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IJM
32,5/6 Organizational learning
Perception of external environment and
innovation performance
512 Yu-Lin Wang
Department of Business Administration, National Cheng Kung University,
Taiwan, and
Andrea D. Ellinger
Department of Human Resource Development and Technology,
The University of Texas at Tyler, Tyler, Texas, USA

Abstract
Purpose – The purpose of this study was to examine the antecedent, perception of the external
environment, and its relationship to organizational learning, as well as explore the relationships
between organizational learning and innovation performance at two levels, including individual and
organizational-level innovation performance.
Design/methodology/approach – Questionnaire data were collected from 268 senior R&D project
team members who reported their perception about the external environment and organizational
learning along with 83 R&D managers who evaluated their employees’ innovative behaviors.
Findings – The results indicated that the antecedent of organizational learning, perception of
external environment, was significant to organizational learning, and organizational learning was
significant to both individual and organization-level innovation performance and contributed more to
the individual-level than organizational innovation performance.
Originality/value – The value of the study lies in its contributions to the scholarly literature on
organizational learning and innovation because examining the antecedent perception of the external
environment and the relationships between organizational learning and innovation performance as
well as the relationship between individual and organizational-level innovation performance have not
received considerable empirical attention.
Keywords Organizational learning, Workplace training, Innovation, Organizational performance,
Individual development, Information dissemination, Competitive advantage,
Human resource management
Paper type Research paper

International Journal of Manpower
Vol. 32 No. 5/6, 2011
pp. 512-536
q Emerald Group Publishing Limited
0143-7720
DOI 10.1108/01437721111158189
Introduction
Globalization of economy, the diverse workforce environment, and use of information
technology have made organizations become more aware of competitive environment
and pursue competitive advantage that lies in learning and knowledge. Learning has
been acknowledged as a key process that contributes to successful innovation, which
determines and supports an organization’s success (Kang et al., 2007; Voronov, 2008).
Organizational learning is defined as the process of acquiring, distributing,
integrating, and creating information and knowledge among organizational
members (Dixon, 1992; Huber, 1991). The processes of organizational learning
involve key components that support knowledge productivity processes, which include
searching for information, assimilating, developing and creating new knowledge on
products, processes, and services. The essence of organizational learning in generating
organizational knowledge not only sustains competitive advantage but also leads to Organizational
new markets and niches creation (Hult et al., 2003). In other words, an organization’s learning
knowledge is an asset that can be managed to contribute to the firm’s innovation
performance (Pham and Swierczek, 2006). In addition, the literature has also connected
organizational learning to the principle means of achieving strategic renewal in an
organization (Crossan and Berdrow, 2003). Therefore, organizational learning has been
equated with innovative efficiency in the innovation literature (Crossan and Berdrow, 513
2003; McKee, 1992; López et al., 2005).
Strategic human resource management (HRM) practice is concerned with
optimizing learning, development, and performance improvement at the individual,
group, team, and organization levels that enables an organization to keep pace with the
changing environment. Saru (2007) has acknowledged that organizational-level
learning and development can be facilitated under a clear linkage between corporate
strategy and HRM practices. It is because organizations require competent people to
learn and interpret new information and technology changes from the external
environment in order to create new knowledge faster than other competitors
(Birdthistle and Fleming, 2005; Casey, 2005). In other words, organizational learning
must be coherent with an organization’s design, strategy, structure, and strategic HRM
practices and context. In the past, the HRM function has tended to be preoccupied with
individual performance and training-dominated activities. In more recent years,
strategic HRM practices have focused on learning and knowledge creation to enhance
individuals’ competencies and collaboration within organizations (López et al., 2006).
López et al.’s (2006) empirical study has demonstrated that HRM practice has a positive
influence on the organizational learning processes. Also Cano and Cano’s (2006)
empirical study has demonstrated that it is HRM practices that impact an
organization’s learning and innovation performance. As a result, HRM professionals
often serve as facilitators in cultivating an organization’s structure and culture to
encourage learning at every level within an organization.

Problem statement
Although the concept of organizational learning has been examined since the 1950s
and the base of literature has expanded conceptually, theoretically, and somewhat
empirically during the past decades (Dodgson, 1993; Easterby-Smith, 1997; Lipshitz
et al., 2002), few studies have investigated the relationship between organizational
learning, its antecedent, and specific performance outcome variables empirically. Most
researchers have focused on the theoretical side of explaining organizational learning
(Saru, 2007). Easterby-Smith and Araujo (1999) have pointed out that learning is a
complex process with many potential levels to investigate empirically. The
relationship between organizational learning and innovation performance has been
mentioned and assumed conceptually in organizational learning and innovation
literature, but little empirical evidence has supported this perspective and the nature of
this phenomenon has not been fully explicated empirically (Bontis et al., 2002; López
et al., 2005). Moreover, there has also been limited research focused on how
organizational learning processes affect performance (Bapuji and Crossan, 2004;
Easterby-Smith and Araujo, 1999).
In addition, the innovation literature has overly focused on organizational-level
innovation performance (Simsek, 2002; Zahra, 1996). Most prior organizational
IJM learning and innovation research has predominantly adopted the firm as the unit of
32,5/6 innovation performance analysis and has overly focused on organizational-level
innovation performance (Åmo and Kolvereid, 2005). In fact, organization learning and
innovation is based on individual-level efforts that contribute to organizational-level
learning and performance (Dixon, 1992; Huber, 1991). Further, the organizational
learning literature has conceptually and theoretically acknowledged that
514 individual-level learning should be embedded and transferred into
organizational-level learning, but the fundamental question of the connection
between individual learning and organizational learning still lacks empirical
investigation in this field (Antonacopoulou, 2006; Ron et al., 2006; Saru, 2007).
As a result, the overall purpose of this study was to examine the antecedents of and
the relationships between organizational learning and innovation performance at two
levels, including individual-level and organizational-level innovation performance.
Also, the relationship between individual-level innovation performance and
organizational-level innovation performance was explored.

