Executive summary
The purpose of the paper is to analyze the description of a learning organization as examined by Senge (1990). The paper begins by summarizing the main components of a learning organization, and then it examines the components broadly in the paragraphs that follow. The four main components of a learning organization include applying both adaptive and generative learning, organization-wide systems thinking, committed leaders and workers, and continuous improvement. The traditional organization is characterized by a culture of responding to crises, short-term solutions, adaptive learning, and leaders who are not committed.
Innovation is carried out by the R&D department of a traditional organization, which differs from a learning organization. The paper draws from the difference between the traditional organization and a learning organization to create a clear picture of a learning organization. The paper looks at the importance of a learning organization in gaining competitive advantage, and avoiding crises occasioned by short-term solutions. The paper examines the factors that may prevent an organization from becoming a learning organization such as commitment, and leadership. The limitation of the findings is that some organizations may show a few characteristics of a learning organization. It may be difficult not to categorize them under learning organizations because they lack some of the characteristics. The conclusion is that a learning organization starts with committed leadership.
Introduction
The four main components of a learning organization are applying both adaptive and generative learning, organization-wide systems thinking, committed leaders and workers, and continuous improvement. A learning organization creates an organizational culture of collective innovation. The traditional setting of an organization is described as one which has a R&D department that innovates for the rest of the organization. Continuous improvement that is carried out throughout the organization is essential to the learning organization. The learning organization can use its collective systems thinking to create new products, or new ways of production.
The learning organization is safe from patterns that have not been tested, which are frequent in a rapidly changing world. Some of the factors that prevent organizations from becoming learning organizations include uncommitted leaders, and rewarding only adaptive learning. The limitation of the findings is that some organizations may show a few characteristics of a learning organization. It may be difficult not to categorize them under learning organizations because they lack some of the characteristics. Leadership and organizational culture are the most important factors in converting traditional organizations into learning organizations.
Analysis
Description of a learning organization
A learning organization can be described as an organization that nurtures and promotes collective systems thinking. A learning organization can be described using four key components, which include generative and adaptive learning, organization-wide systems thinking, continuous improvement, and committed leadership (Senge, 1990).
A learning organization integrates both generative and adaptive learning when a traditional organization promotes only adaptive learning. Generative learning involves the organization creating new ways of doing things. Adaptive learning is finding ways of coping with the current situation (Senge, 1990). Adaptive learning is about the survival of an organization when generative learning is about leading an industry in innovation. Senge (1990) explains that the learning organization needs to adopt both forms of learning in its organizational culture. Denneen & Dretler (2012) discuss that “institutions need not only to survive, but also thrive with a focused strategy and a sustainable financial base” (p. 1). A traditional organization responds only to that which threatens its survival. In addition to survival, a learning institution innovates, and is a pioneer in creating change.
The learning organization emphasizes that employees are the most important part of the organization, instead of the focusing only on the CEO. Mintzberg (2007) implies that the learning organization has to realize that “human beings are the corporation’s greatest asset” (p. 12). Mintzberg (2007) argument is similar to Senge’s when he emphasizes committed leadership. Senge (1990) and Mintzberg (2007) dismiss heroic leadership chosen at the time of crisis to apply short-term solutions. Committed leaders become an important factor of a learning organization because they will seek long-term solutions.
In addition to traditional adaptive learning, the leader in a learning organization teaches his employees to use systems thinking. The leader assists the organization to develop a vision, which is a necessary alignment with creative tensions. Collectivism is an important aspect of a learning organization. Senge (1990) discusses that when the vision is shared by many people, “the vision becomes more real in the sense of a mental reality that people truly imagine achieving” (p. 13). Collective thinking also provides an opportunity for employees to critique and develop the leader’s ideas.
Continuous improvement that is spread throughout the organization is essential to the learning organization. Denneen & Dretler (2012) elaborate the importance of collective systems thinking using the structure of colleges and university, which have strengthened departmental independence. They discuss that it is difficult to achieve great results if improvement cannot be emphasized and implemented throughout the institutions of higher learning. The results are counterproductive when the improvements of one department are absorbed by the presence of waste in another. The waste in one department affects the performance of all departments, even the ones that are implementing a lean system. It means that one department will get inadequate funds because another is using more than enough.
