The Importance of being a Learning Organization


Dr. S. Janakiraman
Asst. Professor
Department of MBA
Prathyusha Institute of Techonology & Management


As highlighted in literature and in practices, a Learning Organization is seen as a response to an increasingly unpredictable and dynamic business environment. Learning Organizations are seen as adaptive to their external environment and continually enhancing their capabilities to change and to adapt. This could be done by developing collective as well as individual learning and by using the results of learning in order to achieve better results. Therefore "Learning Organizations are those that have in place systems, mechanisms and processes, that are used to continually enhance their capabilities and those who work with it or for it, to achieve sustainable objectives for themselves and the communities in which they participate".

The Definition

Organizations are a creature of their environment. Just like people-organizations, in essence, are people too- they derive their beliefs, objectives, systems, and mores from what's around them. At a fundamental level, they symbolize an arrangement with the society they inhabit. In the 17th century Europe-and India too-the first (trading) corporations were 'charted' into existence. The typical deal was rather straightforward: a group of enterprising men would be allowed to conduct business under His Majesty's name in return for a share in the wealth they created and for territorial expansions of the empire. In fact, America was settled by one such corporation, the Massachusetts Bay Company, which King Charles I charted in 1628 for the purpose.

The pact that a nation makes with its corporations, then determines its economic evolution. The American settlers were people who had sailed to a new land to seek personal fortune. Greed was, and still is, good. A Supreme Court ruling way back in the 1880s allowed corporations to be treated as persons and, thus, extended them the right to 'life, liberty and property". Since then, American companies have used this law to nix governmental attempts to limit their powers.

The benefits of continuous learning within any business environment are undisputable. Organizations spend a great deal of time and exert considerable effort on the implementation of easily accessible, educational programmes for their staff. An organization that learns and encourages learning among its people. It promotes exchange of information between employees hence creating a more knowledgeable workforce. This produces a very flexible organisation where people will accept and adapt to new ideas and changes through a shared vision.

Background & History

The importance of learning was first put forward by a Chinese philosopher, Confucius (551 - 479 BC). He believed that everyone should benefit from learning.

"Without learning, the wise become foolish; by learning, the foolish become wise."

"Learn as if you could never have enough of learning, as if you might miss something."

The underlying cause for recent emphasis on organisational learning is because of the increased pace of change. Classically, work has been thought of as being conservative and difficult to change. Learning was something divorced from work and innovation was seen as the necessary but disruptive way to change. The corporation which is able to quickly learn and then innovate their work will be able to change their work practices to perform better in the constantly changing environment. Change is now measured in terms of months not years as it was in the past. Business re-engineering used to concentrate on eliminating waste and not on working smarter and learning.

Major research into `the art of learning' did not actually start until the 1900's. In the 1950's, the concept of Systems Thinking was introduced but never implemented. Gould-Kreutzer Associates, Inc. defined Systems thinking as:  "A framework for seeing interrelationships rather than things; to see the forest and the trees."

This means that organisations need to be aware of both the company as a whole as well as the individuals within the company. Up until the introduction of this concept, companies concentrated on their own needs not the needs of their workers. Systems Thinking tries to change the managerial view so that it includes the ambitions of the individual workers, not just the business goals.

One of the systems used was called Decision Support Systems (DSS). This was for the use of corporate executives to help them make decisions for the future. It was in fact the building of the models, which defined the systems, that benefited the management rather than the system's operation. This was because the building of the model focused on what the business really was and the alternatives available for the future.

In the 1970's, the same idea was renamed to Organisational Learning. One of the early researchers in this field was Chris Arygris from Harvard. He published a book on the subject in 1978. Even with this published information the concept still wasn't physically taken on by any companies.

In the 1980's, companies discovered time as a new source of competitive advantage. This lead to `capabilities-based competition' which included the capability of learning. Many other people have continued along this line of research, such as Peter Senge - one of the modern day gurus. Information on the topic has been passed into various companies. These companies are now trying to become Learning Organisations. If the changeover to a Learning Organisation happens overnight, the environment around the workers will be complex and dynamic. There will be agitations and confusion which means learning may not take place because of the chaos caused. So it can only be introduced into a company that is prepared to reach a balance between change and stability, i.e. a balance between the old and the new. Organisations must interact with the environment around them, so the environment must be suitable for that interaction.

Becoming a Learning Organisation seems a logical step for all companies to follow and hopefully this document will give a clear understanding why.

Why a Learning Organisation ?

A company that performs badly is easily recognisable. Can you spot the signs?

* Do your employees seem unmotivated or uninterested in their work?
* Does your workforce lack the skill and knowledge to adjust to new jobs?
* Do you seem to be the only one to come up with all the ideas?
* And does your workforce simply follow orders?
* Do your teams argue constantly and lack real productivity?
* Or lack communication between each other?
* And when the "guru" is off do things get put on hold?
* Are you always the last to hear about problems?
* Or worst still the first to hear about customer complaints?
* And do the same problems occur over and over?

If any of these points sound familiar the answer for you could be a Learning Organisation.

