CHAPTER TWO
Organizational Learning
© 2013 by Nelson Education Ltd.
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LEARNING OUTCOMES
 Define organizational learning and describe a learning
organization
 Explain the five disciplines of a learning organization
 Discuss the principles of a learning organization
 Discuss the four key dimensions that are critical for
creating and sustaining a learning organization
 Define a learning culture
 Define knowledge and give examples of explicit and
tacit knowledge
© 2013 by Nelson Education Ltd.
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LEARNING OUTCOMES
 Describe the meaning and types of intellectual capital
 Define knowledge management and explain how knowledge
is acquired, interpreted, disseminated, and retained in
organizations
 Define communities of practice and describe what
organizations can do to create them
 Define workplace learning, informal learning, and formal
learning
 Describe what organizations can do to facilitate informal
learning
 Describe the multilevel systems model of organizational
learning
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INTRODUCTION
 Organizations that are going to thrive – survive –
and be globally competitive need to embrace a
culture where learning is fostered – and is
experimented with – at all levels in the organization
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ORGANIZATIONAL
LEARNING
Organizational learning is a process of creating,
diffusing, and applying knowledge in organizations
• Focuses on continuous learning and a systems
approach to distributing and sharing knowledge
• Dynamic process of creating and sharing
knowledge
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LEARNING
ORGANIZATION
A learning organization:
 Acquires, organizes, and shares information and
knowledge
 Uses new information and knowledge to change its
behaviour in order to achieve its objectives and
improve its effectiveness
 Is able to transform itself by acquiring and
disseminating new knowledge and skills
organization-wide and at all levels
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LEARNING
ORGANIZATION
A learning organization:
 Has an enhanced capacity to learn, adapt, and change
its culture
 Has the ability to make sense of and adapt and respond
to its environment – internal/external
Learning results in continual improvements in:
• Work systems
• Products and productivity
• Services
• Management and employee behaviour
• Efficiency and effectiveness
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LEARNING
ORGANIZATION
Five Disciplines:
1.
2.
3.
4.
5.
Personal Mastery
Building a Shared Vision
Mental Models
Team Learning
Systems Thinking
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LEARNING
ORGANIZATION
 Principles
• Everybody is considered a learner
• People learn from each other
• Learning is part of a change process
• Continuous formal and informal learning
• Learning is an investment
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LEARNING
ORGANIZATION
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KNOWLEDGE
 Sum of what is known; a body of truths,
information, and principles
• Synthesis of information – facts, theories,
and mental representations
• Can be found in employee minds or
transferred/stored in organization systems
• Can be tacit or explicit
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KNOWLEDGE
 More than just information! It is:
 Information that has been edited
 Put into context
 Analyzed in a way that makes it meaningful,
and therefore valuable to the organization
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EXPLICIT KNOWLEDGE
 Things that you can buy or trade:
• Patents or copyrights and other forms of
intellectual property
• Can be written into procedures or coded into
database
• Is transferred fairly accurately
• Only 20% of corporate knowledge is explicit
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TACIT KNOWLEDGE
 Learned from experience and insight – intuition,
know-how, little tricks, judgment, and wisdom:
• 80% of corporate knowledge
• Almost impossible to transfer
• Well-known example: Decision-making
behaviour of dealers in financial markets
• Is said to be instinctual
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INTELLECTUAL
CAPITAL
 An organization’s knowledge, experience,
relationships, process discoveries,
innovations, market presence, and community
influence
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INTELLECTUAL
CAPITAL
 Is like intelligence
• The source of innovation and wealth production
• Has to be formalized, captured, and leveraged to
produce a more highly valued asset
• Knowledge of value
• Not like other assets – it grows with use
–Contributes to continued learning
• Is recognized by many organizations as a
valuable asset
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INTELLECTUAL
CAPITAL – TYPES
 Human Capital
• Knowledge, skills, and abilities of employees
 Renewal Capital
• Intellectual property
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INTELLECTUAL
CAPITAL – TYPES
 Structural Capital
• Formal systems and informal relationships
–Allow employees to:
–Communicate, solve problems, and make
decisions
 Relationship Capital
• Organization’s relationships with suppliers,
customers, and competitors:
–Influence how they do business
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INTELLECTUAL
CAPITAL – TYPES
 Customer Capital
• Value of an organization’s relationships with its
customers
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INTELLECTUAL
CAPITAL CYCLE
“As more investments are made in human capital,
the employees are more capable and committed
to increasing renewal and structural capital,
leading to more productive relationship capital,
resulting in better financial performance.”
