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The Nature of Organizational Learning in the Indian Firms Report


The main focus of this study is to examine organizational learning and knowledge among Indian companies. The study also pays special attention on the influence of the local culture, customs, traditions and business practices on the organizational learning and knowledge among Indian firms.

The study relied mainly on the secondary data and personal experience in collecting and analyzing information relating to organizational learning practices in India and how they are affected by culture and customs.

This paper does not investigate the probability of an organizational performance impacting on the learning capacity, which may be possible, and the researcher acknowledges this as a limitation of the study. Future studies carried out on the same subject may explore this further.


Indian economy in the in the recent years have seen considerably transformation in its business environment. Since independence, the Indian economy was state controlled until the World Bank and IMF intervened in 1990 that it became a free market economy. A number of reforms have been witnessed in all sectors of its economy including liberalization of its foreign market (Leitch et al. 1996).

This study is based on the work of the earlier scholars who explored the nature of organizational learning in the Indian firms, their main features and the challenges these organizations were facing following liberalization of the Indian economy (Budhwar 2003).

In the early 90’s, Indian organizations were very closed to competition and were operating in a secure and steady business environment and therefore any learning that was taking place within these organizations was at a singlet loop learning.

However, with the liberalization of the Indian economy many organizations started experiencing myriad challenges of globalization, portfolio management, advancement in technology, introduction of novel systems and professionalism, thus the need to transform into doubled loop learning (Budhwar 2003).

Liberalized Indian economy and the stiff global competition have put a lot of pressure on the Indian firms, thus are making a lot of effort to improve and develop their staff to counter these challenges (Budhwar 2003). Expatriates in India are known to be very knowledgeable and skillful.

The Indian Human Resources departments are also in relentless pressure to establish wide scale professional transformation in line with the new technology and the global market. Therefore, drawing of the organization learning of the Indian leadership from the strategic Human Resources perspective is very important in this study (Jakubik 2008).

Literature Review

Cases where organization learning can be a disaster

Organization learning can either be beneficial or disastrous to a business entity. Organizations can learn wrong ideas for instance manufacturing products with low demand in the market or making false conclusions.

Thus, learning process does not always have t o be beneficial in all cases and scholars should move away from the conception of organization learning as an effective and efficient instrument in achieving organizational productivity (Nidumolu et al. 2001).

Counterproductive performance implications of organization learning are also very common. Superstitious form of organization learning takes place when organizations translates certain events as results/outcome of learning process when the reality is that there is no link whatsoever between learning and the results (Hong 2008).

In a usual circumstance there several factors that can mutually influence the outcome in an organization. At times people rely on the historical events that led to success to bring success in the present and in the future.

This at many times can cause catastrophe especially in the case where business environment changes so fast. There is also case of competency trap when organizations opt for a substandard technology based on experimental results and keep on using it even when there is superior alternative (Gourlay 2006).

Сonception of organization knowledge

To be noted is that in Indian organization, Knowledge is shaped through well connected, constant interaction of two categories of knowledge and that is explicit knowledge and tacit knowledge. Explicit knowledge is the type of knowledge that can be expressed in languages and is objective, while tacit knowledge is the type which is extremely personal and is very difficult to express and convey (Teece 2007).

Examples of tacit knowledge include technical skills represented in day-to-day knowledge of crafts persons and personal skills that characterize individual approach and beliefs. Examples of explicit knowledge are scientific formulas and specifications of product (Enriches & Lim 2005).

There are four styles of knowledge creation in these organization namely; externalization, internalization, socialization and combination of knowledge. According to Hong (2008), “externalization is the transformation of tacit knowledge into explicit knowledge while internalization is the conversion of explicit knowledge into a tacit knowledge”.

Socialization involves conversion of an individual tacit knowledge into another person’s tacit knowledge, while a combination entails conversion of one’s explicit knowledge into another person’s explicit knowledge (Hong 2008). The transformational process in an organization can well be understood through these knowledge creation processes. Traditional information processing models are giving way to the new models of knowledge creation in organizations. The succession of the four methods of knowledge creation has resulted in an upward spiral of knowledge in some of the Indian organizations and fastens additional knowledge creation at higher level (Jakubik 2008).

Indian manufacturing superiority is attributed to their experience-geared, practical methodology of knowledge and this is a big contrast of the language –geared methods used in European nations and US. Experience is analogue type and entails processing of knowledge of vibrant nature; while language geared methodology is static, digital type of knowledge that exhibits a state of affair of a particular object at a specific point in time (Jakubik 2008).

The relationship between these two types of knowledge is jointly compensative. Since analogue type of knowledge is mostly tacit and is engrave in an individual thus hard to be expressed and communicated to others. In the social context of the lower labor mobility in India, the development and progression of personal expertise is very important for the buildup of production technology.

