Organizational learning theory
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The document discusses organizational learning theory and its main concepts. Organizational learning theory states that in order to remain competitive, organizations must learn to change their goals and actions in response to a changing environment. Learning occurs when an organization consciously decides to change actions based on changes in circumstances and links actions to outcomes. Initial individual learning only becomes organizational learning when it is shared, stored in organizational memory, transmitted, and used for organizational goals. The document also examines strengths and weaknesses of organizational learning theory.
Organizational learning theory
- 1. Maria Romanova Natalja Zhuravljova 17.11.2010 Organizational Learning Theory
- 2. Today’s program: Nature of theory Main articles’ overview Strengths and weaknesses Case
- 3. Organizational learning theory states that, in order to be competitive in a changing environment, organizations must learn to change their goals and actions to reach those goals. In order for learning to occur, however, the firm must make a conscious decision to change actions in response to a change in circumstances, must consciously link action to outcome, and must remember the outcome. The initial learning takes place at the individual level: however, it does not become organizational learning until the information is shared, stored in organizational memory in such a way that it may be transmitted and accessed, and used for organizational goals.
- 4. Organizational learning vs Learning organization Organizational learning – set of theories; the result is change in organization/ its development Learning organization– set of standpoints, practical tool; the result is tulemuseks is improving the organization in order to gain competition advantages
- 5. Organizational learning – achieving common wisdom, culture and synergy Organizational learning differs from the processes implemented by the company in order to train the staff. The traditional view of learning involves company’s strategies and concentrates on theoretical knowledge creation (exploration). The important aspect of organizational learning is staff’s ability to put the learned material into practical knowledge – implement gained knowledge(exploitation).
- 6. Adaptive and proactive learning Adaptive learning: monitoring of environment and changing with it, evolution Proactive learning: desire to learn and to change/improve / develop organization, revolution
- 7. Adaptive and Generative Learning • The fundamental contribution of this paper was the development of an OL theoretical model that incorporates adaptive and generative learning processes. This model is based on two concepts from complexity theories: self- organization and self-transcendence. • Adaptive learning aims to improve or develop knowledge of the explicate order through a process of self-organization. Self- organization is a self-referential process characterized by logical deductive reasoning, concentration, discussion and improvement. Adaptive thinking underlines the importance of rationality. • Generative learning involves any approach to the implicate order through a process of self-transcendence, which might involve avoiding previous knowledge. Self-transcendence is a process characterized by intuition, attention, dialogue and inquiry. Generative learning is developed individually or socially at the edge of chaos, through intuition, attention, dialogue, inquiry and attention, which relates to concepts like creativity, or imagination. Maybe creativeness or intuition has always been essential for 1 R.Chiva, A.Grandio, J.Alegre
- 8. • Organizational systems presents three types of states: stability, chaos and edge of chaos. When the system is stable and chaotic, little learning may take.Lerning will emerge at the edge of chaos . • Organizing and learning are strongly linked: When learning we organize reality in a different way, and when organizing, a process of learning should have taken place This paper’s approach differs from previous works such as those by Weick and Westley (1996), who consider organizing and learning as opposites, or Clegg et al. (2005) who consider learning as an element of organizing. • The increasing significance of generative learning for organizations, mainly due to the importance of radical innovations, could lead organizations to follow guidelines that facilitate or foster intuition, attention, dialogue and inquiry, which could require a new organizational form and management logic. That is one of the problems that has grounded every civilization: a certain repetition. Creativity should not be blocked.
- 9. An Organizational Learning Framework: from Intuition to Institution 1. Organizational learning involves a tension between assimilating new learning (exploration) and using what has been learned (exploitation). Both are essential for organization, but they compete for scarce resources 2. Organizational learning is multi-level: individual, group, and organization. Innovate ideas occur to individuals – not organizations. Ideas are shared, actions taken and common meaning developed 3. The three levels of organizational learning are linked by social and psychological processes: intuiting, interpreting, integrating, and institutionalizing 4. Cognition affects action (and vice versa). Understanding guides actions, but action also informs understanding. 2 Crossan, M., Lane, H.W., White, R.E.
