelt, 1982), social
complexity (Barney, 1991; Dierickx and Cool, 1989), and tacit knowledge and
skills (Polanyi, 1967; Reed and DeFillippi, 1990).
Given that organizational learning and resource-based theory both seek the
objective of creating and sustaining competitive advantage, it seems logical for
organizational learning to be identified as a strategic resource within the
resource-based view. However, current articulations of RBT suffer three major
limitations that make the inclusion of organizational learning problematic.
First, most of the early literature on RBT adopted a narrow definition of
resources and focused primarily on the tangible assets under the firms control
(cf. Dierickx and Cool, 1989). Although recent discussion has broadened the
definition of resource to include tangible and intangible resources, as well as the
capabilities required to deploy firm assets (Amit and Schoemaker, 1993; Barney,
1991), there remains a tendency in the literature to focus on the strategic
potential of individual resources. This focus on individual resources in
evaluating opportunities for sustainable competitive advantage has resulted in
the under-exploration of competitive advantage through multiple resources
interactions. Organizational learning, however, assumes benefit from complex
interactions between resources and their effective use. It is therefore necessary
to clarify and operationalize the concept of resource bundles (Barney, 1991) to An integrative
provide a basis for examining the different type of resource interactions that model
can occur.
Second, building a competitive advantage takes time. By adopting a static
perspective, resource-based theory has focused on the result rather than on the
process of building competitive advantage. Organizational learning, however, is
as much a process as an outcome. Although Dierickx and Cool (1989) identified 43
the need to include time in the discussion, there have been no suggestions as to
how time should be incorporated into the resource-based model. As a
consequence, the potential contribution of time-dependent resources or
capabilities like organizational learning to competitive advantage has been
ignored.
Third, an appropriate working definition of the sustainability of competitive
advantage is lacking. For example, Barney states that a firm is said to enjoy a
sustained competitive advantage, when it is implementing a value creating
strategy not simultaneously being implemented by any current or potential
competitors and when these other firms are unable to duplicate the benefits of
this strategy (Barney, 1991, p. 102, italics in original). This definition
emphasizes that sustained competitive advantage does not depend on the
period of calendar time over which a firm enjoys a measurable competitive
advantage. Rather, his definition focuses on the duplication of competitors
actions: a competitive advantage is sustained only if it continues to exist
after efforts to duplicate that advantage have ceased. In this sense, this
definition of sustained competitive advantage is an equilibrium definition
(Barney, 1991, p. 102).
This equilibrium definition of sustained competitive advantage is
problematic for two reasons. First, it is impossible to know with certainty that
all current and potential competitors have ceased to attempt to duplicate ones
competitive advantage or will not seek to do so in the future. Second, despite
Barneys inclusion of capabilities in the broad definition of resources, his
equilibrium definition of sustainable competitive advantage focuses on
outcomes and precludes the modelling and measurement of processes. In other
words, the equilibrium definition does not recognize the dynamic nature of
processes related to continuous improvement or organizational learning.
Firms often derive competitive advantage from resources (e.g. new
knowledge and capabilities) which have been developed based on lessons from
prior experiences and over time. Competitive advantage derived from such
resources might be sustained because other firms which attempt to duplicate
them do not have the necessary organizational knowledge, the learning
capability, or the time required to accumulate them. Given the dynamic nature
of the pursuit of competitive advantage, we believe that the sustainability of
such an advantage must be defined in dynamic, time-sensitive terms. Thus, in
the following section, we extend the resource-based view to address these
limitations and incorporate the dynamics of organizational learning.
JOCM An enhanced resource-based model
9,6 Barney has defined organizational resources to include, all assets, capabilities,
organizational processes, firm attributes, information, knowledge, etc.
controlled by a firm and that enable it to conceive of and implement strategies
that are efficient and effective (Barney, 1991, p. 101). We begin with this broad
definition for it suggests the study of how various resources come together and
44 interact to provide competitive advantage in a given situation.
Target resources
Competitive advantage is commonly measured in terms of comparative
organizational performance, primarily using such measures as profitability
ratios (Clemons and Kimbrough, 1986; Porter, 1985), market share (Wiseman,
1988a), etc. Given the broad definition of resource, profits, which may provide
capital for investment in the form of retained earnings, and market share, which
may provide additional market power, may be considered resources of the firm
as well as measures of performance. Hence, competitive advantage can be
viewed as the relative advantage a firm gains on one particular resource (such
as profitability or market share) by virtue of its ability to capitalize on other
resources. We refer to a resource on which competitive advantage is measured
at a given point in time as a target resource.