Literature review and research hypotheses

Organizational learning
The construct of organizational learning has been articulated for more than 40 years,
and the field of organizational learning has grown rapidly in the 1990s (Casey, 2005;
Dodgson, 1993; Easterby-Smith et al., 1998). The concept of organizational learning has
not only attracted the attention of scholars from disparate disciplines but also
consultants and managers in the business world (Chiva and Alegre, 2005). It is because
the concept of learning provides insights to firms that face uncertain and changing
circumstances (Dodgson, 1993). However, with the emerging importance of
organizational learning, there seems to be little agreement on the definitions,
processes, and models in this field (Lundberg, 1995). A consequence of this is that
diverse disciplinary perspectives are presented in the literature on organizational
learning (Easterby-Smith, 1997). Therefore, Dodgson (1993) has emphasized that it is
important to use a multi-disciplinary approach to fully understand the complexity and
variety of organizational learning literature.
Easterby-Smith (1997) has identified various disciplines that contribute to
organizational learning. One noticeable debate in the literature is whether scholars
should try to move toward a single integrated framework or acknowledge that diverse
disciplinary perspectives exist (Easterby-Smith and Araujo, 1999). Since a number of
scholars have recognized that there is more than a single framework or model in
understanding organizational learning process, researchers have tended to map many
facets of organizational learning and developed integrative conceptual frameworks.
Lipshitz et al. (2002) have stressed that organizational learning should be explicated
more than the cognitive perspective, which has been a dominant focus in the literature.
It is because organizational learning produces and changes the learning in culture,
structures, policy, and norms aspects. Therefore, Lipshitz et al. (2002) have integrated
five facets: structural, cultural, psychological, policy, and contextual, to build their
organizational learning conceptual framework.
In addition, Gnyawali and Stewart (2003) have also argued that the cognitive
perspective has been widely recognized in organizational learning models, but little
research has examined organizational learning by using a contingency approach.
Hence, Gnyawali and Stewart (2003) have adopted the contingency approach in Organizational
proposing an integrative model of organizational learning, which emphasizes how learning
environmental conditions affect organizational learning processes and result in
different types of learning. This conceptual model contains antecedents of
organizational learning, modes of learning, and interaction of the modes and
resulting types of learning. The antecedents of organizational learning are one’s
perception of environmental conditions, which include perception of uncertainty and 515
equivocality. This antecedent of organizational learning, perception of the external
environment, is similar to Lipshitz et al.’s (2002) contextual facet, which focuses on
exogenous factors, such as environmental uncertainty. Gnyawali and Stewart (2003)
have suggested that the characteristics of external environment, uncertainty and
equivocality, interact with the way an organization learns. In other words, how
organizational members perceive the external environment influences organizational
learning.
Organizational learning and its antecedents. From the resource-based perspective,
an organization learns to develop organizational structures and systems to transform
itself to become more adaptive and responsive to changes and jolts in the external
environment (Dodgson, 1993; Meyers, 1982). Meyers (1982) has argued that such
environmental jolts are a good opportunity for an organization to learn to deal with
crisis. In other words, an organization improves performance and readjusts itself to
the dynamic environment through the learning process. Also Gnyawali and Stewart’s
(2003) contingency perspective delineates how one’s mental model towards
environmental change and the organization’s information processing are key
concepts which have been elaborated in the early organizational learning literature,
such as Argyris (1977) and Daft and Weick (1984). These early organizational
learning contributions have viewed an organization as an interpretation system of its
environment. In other words, organizations, as open systems, rely on the
interpretation formulated by organization and individuals, especially the top
managers. The organizational interpretation is analogous to an individual’s learning.
An organization’s overall interpretation functions as the information processing
system with three stages: scanning, interpretation, and learning. Researchers have
suggested that how individuals interpret the external environment influences
organizational learning (Daft and Huber, 1987; Daft and Weick, 1984; Gnyawali and
Stewart, 2003; Garcı́a-Morales et al., 2006). Moreover, when an organization perceives
and recognizes the disconnection between external environment and its internal
design component, it is critical that organization members have the capability to
question underlying assumptions and create learning strategies for higher-level
organizational learning (Dodgson, 1993). In other words, organizational learning is
generated by the organization members’ reaction and perception about the external
environment. However, such conceptual propositions in how members within an
organization perceive the external environment and its influence on organizational
learning have not been investigated empirically. Therefore, when the external
environment is perceived as an uncertain and complex system, organizational
learning is generated:
H1-1. R&D employees’ perception of the external environment (as uncertain and
complex) will be positively associated with organizational learning.
IJM Innovation performance
32,5/6 Innovation is often characterized as a kind of “capital” for the organization and has
been broadly defined as “an idea, a product, or process, system or device that is
perceived to be new to an individual, a group of people or firms, an industrial sector or
a society as a whole” (Rogers, 1995, p. 276). Innovation has also been viewed as a
method to sustain competitive advantage since the beginning of the industrial
516 revolution (Heffner, 2006). March (1991) has indicated that product innovation have
two modes, explorative and exploitive, which mean innovation may be achieved by
exploiting existing products or exploring new ones. Although different definitions of
exploration and exploitation exist, the connotation of these two terms is focused on
learning, and new knowledge acquisition and recognition (Gupta et al., 2006; Ireland
and Webb, 2007). Kanter (1984) has stressed that innovation is not only merely defined
as technological innovation but also organizational learning and change processes in
supporting and stimulating innovations. Recently, one major stream of innovation
studies focus on human aspect that lead to innovation (Prajogo and Ahmed, 2006).
Based on the resource-based view, an organization’s innovation performance is rooted
in the human capital embedded in it that cannot be replicated and transferred (Ireland
and Webb, 2007). In other words, an organization with the most advanced technology
but one that is lacking talented employees still cannot perform and conduct innovative
projects. The concept of organizational learning stresses that organizations are
systems that support learning and performance improvement at multiple levels of an
organization. Therefore, the term innovation performance is connected with
organizational learning practices.
In the organizational learning literature, current empirical research has tried to use
organizational learning as a moderator variable to explain organizational performance
(Bapuji and Crossan, 2004). Empirical studies have tended to adopt an organization’s
financial and marketing performance, either subjective measure or objective measure,
as the organizational learning performance outcome variable. Recently, some empirical
studies have started to demonstrate that an organization learning capability has a
positive effect on the organizational innovation performance (Garcı́a-Morales et al.,
2007; López et al., 2005) Yet, despite some of the limited empirical evidence, there is a
compelling need to continue building the base of empirical research on organizational
learning and performance outcomes that extend beyond marketing and financial
performance to include other performance outcomes such as innovation performance,
at both the individual and organizational-levels. This is because innovation
performance is considered to be a critical competitive advantage and has been
recognized as an important current trend in the strategic HRM field. Therefore, the
researchers hypothesized that:
H1-2a. Organizational learning will be positively associated with individual-level
innovation performance.
H1-2b. Organizational learning will be positively associated with
organizational-level innovation performance.
Individual and organizational-level innovation performance. The organizational
learning literature is primarily underpinned by the concept that individual-level
efforts may contribute to organizational-level performance (Dixon, 1992; Huber, 1991;
Ron et al., 2006). Also, researchers have applied individual learning theories, such as
cognitive psychology theory or behavior theory as the fundamental basis to build the Organizational
organizational learning constructs. Without the individual’s focus and intention learning
towards the new opportunity and innovative information, an organization would have
difficulty to achieve and initiate entrepreneurial activities. Although the sum of the
individuals’ innovative behavior might not equal organization-level innovation
performance, organizational-level innovation performance is based on its members’
innovative behaviors. That is, organizational innovation occurs under the conditions 517
that organizational members’ innovation is able to be transferred to the
organizational-level (Glynn, 1996). In addition, an innovative organization may
facilitate its employee’s innovation performance. Hence, the researchers hypothesized
that:
H3a. Individual-level innovation performance will be positively associated with
organizational-level innovation performance.
H3b. Organizational-level innovation performance will be positively associated
with individual-level innovation performance.

