to Managing Change: Key Player of Continuous Improvement in the 21st Century Zeynep Tuğçe Şimşit Marmara University, Turkey Noyan Sebla Günay Okan University, Turkey

zational Learning

to Managing Change:

Key Player of Continuous Improvement in the 21st Century

Zeynep Tuğçe Şimşit Marmara University, Turkey

Noyan Sebla Günay Okan University, Turkey

Özalp Vayvay Marmara University, Turkey


Nowadays, in our fast moving business world companies have to adapt changes as fast as it is possible to gain advantages among their rivals. At this point, managerial processes become vital for every company and every sector to survive. Firms’ adaptation to changing environmental conditions is one of the most important topics in every century. For that reason, companies use several techniques to adapt their processes to changing conditions for gaining advantages in their market. Organizational learning is not a new concept although its importance significantly increased nowadays. This chapter aims to present a research about effects of organizational learning on managing change. For this purpose, organizational learning as a key player of continuous improvement and its key dimensions will be drawn out through this chapter. The result of this chapter will be a set of tools which describe approaches for implementing learning management to get efficient change management.


Nowadays, in our fast moving business world companies have to adapt changes as fast as it is possible to gain advantages among their rivals. At this point, managerial processes become vital for every company and every sector to survive. The underlying reason is, in today’s business conditions companies have to sustain not only their operational processes also their managerial processes. For that reason, understanding of how organizations perform is still an important question although there are several studies about it.

DOI: 10.4018/978-1-4666-9533-7.ch005

Copyright © 2016, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Organizational Learning to Managing Change

Firms’ adaptation to changing environmental conditions is one of the most important topics in every century. For that reason, companies use several techniques to adapt their processes to changing conditions for gaining advantages in their market. Dynamic managerial capabilities are the key mechanism between companies’ competencies and changing conditions. It can be defined that dynamic capabilities are the firms’ ability to integrate internal and external competences to gain advantages in rapid changes (Vogel and Güttel, 2013). They improve the effectiveness, speed and efficiency of organizational responses to environmental changes (Wilden et. al., 2013).

Deming states that learning encourages innovation activities. So it is not wrong to say that learning ability can stimulate organizational innovation capacity thus maintain a competitive advantage for firms. Sony and Naik (2012) stated that “organizational learning occurs when members use learning to solve a common problem they are facing.” Therefore learning organizations have the ability to adapt changes in new situations continuously and modernize themselves according to changing business environment (Sony and Naik, 2012).

Organizational learning is not a new concept although its importance significantly increased nowadays. However, understanding organizational learning dimensions is a hard question. What is more, even if the dimensions were understood clearly, the connection between learning and performance remains unclear. On the other hand, organizational learning has a great influence on business performance. The underlying reason is that organizational learning clarifies vision, purpose, values and organizational behavior which are also called organizational culture, it helps to understand risks and diversity so companies can achieve high level of quality, it is really important for customer relations, energized workforce and innovation etc.

Analyzing organizational learning dimensions can be a hard task in terms of different viewpoints. Serrat (2010) stated that there were seven key dimensions for organizational learning which is one of the main dimensions of business performance. These are (Serrat, 2010);

• Human nature and organizational context

• Learning management systems

• Adaptive and generative learning

• Key functions

• Strategic learning

• Idealism and reality

• Work styles matrices.

In their study, Gronhaug and Stone (2012) stated that organizational learning based on two critic dimension, tools and climate. The underlying reason is these two dimension changes through time and that’s why the content of organizational learning is also changes. As organizational learning one of the most important key factor for organic organizations, organizational learning directly becomes a key player for gaining advantages. In old version of organizational learning dimensions, there is a centralized power, batch and queue system, independence. However in new version, there is decentralized power, interdependence and flow. For all organizational learning processes, firm members how to use new tools but experiencing old climates is unacceptable (Gronhaug and Stone, 2012).

This proposed chapter aims to present a research about effects of organizational learning on managing change. For this purpose, organizational learning as a key player of continuous improvement and its key dimensions will be drawn out through this section. The result of this section will be a set of tools which describe approaches for implementing learning management to get efficient change management.

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The idea of “learning” for organizations was first put forth by Cyert and March (1963) in their book which has a general acceptance as fundamental study of organizational learning. Organizational learning is information processing according to Huber (1991) and defined as knowledge acquisition, information distribution, information interpretation, reuse of information and storage in organizational memory in order to assess of knowledge. Huber also denoted that the effectiveness of learning through processing of information for an organization depends on the range of its potential behaviors changed.