A good example of a learning organization is Toyota (Senge, 1990). Toyota fits most of the characteristics of a learning organization. It promotes organization-wide continuous improvement. Supervisors are in charge of leading their teams in identifying and proposing any necessary improvement that would make the production process more effective, and more efficient (Monden, 2012). The organization has put both quality and cost as its priority. It fits Senge’s template of solving dilemmas by forming synergies out of the dilemma (Senge, 1990). Working on both areas creates the synergy, instead of choosing one, and neglecting the other.
The organization develops leaders who promote systems thinking from within the organization. It has committed leaders and employees. Some employees are offered a lifetime employment (Monden, 2012). Toyota is cautious in adopting patterns developed outside the organization. Mostly, it integrates generative learning, which has allowed it to develop competitive advantage in the automobile industry. In summary, Toyota has applied all the components of a learning organization.
The company has been able to innovatively modify its production process, increasing set-up speed, quality, and ability to manufacture a variety of parts at the same time (Monden, 2012). However, Toyota experienced the limit of growth rate discussed by Senge (1990). In 2009, it was forced to recall 6 million vehicles in the U.S. because of the sticking accelerator pedal (Kirchhoff & Peterman, 2010). It is a consequence of trying to incorporate changes at a very high rate, which made its quality standards to drop. BMW is another company that operates as a learning organization in China. It tries to adapt to Chinese culture and to smoothly reduce costs because quick changes are likely to encounter problems (Maguire, 2007).
Importance of a learning organization in a rapidly changing world
The first importance of a learning organization, in a rapidly changing world, is that it does not struggle to survive. Using its adaptive learning aspect, a learning organization can find solutions to cope with the current situation. On the other hand, it seeks to find long-lasting solutions. Senge (1990) discusses that an organization that strives to survive may engage in activities that may reduce its social value to the community. They may include compromising standards just to survive. The adaptive learning aspect may enable the learning organization to incorporate the external changes that have occurred in the business environment successfully.
The learning organization can use its collective systems thinking to create new products or ways of production that can make the organization lead the industry. In a rapidly changing world, competition is likely to threaten an organization’s survival. Denneen & Dretler (2012) describe the situation of higher learning institutions relying on copying what others have done to cope with the competition. Quality would become questionable as well as the price. Such organizations are only using adaptive learning to make changes. They are striving for survival. Denneen & Dretler (2012) explain that the institutions should identify their core products, and divert more resources to their core products.
It will make them have a competitive advantage when they become leaders in a few areas than trying to capture many courses in limited facilities. The institutions will be able to think generatively when they focus on a few key areas, which they sell as their brand. In a rapidly changing world, the learning organization does not struggle to survive because it is highly differentiated. It is a leader in innovation.
The learning organization is able to choose between patterns in the rapidly changing world. There are many patterns and events that emerge in a rapidly changing world, such as the rapid increase of stock prices discussed by Mintzberg (2007). Senge (1990) explains that identifying patterns, as the second layer below events, is important. Leaders in the learning organizations have trained their employees to see all the three levels of cause and effect. They include events, patterns, and systemic causes (Senge, 1990). The learning organization can distinguish the kind of patterns they need to adapt because they can see the big picture.
The learning organization is safe from patterns that have not been tested. Mintzberg (2007) describes the culture of Japanese organizations that refused to adopt the “shareholder value that undermines the enterprise value as well as human values” (p. 12). The learning organization is able to select among patterns by looking at the underlying systemic causes. The “shareholder value” was not driven by real production or performance, but by CEOs who attract media attention. The institutions of higher learning can benefit by converting into a learning organization. They may improve on their habit of copying, which Denneen & Dretler (2012) describe as “a me-too perception” (p. 4). Most organizations copy patterns that they have not examined their systemic response.
The problem of adopting changes in a rapidly changing world is that some changes have been initiated by leaders who have short-term goals. Mintzberg (2007) describes the emergence of the heroic leader, and how their ideas were influential until a crisis occurred. Most organizations in the West adopted similar changes (Mintzberg, 2007). Only countries and organizations with strong self-developed organizational cultures avoided the influence. A learning organization emphasizes development from within (Senge, 1990). It is able to protect itself from shortsightedness sold through media hype in a rapidly changing world.