How to Create a Learning Organisation

I. The Building Blocks

Before a Learning Organisations can be implemented , a solid foundation can be made by taking into account the following :

* Awareness
* Environment
* Leadership
* Empowerment
* Learning


Organisations must be aware that learning is necessary before they can develop into a Learning Organisation. This may seem to be a strange statement but this learning must take place at all levels; not just the Management level. Once the company has excepted the need for change, it is then responsible for creating the appropriate environment for this change to occur in.


Centralised, mechanistic structures do not create a good environment. Individuals do not have a comprehensive picture of the whole organisation and its goals. This causes political and parochial systems to be set up which stifle the learning process. Therefore a more flexible, organic structure must be formed. By organic, we mean a flatter structure which encourages innovations. The flatter structure also promotes passing of information between workers and so creating a more informed work force.

It is necessary for management to take on a new philosophy; to encourage openness, reflectivity and accept error and uncertainty. Members need to be able to question decisions without the fear of reprimand. This questioning can often highlight problems at an early stage and reduce time consuming errors. One way of over-coming this fear is to introduce anonymity so that questions can be asked or suggestions made but the source is not necessarily known.


Leaders should foster the Systems Thinking concept and encourage learning to help both the individual and organisation in learning. It is the leader's responsibility to help restructure the individual views of team members. For example, they need to help the teams understand that competition is a form of learning; not a hostile act.

Management must provide commitment for long-term learning in the form of resources. The amount of resources available (money, personnel and time) determines the quantity and quality of learning. This means that the organisation must be prepared to support this.


The locus of control shifts from managers to workers. This is where the term Empowerment is introduced. The workers become responsible for their actions; but the managers do not lose their involvement. They still need to encourage, enthuse and co-ordinate the workers. Equal participation must be allowed at all levels so that members can learn from each other simultaneously. This is unlike traditionally learning that involves a top-down structure (classroom-type example) which is time consuming.


Companies can learn to achieve these aims in Learning Labs. These are small-scale models of real-life settings where management teams learn how to learn together through simulation games. They need to find out what failure is like so that they can learn from their mistakes in the future. These managers are then responsible for setting up an open, flexible atmosphere in their organisations to encourage their workers to follow their learning example.

Anonymity has already been mentioned and can be achieved through electronic conferencing. This type of conferencing can also encourage different sites to communicate and share knowledge, thus making a company truly a Learning Organisation.

Implementation Strategies

Any organisation that wants to implement a learning organisation philosophy requires an overall strategy with clear, well defined goals. Once these have been established, the tools needed to facilitate the strategy must be identified. It is clear that everyone has their own interpretation of the "Learning Organisation" idea, so to produce an action plan that will transform groups into Learning Organisations might seem impossible. However, it is possible to identify three generic strategies that highlight possible routes to developing Learning Organisations. The specific tools required to implement any of these depends on the strategy adopted, but the initiatives that they represent are generic throughout. These initiatives are ably described using Peter Senge's Five Disciplines of Learning Organisations (Senge, 1990). The three strategies are:


For many companies, adopting a learning organisation philosophy is the second step to achieving this Holy Grail. They may already be taking steps to achieve their business goals that, in hindsight, fit the framework for implementing a Learning Organisation. This is the accidental approach in that it was not initiated through awareness of the Learning Organisation concept.


Once an organisation has discovered the Learning Organisation philosophy, they must make a decision as to how they want to proceed. This is a choice between a subversive and a declared strategy. The subversive strategy differs from an accidental one in the level of awareness; but it is not secretive! Thus, while not openly endorsing the Learning Organisation ideal, they are able to exploit the ideas and techniques.


The other option is the declared approach. This is self explanatory. The principles of Learning Organisations are adopted as part of the company ethos, become company "speak" and are manifest openly in all company initiatives.

Why Learning Organisations Work

1. The People Develop
    2. Greater motivation
    3. The workforce is more flexible
    4. People are more creative
    5. Improved social Interaction

2. Teams and Groups Work Better
    1. Knowledge sharing
    2. Interdependency

3. The Company Benefits
    1. Breakdown of traditional communication barriers
    2. Customer relations
    4. Information resources
    5. Innovation and creativity

The Future:

Investment in Learning

There will be more emphasis on learning and hence more investment in improving individuals, teams and the organisation. There will be more emphasis on the ability to learn and take on board new ideas and methods. Training will be provided by people within the company who actually do the work. Training will no longer be a separate activity but an integral part of the teams in the company.


The price per performance ratio of technology will increase greatly. The value of technology compared to labour will improve by an even greater amount. Technology will become more cross functional and transparent.

Information Highway

The increased access to the information highway will make information more available and to a wider audience. Barriers to learning, such as lack of information and the availability of material will be reduced. Learning Organisation will harness this form of information and use it to their advantage. Employees regardless of their status will have access to information that previously only their managers had.

Knowledge is the Key

In the future, organisation will be based on knowledge and not just physical assets such as land or products. The most important employee will be a `knowledge worker' and employees will be judged on their ability to learn.

Dr. S. Janakiraman
Asst. Professor
Department of MBA
Prathyusha Institute of Techonology & Management

Source: E-mail December 20, 2008


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