With reference to specific organizational examples and academic theory, explain

why Learning Organizations have potential to reach high levels of efficiency and

performance

From the very beginning, organizations have been taught to look at problems

and then break them apart. The advantage is that this makes complex tasks rather

easy. However, we loose our intrinsic sense of connection to the larger picture.

Human beings are designed for learning. When people are born, they come fully

equipped with insatiable drive to explore, experiment and learn.

Unfortunately, all our institutions are focused more on controlling than learning.

People are the main resource of any organization. Without the employees, an

organization is nothing. Therefore, learning should be a big part of any organization.

Learning Organizations can be defined as organizations where people continually

expand their capacity to create the results they truly desire, where new and expansive

patterns of thinking are nurtured, where collective aspiration is set free, and where

people are continually learning how to learn together. (Senge, 1994) It is important to

include learning in the business strategy and once that happens, People become

aligned around a common vision. They sense and interpret their changing

environment. They generate new knowledge, which they use to create innovative

products and services to meet the customers’ need. (Marsick V. and Watkins K.,

1999). Learning Organization requires expansion of the duties and responsibilities of

an individual in order to achieve the desired outcomes. It also requires for individuals

to work as a team. It should focus on collective thinking, common vision, mastery on

the job, importance of team learning and mental models. (Sachan, S., Aroura S. and

Pandey S. 2016) There is debate about whether organizational learning should be

defined as a change in cognition or a change in behavior. Swee defines learning

and at modifying its behavior to reflect new knowledge and insights. In learning

organizations, employees help companies adapt to the unpredictable faster than the

rivals can. (Garvin, 1993)

There are five disciplines of learning organizations. It is important to study them

because it is because of these disciplines that lead to all the benefits of becoming a

learning organization. The first one is the system thinking. It is a framework for

seeing inter-relationships that underlie difficult circumstances. This allows the team to

see beyond hidden subtleties and influences. This is done to map and analyze

situations and to decide what course of action to take. The second discipline is shared

vision. All employees should share the same vision. They should decide on what they

want to see together and then stick to it. The third discipline is mental models. Beliefs,

values, mindsets and assumptions that determine the way people think needs to be

changed. Everyone should share his or her mental models in order to build shared

understanding. The fourth discipline is personal mastery. Personal mastery is ‘what

we know about ourselves and the impact our behavior has on others’. This is very

closely linked to self-awareness. The last and the most discipline is team learning.

This happens when teams start collaborating and thinking together. Everyone shared

his or her experiences, insights, knowledge and skills with each other. (Senge P,

1994)

To be a Learning Organization provides a competitive advantage. They are superior

competitors. They have brand equity that their competitors cannot match. They also

attract and retain the best talent. In the paper, The Organizational Performance of
Learning companies (Swee and Peter, 2008) concludes that there is a positive

relationship between Learning Organization and competitive advantage. There is also

a positive relationship between the way companies identify, utilize knowledge and

organizational performance. Hence, it can be proved that learning capacity can have

financial and non-financial benefits. Learning Organizations are better equipped to

modify themselves when faced with unpredictable circumstances compared to their

competitors. The people in the organization become more tolerant open-minded and

participate in more open discussions which leads to shared vision and team learning.

Innovation can be encouraged in the right kind of environment. Karen Jaw-Madson

in his book ‘Culture Your Culture: Innovating Experiences at Work’ says that

developing a culture that enables learning develops innovation. Organizational

Learning can also lead to greater efficiency. The organizations become self-reliant

and do not help from the other firms. The issues can be resolved internally at a much

lower cost. This would not have been possible without developing the learning culture

within the organization.

The benefits are many folds. Due to lower costs, there are increased profits. Due to

learning, the productivity is at a new high. As all the workers of an organization are

involved in the learning, they feel as an important part of the company. This increases

their satisfaction level. Hence, they work with more commitment. Their mind set

changes from fixed mindset to the growing mindset. The personal goals of the

individuals match the goals of the organization. They are no longer working for

someone but now offering solutions that can help solve the problems rather than just

not caring and offering solutions that can fix the problem only temporarily. According

to Swee and Peter, learning organizations are a better option in terms of investment.
There is a positive relationship between the organization’s performance and ways in

which organizations identify and utilize knowledge.

