Management REPORT

Team Members
Solat Abbas
Aliza
Neelam Nadeem

Department of Management Sciences

Bahria University Karachi Campus
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Acknowledgement
It is an honor for us to have a chance by Sir Essa Khan to prepare the report on the
impact of learning on Organizations competitive advantages which help us to learn
practically, what the importance of learning organization in the world is and how
Organizations can achieve good outcomes result.
We are very thankful to our honorable teacher Sir Essa Khan for his continuous
support and co-operation which helped us in preparing this report accordingly.

Best Regards,
Solat Abbas
Aliza
Neelam

Critically Examine the Impact of

Learning on the Organizations
Competitive Advantages
Background:
Major research into the art of learning did not actually start until the 1900's. In the
1950's, the concept of Systems Thinking was introduced but never implemented.
Gould-Kreutzer Associates, Inc. defined Systems thinking as:
"A framework for seeing interrelationships rather than things; to see the forest and
the trees."
This means that organizations need to be aware of both the company as a whole as
well as the individuals within the company. Up until the introduction of this concept,
companies concentrated on their own needs not the needs of their workers. Systems
Thinking tries to change the managerial view so that it includes the ambitions of the
individual workers, not just the business goals.
One of the systems used was called Decision Support Systems (DSS). This was for
the use of corporate executives to help them make decisions for the future. It was in
fact the building of the models, which defined the systems that benefited the
management rather than the system's operation. This was because the building of the
model focused on what the business really was and the alternatives available for the
future.
One benefit of DSS was that it made implicit knowledge explicit. This makes extra
knowledge available to the organization and will tend to allow the organization to
learn better because explicit knowledge will tend to spread faster through an
organization. In this respect DSS can be considered as an additional method of
communication in organizations. This systems tool was predicted to be necessary for
every executive's desktop. But this did not happen.
In the 1970's, the same idea was renamed to Organizational Learning. One of the
early researchers in this field was Chris Arygris from Harvard. He published a book
on the subject in 1978. Even with this published information the concept still wasn't
physically taken on by any companies.

Introduction:
A learning organization is the term which provides to a company that facilitates the
learning of its member and quickly transforms itself. It has five characteristics
systems thinking, personal mastery, mental models, shared vision, and team learning.
The Learning organization concept was invented through the work and research of
Peter Senge and his coworkers. Organizations are encouraging the learning to a more
interconnected way of thinking.
The number of usable definitions of the learning organization defines the impact of
learning on Organizations competitive advantages are as follows:
The concept of organizational learning is the subject of a fast growing body of
literature
[Farrell and Movado, 2004]

A Learning Organization is an organization skilled based on two things: creating,

acquiring, interpreting, transferring, and retaining knowledge, and second, acting,
changing its behavior to respond to those new knowledge and insights.
[DAVID GARVIN, 2008]

Organization as a learning system and focus on three key characteristics of learning

Organization. They are the learning process, the learning orientation, and the
facilitating factors within the organization.
[Appelbaum and Reichart, 1998]

The concept of learning organization has been focused on the management theorists
and practitioners for both its theoretical development and endeavor at practical
implication
[Mintzberg et al., 1998]

The thought of such organizations became salient because many of them recognize
that learning provide competitive advantage and effectiveness. The importance of
learning organization derives from the organizations ability to learn more quickly
than their competitors, which is measured the only sustainable corporate advantage.
The Learning Organization can be defined and described in different ways,
such as a learning organization is a consciously managed organization
with learning as a vital component in its values, visions and goals, as well
as in its everyday operations and their assessment. The Learning
Organization eliminates structural obstacles of learning, creates enabling
structures and takes care of assessing its learning and development. It
invests in leadership to assist individuals in finding the purpose, in
eliminating personal obstacles and in facilitating structures for personal
learning and getting feedback and benefits from learning outcomes
(Moilanen, 1999a).

THE TOPIC:
Impacts of learning Organizations competitive advantage
The element that discriminates learning from more traditional organizations is the
mastery of certain basic disciplines or component technologies. The five that Peter
Senge identifies are said to be converging to innovate learning organizations. They
are:
Systems thinking
Personal mastery
Mental models
Building shared vision
Team learning
He adds to this recognition that people are agents, able to act upon the structures and
systems of which they are a part. All the disciplines are, in this way, concerned with
a shift of mind from seeing parts to seeing wholes, from seeing people as helpless
reactors to seeing them as active participants in shaping their reality, from reacting to
the present to creating the future (Senge 1990: 69). It is to the disciplines that we will
now turn.
By reviewing the Article of David A. Garvin he mentioned that the Organizational
research over the past two decades has revealed three broad factors that are essential
for organizational learning and adaptability: a supportive learning environment,
concrete learning processes and practices, and leadership behavior that provide
reinforcement. We refer to these as the building blocks of the learning organization.
Each block and its discrete subcomponents, though vital to the whole, are
independent and can be measured separately. This degree of granular analysis has not
been previously available.
The three building blocks that Davids talk about in his article. So there are learning
processes, which the definition really emphasizes. Theres also the learning
environment that makes those processes possible. And as important, over all of this, is
leadership that really fosters and inspires the learning processes and helps create the
learning environment. Because all three building blocks are generic enough for
managers and firms of all types to assess, our tool permits organizations and units to
slice and dice the data in ways that are uniquely useful to them. They can develop
profiles of their distinctive approaches to learning and then compare themselves with
a benchmark group of respondents. To reveal the value of all these comparisons, lets
look in depth at each of the building blocks of a learning organization.
A standout amongst the most accomplished "capacity advancement" associations on
the planet is the US Military. As one General put it to me, "We have just two
missions: to prepare and to battle. When we aren't battling, we are preparing. What's
more when we are battling, we are learning."
Projects like activity audits, execution help devices, portable learning frameworks,
little groups, and military drilling projects are pretty much as imperative in business
as they are in the decisive of fighting.
Today's industry pioneers exceed expectations in business arrangement, authoritative
technique, content improvement and learning conveyance procedure. Bersin &
Associates as of late upgraded one of its biggest and most fascinating exploration
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considers, "The High Impact Learning Organization." This examination study is