Conceptual framework
Based on the reviews of organizational learning and innovation performance
literatures, the researchers have proposed Figure 1 to represent the conceptual
framework from which the above research hypotheses have been developed. Grounded
upon and informed by Huber (1991), Dixon (1992), and Gnyawali and Stewart’s (2003)
organizational conceptual frameworks, the researchers have developed the framework
to included organizational learning, its antecedent, perception of external environment,
and individual and organizational-level innovation performance as the outcome
variables. The organizational learning process contains four sub-processes:
information acquisition, information distribution, information interpretation, and
organization memory.

Research sample
The research sites for this study included organizations in an industry that pursues
and puts an emphasis on innovation performance. In addition, Yang et al.’s (2007)
empirical study has demonstrated that in Taiwan, only high technology firms
emphasize supporting and applying the organizational learning practice through their
organizations to improve their organization performance and effectiveness.
Consequently, high technology firms located within one science park in Taiwan
became the target sample selection sites for this study.

Figure 1.
Conceptual framework
IJM Each organization’s R&D manager and three to five senior R&D project team members,
32,5/6 randomly selected by the R&D manager, in each high technology firm listed in the
Directory of 2006 Association of Industries in the specific Science Park Directory of
Taiwan were invited to participate in this study. The criterion for each organization’s
R&D manager to identify three to five senior R&D project team members in each high
technology firm was to randomly select individuals who have been working for more
518 than three years in the R&D project teams of each firm. These potential participants may
be product developers, designers, engineers, or marketing personnel. Individuals in
these positions tend to pay more attention to knowledge and information towards
innovation performance. The main study resulted in 83 (30.29 percent response rate)
high technology firms with 83 R&D managers evaluating their respective senior R&D
project team members’ innovative behaviors and 268 (64.58 percent response rate) valid
returned questionnaires from senior R&D project team members. The descriptive
information on the participant’s organizational demographics and the participant’s
individual demographics are presented in Table I and Table II, respectively.

Non-participants bias
To address the non-participants bias issue, the T test comparisons of the participant
firms and non-participants firms on number of employees ðt ¼ 1:23; p ¼ 0:21Þ and
annual revenue ðt ¼ 1:18; p ¼ 0:24Þ did not reveal significant differences between the
two groups. The researcher concluded that participant firms did not differ significantly
from the non-participants firms.

Frequency (n) %

Number of employees
51 – 100 9 10.8
101 – 200 15 18.1
201 – 250 18 21.7
251 – 300 28 33.7
301 – 400 2 2.4
401 – 500 6 7.2
More than 501 5 6.0
Annual revenue
Less than 1 billion NTD 13 15.7
1 – 4 billion NTD 17 20.5
4 – 7 billion NTD 14 16.9
7 – 10 billion NTD 19 22.9
More than 10 billion NTD 20 24.1
Main product of the organization
Computer and peripherals 15 18.1
Integrated circuits 11 13.3
Opto-electronics 14 16.9
Precision machinery 15 18.1
Telecommunications 13 15.7
Table I. Others 15 18.1
Characteristics of
organizations Note: N ¼ 83
 Organizational
Frequency (n) Percentage (%)
learning
Gender
Female 25 9.3
Male 243 90.7
Length of employment
3 – 5 years 77 28.7 519
6 – 8 years 146 54.5
9 – 11 years 37 13.8
12 215 years 8 3.9
Work experience in industry
3 – 5 years 65 24.7
6 – 8 years 136 50.7
12 – 15 years 54 20.1
16 – 20 years 13 4.9
Level of education
Associate degree 4 1.5
Bachelor’s degree 85 31.7
Master’s degree 172 64.2
PhD 7 2.6
Hours dedicated to work related learning
0 hours per month 10 3.7
1 – 10 hours per month 162 60.4
11 – 20 hours per month 74 27.6
21 – 35 hours per month 15 5.6
More than 36 hours per month 7 2.6 Table II.
Characteristics of
Note: N ¼ 268 participants

Instrumentation
The researcher developed two sets of survey instruments from measures drawn from
the existing literature: one instrument was designed for senior R&D project team
members and the other was designed for R&D managers in each participating firm
respectively. The instrument for the senior R&D project team members included two
sections: section 1 contained questions using Garcı́a-Morales et al.’s (2006) perception
of external environment measure, López et al.’s (2006) organizational learning measure,
and Simsek’s (2002) organizational-level innovation measure. Responses were
five-point Likert-type scales. Section 2 contained demographic items. The instrument
for R&D managers included six items derived from Scott and Bruce’s (1994)
individual-level innovation performance measure. The R&D managers were asked to
rate every senior R&D project team member’s innovative behavior on a five-point
Likert-type scale.