The learning organization prevents crisis by finding long-term solutions. Senge (1990) demonstrates that short-term solutions, which are common in a rapidly changing world, intensify the level of a future crisis. A learning organizations shield itself from such influence through its collective systems thinking. It is able to prevent the systemic problems from becoming too big to address. Collective system thinking is able to shape ideas obtained from the external environment for better improvement of the internal structure.
A good example of a learning organization in the rapidly changing world is the case of Shell (Senge, 1990). In the 1970s, Shell was able to grow by applying systems thinking, and being able to anticipate changes in the petroleum industry after the formation of OPEC. The company had already developed solutions that waited implementation if the anticipated worst-case scenario occurred.
Barriers to becoming a learning organization
One of the elements that prevent organizations from becoming a learning organization is that organizations only promote adaptive learning. Senge (1990) explains that organizations reward adaptive learning with promotions, and higher wages. A learning organization has to teach its workers to apply systems thinking when looking for solutions or making changes. A learning organization has to make generative learning an aspiration of everyone in the organization.
Most organizations isolate a R&D department to engage in innovation for the others. In some cases, the R&D department has not been trained in systems thinking. In this part, three elements occur that prevent organizations from becoming a learning organization. Firstly, innovation is isolated as a duty of a R&D department when generative learning should be an organization-wide process. Secondly, adaptive learning is rewarded at the expense of generative learning, and systems thinking. Thirdly, the employees together with the R&D department have not been taught to incorporate systems thinking in their innovations.
Another factor that prevents an organization from becoming a learning organization is lack of commitment. Lack of commitment captures the role of ‘heroic leaders’, unmotivated workers, and organizations that neglect their future by neglecting the future value of what the society needs. Senge (1990) discusses heroic leaders who are called upon during times of crises to apply short-term solutions. The leaders lack commitment to the companies that employ them. Mostly, they care about compensation packages and fame (Mintzberg, 2007). Mintzberg (2007) expresses that the issue of commitment should be extended to shareholders as well. Employees will be more motivated if they are increasing the value of committed shareholders. Employees would be more motivated to incorporate generative learning if the organization was committed about retaining them, and their long-term welfare.
Commitment by itself is not enough. In their discussion about higher learning institutions, Denneen & Dretler (2012) imply that the institutions’ department leaders are committed. However, they still fail to meet the requirements of a learning organization. The reason they fail is that they lack collective generative learning. Independence among departments is captured by inability to carry out organization-wide systems thinking. It can be explained that commitment together with organization-wide improvement, adaptive and generative learning are necessary for an organization to become a learning organization.
Limitations of study
The limitation of the findings is that some organizations may show a few characteristics of the learning organization. It may be difficult not to categorize them under learning organizations because they lack some of the characteristics. The research is also based on a study that was conducted more than two decades ago. However, the two articles, one by Mintzberg (2007) and the other by Denneen & Dretler (2012), indicate that the article is still relevant in today’s management. The article portrays what actually happened to large organizations that failed in the 2008 financial crisis.
Conclusion
Organizations may show some of the four main components of a learning organization when neglecting others. A learning organization needs to apply both adaptive and generative learning, organization-wide systems thinking, committed leaders and workers, and continuous improvement. A learning organization will not struggle to survive in the rapidly changing world because it is innovative, and differentiated. A learning organization seeks solutions that are customer-focused, employee-focused, and community-focused through systems thinking. The growth of a learning organization is limited by the need to improve or maintain quality standards, and the rate of recruiting committed leaders and workers. The learning organization has to be integrated into organizational culture by the leaders of the organization.
References
Denneen, J., & Dretler, T. (2012). The financially stable university. Chicago: Bain & Company. Web.
Kirchhoff, S., & Peterman, D. (2010). Unintended acceleration in passenger vehicles. Collingdale, PA: Diane Publishing. Web.
Maguire, M. (2007). Managing organizational change for BMW in the emerging Chinese market. Munchen: GRIN Verlag. Web.
Mintzberg, H. (2007). How productivity killed American enterprise. Web.
Monden, Y. (2012). Toyota production system: An integrated approach to Just-in-Time (4th ed.). Boca Rato, FL: CRC Press. Web.
Senge, P. (1990). The leader’s new work: Building learning organizations. Sloan Management Review, 32(1), 7-21. Web.