intended to investigate the key patterns and drivers of high-performing preparing
associations.
Corporate learning is more important than ever. Among the more than 800
organizations that took part in this examination, we discovered 72 that were
commendable and met our criteria for high-effect learning associations. These
associations, more or less 9 percent of the specimen, are samples we all can gain
from. They incorporate industry pioneers, for example, Citibank, GE and Tiffany.
Through greatness in ranges, for example, business arrangement, hierarchical
procedure, content improvement and learning conveyance system, they demonstrate
that a well-run L&d association can be a standout amongst the most profitable
supporters to any business.

CONCEPTUAL MODEL:
The competitive benefit is in use as self-determining changeable and the
organizational performance is taken as reliant changeable that is considered in
language of return on asset and sales growth. This model is developed on the source
of hypothetical structure. It show a linear connection stuck between the competitive
advantage and sales growth.

Competitive
Advantage

Return on Asset
Organization
al Advantage
Sales Growth

Many
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Wright,
and
2001).
Ketchen,
Many organizational leaders and strategy scholars would agree that the ability to
effectively manage information within the firm has become critically important
because it may deliver a basis for gaining a competitive advantage. Seen by many as
a source of value creation instead of a cost (Sampler, 1998), information has become
an invisible asset that, when managed properly, can be used to leverage other firm
resources. The ability to obtain information about markets and customers helps to
ensure that firms are more attuned to changes in the environment and can result in a
competitive advantage over slower, ill-informed competitors (Barney, Wright, and
Ketchen, 2001).

COMPETITIVE
ADVATAGE

ORGANIZATIONAL
LEARNING

Organizations
Goal

DAVID GARVIN: Theres a telling quotation from a man named Ray Stata. Stata was
for many years CEO of Analog Devices, a semiconductor company. And he said, the
rate at which organizations and individuals learn may well become the only
sustainable competitive advantage. Products can be copied. Services can be copied.
Even processes can be copied. Things like Six Sigma are available on the open
market. But if youre learning more rapidly than the competition, you can get ahead
and stay ahead.
Jack Welch said an organizations ability to learn and translate that learning into
action rapidly, is the ultimate competitive advantage. The learning organization
facilitates the above mentioned competitive advantage, it empowers employees, it
enriches and enhances the customer experience and collaboration with key business
partners and ultimately boosts business performance. Read further what the main
characteristics are and how technology amplifies the learning organization.
According to PABLOS (2006) the practical progress of a universal organization lies
to a large degree in its skill to recognize and move tactical knowledge between its
geographically dispersed locations.
The organizations competitive advantage and performance are two unique terms with
an actually composite association. Overall studies have exposed an important
association between performance and competitive edge. The performance theories
can simply pushed on strengthening about how performance should be extent below
spirited development. When we talk about the new qualities of a firms products this
is actually the rising of its value and eventually it gives back to the firm in form of
increased profits. These studies deliver large support for the significance of
competence as a base of benefit in enhancing the firm yield.