Most companies in India have become successful by converting analogue, tacit knowledge into digital, explicit knowledge common in most advanced production facilities (Hong 2008).

Learning process

Organizational learning in all organizations entails four unified processes and these are discovery, intervention, creation and generalization. Learning process starts with the discovery of gaps between the real and the expected outcomes (Gourlay 2006). Intervention includes identifying the cause of the error and finding the necessary solution to the problem.

Production entails implementation of the solutions and generalization entails drawing of appropriate conclusion and using the results in future or the same problem. Learning process assist employees of an organization to use the knowledge they have acquired to transform and enhance the organization.

Models of learning in organizations emphasizes on leadership and administration, culture and communication mechanisms. In organizational learning top leadership provides support to the group learning and individual persons (Monika &Toyama 2007).

Learning in networks

Learning networks are mechanisms through which learning can be facilitated within an organization. These mechanisms can be specifically valuable in building up formal and informal networks in the organization.

Intra organization networks are significant since they improve the chances of securing an individual knowledge and diffusing it across the organization. Informality permits knowledge about complex issues and solutions to be passed extensively in the organization as well as playing an important part in spreading tacit knowledge (Tregaskies 2003).

One of the most significant elements of networking in an organization is the organizational structure. Organization structure refers to the well-established model of relationships among different constituents or components within an organization. Organization structure is further split into formal and informal structure. Formal structures are well planed and enable an organization to meet its objective effectively and efficiently.

It is through formal structure that decision-making process takes place following the organization’s hierarchy. Informal structure on the other hand confines all relationship patterns that are not openly designed. This structure materializes as a result of complex interaction among employees of an organization. Informal interpersonal networks play a very important role in the learning process in organizations (Pritchard 2000).

It also enhances formal structures by offering support to the top leadership, ensuring stable business environment, and acts as effective communication channel. However, the informal networks can also result to the generation of erroneous information or opposition to the transformation desired by the management (Tregaskies et al. 2005).

Multinational networks

One of the traditional methods used by multinational companies in India to pass knowledge across its branches internationally was through deployment of its staff or expatriates across different countries.

Expatriates developed a knowledge warehouse from exposure to variety of situations and cultures which benefited these organizations massively. They developed a wide range of ideas and view in their assignments that was drawn by the organization to enhance their competitive advantage (Tregaskies 2003).

Besides this, there are several structural mechanisms that were used by these organizations and these are international project teams or task force, steering committees, international informal networks and international boards. These structural devices provided a different learning experience to the traditional method of using expatriates.

Use of the local people is specifically useful in helping local workers who are unfamiliar with the goals, technologies and managerial practices of the multinational organization. These devices are also important in developing global innovation since they take into consideration the local factors. The above devices offset the disadvantages of using expatriates (Tregaskies 2003).

Whilst benefiting and conveying knowledge from internal interactions and networks can be of substantial advantage, the development of networks with the outsiders is equally important.

These external networks provide the Indian organizations with access to skills and knowledge that was not available in their organization. Specifically, network creation with the research and development organs, suppliers, and even the competitors presented the organizations with new expertise and knowledge (Tregaskies et al 2005).

Barriers to learning in an organization

The most logical discussion of barriers to effective organizational learning was first provided by Olsen and March in 1975. Their list was further expounded by a number of authors including Harsh in 2009. Budhwar (2003) conducted a series of study to establish different barriers of organizational learning in India against the fundamental changes that were taking place.

There are four major factors that create interruption in the learning process within Indian organizations and these are individual beliefs, personal actions, managerial action, and environmental response. Interruption linked to individual beliefs and action results when and individual’s role in an organization is restricted and is not able to learn. This is also known as role constrained learning.

The other set of individual interruption is experienced when a person modifies their behavior but the effects of these acts on the organizational conduct and action is indistinctness. In this case, individual learning and development of skills ensues but adaptation to the organization’s environment does dot essentially takes place (Pritchard 2000).

Another barrier to the learning process in Indian organizations occurs when employees of an organization makes erroneous conclusions in relation to the effects of an organizational actions to the environment. This also called superstitious learning.

The other barrier is learning under ambiguity and occurs when reasons for changes in an organizational environment are unclear or cannot be identified. This also occurs when the connection between environmental response and individual learning is broken up (Teece 2007).

Another barrier to the organizational learning in India is the situational learning which refers to the situation where learning occurs but is either forgotten or not documented/ stored for future use and is a very common occurrence in crisis management.

In this case learning takes place but does not transform individual mental models and thus have no long-term effect on an individual since leaning specific for a particular situation. In such cases individual benefits from the knowledge in solving immediate problem but does not sustain it to help in solving future reoccurrence of the same problem (Harsh 2009).

Fragmented learning is another barrier to the learning process in Indian organizations and takes place when only an individual or a section of individuals within an organization gets to learn but not the whole organization. This kind of barrier is common among the decentralized organizations that lack networking ability to reach all the departments/individuals within an organization.