The target resources of a firm can change from time to time, as firms view
their competitive needs differently depending on various economic conditions.
For example, in a growth economy, market share may be given priority, while in
a weak economy, profitability may become most important. In short, at various
points along the path to superior performance, different measures of
competitive advantage may dominate strategic choices. Importantly, at any
point on this path, competitive advantages achieved on intermediate resources
contribute to competitive advantage measured subsequently on different target
resources.
Strategic resources
A strategic resource is defined as any resource which is capable of providing a
firm with a competitive advantage. According to RBT, such resources are
valuable, tend to be scarce, and are typically difficult to imitate or substitute for.
In its simplest articulation, therefore, RBT suggests that competitive advantage
is a function of a strategic resource. For example, it has been suggested that
SABRE, American Airlines online reservation system, is a strategic resource
which has provided the company with a competitive advantage measured in
terms of profitability.
Resource bundles
In reality, it is difficult to find situations in which competitive advantage is
derived exclusively from a single strategic resource. More often, it is a collection
of varied resources which together provide competitive advantage, referred to
here as a resource bundle (Barney, 1991).
The number and type of resources in the bundle may vary, as may their An integrative
individual value measured in terms of each resources individual contribution model
to the target resource. Depending on the particular target resource, certain
resources in the bundle may attain prominence based on their contribution and
strategic nature. As the target resource changes, a different configuration of
resources may be required to achieve the maximum competitive advantage
possible. 45
Resource-based theory, then, suggests the case in which competitive
advantage is derived from a bundle of strategic resources which individually
and directly contribute to competitive advantage. For example, Southwest
Airlines competitive advantage in the US airline industry is arguably the result
of a number of strategic resources including its single aircraft-type fleet (which
reduces overall costs), its motivated and flexible workforce (which increases
productivity), and its reputation for on-time performance (which increases
sales) (Kling and Smith, 1995).
Resource interactions
Beyond their individual contributions to competitive advantage, resources may
interact and have impact on the target resource by creating new and often
intangible resources. These new resources may be labelled quasi-resources,
whose contribution to competitive advantage is separately measurable. The
concept of a quasi-resource is based on the notion of synergy among resources:
that is, the potential contribution to competitive advantage from a bundle of
resources is greater than the sum of the contribution from each individual
resource in the bundle. Kling and Smith (1995) have noted that the Turn Team
is an excellent example of how Southwest Airlines resources complement each
other and jointly contribute to the firms overall performance. The fact that all
Southwests planes are Boeing 737s allows ground and flight crews to routinize
and standardize gateway, fuelling, and baggage loading activities. The use of
smaller, less congested airports minimizes gate-holds and the time spent in
queues on the airfield, and the flexibility and commitment of Southwests
employees makes minimizing the time between arrival and departure a spirited
challenge for the Turn Team. Synergy between these resources results in a
gate turn-around time averaging 15-20 minutes compared to an industry
average of 50-60 minutes, translating into greater service and lower costs.
Enabling resources
It is also possible for the value of a strategic resource to be enhanced by the
influence of a second resource, without this second resource directly
contributing to competitive advantage. In such cases, the second resource or
enabling resource plays a catalytic role by enhancing the value of a strategic
resource, thereby contributing indirectly to competitive advantage. This
enhancement might take the form of enabling the process by which the primary
strategic resource is acquired or deployed. Alternately, the enabling resource
JOCM might enhance the value of a strategic resource by providing the strategic
9,6 resource with rare, firm-specific, and/or inimitable characteristics.
As an example, TWA Getaway Vacations, Inc., provides customized tours at
the prices of standard vacation packages (Pine, 1993). They use their market
share advantage (a strategic resource) to purchase in bulk various components
of tours (airline seats, hotel rooms, entertainment options, etc.) at low cost.
46 Getaway then uses widely available database technology to mix and match
these tour components to fit individual customer needs. Thus, Getaway uses
information technology that is not in and of itself strategic (it is valuable, but
not rare or inimitable) to effectively deploy its true strategic resource: the ability
to purchase low cost tour components. In this way, information technology here
serves as an enabling resource.