There are many examples of learning organizations which will help us understand if

learning organizations lead to better efficiency and performance. Once of the world’s

greatest manufacturers is Toyota. The success of Toyota did not depend on what

country it belonged to but the principles it followed as an organization. The reason for

Toyota’s success is the way Toyota views this world and does business. The two ways

that worked for Toyota are Continuous improvement and respect for people.

Continuous improvement was something that could be or can be achieved is through

continuous learning. Toyota succeeded in creating an environment and atmosphere

where learning was encouraged and change was encouraged and promoted. An

environment with continuous learning can only be achieved if the organization

respects its people. They do so by giving employment benefits and security. One of

the most important things in a learning organization is team learning. Toyota gave

importance to this too. The workers were encouraged to actively participate in

discussions about how to improve their jobs. The managers made sure that the large

number of people were working together with mutual respect and trust towards a

common goal. The minds of the people must be engaged so they can contribute ideas

to the organization. Because of all these reasons, Toyota emerged to be world’s

greatest manufacturer. Jerffery K. Liker identifies 14 principles in the book ‘The

Toyota way’ and said that it took Toyota a long time to become a learning

organization and that is one of the reasons for its success.

Watkins gives an example of a company, Sulzer Orthopedic, Inc. It took this company

many years to become a learning organization. There were many cycles of

experimentations but it lead to some significant things. When you turn into a

knowledge producing company, it allows you adapt and change according to the

different situations before break point compared to the other organizations. The CEO

of Sulzer Orthopedic focused on creativity and innovation. Focus on becoming a

learning organization helped the company promote their sense of purpose. Along with

this, the learning organization also helps you in changing the mindset of a company.

The growth mindset proves to be beneficial and also gives companies courage to

adapt in time of pressure. The CEO helped create a shared vision. The company grew

and outperformed after becoming a learning organization.

Another example of a learning organization is the British Heart Foundation. This

organization became a learning organization in order to incorporate technology into

their company. British Heart Foundation is a charity, which provides supports to

millions of people with heart and circulatory disease. The chief technology officer

was aware of the role technology plays in all circles of life. The British Heart

Foundation decided to incorporate technology and innovation in order to do their

work better. The charity was aware of the benefits and advantages of making their

company become a learning organization. The experience of the supporters increased.

There was a significant increase in the organizational efficiency and effectiveness.

The technology can allow for further innovations to happen. This is one of the main

benefits of becoming a learning organization. The organization can now have a more
meaningful difference to the seven million people who have heart and circulatory

diseases.

Virgin Media is a telephone company, which provides telephone, television and

Internet services. In 2010, Virgin Media carried out pilots of the performance and

learning. They made an in-house learning and development system. The managers can

set career goals, and performance targets and all employees can view their own

individual and long-term training and performance status. Virgin Media turning into a

learning organization lead to many advantages. The productivity increased. Before the

learning and development system, the employees spent more time in training.

However, now they have more time to focus on day-to-day work. The company

profitability increased. Due to the training, the organization can bring new services to

market faster and hence make more profits. The customer satisfaction increased. The

employees became better at dealing with clients due to these online trainings and

learning. The system became more automated and this required less administration.

The company became more enabled. They were able to make better decisions without

the help of outside. The cost savings increased. E learning reduced training costs and

ended up saving money compared to the traditional training.

Another successful example of learning organization is Apple Japan. In 1989, Apple

Japan had only 1 percent of the market share. Apple Japan introduced Senge’s five

disciplines in order to become a learning organization. The meetings consisted of

team education. This led to team learning and created a shared vision amongst all

employees of the company. This led to an increase in sales and also increase in the

market share. Annual sales jumped to $1.3 billion in 1994.

exercises and practical examples are used. Employees must push beyond obvious

symptoms to assess the real causes. A company, which is successful in problem

solving techniques, is Xerox in United State of America, New York. In 1983, senior

manages introduced the company’s leadership through quality initiative. The

employees have gotten training in small group activities and problem solving

techniques. A six-step process was developed for all decision making. This six-step

process is not being used for every single decision. There are four areas in which the

employees are provided with tools in. They are generating ideas and collecting

information, reaching consensus, analyzing and displaying data and planning actions.

These tools are then practiced over various days. The training takes place in family

groups. This means that members of the same department or business unit team are

giving trainings together. These tools are then applied to real life problems. This

resulted in common vocabulary and a consistent, company wide approach to problem

solving. After the training, it is expected for all employees to use the same techniques.

