Organisational Learning and Systems Thinking Elite Series – What is Organisational Learning and Systems Thinking

During the last decades several new management tools for improving efficiency and the overall performance of the firms have been developed. Organizational Learning, the ability of the workforce to combine their efforts together in achieving desired goals according to Khandekar and Sharma (2006) or in simpler words how organizations rather than individuals learn and evolve, is the scientific discipline behind them, still at the early adopters stage of its life cycle as Salvatore (2006) points out. This cutting edge approach to management, rooted in the Ancient Greek Philosophers, was based primarily on Forester’s (1961) “Industrial Dynamics”, Maslow’s Enlightened Management concept introduced in 1965 with his book titled “Eupsychian Management” and Argyris and Schön’s Organizational Learning theory (1978 and 1996) that further informed from Deming’s TQM findings lead to “The Fifth Discipline” breakthrough by Peter Senge in 1990.

In 1991, the Center for Organizational Learning was founded as a sponsored research center at the MIT Sloan School of Management by a group of scientists including Peter Senge, Daniel Kim, Janet Gould and Bill Isaacs committed to fundamental organizational change. By 1995 the Center consisted of 19 MNCs and the interest was still growing. The desire to meet demand and expand this learning community led to a process of extended reflection and renewal in 1995 influenced by the work of Russell Ackoff on “idealized design”, lead by Dee Hock and guided by his belief in “chaordic organizations”, a process that resulted in the formation of the Society for Organizational Learning in 1997 as the successor to MIT’s COL (Clanon, 1999 , personal archives and dialogues with the founders).

Definitions overview

The most popular definition of Organizational Learning is “How a group of people collectively enhance their capacities to produce the outcome they really wanted to produce. That’s what we want to point to with the term ‘organizational learning’.” says in an interview P. Senge (n.d.). However there is another interesting definition that is not very common and yet might be more clear. Child (2005) says that Organizational learning is one of the four categories of holistic organizational change approaches with the other three being Business Process Reengineering, Organic Development and Annual Targeted Improvements. The author states that there is one more set of four approached to change but address change on part of the organization only (merger of departments, change to selection of new members made by teams, changes agreed in staff performance plans and continuous improvements through project teams). 

In my opinion and as several studies point out, Organizational Learning is of crucial importance to the performance and consequently sustainability of the organization; especially during the current economic conditions regardless of the classification we chose to attach. Shenkar and Luo (2008: 64) suggest that “Organizational learning has long been a key building block and major source of competitive advantages. Sustainable competitive advantages are only possible when firms continuously reinvest in building new resources and upgrading existing resources.”

References:
Khandekar, A.,  & Sharma, A., 2006.Organizational learning and performance–Understanding Indian scenario in present global context Education and Training
Vol. 48, Issue 8/9, pg. 682-692.

Salvatore, D. (2006) Managerial economics in a global economy. 6th ed. New York: Oxford University Press.

Senge, P. (1990) The Fifth Discipline. The art and practice of the learning organization, London: Random House.

Argyris, C., & Schön, D. (1978) Organizational learning: A theory of action perspective, Reading, Mass: Addison Wesley.

Argyris, C. and Schön, D. (1996) Organizational learning II: Theory, method and practice, Reading, Mass: Addison Wesley.

Clanon, J. (1999) Organizational Transformation from Inside Out; Reinventing the MIT Center for Organizational Learning, The Learning Organization Journal, 6 (4), September, MCB University Press.

Senge, P. (n.d.) An Interview with Peter Senge; An Overview of Organizational learning [Online]. Available from: http://www.solonline.org/organizational_overview/ (Accessed 10 December 2010)

Child, J. (2005) ‘Organizational Choices’. In: Organization: Contemporary Principles and Practice. London: Blackwell Publishing Ltd. 

Shenkar, O. and Luo, Y. (2008)International Business. 2nd ed. California: Sage Publications, Inc.