Conclusion
In this paper, we made the case that organizational learning is an important
organizational capability which should be considered a strategic resource. We
suggested that current articulations of resource-based theory are limited by a
static perspective, with the result that they have failed to incorporate the
dynamics of organizational learning despite a definition of strategic
resources broad enough to include OL capability. We then provided an
enhanced resource-based model that explicitly allows for learning dynamics
through resource interactions and time-lagged resource effects. Finally, by
providing examples of how IT resources can contribute to competitive
advantage, we have demonstrated how the dynamics of OL result in sustained
competitive advantage from an arguably common resource.
Although the anecdotal nature of the examples provided reflect the
developmental state of the integrative model, we believe that the model has
great potential for providing understanding of how OL can be incorporated into
the resource-based view. Additional research will be needed to fully
operationalize the model and test it with empirical data.
1. Agnieszka Zakrzewska-Bielawska. 2016. Perceived mutual impact of strategy and organizational structure: Findings from the
high-technology enterprises. Journal of Management & Organization 1-24. [CrossRef]
2. Xiaoqing Li, Yu Zheng, Catherine L. Wang. 2015. Inter-firm collaboration in new product development in Chinese
pharmaceutical companies. Asia Pacific Journal of Management . [CrossRef]
3. Ulrike de Brentani, Elko J. Kleinschmidt. 2015. The Impact of Company Resources and Capabilities on Global New Product
Program Performance. Project Management Journal 46:10.1002/pmj.2015.46.issue-1, 12-29. [CrossRef]
4. Catherine KillenOrganizational Agility through Project Portfolio Management 1-14. [CrossRef]
5. George Z. Peng, Paul W. Beamish. 2014. MNC subsidiary size and expatriate control: Resource-dependence and learning
perspectives. Journal of World Business 49, 51-62. [CrossRef]
6. Adam S. Maiga, Anders Nilsson, Fred A. Jacobs. 2013. Extent of managerial IT use, learning routines, and firm performance:
A structural equation modeling of their relationship. International Journal of Accounting Information Systems 14, 297-320.
[CrossRef]
7. Adriana Martnez, Jos A. BelsoMartnez, Francisco MsVerd. 2012. Industrial clusters in Mexico and Spain. Journal of
Organizational Change Management 25:5, 657-681. [Abstract] [Full Text] [PDF]
8. Catherine P. Killen, Kam Jugdev, Nathalie Drouin, Yvan Petit. 2012. Advancing project and portfolio management research:
Applying strategic management theories. International Journal of Project Management 30, 525-538. [CrossRef]
9. Jim Andersn. 2012. A resourcebased taxonomy of manufacturing MSMEs. International Journal of Entrepreneurial Behaviour
& Research 18:1, 98-122. [Abstract] [Full Text] [PDF]
10. Zong Dai. 2012. Toward a learningbased view of innovation. Competitiveness Review 22:1, 18-27. [Abstract] [Full Text]
[PDF]
11. Shu-Hui Chuang. 2011. The Relationships Among Knowledge Types, Organisational Learning, and Performance. Journal
of Information & Knowledge Management 10, 169-181. [CrossRef]
12. Jim Andersn. 2011. Strategic resources and firm performance. Management Decision 49:1, 87-98. [Abstract] [Full Text]
[PDF]
13. Matti J. Haverila. 2011. Company related variables and their impact on the NPD outcome in the context of international
markets in Finnish high-technology companies. The Journal of High Technology Management Research 22, 94-101. [CrossRef]
14. Sren Salomo, Elko J. Keinschmidt, Ulrike De Brentani. 2010. Managing New Product Development Teams in a Globally
Dispersed NPD Program. Journal of Product Innovation Management 27:10.1111/jpim.2010.27.issue-7, 955-971. [CrossRef]
15. Linda Too, Michael Harvey, Eric Too. 2010. Globalisation and corporate real estate strategies. Journal of Corporate Real
Estate 12:4, 234-248. [Abstract] [Full Text] [PDF]
16. Susita Asree, Mohamed Zain, Mohd Rizal Razalli. 2010. Influence of leadership competency and organizational culture
on responsiveness and performance of firms. International Journal of Contemporary Hospitality Management 22:4, 500-516.
[Abstract] [Full Text] [PDF]
17. Raphael Klein, Uzi Haan, Albert I. Goldberg. 2010. Corporate Exploration Competence and the Entrepreneurial Enterprise.
