Organizational Learning

Organizational Learning

Chapter 1 introduced the general idea of learning, discussed in the context of the relatively general inductive and deductive learning modes, and the more refined observational, theoretical, computational, and simulational learning paradigms. Broadly characterized, inductive learning generalizes from specific instances, whereas deductive learning applies generalized principles to arrive at specific conclusions. Products of the ferment of the Renaissance and Reformation movements that swept through Europe in 16th and 17th centuries and saw science becoming an autonomous (from philosophy) discipline focused on the pursuit of knowledge through observation and experimentation, inductive and deductive learning captured the essence of learning at that time. The more recent learning paradigms -observational, theoretical, computational, and simulational -can be seen as products of perhaps not as grand a revolution,5 but a revolution nonetheless, commonly referred to as the Information Age. The rise and rapid proliferation of the ever-increasing varieties of transactional and communication data are now opening up new avenues of learning, ones that reach far beyond just observation and experimentation to also include data-enabled constructed, or virtual reality based learning. And while the inductive-deductive duality is still meaningful, it is more instructive to examine organizational learning through the lens of the more complete typology of observational, theoretical, computational, and simulational learning, which better reflects the ‘who’ and the ‘how’ of current-day learning.

Observational learning is a product of sensory experiences, a curious mind driven to understand the world through careful observation and subsequent generalization, which closely resembles the traditional inductive learning paradigm. Along the similar lines, the theoretical learning paradigm closely resembles deductive learning, which produces specific knowledge claims by means of applying general theories or conjectures to specific situations. Computational learning can be seen as a direct consequence of the emergence and rapid growth of electronic transaction processing and communication infrastructure along with rapid maturing of computer science; the combined effect of the two manifests itself in the ability to discover new insights (exploratory analyses) as well as validate the truthfulness of prior beliefs (confirmatory analyses). And lastly, simulational learning represents an evolution of computational learning, a direct result of coming together of vast and varied volumes of data and the ever-advancing data processing capabilities, which together enable knowledge creation by means of computer-rendered virtual reality. Moreover, learning is no longer an exclusively human endeavor -machines are now also capable of learning (see chapters 1 and 3 for more details), and as evidenced by recent advances in the field of artificial intelligence, machine learning capabilities are improving at a staggering pace.

Let us pause here. If the traditional conception of learning implies acquisition of knowledge by individuals, what then constitutes organizational learning? In a sense, it is easier to say what it is not, and it is not a simple sum of knowledge acquired by members of an organization although that is certainly a part of it. It has been noted earlier that organizations are essentially groups of individuals joined together in pursuit of common goals, and so as those groups mature, in the sense of moving from a simple collection of individuals toward a complex, integrated system, they begin to preserve certain behaviors, norms, and values, which, together with the sum of individually held explicit and tacit knowledge, can be broadly characterized as organizational learning. As such, the slowly accumulating institutional knowledge enables organizations to build organizational understanding and interpretation of their environment, and as such it is of key importance to organizations’ ability to assess their strategies, and ultimately, to the attainment and maintenance of competitive advantage.

Content-wise, organizational learning encompasses the two independent dimensions of behavior, or the act of doing, and cognition, or the process of knowing. The former commonly takes the form of what is known as lower level learning, which is the process of forming rudimentary behavior-outcome associations, whereas the latter usually takes the form of higher level learning, which is the process of discerning overall rules and norms (rather than just specific activities and behaviors). Both the lower and higher learning are shaped by four broad, contextual factors: (1) culture, or shared beliefs, ideologies, and patterns of behavior, (2) strategy, or organizational goals and objectives that provide boundaries and context for decision-making and thus focal points for learning, (3) structure, or the organizational arrangement of authority, which can either reinforce past behaviors (as is the case with centralized, mechanistic structures) or facilitate shifts in beliefs and actions (typically the case with de-centralized, organic structures), and (4) environment, or the relative complexity and stability of the context within which organizations function. Individually and collectively, those four broad contextual factors shape what and how much an organization learns, though it should be noted that environmental complexity and stability exert particularly strong influence on organizational learning – in general, the less complex and more stable the organization’s environment, the more effective the organizational learning.

The socio-cognitive view of organizational learning summarized above suggests that organizational learning takes place in a complex web of individual interactions and cultural structures that define organizations, which draws attention to the importance of the idea of social cognition, first raised in the context of organizational culture. Placing the ideas learning and knowing, or cognition, in the context of interpersonal interactions yields more realistic collective cognitive representations of organizational learning. More specifically, by bringing to light conscious and subconscious human information processing, the theoretical lens of social cognition unmasks the otherwise hidden learning influencers that directly or indirectly shape organizational learning in complex social and structural interactions. For instance, the perspective offered by social cognition helps to better understand the interplay between learning and emotions – do managers feel threatened when challenged by more knowledgeable subordinates, and what effect does that have on a broader landscape of organization-wide learning?

The term ‘learning organizations’ is often used to characterize actual or aspirational capability to adapt to opportunities and threats by means of identifying and assimilating appropriate knowledge and implementing necessary changes. Popularized by consultants dispensing sage advice and surefire solutions promising to deliver a lot and fast, the concept of learning organizations became a yet another 6 ‘quick fix’ managerial remedy. Setting aside a nagging question prompted by the idea of learning organizations – are there organizations that do not learn? – the applied conception of learning organizations seemed to have accomplished one thing, which was to turn an important set of socio-cognitive ideas aimed at understanding how organizations learn into a faddish buzzword.

Accepting that some manner and degree of learning can be considered an inescapable aspect of organizational (or personal, for that matter) existence, or stated differently, that learning is endemic to organizational functioning, cross-organization performance variability suggests that not all organizations learn equally well (as discussed in Chapter 7 in the context of contrasting fortunes of the now defunct Circuit City and still thriving Best Buy). As noted earlier, structural and cultural differences, in addition to strategic and environmental factors shed some fairly general explanatory light on cross-organization learning effectives. For instance, centralized, mechanistic organizational structures tend to reinforce past behaviors and impede new ideas, whereas de-centralized and more organic structures, as exemplified by flatarchies and holacracies, are more conducive to shifts in beliefs and behaviors. Looking beyond those relatively coarse explanations, deeper understanding of cross-organization learning efficacy can be realized by differentiating among different types of organizational learning, which can be grouped into the following three modalities:

1. adaptive learning, which encompasses mostly automatic changes needed to accommodate changing environmental demands or requirements,
2. generative learning, which describes purposeful acquisition and dissemination (within the organization) of new knowledge or skills as a mean of attaining organizational goals, and
3. transformative learning, which encapsulates strategic shifts in organizational structure, tasks, or goals, typically in response to outside opportunities or threats.

Starting with the premise that, as noted earlier, all organizations can be assumed to learn, a more in-depth assessment of the degree of adaptive, generative, and transformative learning can shed light on the variability in cross-organizational learning efficacy. It seems likely that most organizations exhibit comparable degrees of adaptive learning, and that there are more notable cross-organization differences in generative learning, and even more pronounced differences in transformative learning; lastly, those learning dissimilarities ultimately help to explain cross-company performance differences. All considered, the ‘what’ and ‘how’ of organizational learning represent important albeit complex aspects of organizational behavior. Deeper understanding of the efficacy of organizational learning requires careful and thoughtful study of the socio-cognitive fabric of individual organizations, with particular emphasis on organizational structure, culture, and the intricate web of interpersonal interactions. In a more forward-looking, prescriptive sense, building and sustaining maximally effective organizational learning habits also calls for an equally deliberate study of the sources and types of knowledge, as captured in the 3E framework.