Critical Analysis:
When making judgments about Peter Senges work, and the ideas he promotes, we
need to place his contribution in context. This is not meant to be a definitive addition
to the academic literature of organizational learning. Peter Senge writes for
practicing and aspiring managers and leaders. The concern is to identify how
interventions can be made to turn organizations into learning organizations. Much
of his, and similar theorists efforts, have been devoted to identifying templates,
which real organizations could attempt to emulate (Easterby-Smith and Araujo 1999:
2). In this field some of the significant contributions have been based around studies
of organizational practice, others have relied more on theoretical principles, such as
systems dynamics or psychological learning theory, from which implications for
design and implementation have been derived (op. cit.). Peter Senge, while making
use of individual case studies, tends to the latter orientation.
For learning to be a meaningful organizational goal, it must be widely understood,
have application to the work being performed, and be supported by the organizational
leadership. A key means of support is the tolerance of mistakes or failures. The
organizational culture must embrace reasonable risk-taking such that mistakes or
failures become learning opportunities that can be spread throughout the organization.
Even within or without learning organization, problems can stand the process of
learning or cause it to degenerate. Most of them arise from an organization not fully
embracing all the necessary facets. Once these problems can be identified, work can
begin on improving them.
Some organizations find it hard to embrace personal mastery because as a concept it
is intangible and the benefits cannot be quantified, personal mastery can even be seen
as a threat to the organization. This threat can be real, as Senge points out, that to
empower people in an unaligned organization can be counterproductive. In other
words, if individuals do not engage with a shared vision, personal mastery could be
used to advance their own personal visions. In some organizations a lack of a learning
culture can be a barrier to learning. An environment must be created where
individuals can share learning without it being devalued and ignored, so more people
can benefit from their knowledge and the individuals becomes empowered. A
learning organization needs to fully accept the removal of traditional hierarchical
structures
Resistance to learning can occur within a learning organization if there is not
sufficient buy-in at an individual level. This is often encountered with people who
feel threatened by change or believe that they have the most to lose. They are likely to
have closed mind sets, and are not willing to engage with mental models. Unless
implemented coherently across the organization, learning can be viewed as elitist and
restricted to senior levels. In that case, learning will not be viewed as a shared vision.
If training and development is compulsory, it can be viewed as a form of control,
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rather than as personal development. Learning and the pursuit of personal mastery
needs to be an individual choice, therefore enforced take-up will not work.
In addition, organizational size may become the barrier to internal knowledge
sharing. When the number of employees exceeds 150, internal knowledge sharing
dramatically decreases because of higher complexity in the formal organizational
structure, weaker inter-employee relationships, lower trust, reduced connective
efficacy, and less effective communication. As such, as the size of an organizational
unit increases, the effectiveness of internal knowledge flows dramatically diminishes
and the degree of intra-organizational knowledge sharing decreases.[11]
Some problems and issues In our discussion of Senge and the learning organization
we point to some particular problems associated with his conceptualization. These
include a failure to fully appreciate and incorporate the imperatives that animate
modern organizations; the relative sophistication of the thinking he requires of
managers (and whether many in practice are up to it); and questions around his
treatment of organizational politics. It is certainly difficult to find real-life examples
of learning organizations (Kerka 1995). There has also been a lack of critical analysis
of the theoretical framework.
Based on their study of attempts to reform the Swiss Postal Service, Matthias Finger
and Silvia Brgin Brand (1999) provide us with a useful listing of more important
shortcomings of the learning organization concept. They conclude that it is not
possible to transform a bureaucratic organization by learning initiatives alone. They
believe that by referring to the notion of the learning organization it was possible to
make change less threatening and more acceptable to participants. However,
individual and collective learning which has undoubtedly taken place has not really
been connected to organizational change and transformation. Part of the issue, they
suggest, is to do with the concept of the learning organization itself. They argue the
following points.
The concept of the learning organization: Focuses generally on the cultural
dimension, and does not adequately take into account the other dimensions of an
organization. To transform an organization it is necessary to attend to structures and
the organization of work as well as the culture and processes. Focusing exclusively
on training activities in order to faster learning favors this purely cultural bias.
Favors individual and collective learning methods at all levels of the organization, but
does not connect them properly to the organizations strategic objectives. Popular
models of organizational learning (such as Dixon 1994) assume such a link. It is,
therefore, imperative, that the link between individual and collective learning and the
organizations strategic objectives is made. This shortcoming, Finger and Brand
argue, makes a case for some form of measurement of organizational learning so
that it is possible to assess the extent to which such learning contributes or not
towards strategic objectives

Conclusion:
The main conclusion drawn from this study is that even though learning can be
competitive, an organization should not rely exclusively on learning as their
competitive advantage but should struggle to stay competitive in all further areas of
the business using learning in combination with all other resources in a company.
Organizations do 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) and reemerge 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. 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.
To maintaining levels of improvement and remaining competitive being better placed
to respond to external pressures:
Having the knowledge to better link resources to customer needs
Improving quality of outputs at all levels
Improving Corporate image by becoming more people oriented
Increasing the pace of change within the organization

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References:
Peter Senge, (1990 & 2006), ISBN 0-385-26095-4 & ISBN 0-385-51725-4; The Fifth
Discipline: The Art and Practice of the Learning Organization
Argyris, C. and Schn, D. (1996) Organizational learning II: Theory, method and
practice, Reading, Mass: Addison Wesley.
Gianluigi Cuccureddu ; (2013) ; Why learning organization ultimate competitiveadvantage Web blog
Mintzberg, H. Ahlstrand, B. & Lampel, J. (1998); Strategy safari: Hemel
Hempstead, Hertfordshire: Prentice Hall.
Pablos. D.; (2006) - Transnational Corporations and Strategic Challenges: An Analysis of
Knowledge Flows and Competitive Advantage, The Learning Organization, volume 14; pp.
544-559.

Scott Keller and Colin Price (June 2011): Organizational health: The ultimate
competitive advantage Article: McKinsey Quarterly
Josh Bers; (2008) Today's High-Impact Learning Organization;
http://www.clomedia.com/articles
David A. Garvin, Amy C. Edmondson, and Francesca Gino; (March 2008): Is Yours a
Learning Organization? - Harvard Business Review

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