organization, n. An organized body of people with a particular purpose, as a business, government department, charity, etc.
1793 D. RAMSAY Hist. Amer. Revolution (new ed.) I. p. vi (advt.) Some of these additions we have ourselves received, as in the case of the words
“organize, and organization,” when applied to political bodies.
In ThIs ChapTer
Key ConCepts
Origins of Organizational Learning and Learning Organizations Organizational Learning vs. Learning Organization
Characteristics of the Learning Organization Origins of Failure in Continuous Improvement
Key papers
Vincent E. Cangelosi and William R. Dill, “Organizational Learning: Observations toward a Theory”
C. West Churchman, The Systems Approach
Chris Argyris and Donald A. Schön, Organizational Learning: A Theory of Action Perspective
Peter Senge, The Fifth Discipline: The Art and Practice of the Learning Organization
67
OrIgIns Of OrganIzaTIOnaL LearnIng and LearnIng OrganIzaTIOns
Although some authors trace the notion of organizational learning and the learn- ing organization to the late 1960s and early 1970s, Garratt expressed the belief “that all the necessary conditions to create both the intellectual and practical basis of a learn- ing organisation were in place by 1947.”1 The expression “organizational learning” first appeared in 1950 as a subject heading in Psychological Abstracts. In 1955 Krulee referred to organizational learning in a very modern sense.2 Simon is frequently credited with calling attention to organizational learning in his 1953 article in the Public Administra- tion Review.3 Jones and Hendry suggested that the term “learning organization” was introduced simultaneously in 1988 by Hayes and by Pedler, but the term was actually used as early as 1976 by Gardner, who attributed the expression to Schön’s Beyond the Stable State (1970).4 Lieberman, however, explored both organizational learning and the concept of the learning organization in his 1972 report on a series of experiments sponsored by the Rand Corporation.5
OrganIzaTIOnaL LearnIng vs.
LearnIng OrganIzaTIOn
Many authors tacitly define organizational learning as what happens in a learning organization. Huysman, however, suggested that the two concepts are quite distinct, and that there is in fact a gap between them that needs to be bridged if the general prin- ciples of organizational learning are to be incorporated into the practical specifics of the learning organization. “The ideas concerning the learning organization more often than not lack solid theoretical as well as empirical foundation.”6 Huysman proposed the descriptive theoretical orientation of the literature of organizational learning as the appropriate underpinning for the prescriptive, interventive arena of the learning orga- nization: “A descriptive perspective on organizational learning leads to almost opposite insights than does the prescriptive perspective on the learning organization.”7 Lahteen- maki, Toivonen, and Mattila, however, found significant gaps and inconsistencies in the theoretical base for organizational learning that make it difficult even to verify the existence of learning organizations as a functional reality.8
CharaCTerIsTICs Of The LearnIng OrganIzaTIOn
Pedler suggested that there are two fundamental characteristics of a learning organization:
1. All the people who are associated with the organization must operate in a mode of con- tinuous learning and development.
2. The organization as a whole must operate in a mode that incorporates and integrates the learning and development of individuals and leads to the “self-development” of the organization.9
According to Pedler, “given the resources and will, the first of these is not so difficult—the technologies and methods for encouraging all staff in continuous learning
and development exist—but the second remains much more mysterious and challeng- ing.”10 “No amount of individual development will alone produce an organization able to change itself as a whole. The learning company is not the training company.”11
Elkjaer echoed Pedler’s concern in a case study examination of a failed attempt to create a learning organization in which “the emphasis was placed on changing indi- vidual employees while the organization itself—its managerial structures and work practices—remained fairly constant.”12 Elkjaer attributed the failure in part to a “quick fix” approach to managing the transformation into a learning organization.13 Elkjaer described the focus on individual learning within the organizational context as an acquisition metaphor for organizational learning, which has dominated the organiza- tional learning literature, and contrasted that focus with a participation metaphor that emphasizes communities of practice rather than structured learning.14
OrIgIns Of faILure In COnTInuOus ImprOvemenT
Garvin noted that failures in continuous improvement initiatives “far outnumber successes. Why? Because most companies have failed to grasp a basic truth. Continuous improvement requires a commitment to learning.”15 Garvin lamented that discussions of learning observations “have often been reverential and utopian, filled with near mys- tical terminology.”16 Garvin was particularly critical of the works of Senge and Nonaka, noting that while the scenarios they present are “idyllic” and their outcomes desirable, they fail to “provide a framework for action. The recommendations are far too abstract, and too many questions remain unanswered.”17 To Garvin, there are three unresolved critical issues that need to be addressed to make the idea of the learning organization accessible and practical: (1) the expression “learning organization” needs to be precisely defined in terms that are “actionable and easy to apply,” (2) incorporation of the learn- ing organization idea into management requires “clearer guidelines for practice, filled with operational advice rather than high aspirations,” and (3) there needs to be a specific approach to measurement of “an organization’s rate and level of learning to ensure that gains have in fact been made.”18 Unless these “three Ms”—meaning, management, and measurement—are addressed, Garvin predicted, it is unlikely that there will be mean- ingful progress toward realizing the promise of the learning organization.
