Organizational learning is defined as the vibrant process of creating, acquiring and integrating knowledge with the aim of developing the assets and capabilities that give better organizational performance. Based on the assumption that organizational learning is a process aimed at developing the organization by creating new technological, productive or commercial initiatives, the process shall require devising new methods of making knowledge stream into the organization and influence the business performance. All industries and companies undergo some changes caused by the change in customer preference, competitor innovation or technological advances (Murray & Donegan, 2003, pp. 57). The changes create pressure on the business to update and improve their products and services in order to increase their competitiveness in the market or to retain their customers. For a company to achieve this, they have to be always ahead of the customer and learn faster than them.
Organizational learning is a complex non-transferable capability that results from the evolution and history of a firm. It is also dependent of experience and the knowledge involved is generated from social collaborations and interactions aimed at understanding complex problems. This being the case, the learning contributes positively both to innovation and competitiveness since interaction is encouraged and ideas are exchanged that lead to a healthy competition across the board. The learning also creates a link between the environment and the firm that enhances pro-active trends. The knowledge acquired from here creates a better understanding of the environment and therefore an improvement in their capacity of response. The learning also makes the firm yearn to know more about the customers and other key stakeholders, together with how to develop healthy and productive relationships with them (Tippins & Sohi, 2003, pp. 750).
Due to the flexibility created by the knowledge, the learning organizations are able to re-calculate their moves and re-allocate their resources on the important opportunities and threats while also focusing on conflict resolution. The ability to learn is important because of the speed of the frequency in which changes in the market and technology occur. It is also important because it aids the firm acquire anticipatory skills and make their policies impossible to imitate. In agreement with the views that have been laid down, I would say that learning is a perfect facilitator of behavioral change and it aids in the improvement of performance. Organizations that have the capability of learning about their customers and other key stakeholders are better placed to sense and act with regard to the trends and events in the market.
Organizational learning is also important to the customers of the organization since it concentrates on the understanding of not only how to satisfy their needs but also of how to produce new products’ services and methods of conducting business. The results of this for the firm are better product performance in the market, good customer retention, and unshakable quality and in the end significant growth and profitability. Organizational learning is the most fundamental source of establishing a competitive advantage within the business world (Lopez, Peon & Ordas, 2005, pp. 230). The capacity to learn at a higher pace than the customers and other key stakeholders is the best way to sustain a firm’s competitive advantage.
In conclusion, it is correct to say that organizational learning greatly affects innovation and competition positively and it affects economic and financial outcomes positively. It is also correct to state that there is a positive relationship between innovation and competition and the financial results of an organization. Therefore there is need to improve the learning in organizations. This can be done by developing an instrument that measures the firm’s ability to learn. The instrument can in the future be used to conduct research and expand the understanding of the learning.
LOPEZ, S. P., PEON, J. M. M., & ORDAS, C. J. V. (2005). Organizational Learning as a Determining Factor in Business Performance. Learning Organization. 12, 227-245.
MURRAY, P., & DONEGAN, K. (2003). Empirical Linkages between Firm Competencies and Organisational Learning. Learning Organization. 10, 51-62.
TIPPINS, M. J., & SOHI, R. S. (2003). It Competency and Firm Performance: Is Organizational Learning a Missing Link? Strategic Management Journal. 24, 745-761.
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