Journal of the Knowledge Economy 1, 86-116. [CrossRef]
18. Ulrike de Brentani, Elko J. Kleinschmidt, Sren Salomo. 2010. Success in Global New Product Development: Impact
of Strategy and the Behavioral Environment of the Firm. Journal of Product Innovation Management 27:10.1111/
jpim.2010.27.issue-2, 143-160. [CrossRef]
19. Anthony McDonnell, Patrick Gunnigle, Jonathan Lavelle. 2010. Learning transfer in multinational companies: explaining
inter-organisation variation. Human Resource Management Journal 20:10.1111/hrmj.2010.20.issue-1, 23-43. [CrossRef]
20. Karim Moustaghfir. 2009. How knowledge assets lead to a sustainable competitive advantage: are organizational capabilities
a missing link?. Knowledge Management Research & Practice 7, 339-355. [CrossRef]
21. Giovanni Schiuma. 2009. The managerial foundations of knowledge assets dynamics. Knowledge Management Research &
Practice 7, 290-299. [CrossRef]
22. Ricardo Chiva, Joaqun Alegre. 2009. Investment in Design and Firm Performance: The Mediating Role of Design
Management. Journal of Product Innovation Management 26:10.1111/jpim.2009.26.issue-4, 424-440. [CrossRef]
23. Sren Salomo, Katrin Talke, Nanja Strecker. 2008. Innovation Field Orientation and Its Effect on Innovativeness and Firm
Performance. Journal of Product Innovation Management 25:10.1111/jpim.2008.25.issue-6, 560-576. [CrossRef]
24. Catherine P. Killen, Robert A. Hunt, Elko J. Kleinschmidt. 2008. Learning investments and organizational capabilities.
International Journal of Managing Projects in Business 1:3, 334-351. [Abstract] [Full Text] [PDF]
25. Doren D. Chadee, Billy Pang. 2008. Technology strategy and performance: a study of information technology service providers
from selected Asian countries. Service Business 2, 109-126. [CrossRef]
26. Massimo Franco, Stefania Mariano. 2007. Information technology repositories and knowledge management processes. VINE
37:4, 440-451. [Abstract] [Full Text] [PDF]
27. Ruth Alas, Wei Sun. 2007. Organizational changes in Chinese companies: a resourcebased view. Chinese Management Studies
1:4, 225-242. [Abstract] [Full Text] [PDF]
28. Elko J. Kleinschmidt, Ulrike de Brentani, Sren Salomo. 2007. Performance of Global New Product Development Programs:
A Resource-Based View. Journal of Product Innovation Management 24:10.1111/jpim.2007.24.issue-5, 419-441. [CrossRef]
29. Jim Andersn. 2007. How and what to imitate? A sequential model for the imitation of competitive advantages. Strategic
Change 16:10.1002/jsc.v16:6, 271-279. [CrossRef]
30. Juan C. Real, Antonio Leal, Jos L. Roldn. 2006. Information technology as a determinant of organizational learning and
technological distinctive competencies. Industrial Marketing Management 35, 505-521. [CrossRef]
31. Thomas D. Kuczmarski. 2006. Rejoinders to "Establishing an NPD Best Practices Framework". Journal of Product Innovation
Management 23:10.1111/jpim.2006.23.issue-2, 117-127. [CrossRef]
32. Susana Prez Lpez, Jos Manuel Montes Pen, Camilo Jos Vazquez Ords. 2005. Organizational learning as a determining
factor in business performance. The Learning Organization 12:3, 227-245. [Abstract] [Full Text] [PDF]
33. Jong-min Choe. 2004. Impact of management accounting information and AMT on organizational performance. Journal of
Information Technology 19, 203-214. [CrossRef]
34. Jong-min Choe. 2004. The relationships among management accounting information, organizational learning and production
performance. The Journal of Strategic Information Systems 13, 61-85. [CrossRef]
35. Pilar Jerez Gmez, Jos J. Cspedes Lorente, Ramn Valle Cabrera. 2004. Training practices and organisational learning
capability. Journal of European Industrial Training 28:2/3/4, 234-256. [Abstract] [Full Text] [PDF]
36. JonArild Johannessen, Johan Olaisen, Bjrn Olsen. 1999. Strategic use of information technology for increased innovation
and performance. Information Management & Computer Security 7:1, 5-22. [Abstract] [Full Text] [PDF]
37. Karim Moustaghfir, Giovanni SchiumaKnowledge Assets and Value Creation Dynamics 30-49. [CrossRef]
38. Giovanni SchiumaManaging and Measuring Knowledge Assets Dynamics for Business Value Creation in Organisations 13-29.
[CrossRef]
39. John GallaugherStrategic Positioning and Resource-Based Thinking 92-103. [CrossRef]