Several definitions of organizational learning are available at literature. Argyris and Schön (1978) define organizational learning as the process of detection and correction of errors. According to Daft and Weick (1984) organizational learning holds information about interaction between environmental and organizational activities. Fiol and Lyles (1985) contributed that organizational learning is a redevelopment process which using and improving knowledge.

Levitt and March (1988) submitted that organizations learn with experience which is gained by coding the results from customary working methods they have in the past. Organizational learning occurs in accordance with shared vision, knowledge and mental models (Stata, 1989). Learning is built up on previous knowledge and experience which are in organizational memory. Senge (1990) defines the learning organization as “a group of people continually enhancing their capacity to create what they want to create”. Kim (1993) comments the organizational learning as a necessary process to increase capacity of an enterprise. Garvin (1993) also defines the learning organization as an organization which is able to change its behavior to internalize new information and has the ability of knowledge creation, knowledge acquisition and knowledge distribution. Learning is a change process occurs in behavior.

Argyris and Schön (1978) got a remarkable attention by the book in which they first proposed models for organizational learning: single-loop learning and double-loop learning. Single-loop learning is based on only detection and correction of errors. Goals, values, plans and rules of organization are operationalized rather than questioned. They say that single-loop learning is like a thermostat that learns when it is too hot or too cold and turns the heat on or off because it can receive information which is the temperature of the room and implements corrective action. Similarly, errors are detected and corrected in double-loop learning process, but it involves modification of an organization’s underlying norms, policies and objectives. Double-loop learning requires examination and changing current implementations, it is questioning the role of the learning systems which underlie actual goals and strategies. Senge (1990) separated organizational learning into two types as “adaptive learning” and “generative learning”. Adaptive learning is like a part of single-loop learning and generative learning is similar to double-loop learning. Adaptive learning is about copying whereas generative learning is about creativeness.

Organizational learning is a dynamic process where knowledge is transferred from individuals to group level then from group level to organizational level and back to individuals. Organizational learning is appeared as a set of processes which occurs in a cyclic manner. According to Daft and Weick (1984) learning process consists of 3 stages in this cyclic approach: scanning (data collection), interpretation (data given meaning), and learning (action taken). First stage involves monitoring the environment and collecting the environmental data for managers. Formal data providing systems can be used for data collection or personnel contacts can be used to acquire data. Interpretation occurs as the second stage where gained information and perceptions are shared between individuals and cognitive maps are constructed. Interpretation is seen as translating events into a common perception in organization to develop a shared understanding, in other words interpretation is getting meaning from data. The third stage, learning, is

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creating a new action based on the previous stage interpretation. Learning occurs by changing this shared information to activities. These activities can provide new data or the results of activities can generate new data which are collected again in the first stage. So, the three stages are interconnected through a loop.

Another functional model of organizational learning process belongs to Huber (1991) can be examined through 4 stages: knowledge acquisition, information distribution, information interpretation, organizational memory. Knowledge acquisition is the process of obtaining data from various sources. Second step, information distribution, is sharing information also to lead a new understanding. The third step, information interpretation creates a common perception from distributed information as referred previous model. Organizational memory is the process of storing knowledge and reuse when required.

Crossan, Lane and White (1999) proposed a model which is known as “4I Organizational Learning Model”. The 4I framework consists of four processes: intuiting, interpreting, integrating, and institutionalizing which are occurring over levels of individual, group and organization. The process starts at individual level with two sub-processes, intuiting and interpreting. Subsequently integrating occurs at group level and institutionalizing occurs at organizational level. Intuiting is recognition of patterns from individual experiences; interpreting is changing words and actions to a shared language which is resulted with language development. Integrating is creating a shared understanding between group members, also links between group and organizational levels. Institutionalizing is a changing process of activities, structures, strategies, rules and procedures into an information system which means learning process is put in place.

Consequently, the organizational learning process can be explained as follows by putting together the approaches in various studies. Organizational learning process starts with the knowledge acquisition at individual level, information is integrated between individuals then interpreted to get collective information and a common understanding. Organizational learning occurs as a result of individual learning and group learning. The information gained by interpretation is transformed to actions and learning occurs by changing this shared information to activities. These activities, rules, procedures generate an information system which is stored at organizational memory. The outputs of all these steps provide input to next steps and also feedback to previous steps, so they are interconnected through a loop. To sum up, the integral factors of organizational learning are knowledge acquisition, information integration and distribution, information interpretation, and organizational memory.