Perception of external environment

The items measuring perception of external environment were adopted from
Garcı́a-Morales et al.’s (2006) environment instrument (Cronbach’s alpha was 0.864).
All four items measure the degree of dynamism, complexity, diversity, and
IJM heterogeneity of external environment were summed to derive the measure of
32,5/6 perception of external environment.

Organizational learning
The items measuring organizational learning were adopted from López et al.’s (2006)
measure of organizational learning, which was based on Huber (1991) and Dixon’s
520 (1992) organizational learning conceptual frameworks. A total of 25 items with four
dimensions, information acquisition (seven items), information distribution (five
items), information interpretation (five items), and organizational memory (eight
items), were summed to derive the measure of organizational learning. The Cronbach’s
alphas on López et al.’s (2006) information acquisition, information distribution,
information interpretation, and organizational memory measure were 0.796, 0.772,
0.822, and 0.844, respectively. Respondents were asked to use a five-point rating scale
to rate extent of agreement at items describing the learning practices and activities in
their organizations.

Individual-level innovation performance

The items measuring individual-level innovation performance were adopted from Scott
and Bruce’s (1994) six-item innovative behavior measure (Cronbach’s alpha was 0.89),
which asks supervisors to rate their subordinates’ innovative behaviors in workplace.
In addition, Scott and Bruce’s (1994) measure was designed for employees who work in
technology related areas, such as R&D personnel. All six items were summed to derive
the measure of each senior R&D project team member’s individual-level innovation
performance.

Organizational-level innovation performance

In collecting sensitive performance data, prior literature has tended to adopt an indirect
approach (López et al., 2005). That is, scholars have tended to ask participants to report
how well their firm innovatively performed in terms of the extent of new product,
process, and service development rather than ask participants directly to report
financial statement data. Although objective data has been argued to provide greater
validity in theory, Homburg et al.’s (1999) empirical study has demonstrated that both
objective and subjective data are all valid in measuring an organization’s performance.
In this study, the researchers primarily adopted the subjective self-report approach and
use subjective secondary sources as supplementary data. Simsek’s (2002) five-item
innovation performance was adopted (Cronbach’s alpha was 0.87).
A unique method in revising the self-report approach was used to resolve the
common method bias issue. Instead of adopting the participant’s own score on the
organizational-level innovation performance, the researcher used the mean score from
the rest of the participants in the same firm. Therefore, the participant’s own rating on
the organizational-level innovation performance was excluded in the measure.
In addition, the researcher also compared the participant’s evaluation of the
organizational-level innovation performance with the organization’s actual financial
performance in the market, such as return on investment (ROI), which was accessed
from the 2006 Association of Industrial Directory to ensure credibility. However, the
Directory is not an official directory, and some firms choose not to release their
financial reports and statements. Therefore, this method was used as a supplementary Organizational
tool to increase the validity of the measure. learning
Control variables
On the basis of a review of the literature, the researchers identified the following
variables that should be controlled in the data analyses. These variables include an
organization’s annual revenue and number of employees, individuals’ off office time 521
spent on work-related learning and lengths of employment in the high technology
industry (Zahra, 1996).

Results
Psychometric properties of the instrument
An exploratory factor analysis with varimax rotation method was conducted on all
items of the survey. The results of the factor analyses indicated that the groupings of
factors were exactly the same as the instrument factor analyses reported in the past
research, and no items were deleted in this stage. Next, the researchers conducted
confirmatory factor analysis to evaluate the factor structure, and Cronbach’s alpha was
used to rate the reliability of the instrument. The overall fit of the 7-construct
confirmatory factor model to the data suggested a good fit of the measurement scales
(x 2 ¼ 996.896, df ¼ 710, p , 0.01; Comparative Fit Index (CFI) ¼ 0.956, the
Tucker-Lewis Index (TLI) ¼ 0.952; the Incremental Fit Index (IFI) ¼ 0.957, the root
mean square error of approximation ðRMSEAÞ ¼ 0:039Þ: In addition, each of the
standardized factor loadings was significant ( p , 0.001) and quite high (Table III). As
indicated in Table III, the Cronbach alpha internal consistency reliability estimates
were all above Nunally and Bernstein’s (1994) recommended level of 0.70.
Further, to confirm the dimensionality of the organizational learning, second order
confirmatory factor was conducted, following López et al. (2006). The second order
model was estimated to test whether information acquisition, information distribution,
information interpretation, and organizational memory are affected by the higher-order
construct, organizational learning. In other words, the second-order confirmatory
factor analysis of the organizational learning was based upon the hierarchical structure
that the dimensions obtained from the first-order analysis (information acquisition,
information distribution, information interpretation, organizational memory) are
viewed as factors that presumed to be caused by organizational learning. In Table IV,
standardized loadings of second order factors were all high and significant at p ,
0.001, and the CFI exceeded the recommended norm of 0.90. Therefore, the results as a
whole confirm the dimensionality of the organizational learning measure.

Test of the model

A series of multiple regressions with hierarchical method were used to examine the
research hypotheses. That is, relevant control variables were entered into the
regression first, followed by the respective independent variables, organizational
learning, entrepreneurial opportunity recognition, to estimate the additional
contribution of the organizational learning variable to the dependent variables,
individual-level and organizational-level innovation performance. Table V presented
an overview of the means and standardized deviation of all the variables.
IJM
Standardized Average variance Cronbach’s Composite
32,5/6 Item loading extracted alpha reliability