Garvin contended that while there are many workable definitions of organizational learning, there is no useful definition of learning organization. He proposed the fol- lowing working definition: “A learning organization is an organization skilled at creat- ing, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.”19 The management problem can be addressed by understand- ing those things that a learning organization does well, which include “systematic prob- lem solving, experimentation with new approaches, learning from their own experience and past history, learning from the experiences and best practices of others, and trans- ferring knowledge quickly and efficiently throughout the organization.”20 It is through the systematic application of these “building blocks” that an organization manages its learning activities.
With regard to measurement, Garvin viewed the measures used in most organiza- tions as “incomplete” in that they “focus on a single measure of output (cost or price) and ignore learning that affects other competitive variables, like quality, delivery, or
new product introductions,” while telling “us little about the sources of learning or the levers of change.”21 He saw a need to measure not just results, but also the processes that yield those results, which can be done through the use of surveys, questionnaires, interviews, and direct observation of behavior within the organization. Ultimately, the efforts to build a learning organization will pay off if they are accompanied by “a subtle shift of focus, away from continuous improvement and toward a commitment to learn- ing. Coupled with a better understanding of the ‘three Ms,’ the meaning, management, and measurement of learning, this shift provides a solid foundation for building learning organizations.”22
Vincent E. Cangelosi and William R. Dill, “Organizational Learning: Observations toward a The- ory,” Administrative Science Quarterly 10 (September 1965): 175–203.
Vincent E. Cangelosi (1928–88) earned bachelor’s and master’s degrees from Louisi- ana State University and a doctorate from the University of Arkansas. He held faculty positions at the University of Arkansas, the University of Texas, and Louisiana State University, where he was chair of the Department of Quantitative Methods and dean of the junior division of the university. William R. Dill received a bachelor’s degree from Bates College, a master’s degree from the Carnegie Institute of Technology, and a doctorate from the University of Oslo. He has held faculty positions at Carnegie-Mellon University, the Carnegie Institute of Technology, and New York University and was program director of education for IBM’s research and development division. From 1981 to 1989 he was president of Babson College. “Organizational Learning: Observations toward a Theory” is a minor citation classic, with 59 entries in the Social Sciences Cita- tion Index between 1974 and 2005.
an OrganIzaTIOnaL LearnIng game
Cangelosi and Dill describe a pseudoexperiment conducted in the form of a game at the University of Texas. Such games have been used extensively in business administra- tion education. Seven students in a graduate administration program engaged in a highly structured and closely monitored semester-long simulation of a corporate management environment. “The tasks that management had to perform were sufficiently complex to induce the team to organize on a hierarchical, functionally specialized basis.”23 The simulated environment involved responsibility to a board of directors and competi- tion with two parallel teams in the same industrial domain and three teams in a closely related industrial domain. Efforts were made to make the simulation sufficiently realis- tic to ensure that the learning processes necessary for team success were representative of those that would take place in the real world.
The game was structured in the form of “moves,” each of which represented a month in the life of the simulated company, although the time frame was substantially condensed for purposes of the exercise. A typical move required a week at the beginning of the semes- ter, but by the end of the semester, as the team developed higher comfort and confidence levels, up to three months of simulated action could be accomplished in a single week.