The most common case of this problem arises when each department has experts in a particular subject but the whole organization cannot apply these skills or knowledge (Tregaskies et al. 2005).

Another type of barrier to effective learning in Indian organizations is referred to as opportunistic learning. This is in most cases is not considered as a barrier but rather a strategy to evade normal procedures of an organization to partly achieve learning.

This occurs when certain clique of individuals in organization want to cut the link between the shared knowledge and organization’s action in order to grab an opportunity that cannot hang around for the entire organization to be transformed or is not desirable for the transformation of the organization (Halal 2006).


Data collection and analysis

The study relied mainly on the secondary data and personal experience in analyzing organizational learning practices in India. The study pays special focus on the influence of the local culture, customs, traditions and business practices on the organizational learning and knowledge among Indian firms.

Most the materials used in the study was obtained from the ministry of human resource development and ministry of labor and employment offices in Mumbai. Other materials were acquired from the government library and internet sources. Literature review provided more insight of the industry and expound on the researchers experience within Indian business sector.

This chapter encompassed the in-depth discussions of significant subject, which included the limitations of the study. There is a logical presentation of study methods to offer further assistance to emerging and existing researchers.

Based on a study by Saunders et al. (2007), the research consequently progressed from philosophy of the study, approach, strategic applications, study plan, data gathering advancements and substantiation of results. The theoretical framework of this study was based on the causes, effects, and solutions of organizational learning and knowledge in India.


Significance of organizational learning among Indian companies

Indian market is becoming g increasingly dynamic and has established itself among the world dominant business centers. This can be proven through a variety of available economic indicators.

Organizations operating or about to operate in the Indian market have no other option but to embrace organizational learning and knowledge to get familiar with the Indian market and to develop custom products for different markets within the Indian economy (Jakubik 2008).

The study found out that there is escalated significance attached to the human resource development (Denton1998). This is proved by the availability of the in-house training and development facilities in many companies within the public sector.

In support of the literature reviews, the study also established that top management tend to focus more on the new ideas for change, but disregard the element of organization process, which facilitates the flow of knowledge and information in different units within the organization.

The study also showed a significant disparity between the Indian firms and their foreign counterpart in terms of the organizational learning capacity thus supporting the study carried out by Budhwar (2003).

The results from the study found out that the private companies in India were swifter in responding to the organizational changes within and without. A number of scholars have shown a lot of influence of the Japanese models of management in Indian companies.

From the researchers personal point of view there is a linear relationship between the company’s financial turnover and the organizational learning capacity. This result is partially supported by the study of Dierkes et al. (2001), who suggested a positive correlation between organizational learning practices and the financial performance of the companies.

Influence of culture and customs on the learning process

From the study, we found out that most Indian companies have effective and durable learning in a centralized and hierarchical organizational structure in addition to the decentralized structure. Organizational culture, structure and leadership forms the most significant drivers of learning and knowledge in Indian organizations.

For that reason, any attempt to alter organization structure without adjusting organizational culture plus the leadership style, in most cases result to lack of improvement or acts as obstacle to organizational learning (Dierkes et al. 2001)

Among Indian companies, organization culture acts as a sieve for recognizing and comprehending information within these companies. The mental model engraved in these cultures affects the way employees of these companies perceive transformation in the social, political and technological surrounding that necessitates organization to learn (Jakubik 2008).

The mental model in organizational culture dictates value of knowledge and creates the team or individual who is significant holder of knowledge and authentic agent of the learning process. Organizational culture among the Indian companies is often subdivided or distinct between different departments or profession, therefore learning becomes hard to be evenly enforced within a company (Dierkes et al., 2001).

The custom in these culture especially those that deals with challenges within an organization also affects the organizational course to learning. For instance, companies that put a lot of limitation or based on dictatorial leadership which punishes employees who deviated from the customs of the organization have found it more difficult to convince their workers to learning process (Dierkes et al., 2001).


The findings of the study reflect the significance of organization learning and knowledge and its improvement in Indian managers. This study provides authenticity to measuring of the organizational learning capacity in Indian companies. The response from the managers is based on type of ownership and the type of industry with ICT sector and the Multinational companies leading.

These two sectors exhibits excellent development and capabilities, however their manager’s feels environmental assessment and conservation should be given a priority. The ICT sector is presently focusing on the level of growth and the advancement of information communication technology, which is the basis for the organizational learning capacity.

The public sector and the manufacturing sector in India exhibits an average score when it comes to organizational learning capacity. All the same, the performance of organizations in India and the rest of the world are significantly influenced by the organizational learning capacity.

The study finds massive implications for the organizational learning capacity of managers in Indian companies, cased in the context of learning economy following the reforms. This study adds to the theories and practices that have already been carried out.


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