Perception of external environment 0.731 0.870 0.870

1. There are few changes in the
industry that could affect the
522 organization 0.900
2. The changes in the industry
have been easily predictable 0.882
3. The industry’s evaluation
depended on multiple factors 0.680
4. The factors that affect the
industry’s evolution differ
greatly from each other 0.671
Information acquisition (IA) 0.701 0.919 0.919
1. Makes co-operation agreement
with other companies,
universities, technical colleges,
etc 0.607
2. Is in touch with professionals
and expert technicians 0.658
3. Encourages employees to join
formal or informal nets made up
by people outside the
organization 0.665
4. Asks employees to attend fairs
and exhibitions regularly 0.663
5. Has a consolidated and
resourceful R&D policy 0.706
6. New ideas and approaches on
work performance are
experimented continuously 0.720
7. Has the organizational systems
and procedures that support
innovation 0.708
Information distribution (ID) 0.720 0.869 0.869
1. Informs all members about the
aim of the company 0.679
2. Holds meetings periodically to
inform all the employees about
the latest innovations in the
company 0.680
3. Has formal mechanisms to
guarantee the sharing of the best
practices among the different
fields of the activity 0.792
4. There are within the
Table III. organization individuals who
Construct measurement take part in several teams or
summary: confirmatory divisions and who also act as
factor analysis and links between them 0.764
reliability (continued)
 Standardized Average variance Cronbach’s Composite
Organizational
Item loading extracted alpha reliability learning
5. Has individuals responsible for
collecting, assembling, and
distributing internally
employee’s suggestions 0.769 523
Information interpretation (IT) 0.714 0.854 0.854
1. All the members of the
organization share the same aim
to which they feel committed 0.780
2. Employees share knowledge
and experience by talking to
each other 0.660
3. Teamwork is a very common
practice 0.708
4. The organization develops
internal rotation programs so as
to facilitate the shifts of the
employees from one department
or function to another 0.722
5. The organization offers other
opportunities to learn (visits to
other parts of the organization,
internal training programs, etc.)
so as to make individuals aware
of other people or departments’
duties 0.692
Organizational memory (OM) 0.707 0.846 0.846
1. Has databases to stock its
experiences and knowledge so
as to be able to use them later on 0.816
2. Has directories or emails field
according to the field they
belong to, so as to find an expert
on a concrete issue at any time 0.843
3. Has up-to-date databases of its
clients 0.789
4. Has access to the organization’s
data basis and documents
through some kind of network
(Lotus Notes, Intranet, etc.) 0.824
5. Keeps databases up-to-date 0.656
6. Allows all the employees have
access to the organization’s
databases 0.702
7. Employees consult the
databases 0.707
8. The codification and knowledge
administration system make
work easier for the employees 0.800
(continued) Table III.
IJM Standardized Average variance Cronbach’s Composite
32,5/6 Item loading extracted alpha reliability

Individual-level innovation
performance 0.709 0.918 0.918
1. Searches out new technologies,
524 processes, techniques, and/or
product ideas 0.786
2. Generate creative ideas 0.805
3. Promotes and champions ideas
to others 0.790
4. Investigates and secures funds
needed to implement new ideas 0.790
5. Develops adequate plans and
schedules for the
implementation of new ideas 0.828
6. Is innovative in work
performance 0.843
Organizational-level innovation
performance 0.713 0.899 0.899
1. Has spent heavily (well above
the industry average) on product
development 0.750
2. Has introduced a large number
of new products to the market 0.812
3. Has pioneered the development
of breakthrough innovations in
its industry 0.840
4. Has spent on new product
development initiatives 0.805
5. Has acquired significantly more
patents than its major
competitors 0.799
Note: All estimates were significant at p , 0.0, N ¼ 268; CFI ¼ 0.956; TLI ¼ 0.952; IFI ¼ 0.957;
Table III. RMSEA ¼ 0.039; and x2 ¼ 996.896 with 710 degrees of freedom ( p , 0.01)

Organizational learning and its antecedent. To examine the contribution of senior R&D
project team members’ perception of the external environment to organizational
learning, organizational learning was entered into the regression model. In Table VI,
R&D project team member’s perception of the external environment (beta ¼ 0.40)
variable was significant to the organizational learning. Hence, H1-1 was supported.
Organizational learning and innovation performance. To examine the contribution
of organizational learning to individual-level innovation performance, organizational
learning was entered into the regression model after the four control variables, annual
revenue, number of employees, out of office time spent on work-related learning, and
work experience in high technology industry. There was a 24 percent increment in the
total variance explained when organizational learning variable was added to the
regression model (Model 2 of Table VII). The total variance explained, including the 8
percent by the four control variables, was 32 percent ðF 5=262 ¼ 24:62; p , 0.001).
 Organizational
Item Standardized loading
learning
First order model
Information acquisition (IA)
IA1 0.601
IA2 0.660
IA3 0.660 525
IA4 0.658
IA5 0.713
IA6 0.719
IA7 0.713
Information distribution (ID)
ID1 0.681
ID2 0.676
ID3 0.788
ID4 0.767
ID5 0.773
Information interpretation (IT)
IT1 0.782
IT2 0.659
IT3 0.706
IT4 0.722
IT5 0.691
Organizational memory (OM)
OM1 0.816
OM2 0.843
OM3 0.790
OM4 0.825
OM5 0.656
OM6 0.701
OM7 0.705
OM8 0.801
Second order model
Information acquisition (IA) ˆ Organizational learning 0.723
Information distribution (ID) ˆ Organizational learning 0.874
Information interpretation (IT) ˆ Organizational learning 0.918
Organizational memory (OM) ˆ Organizational learning 0.795 Table IV.
First order and second
Note: First order model: All estimates significant at p , 0.01; N ¼ 268; CFI ¼ 0.954; TLI ¼ 0.948; order confirmatory factor
IFI ¼ 0.955; RMSEA ¼ 0.05; and x2 ¼ 438.292 with 263 degrees of freedom ( p , 0.01) analysis of the
Second order model: All estimates significant at p , 0.01; N ¼ 268; CFI ¼ 0.954; TLI ¼ 0.948; organizational learning
IFI ¼ 0.954; RMSEA ¼ 0.05; and x2 ¼ 441.559 with 265 degrees of freedom ( p , 0.01) measurement

Annual revenue ðbeta ¼ 0:15Þ; employee work experiences in industry (beta ¼ 0.14),
and organizational learning ðbeta ¼ 0:50Þ variables were significant to the
individual-level innovation performance. Therefore, H1-2a: organizational learning
activities will be positively associated with individual-level innovation performance,
was supported.
Next, to examine the contribution of organizational learning to organizational-level
innovation performance, organizational learning was entered into the regression model
after four control variables, annual revenue, number of employees, out of office time
 IJM

526
32,5/6

variables
Table V.