The game was controlled and monitored by a sophisticated computer program.
fOur phases Of OrganIzaTIOnaL LearnIng
The main objective of the researchers was to observe and categorize the ways in which the team learned to accomplish the tasks necessary for team success in the simulated company environment. From those observations, Cangelosi and Dill identify four phases of organizational learning: (1) the initial phase, (2) the searching phase, (3) the comprehending phase, and (4) the consolidating phase.
In the initial phase, which accounted for the first three “game-months” of the simu- lation, decisions were relatively tentative, with each decision accounting for a single move. During this phase, team members were not fully in agreement with company objectives and were uncertain how to work together or with the board of directors. Sub- mitting objectives to the board of directors for approval was viewed as a necessity rather than an active strategy for improvement. Most decisions and actions were short-term tactical moves with no long-term strategic value; many decisions were poorly structured and essentially ad hoc. During the initial phase awareness of competitors was focused primarily on learning what the competitors were doing and deciding which competitor characteristics to emulate. Information seeking, gathering, and use during the initial phase were disorganized and largely ineffective.
The searching phase was characterized by the transition from single moves to multiple moves as the team gained knowledge, experience, and confidence. The tentative nature of the initial phase was overcome as the team began to detect and search for patterns related to the simulated “history” of the company, which had been losing money prior to the beginning of the simulation, and their own actions and decisions. Objectives were strengthened and finalized, and a central goal of improving the product line, increasing market share, and making a profit emerged. During this phase the team recognized the need to divide responsibility into subteams or “departments” and to entrust responsi- bility and authority to the departments. The management team became more engaged with the board of directors. During the searching phase the team began to view the com- pany’s impact on competitors as being more important than competitors’ impact on the company. Information seeking, gathering, and utilization processes began to improve as they became more structured, with the emphasis primarily on seeking and gathering.
Although the team was coalescing and gaining the ability to understand the company, during the searching phase “it was difficult for management to feel any significant sense of accomplishment.”24
The comprehending phase was “a period of more rapid and positive learning.”25 The overall team and departments began to make effective use of established objectives and the overall goal shifted from a focus on market share to a focus on profitability. Imme- diate and long-term objectives, decisions, and actions took on the characteristics of an integrated whole. Information processes shifted from a focus on seeking and gather- ing to an emphasis on assessment and utilization. More sophisticated decision-making tools and processes were employed as the team began to look outside the company for input from “economics, marketing, statistics, and operations research.”26 These pro- cesses were used to shape critical information into explicit models, which could then be tested to provide input into decisions. During this phase the team began to experi- ence concrete signs of success, increasing the company’s market share and improving production, although the company was initially still losing money. New products were
explored and developed as an approach to enhancing market share and profitability.
Interactions with competitors were increasingly driven by the desire to control competi- tion rather than simply monitoring or being influenced by competition. As those actions began to pay off, the management team developed stronger relationships among them- selves and with the board of directors. Toward the end of the comprehending phase, the company became truly profitable.
The consolidating phase was characterized by concentrated systematic actions designed to stabilize the company. Experimentation essentially stopped as processes and activities became established routines. At the same time, though, decision making became more creative and more flexible as the management team gained confidence in decision models and became more assured of the success of the company. The roles of the departments became less important and the team began to act as a cohesive whole.
The board of directors, gaining confidence in the management team, assumed a sup- portive but more distant role.
Ultimately, Cangelosi and Dill conclude that the team learned a great deal but “it was not a clearly drawn and easy kind of learning.”27 Ultimately, although the authors feel confident that what was observed truly constitutes organizational learning, they are less sure of how it was that the organization learned. It is clear, however, that organizational learning was more a byproduct of the company simulation than a goal or activity delib- erately addressed by the management team.