- 10. The fifth Discipline (Senge, 1990) In Senge's view, generative learning requires five disciplines: personal mastery, mental models, shared vision, team learning and systemic thinking. Personal mastery, is the term Senge uses to refer to institutionalized conditions for personal learning within an organization. It is related to issues of staff empowerment and the development of staff potentials. People in an organization have different internal pictures of the world or mental models, the second discipline, which should be made explicit so that they can be discussed openly and modified Shared vision concerns the need for a certain degree of consensus within an organization, and at the same time the need for inspiration and motivation. Teams, not individuals, are the fundamental learning unit in modern organizations; unless the team can learn, the organization cannot learn. This requires improved interpersonal communication between team members, a reduction in defensive behavior, and openness to creative thinking. The Fifth Discipline that integrates the other 4. Systemic thinking, is crucial to examine the interrelationships between parts of an analysis: Åsa Lööf Society for Organizational Learning (Senge) 3
- 11. The 11 Laws of the Fifth Discipline Today's problems come from yesterday's "solutions." The harder you push, the harder the system pushes back. Behavior will grow better before it grows worse. The easy way out usually leads back in. The cure can be worse than the disease. Faster is slower. Cause and effect are not closely related in time and space. Small changes can produce big results...but the areas of highest leverage are often the least obvious. You can have your cake and eat it too - but not all at once. Dividing an elephant in half does not produce two small elephants. There is no blame.
- 12. The Language of Systems Thinking: "Links" and "Loops” From any element in a situation you can trace arrows ("links") that represent influence on another element. These, in turn, reveal cycles that repeat themselves, time after time, making situations better or worse Links never exist in isolation. They always comprise a circle of causality, a feedback "loop," in which every element is both "cause" and "effect“ - influenced by some, and influencing others, so that every one of its effects, sooner or later, comes back to roost. There are basically two building blocks of all systems representations: reinforcing and balancing loops Reinforcing loops generate exponential growth and collapse, in which the growth or collapse continues at an ever-increasing rate. For example, organizations often assume that they will face steady, incremental growth in demand. The limits will appear. Balancing processes generate the forces of resistance, which eventually limit growth. But they are also the mechanisms, found in nature and all M.Goodman, J.Kemeny, C.Roberts 4
- 13. Näide organisatsiooni juhtimisest (balancing loop): The N Hospital in Connecticut opened a very attractive outpatient clinic in the late 1980s. The administrators knew that it was meeting a real need, and they assumed it would always be filled with patients. That would make it a constant revenue generator. However, a few months after it opened, the number of patient visits (and thus revenues) leveled off, below the hospital's forecasts. The hospital started a community marketing campaign, and patient visits rose for a time, but soon dropped off again. Finally, the administrators took a close look at their patient volume statistics. They spent time in the waiting room and surveyed staff at the front desk and patients. It turned out that when traffic was low, people were served quickly. Word got around, doctors and paramedics referred people, and the clinic became crowded. But people have an innate distaste for sitting in busy waiting rooms. Since they had a choice, they went elsewhere. The general lesson for all businesses is: if you don't adjust your
- 14. The Myopia of Learning Examined processes of experiential learning as instruments of organizational intelligence. Organizations should be designed taking learning limits to learn into account. Confusion of experience Problems of memory, conflict, turnover, and decentralization make it difficult to extract lessons from experience and to retain them. -Studies of reductions in the cost of production associated with the number of units produced do not, in general, provide direct confirmation of the processes by which those improvements have occurred, nor do they demonstrate that experiential learning processes inexorably lead to optimal practices. -The interpretations of history are political, reflecting efforts to assign and evade responsibility and to establish favorable historical stories Exploration/exploitation balance -Successful trap – exploitation drives exploration. The returns to exploitation are ordinarily more certain, closer in time, and closer in space than are the returns to exploration. As develop greater and greater competence at a particular activity, they engage in activity more, thus further increasing competence and the opportunity cost of This competency trap is a standard, potentially self-destructive product of -Failure trap – exploration drives exploitation. Failure leads to search and change Levinthal, Daniel A. and James G. March 5
- 15. Three types of myopia were discovered: Temporal myopia Learning tends to sacrifice the long run to the short run. - As learning develops distinctive competencies and niches, it simultaneously compromises capabilities outside those competencies and niches. When conditions change, the learned skills become impediments. -Possible option for individuals or sources of capital is to move in and out of organizations as entrepreneurs, leaving others to experience their decline, but this may be scant comfort to those who suffer the fate of the specific organization. Spatial myopia. Learning tends to favor effects that occur near to the learner There is difficulty in subordinating the interests of individuals and subunits in an organization to the interests of the organization. Failure myopia. Organizational learning oversamples successes and undersamples failures