deviations, and
Means, standard

correlations for all

Variable Mean SD 1 2 3 4 5 6 7 8

1. Annual revenue 3.08 1.42 –

2. Number of employees 3.44 1.55 0.07 –
3. Out of office time spent in work-related learning 2.06 0.77 0.06 0.04 –
4. Work experience in industry 2.43 0.80 2 0.08 0.09 0.10 –
5. Perception of external environment 3.37 0.60 0.13 * 0.11 0.04 0.10 –
6. Organizational learning 3.39 1.54 0.13 * 0.10 0.07 0.11 0.40 * * –
7. Individual-level innovation performance 2.91 1.68 0.19 * * 0.06 20.01 0.16 * * 0.43 * * 0.53 * * –
8. Organizational-level innovation performance 3.38 1.79 0.23 * * 0.16 * * 0.17 * * 0.15 * 0.41 * * 0.48 * * 0.46 * * –
Note: *p , 0.05, * *p ,0.01; N ¼ 268
spent on work-related learning, and employee work experience in high technology Organizational
industry. Table VII Model 2 indicated that the total variance explained, including the learning
12 percent by the four control variables, was 29 percent (F 5=262 ¼ 21:80; p , 0.001).
That is, organizational learning added another 17 percent of variance explained. In
Table VII Model 2, annual revenue ðbeta ¼ 0:18Þ; employee off office time spent in
learning ðbeta ¼ 0:11Þ; employee work experiences in industry ðbeta ¼ 0:12Þ; and
organizational learning ðbeta ¼ 0:42Þ were significant to organizational-level 527
innovation performance. Therefore, H1-2b: organizational learning activities will be
positively associated with organizational-level innovation performance, was also
supported. Apparently, organizational learning plays a critical role to both
individual-level and organizational-level innovation performance.
Organizational learning subprocesses and innovation performance. In organizational
learning subprocesses and innovation performance correlation table (Table VIII), the
organizational learning and its subprocesses, information acquisition ðr ¼ 0:46Þ;
information distribution ðr ¼ 0:47Þ; information interpretation ðr ¼ 0:38Þ; and
organizational memory ðr ¼ 0:45Þ were all positively correlated to individual-level
innovation performance. Also, among the four subprocesses, it was information
distribution activities that correlated most to an individual’s innovative behaviors. In
addition, these four organizational learning subprocesses, information acquisition ðr ¼
0:41Þ; information distribution ðr ¼ 0:43Þ; information interpretation ðr ¼ 0:31Þ; and
organizational memory ðr ¼ 0:41Þ were also all positively correlated to

Predictors Organizational learning

b
Table VI.
Perception of external environment 0.40 * Senior R&D project team
R2 0.18 member’s perception of
F 49.82 * external environment as
predictor of
Note: *p , 0.001; N ¼ 268 organizational learning

Individual level/ Individual level/

Predictors organizational level organizational level
Model l Model 2
b b

Annual revenue 0.23 * * * 0.24 * * * 0.15 * * 0.18 * *

Number of employees 0.03 0.12 * 2 0.01 0.09
Off office time spent in learning 2 0.04 0.13 * 2 0.07 0.11 *
Work experience in industry 0.20 * * * 0.17 * * 0.14 * * 0.12 *
Organizational learning 0.50 * * * 0.42 * * *
R2 0.08 0.12 0.32 0.29
Adjusted R2 0.06 0.11 0.31 0.28 Table VII.
DR2 0.24 0.17 Organizational learning
F 5.59 * * * 9.30 * * * 24.62 * * * 21.80 * * * as predictor of
F Change 92.93 * * * 63.02 * * * individual-level and
organizational-level
Note: *p , 0.05; * *p , 0.01; * * *p , 0.001; N ¼ 268 innovation performance
IJM organizational-level innovation performance. Like the result in individual-level
32,5/6 innovation performance, it was information distribution activities that played the most
critical role in affecting an organization’s innovation performance.
To further examine the impact of these four subprocesses on individual-level
innovation performance and organizational-level innovation performance, a structural
equation modeling was conducted with AMOS 5.0 version. The indicators
528 demonstrated that the model-fit indexes have an acceptable overall disposition
(x 2 ¼ 880.785, df ¼ 573, p, 0.01; CFI ¼ 0.948; TLI ¼ 0.942; IFI ¼ 0.948;
RMSEA ¼ 0.045). The analytical results (Table IX) showed that individual-level
innovation performance is positively influenced by information acquisition
(beta ¼ 0.402, t ¼ 5.56, p, 0.01), information distribution ðbeta ¼ 0:412; t ¼ 6:09;
p, 0.001), information interpretation ðbeta ¼ 0:385; t ¼ 4:08; p, 0.05), and
organizational memory ðbeta ¼ 0:391; t ¼ 4:46; p , 0.05). Additionally, these four
subprocesses, information acquisition ðbeta ¼ 0:398; t ¼ 4:68; p, 0.05), information
distribution ðbeta ¼ 0:406; t ¼ 5:74; p, 0.01), information interpretation ðbeta ¼

Variables 1 2 3 4 5 6

1. Information acquisition –
2. Information distribution 0.54 * –
3. Information interpretation 0.54 * 0.67 * –
Table VIII. 4. Organizational memory 0.48 * 0.63 * 0.67 * –
Organizational learning 5. Individual-level innovation performance 0.46 * 0.47 * 0.38 * 0.45 * –
subprocesses and 6. Organizational-level innovation performance 0.41 * 0.43 * 0.31 * 0.41 * 0.46 * –
innovation performance
correlation Note: * p , 0.01; N ¼ 268