These trainings led to various benefits for the company. The performance and

efficiency increased. (Garvin D, Edmondson A and Gino F, 2008)

Looking at the examples above, it can be concluded that learning organizations can

increase efficiency and performance, reduce cost, and increase productivity and

profits. However, not everybody agrees to this idea. Senge’s ideas receive a lot of

critique. The system model in his book does not theorize the organizing practices by

which learning and change occurs in an organization. Therefore, his idea seems to be

theoretically flawed. The increase in human agency, power, knowledge and autonomy

within the workplace can prove to be not beneficial. (Caldwell R, 2012)

better every single day. There might to be problems directly with the learning theory

of Senge. However, it is difficult for organizations to keep on doing as they say. There

are companies that struggle to become learning organizations and then to remain

learning organizations. There are some human tendencies, which make learning

difficult. Some people focus too much on success and competition. They become

hasty and take decisions too quickly. People tend to rely too much on experts and not

focus on learning from experience. All these reasons stops learning in an organization.

There is fear of failure. No one likes making mistakes and if they are made, they are

hidden without giving too much thought into it. This does not allow the organizations

to learn from their mistakes because they are too ashamed of what has happened.

Humans have two kinds of mindsets. Learning encourages a growth mindset.

However, fixed mindsets does not allow you to learn because it makes one believe

intelligence is something you are born with and it is not something that you can learn.

Organizations tend to put more focus on performance rather than on the potential to

learn. Therefore, when hiring employees it is important to focus on their ability to

learn instead of how they have performed in the past. Senge did not focus on how

certain things can hamper learning. His theory is utopic which less focus on his model

can be implemented in an organization successfully.

Another critique of the learning organization is that there is little known about how to

measure it. Most of the research conducted regarding learning organizations lack

empirical and systematic research. For research purposes, there should be a way to

measure learning in order to be able to compare different organizations. We also need

being the most talked about topic of the recent time, there is less amount of good

empirical research done on this topic. Some organizations base their learning on

theoretical material. This does not provide a framework for action. (Garvin, 2005)

Organizations can learn better from the past experiences rather than focusing on

things that the organization will probably not go through. Learning organizations do

improve efficiency and performance but we need to know whether it is worth it not.

There are significant costs attached to it. (Smith, M and Araujo, 1999) Involving

employees equally in an organization to promote learning can lead to hierarchy not

being followed. Equal amount of power is given to all individuals. A place where

personal mastery and growth are encouraged will change the power dynamics in an

organization. This can have its disadvantages, as some of rules and regulations will be

overlooked. (Fenwick, 1998) Previous organizational traditions and settings need to

change in order to develop a learning organization. This process of change can be

long and complicated. (Lewis et al, 2001) Learning organization requires self-

leadership. All employees are involved in the decision-making and this can impact the

higher authorities in an organization. Letting go of control is not very easy. This

requires for them to let go some form of control and trust their employees to make

better decisions. (Whitebeck, B.A., 2014) Making an organization a learning

organization requires a certain type of culture to be developed within the organization.

However, the type of culture with which everyone is satisfied with will be hard to

come up with. There will be culture and value clashes. Some organizations find it

hard to excel in personal mastery. Personal mastery is a concept, which is intangible

and something that cannot be measured. The benefits achieved by it cannot be

calculated. Therefore, some employees may not take this discipline too seriously.
Another reason why personal mastery can be hard for an organization is that it may

lead individuals to focus more on personal gains and not focus on the shared vision of

everyone else and the organization.

There are benefits of becoming a learning organization and it comes with its critique.

After looking at all the research and analysis, it can be said that there are some

problems in Senge’s theory with regards to how to conceptualize it and measure it.

However, his emphasis on shared vision, team learning, personal mastery and

development of more mental models has lead to understanding of the organizational

life and learning. And this definitely leads to organizations and humans flourishing.

Employees are the most important part of an organization. They are the most

important resource. The company runs because of them. When a learning

environment is created within an organization, it promotes the learning of all the

employees as well. When humans put their minds to something, they achieve it for

sure. The right type of leadership can ensure a clear-shared vision, clear incentives for

the employees and the right type of training to ensure that the organization performs

better and efficiently and continues being learning organization. The benefits

outweigh the critique and hence, it can be concluded that all organizations should be

learning organizations.
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