a TheOreTICaL mOdeL Of OrganIzaTIOnaL LearnIng
Cangelosi and Dill assess their pseudoexperiment within the context of three “theories of organizational learning” as a means of attempting to provide insight into the learning process they observed: the Air Defense experiments carried out during the late 1950s, Cyert and March’s “Behavioral Theory of the Firm,” and Hirschman and Lindblom’s exploration of imbalance and convergence.28 From this assessment, the authors synthe- size the theoretical model of organization learning visualized in figure 3.1
Cangelosi and Dill define the model in the following terms: “The basic concept of the model is that organizational learning must be viewed as a series of interactions between adaptation at the individual or subgroup level and adaptation at the organi- zational level.”29 The authors identify three key sources of stress in the organizational learning process. Discomfort stress and performance stress both affect individuals and groups. Discomfort stress is the pressure exerted on individuals and subgroups by “the complexity of the environment relative to the time, energy, and ability that groups can expend understanding it and of the uncertainty in the environment relative to a group’s ability to forecast the future.”30 Performance stress “allows for the possibility that orga- nizations may be highly sensitized either to success or to failure, or to some mixture of the two.”31 “Performance stress is affected by the outcomes of previous decisions, by changes in preferences or aspiration levels, by incentives existing within the organization and manipulated by its leaders, and by the degree to which management is challenged with the newness of its task.”32 Performance stress affects the organization as a whole as well as individuals and subgroups, but both discomfort stress and individual stress are experienced primarily by individuals.
The third form of stress in organizational learning “results from increasing degrees of divergence and conflict in the ways in which individuals and subgroups behave” and is known as disjunctive stress.33 According to Cangelosi and Dill, organizational learning is primarily a reaction to the disjunctive stress that is produced by individual and group adaptation to discomfort stress and performance stress. In other words, as individuals and groups learn and adapt, the organization as a whole is forced to learn and adapt.
Figure 3.1
Cangelosi and Dill’s Model of Organizational Learning Sources of Stress
Although discomfort stress is experienced entirely by individuals and groups, and per- formance stress is experienced mostly by individuals and groups, disjunctive stress is experienced only by the organization. “Thus, individual and subgroup adaptation control learning at the organizational level primarily by producing divergent and con- flicting patterns of behavior.”34 Organizational growth and development are furthered as organizational adaptation influences individuals and groups and as individual and group adaptation influences the organization.
The impact of stress on individuals, groups, and the organization is tempered by two forces. Attention focus has to do with the extent to which individuals, groups, or orga- nizations are aware of and responsive to sources of stress. Attention to stress is selective and variable: it is possible at any given time to pay attention to a limited number of influ- ences, and the attention given to any particular influence varies over time. At any given point in time, each source of stress is associated with a threshold level that determines the extent to which the source of stress can exert an influence. Threshold levels are also variable over time. The influence of attention focus and threshold level for any given source of stress diminishes as attention shifts from the individual to the group or from the group to the organization, but the potential magnitude of a reaction to a source of stress increases. “Adaptation will occur more frequently and in smaller increments if an individual rather than a group is involved, if ideas for adaptation are readily available, if the persons involved are not under great time pressure to maintain current programs and activities, if the adaptation can be implemented routinely and without stress, and if it can be reversed or retracted after undesirable outcomes result.”35
C. West Churchman, The Systems Approach (New York: Delta, 1968).
C. West Churchman (1913–2004) was a philosopher and professor of philosophy at the University of California, Berkeley. He was instrumental in the development of operations research and the expansion of systems analysis from a focus primarily on time and motion studies and computer science to a generalized approach to manage- ment and organizational analysis. The Systems Approach is one of the classic works in the field of general systems theory. It was generally well received, although it did not attract many reviews, and is represented by 320 citation entries in the Social Sciences Citation Index.
The Systems Approach is an attempt to make the fundamental nature and benefits of scientific systems thinking accessible to a general readership. Although it succeeds to a considerable degree, it is hardly surprising that the book did not emerge as a best seller.
The topic is necessarily somewhat esoteric, and the phenomenon of the immensely pop- ular business-world nonfiction book was not as widespread during the 1960s as it has been in more recent decades.
Argyris and Schön placed Churchman’s approach to organizations as systems and organizational learning in the category of cyberneticists, who “have concentrated on organizations as systems of decision and control, seeking to apply the principles of con- trol and communications theory to organizational phenomena.”36 “For systems theorists, organizational learning consists of the self-regulating process of error-detection and error-correction itself, whether or not maintenance of the organizational steady state is mediated by the self-conscious efforts of individual members of the organization.”37