Standardized estimate t-value

Information acquisition ! individual-level

innovation performance 0.402 * * 5.56 * *
Information distribution ! individual-level
innovation performance 0.412 * * * 6.09 * * *
Information interpretation ! individual-level
innovation performance 0.385 * 4.08 *
Organizational memory ! individual-level
innovation performance 0.391 * 4.46 *
Information acquisition ! organizational-level
innovation performance 0.398 * 4.68 *
Information distribution ! organizational -level
innovation performance 0.406 * * 5.74 * *
Information interpretation ! organizational -level
innovation performance 0.379 * 3.67 *
Table IX. Organizational memory ! organizational -level
Structural equation innovation performance 0.390 * 3.90 *
modeling on
organizational learning Note: *p ,0 .05; * *p , 0.01; * * *p , 0 .001; N ¼ 268: All estimates were significant at p , 0.01.
subprocesses and The model fit index x2 ¼ 880.785 with 573 degrees of freedom (\hskip 1.5ptp , 0.01). CFI ¼ 0.948;
innovation performance TLI ¼ 0.942; IFI ¼ 0.948; RMSEA ¼ 0.045
0:379; t ¼ 3:67; p , 0.05), and organizational memory ðbeta ¼ 0:390; t ¼ 3:90; p , Organizational
0.05) were also positively associated with organizational-level innovation performance. learning
As a result, information distribution had the most critical role in both individual and
organizational-level innovation performance.
Individual-level innovation performance and organizational-level innovation
performance. Innovation performance, individual-level innovation performance was
entered into the regression model after annul revenue, number of employees, out of 529
office time spent in work-related learning, and work experience in industry. There was
a 16 percent increment in the total variance explained when the individual-level
innovation performance variable was added to the regression model (Model 2 of
Table X). The total variance explained, including the 12 percent by four control
variables, was 28 percent ðF 3=264 ¼ 20:43; p , 0.001). Work experience in industry was
not significant to the organizational-level innovation performance in regression Model
2 of Table X. Only annual revenue ðbeta ¼ 0:15Þ; number of employees ðbeta ¼ 0:15Þ;
out of office time spent in work-related learning ðbeta ¼ 0:11Þ; and individual-level
innovation performance ðbeta ¼ 0:41Þ were significant to organizational-level
innovation performance. Hence, H3a: individual-level innovation performance will
be positively associated with organizational-level innovation performance, was
supported.
On the other hand, to examine the contribution organizational-level innovation
performance to individual-level innovation performance, organizational-level
innovation was entered into the regression model after the annual revenue and work
experience in industry. Because number of employees and out of office time spent on
work-related learning ðr ¼ 0:04; r ¼ 20:01Þ did not correlate with individual-level
innovation performance, they were excluded from the Model 1 of Table XI in the
regression analysis. Inclusion of two control variables, Table XI pointed out that the
total variance explained, including the 8 percent by the two control variables, was 23
percent ðF3=264 ¼ 26:65; p , 0.001). Annual revenue ðbeta ¼ 0:12Þ; work experience
in industry ðbeta ¼ 0:12Þ; and organizational-level innovation performance ðbeta ¼
0:42Þ variables were significant to individual-level innovation performance. As a result,

Predictors Organizational level

Model 1 Model 2
b b

Annual revenue 0.24 * * * 0.15 * *

Number of employees 0.13 * 0.15 * *
Off office time spent in learning 0.12 * 0.11 *
Work experience in industry 0.17 * * 0.09
Individual-level innovation performance 0.41 * * *
R2 0.12 0.28
Adjusted R2 0.11 0.27 Table X.
DR2 0.16 Individual-level
F 9.30 * * * 20.43 * * * innovation performance
F change 57.02 * * * as a predictor of
organizational-level
Note: *p , 0.05; * *p , 0.01; * * *p , 0.001; N ¼ 268 innovation performance
IJM H3b: organizational-level innovation performance will be positively associated with
32,5/6 individual-level innovation performance was supported.

Discussion
Antecedent of organizational learning
530 The results indicated that the senior R&D project team member’s perception of
external environment was positively correlated with organizational learning. The
findings empirically supported early organizational learning conceptual studies, which
argued that an organization as an interpretation system of its environment and
individuals’ mental model in scanning and interpreting the external environment and
information have been very important for organizations to learn to prepare for external
environmental jolts (Daft and Huber, 1987, Daft and Weick, 1984; Gnyawali and
Stewart, 2003; Meyers, 1982). Recently, Garcı́a-Morales et al.’s (2006) empirical study
has demonstrated that managers’ perceptions of the environment are positively related
to organizational learning. Unlike their study, the researcher used senior R&D project
team members as participants in this study. In the high technology industry, senior
R&D project team members were deemed to be the new information and knowledge
gatekeepers of their organizations, and are first-line employees engaging in learning
and innovation activities rather than the managers.

Subprocesses of organizational learning

One unique aspect of this study was that the researcher further investigated the
relative importance of the four organizational learning subprocesses toward
innovation performance. The findings indicated that information distribution was
the most important predictor to both individual and organizational-level innovation
performance. Although information distribution follows after information acquisition
in the organizational learning process, the practices and activities that information
distribution contain do help organization members to contribute and transfer their
individual-level learning and knowledge acquisition to the organizational level. That
is, based upon this study, information distribution can be viewed as the most critical
function in the organizational learning process.

Predictors Individual level

Model 1 Model 2
b b

Annual revenue 0.23 * * 0.12 *

Work experience in industry 0.20 * * 0.12 *
Organizational-level innovation performance 0.42 * *
R2 0.08 0.23
Table XI. Adjusted R2 0.07 0.22
Organizational level DR2 0.15
innovation performance F 10.87 * * 26.65 * *
as a predictor of F Change 53.89 * *
individual level
innovation performance Note: *p , 0.05; * *p , 0.001; N ¼ 268
Organizational learning and innovation performance Organizational
The current study showed a clear division between individual and firm-level learning
innovation performance and their relative importance to the organizational learning.
The findings indicated that organizational learning contributed more to individual
level than organizational-level innovation performance. The results may challenge the
general thought that organizational learning should contribute more to
organizational-level innovation performance than individual-level innovation 531
performance. However, organizational learning relies on its member’s
individual-level learning performance (Easterby-Smith and Araujo, 1999). Also, how
an individual perceives his or her organization’s learning systems and practices may
affect the individual’s attitudes towards learning (Gnyawali and Stewart, 2003). That
is, an organization member’s learning behaviors and performance are shaped and
influenced by the organization’s learning mechanisms they perceived. Therefore,
organizational learning has a much more direct impact on an individual’s performance
than on organizational-level performance.

