Learning organization

In business management, a learning organization is a company that facilitates the learning of its members and continuously transforms itself. The concept was coined through the work and research of Peter Senge and his colleagues. In business management, a learning organization is a company that facilitates the learning of its members and continuously transforms itself. The concept was coined through the work and research of Peter Senge and his colleagues. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. There is a multitude of definitions of a learning organization as well as their typologies. Peter Senge stated in an interview that a learning organization is a group of people working together collectively to enhance their capacities to create results they really care about. Senge popularized the concept of the learning organization through his book The Fifth Discipline. In the book, he proposed the following five characteristics: This combination encourages organizations to shift to a more interconnected way of thinking. Organizations should become more like communities that employees can feel a commitment to. Organizations do not organically develop into learning organizations; there are factors prompting their change. As organizations grow, they lose their capacity to learn as company structures and individual thinking becomes rigid. When problems arise, the proposed solutions often turn out to be only short-term (single-loop learning instead of double-loop learning) and re-emerge in the future. To remain competitive, many organizations have restructured, with fewer people in the company. This means those who remain need to work more effectively. To create a competitive advantage, companies need to learn faster than their competitors and to develop a customer responsive culture. Chris Argyris identified that organizations need to maintain knowledge about new products and processes, understand what is happening in the outside environment and produce creative solutions using the knowledge and skills of all within the organization. This requires co-operation between individuals and groups, free and reliable communication, and a culture of trust. One of the main benefits being a learning organization offers is a competitive advantage. This competitive advantage can be founded on different strategies, which can be acquired by organizational learning. One way of gaining a competitive advantage is strategic flexibility. The continuous inflow of new experience and knowledge keeps the organization dynamic and prepared for change. In an ever-changing institutional environment this can be a key factor for an advantage. Better management of an organizations explorative investments and exploitative acting can be a benefit of a learning organization, too. Next, a competitive advantage of a company can be gained by lower prices and better quality of products. Through organizational learning both cost leadership and differentiation strategies are possible. The ability to reconfigure actions based on needs and environment avoids the tradeoff between the two. Overall the customer performance of learning organizations might be better, which is the direct and measurable channel, that establishes a competitive advantage. Another important aspect is innovation. Innovation and learning are closely related. While encouraging people to learn and develop, a more innovative environment is commonly generated, innovative ideas coming from e.g. communities of practice can result in greater overall organizational learning.