- 16. Organizational memory Organizational memory consists of mental and structural artifacts that have consequential effects on performance. The paper discusses the processes of information acquisition, retention, and retrieval from memory in the context of these structural bins and then elaborate on how organizational memory can be used, misused, and abused in organizations. 3 assumptions: Organizations functionally resemble information-processing systems that process information from the environment. As information processing systems, organizations exhibit memory that is similar in function to the memory of individuals. Organizations being information systems act as interpretative systems. Organization is a network of intersubjectively shared meanings that are sustained through the development and use of a common language and everyday social interactions. Walsh, J.P. & G.R. Ungson 6
- 18. Defining the organizational memory Acquisition Retention Individuals Culture Transformations Ecology Structures External archives
- 19. Aaggregation of individuals' shared beliefs, an organization's culture also reflects information about the who, what, when, where, and how of a decision stimulus and response. Examples of failure due to organizational memory Starbuck and Hedberg (1977) reviewed the problems the Facit Company faced in coping with the changing technology in the mechanical calculator industry. The company's near bankruptcy and subsequent takeover was attributed to Facit's top managers' inability to recognize the development of electronic calculators as a serious competitive threat. These managers' memory for their great successes in the mechanical market blinded them to the changes. Wilensky (1967) reviewed the Ford Motor Company's experience with the Edsel failure. He attributed this failure, in part, to Ford's insensitivity to the increasing sales of foreign import.
- 20. Organizational memory plays 3 important roles: Informational role. The information content that is housed in memory's retention facilities can contribute to efficient and effective decision making. Control function. It can reduce the transaction costs that are often associated with the implementation of a new decision. Political role. Control of information creates a source of dependence with which individuals or groups in power are able to influence the actions of others.
- 21. The use of organizational memory: Proposition 1: Decisions that are critically considered in terms of an organization's history as they bear on the present are likely to he more effective than those made in a historical vacuum. Proposition 2: Decision choices framed within the context of an organization's history are less likely to meet with resistance than those not so framed. Proposition 3: Proposition 3: Change efforts that fail to consider the inertial force of automatic retrieval processes are more likely to fail than those that do. The misuse of organizational memory: Proposition 4: The automatic retrieval of past decision information that fails to meet the requirements of more novel situations is likely to promote deleterious decision making. Proposition 5: 5: In inertial situations that call for routine solutions, the critical consideration of purposefully retrieved past decision information consumes a manager's time and energy and, thus, creates wasteful opportunity costs. Proposition 6: The controlled retrieval of decision information that is not examined in the context of novel situations is likely to promote deleterious
- 22. Advantages and disadvantages of theory Advantages: Maintaining levels of innovation and remaining competitive Being better placed to respond to external pressures Having the knowledge to better link resources to customer needs Improving quality of outputs at all levels Improving corporate image by becoming more people oriented Increasing the pace of change within the organization Disadvantages: • Exploration/exploitation balance • Competency trap • Temporal, spatial, failure myopia • Organizational memory
- 23. Juhtumi analüüs Tallinna Tehnika ülikooli arengukava aastateks 2006–2010 Visioon - Reageerib paindlikult ühiskonnaootustele ja vajadustele Missioon - Eesti jätkusuutliku arengu toetamine teadusloome ja teaduspõhise kõrghariduse kaudu Eesmärgid - Jätkab õppetegevuse kvaliteedi tõstmist, - Valmistab spetsialiste - Suurendab perioodi jooksul teadus- ja arendustööde mahu - Tagab akadeemilist mobiilsust • Tegevused - Tõhus uurimistöö ja arendustegevus - Õppekavade täiustamine - Arendab tehniliste vahendite tugisüsteemi - Kaasab tippasjatundjaid - Kvaliteedinõukogu
Editor's Notes
- #6: “Kui sa kogu aeg tööd teed, siis sa ei õpi. Kui sa kogu aeg õpid, siis sa tööd ei tee”
- #8: Explicate – selgitama, arendama; Implicate – asjasse segama; Self-transcendence – ise ületavus ...we propose and explain some characteristics that describe both adaptive and generative learning. Through these characteristics we explain the process of generative and adaptive learning and make certain conceptual suggestions to better understand and foster these processes. Finally, we include both types of learning processes within the OL framework.
- #13: Delay (the link,the chain of influence, that takes a particularly long time to play out) can have enormous influence in a system. In reinforcing loops, delays can shake our confidence, because growth doesn't come as quickly as expected. In balancing loops, delays can dramatically change the behavior of the system.