In the organisational learning literatures, there is an underlying assumption that learning will improve a firm’s performance. In contrast, a key premise in the strategy literatures is that this will be achieved by close alignment of the firm to its environ- ment. A definition of organisational learning based on action that encompasses such assumptions is proposed by Fiol and Lyles (1985):
‘Organisational learning means the process of improving actions through better knowledge and understanding.’
A number of studies have investigated the disparate literatures of organisational learning and tried to chart its varied terrain (Crossan et al. 1999; Easterby-Smith 1997;
Fiol and Lyles 1985; Huber 1991; Levitt and March 1988; Shrivastava 1983). Each examination has provided a somewhat different map of the landscape depending on the epistemological perspectives and backgrounds of the researchers. A recent eth- nomethodology framework of organisational learning (Bontis et al. 2002; Crossan et al.
1999) builds on the tension between exploration and exploitation in organisations and places these notions at the heart of strategic renewal. Renewal is based on organisations exploring and learning new ways while at the same time exploiting what they have already learnt. This framework considers organisational learning at three levels: individ- ual, group and organisational, as shown in Table 5.1. There are four learning processes that flow naturally from one to another without any clear distinction of where they begin or end. Also, there may be feedback loops from the learning processes between the three levels.
Environmental
changes Sensemaking
‘Cognitive gap‘
driver Complexity
Chaos Unintelligible
Uncertainty Mental models
Identity Plausible
stories
Future actions
Situational awareness
Figure 5.4 Sensemaking and situational awareness
Table 5.1 Organisational learning framework (Crossan et al. 1999)
Level Process Inputs/outcomes
individual intuiting experiences
images Metaphors
interpreting language
Cognitive map Conversation/dialogue
group integrating Shared understandings
Mutual adjustments interactive systems
organisation institutionalising routines
diagnostic systems rules and procedures The four learning processes entail:
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● Intuiting. This is largely a subconscious process that often requires some form of pattern recognition. For instance, an expert may be able to foresee a pattern in a problem that a novice may not. This pattern recognition will support exploitation.
However, intuition is also important for exploration to help generate new insights and novel applications. Metaphors and the use of imagery can help provide the lan- guage to communicate one’s insight to someone else.
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● Interpreting. This is the process of explaining through words and/or actions an insight or an idea to one’s self or to another person. We develop our own cogni- tive map of a domain and can interpret the same stimulus differently thanks to our established cognitive maps. In a group situation, this can result in multiple and potentially conflicting interpretations of the best course of action.
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● Integrating. This learning process is about developing shared understanding and taking coordinated action through mutual adjustment. Group dialogue and storytell- ing are seen as major tools for developing new and deeper shared understandings.
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● Institutionalising. This learning process is to ensure that routinised actions occur.
Successful actions over time often become embedded in organisational routines.
Such routines have an effect on the systems, structures and strategies of an organi- sation. One characteristic of institutionalisation is the endurance of the behaviour over a period of time.
This model proceeds to suggest a dynamic between the four learning processes through ‘feedforward’ and feedback loops. It does not elaborate on how these processes assist organisations to find the balance between exploration and exploitation behav- iours which are seen as critical for strategic renewal. Most of the innovation in this 4I framework rests on the entrepreneurial intuiting in the first individual phase. Without the ‘feedforward’ loops, it is unlikely that the institutionalised organisational routines would be challenged, with a consequence of exploitation behaviours predominating within any organisation. How could managers balance the wisdom of their experts
Chapter 5 / organisational learning 135 with the uneasy flair of the entrepreneurs? What effect would culture have on strategic renewal? Dialogue may be valuable for developing divergent thinking but what are the implications for actions requiring convergent thinking and decision making?
One criticism of this 4Is model is the tendency in management literature towards prescriptions related to certain characters of the alphabet: 4Ps in marketing and 4Is in action learning (Mumford 1991). What distinguishes the effectiveness of Mumford’s model based on 4Is of interaction, integration, implementation and iteration over the Crossan et al. one? There appear to be similarities between interaction in one model and interpreting in another, integration occurs in both models, and iteration could be seen as a form of the feedback loops leading to institutionalisation.
Most empirical research in organisational learning tends to be qualitative in nature and it is relatively uncommon to find many quantitative studies. This is mainly related to the difficulties of developing valid instruments that measure organisational learn- ing. One can always develop a multitude of items from pilot interviews and theoretical frameworks related to organisational learning. From statistical analysis one can demon- strate the strength of reliability of these constructs relatively easily. However, we still don’t know whether what we are measuring is really organisational learning. Evidence for validity of these instruments is often found wanting. The main reason is that there isn’t a singular valid instrument in the public domain that has the consensus of this academic community. If this was the case, one could develop new instruments con- fidently, knowing that an element of a valid instrument was contained within the questionnaire for empirical testing.
The second major issue is around sampling. Who do you send your questionnaires to? How many people need to be sampled within a firm to get a reliable sample?
Assuming that the research has limited resources, do you sample many people in a few firms or a few people in lots of firms to get greater generalisations from the results?
Some researchers have surveyed a single senior executive from each firm, assuming that their position is likely to give them a ‘helicopter view’ of the organisation. Given the complexity of these methodological issues, can the results from quantitative studies of organisational learning be meaningful?
One of the seminal papers in this discipline comes from Huber (1991) who attempts to understand and evaluate the diverse literatures of organisational learning under four constructs, as shown in Figure 5.5. He adopts an information-processing perspective defining organisational learning as follows:
‘An entity learns if, through its processing of information, the range of its potential behav- iours is changed.’
This framework adopts a behavioural rather than a cognitive perspective of learning and assumes that the four constructs are interrelated. No attempt is made to show how the processes in each construct integrate with one another. Knowledge acquisition is seen as the process by which knowledge is obtained. Information distribution is the process by which information is shared, which can often lead to new information or understanding. Information interpretation is the process by which information is given one or more interpretations. Organisational memory is the means by which knowledge is stored for future use (Huber 1991).
The main criticisms of this perspective are around the problems of implementing organisational learning (Easterby-Smith 1997):
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● Political behaviours in organisations are not considered in the framework and can lead to distortion and suppression of information. The political climate can also lead managers to make decisions based on irrational grounds. The framework could be considered as politically naïve.
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● As the framework adopts a behavioural rather than a cognitive perspective, there is a danger that it may lead to a tendency towards exploitation rather than exploration in organisations.
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● Behavioural perspective may create a tendency to hold on to old views and practices rather than questioning them.