Individual and organizational-level innovation performance

Under control variables related to the firm-level innovation performance (Table IX), the
individual-level innovation performance was significant to firm-level innovation
performance. The findings confirmed that organization learning is primarily
underpinned by the concept that individual-level efforts may contribute to
organizational-level performance (Dixon, 1992; Huber, 1991; Ron et al., 2006). This
study further extended the limitation of existing literature in which individual-level
learning and innovation measures are usually neglected and restricted to
organizational-level performance (Antonacopoulou, 2006). Also the empirical
findings supported Glynn’s (1996) and Antonacopoulou’s (2006) conceptual
framework that organizational innovation occurs under the condition that an
organization members’ innovation performance is able to transferred to be the
organization.
Moreover, the findings in Table X indicated that firm-level innovation performance
had significant impact on individual-level innovation performance. It contributed to
the understanding of innovation performance literature from another perspective,
which not only emphasized how individuals contribute to the whole organization but
also how an innovative organization facilitates and encourages its members to pursue
innovation. In addition, this empirical study supported Antonacopoulou’s (2006)
conceptual argument that the organization’s learning and innovation environment
influences its member’s learning and innovation performance.

Implications for practice

As HRM professionals’ roles have shifted from traditional operational functions to an
organizational consultancy role, HRM professionals have become more proactive as
strategic advisors of the organization (Ulrich, 1997). A range of environmental
pressures contributed to the emergence of HRM strategic activities and practice.
Learning at the individual, group, and organizational-levels has become a critical
imperative in organizations, and HRM professionals are being challenged to become
strategic business partners that can impact learning and development to improve
innovation performance and enhance organizational functioning in a competitive
IJM global business environment. Although scholars have articulated the applications and
32,5/6 practice of organizational learning from the management perspective and literature
(Bapuji and Crossan, 2004), the findings from this study have specific applications and
utility for HRM professionals and managers.
The findings of this study indicated that organizational learning processes enhance
both individual-level and organizational-level innovation performance. Among the
532 organizational learning subprocesses, the finding suggested that it is information
distribution that contributes most to both individual-level and organizational-level
innovation performance. In other words, information distribution is the most important
subprocess within organizational learning. From an organization development
perspective, improving upon systems and structures may strengthen information
distribution thus augmenting organizational learning. Therefore, HRM professionals
and managers may be positioned to better assist the organization with information
distribution by creating the environment with technology system and informal culture
that fosters employees to share, exchange, and disseminate information and
knowledge within the organization. It is also important that the organization
structure or system does not limit the information distribution activities. In addition,
from the employee development practice perspective, job rotations can broaden the
employees’ information distribution scope, especially in the high technology industry.
For example, research and development division employees often need to communicate
with manufacturing division employees and rotating employees may enhance this
subprocess.
Moreover, the results also empirically reflect the importance of information
acquisition to individual-level innovation performance is the next most important
subprocess next to information distribution. This suggests that information
acquisition strategies should be strengthened as one critical subprocess within the
organizational learning infrastructure. HRM professionals should help their
organizations and employees to identify and assess diverse or information
acquisition channels and opportunities either internal or external the organization.
In addition, grafting new employees and merging with other firms are
organizational-level information acquisition strategies. For example, managers may
consider initiating collaborative relationships with other firms and recruiting talented
employees from other firms, which are concepts of the construct of information
acquisition. Further, an organization’s managers and HRM professionals may consider
strategic organization development interventions at the organizational-level, such as
mergers, acquisitions, networks, or alliances.
Findings also suggest that senior R&D employees’ perception of external
environment was positively correlated to organizational learning. If R&D employees
are taught to be more sensitive in scanning and searching the external general
environment and industrial environment, they may become more proactive in fostering
learning. Hence, HRM professionals may be positioned to encourage R&D employees,
especially those junior R&D employees, to perceive and interpret the jolts and changes
on the external environment.

Limitations and recommendations for future research

There were some limitations which need to be acknowledged in this study. First,
although the researcher assumed that each R&D manager did randomly select the
senior R&D project team members in the organization, the potential differences Organizational
between employees might exist. Moreover, the survey data were mostly based on learning
self-reports, which may become a research bias. To resolve the challenges associated
with common method bias, the researcher assumed that having R&D managers rate
their employees’ individual-level innovation performance would address this issue.
Also, the researcher assumed that excluding the participant’s own rating on the
firm-level innovation, and along with using partial secondary sources of financial data 533
on firm-level innovation performance as a supplementary tool would address the
common method bias and enhance the validity of firm-level innovation performance
measure. Furthermore, one limitation is that the instrumentation on individual-level
innovation performance may underestimate tacit knowledge creation.
Given the research limitations addressed and the findings reported aforementioned,
the following recommendations are made for future research. First, this study
investigated individual-level and organizational-level innovation performance. Future
research may involve team or group-level participants and investigate their innovation
performance since there is an increasing interest in understanding organizational
learning processes at the group-level, especially virtual teams (Vince et al., 2002).
Hence, understanding how team or group-level innovation performance impacts upon
individual and organizational-level innovation performance may provide HRM
professionals with significant practice knowledge on developing team or group-level
interventions to facilitate their learning and performance.
In addition, Lipshitz et al. (2002) have integrated five facets: structural, cultural,
psychological, policy, and contextual, to build their organizational learning conceptual
framework. As a result, future research may include other facets or variables related to
organizational learning, such as organizational culture or leadership to have a
comprehensive understanding of how these variables interactively or independently
impact on learning and innovation and analyze their relative importance towards
innovation performance and other outcome variables. While the organizational
learning instrument used in this study appeared to be robust in this Asian context,
future research may be focused on developing an indigenous organizational learning
instrument that captures organizational learning practices and other indigenous facets
that may be unique to Taiwan. Finally, a longitudinal research design may provide
more detailed data in further understanding the change of an individual’s innovative
behaviors and an organization’s innovation performance over more substantial periods
of time.

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About the authors

Yu-Lin Wang is Assistant Professor in the Department of Business Administration at National
Cheng Kung University, Taiwan. Her research interests focus on organizational learning and
entrepreneurship in small and medium enterprises. Yu-Lin Wang is the corresponding author
and can be contacted at: ywang@mail.ncku.edu.tw
Andrea D. Ellinger is Human Resource Development Professor in the Department of Human
Resource Development and Technology at The University of Texas at Tyler, USA. Her research
interests focus on managerial coaching, informal workplace learning, organizational learning,
and the learning organization concept.

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