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KNOWLEDGE
MANAGEMENT
 Creation, collection, storage, distribution, and
application of compiled “know what” and “know
how”
 Knowledge management/infrastructure refers to
systems and structures that integrate people,
processes, and technology
• Why is this important?
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WHY?
To ensure that important knowledge is:




Coded
Stored
Is readily available
Not lost
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MANAGING
KNOWLEDGE
Acquisition
 Environment scanning:
• External: External information from other
organizations, customers, industry watchers,
marketplace
• Internal: Internal individuals, teams,
departments
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MANAGING
KNOWLEDGE
Interpretation
 Mental models
 Learning occurs when employees form views of
the organization and its environment
• Deeply engrained assumptions,
generalizations, or images that influence
how we understand and take action
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MANAGING
KNOWLEDGE
Dissemination
 Providing task information and know-how to:
• Help and collaborate with others to solve
problems
• Develop new ideas
• Implement policies and procedures
 Use formal systems grounded in technology
• Easily transmitted
• Exchange ideas quickly and efficiently
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MANAGING
KNOWLEDGE
 Intranet: Critical component for managing
knowledge
• Employee questions can be answered in
hours instead of weeks
• Can be like an instant coach
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MANAGING
KNOWLEDGE
Retention
 Important to compile, store, and retrieve
information residing in employee’s minds and
systems
• Intellectual Inventory (knowledge
repositories)
• Built to encourage use and facilitate
interaction
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COMMUNITIES OF
PRACTICE
Groups of employees who:
 Share similar concerns and problems
 Meet regularly to share their experiences and
knowledge
 Learn from each other and identify new
approaches for working and solving problems
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COMMUNITIES OF
PRACTICE
Wenger & Lave identify three characteristics:
1. Domain (shared interest)
2. Community (interaction, discussion, sharing,
exchanging, and mutual assistance)
3. Practice (practitioners with resources and tools they
use to solve problems)
 Are typically informal, self-organizing, and form
naturally – but can be created, fostered, and
nurtured in organizations
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COMMUNITIES OF
PRACTICE
Three things to focus on if COPs to be
nurtured:
 Identify potential COPs that will enhance
organization’s strategic capabilities
 Develop an infrastructure to support and
enable members to share their expertise
 Assess the value of the organizations COPs
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WORKPLACE
LEARNING
 Workplace learning:
• Process of acquiring job-related knowledge and
skills through both formal training programs and
information social interactions among employees
 Informal learning:
• Learning that occurs naturally as part of work and
is not planned or designed by the organization
 Formal learning:
• Learning that is structured and planned by the
organization
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WORKPLACE
LEARNING
 Formal learning (training and development):
• Key part of the knowledge-acquisition process
• Approximately 30% of how employees learn
 Informal learning:
• Approximately 70% of how employees learn
• By trial & error
• Spontaneous, immediate, and task-specific
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WORKPLACE
LEARNING
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MULTILEVEL SYSTEMS OF
ORGANIZATION LEARNING
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SUMMARY
 Discussed learning and knowledge management
 Described the five disciplines and principles of a learning
organization as well as the four dimensions necessary for
creating and sustaining a learning organization
 Discussed different types of knowledge in organizations
and intellectual capital
 Described knowledge management practices
 Described multilevel systems model and connection of
organizational learning to training and development
© 2013 by Nelson Education Ltd.
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