Senge (1990) identifies five disciplines in his book “The Fifth Discipline” which popularized the concept of learning organizations and received great attention. These five disciplines are required to converge a traditional organization to a learning organization: systems thinking, personal mastery, mental models, building shared vision, team learning. Organizations that can achieve integration of all these disciplines would be learning organizations.

The learning requirements of organizations are grow out of constant and rapid change occurred in environment. In a context of uncertainty, the requirement to learning will increase in a direct proportion. Organizations which are surviving in a constantly changing and evolving environment have to adapt to these changes as structural while they are also determining their strategic goals. That means organizations need continually learning similar to survival of living organisms. The success in global market conditions depends on the learning ability of organizations, therefore employees and managers have to be rendered to learning individuals and they have to actuate knowledge that they have.

As a conclusion, aims of the organizational learning can be listed as improving the knowledge of organization employees, interpreting information to develop a shared understanding and a common

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language, ensuring information distribution, creating a shared vision, changing shared information to activities, generating an information system with these activities at the organizational memory and implementing the learning knowledge rapidly.

Organizational Learning Process

Organizational learning is information based dynamic process (Rhodes et. al., 2008). This process is moves from individual learning through organizational learning. When learning analyzed as a process, there is three main cases. The first one is knowledge that can be gain by learning and outcomes of this knowledge that can gain with institutionalization create a strategic resource. Secondly creation and sharing of new knowledge reveals internal changes which are constant in cognitive and behavioral level. Thirdly and finally, these internal changes result in developing and sustaining actions for achieving continuous improvement process of organizations and thus competitive advantage can created.

In literature learning is generally take into account as a process however there is not a common opinion that how this process carry on or which stages should be taken. According to different models different stages created for organizational learning. In 1991 Huber and in 1992 Dixon creates a five stage model which is commonly used today. According to these models stages of organizational learning is as follows;

• Having knowledge

• Distribution of knowledge

• Interpretation of knowledge

• Organizational memory and

• Usage of knowledge.

In the first stage, having knowledge, organization can internalize knowledge using several methods and techniques (Kalkan, 2006). They can use both internal and external sources for knowledge. Main resources are pass knowledge, experiments, external experiments, strategic actions and etc (Romme and Dillen, 1997). Organizational structures generally simplify this stage.

Distribution of knowledge is a prerequisite for creation of new knowledge between individuals, groups and organizations, sharing and materialization of learning (Barrett et. al., 2004). According to Huber (1991) individuals in the organizations cannot know to whom or which units that knowledge belongs to. Conversely, individuals do not know where the knowledge is in the organization. Garvin (1993) stated that documental, verbal and visual information, organization visits, personnel rotation programs and standardization programs etc. can affect knowledge distribution process.

Interpretation is the process that explaining the meaning of knowledge. At this stage main purpose cannot be achieving a common opinion. The underlying reason is that different comments are going to increase the positive outcomes that obtained from learning. Dialog is an important concept for interpretation and distribution of knowledge. According to Dixon (1999), dialog is a conversation that every person can reveal their own content structure (Dixon, 1999). This type of conversation can create mutual learning between individuals.

Organizations can be accepted as systems that operated knowledge and from this point of view, organizational memory becomes a must. Organizational memory is not a whole memory of personnel in the organization because it is formed up mutual interaction of lots of people from inside and outside of the company (Moorman and Miner, 1997). Organizational memory is a kind of collective storage that

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consists of policies, procedures, routines and rules. Romme and Dillen (1997) mentioned five points where knowledge can store in the organization. These are individual memory, organizational culture, transformation, organizational structure and physical structure. Knowledge that is already in the organizational memory can formed the new knowledge for that reason first stage, having knowledge is under effect of organizational memory stage.

All the other stages have significant importance in terms of organizational learning however knowledge provides values as much as its usage. Organizational learning process can be considered as completed with using knowledge in other words providing behavioral changes. In this sense, learning theories emphasize that usage of knowledge is an important step for revealing behavioral changes (Antal, 1997). Success of management of knowledge generally depends on how effective knowledge is using. Successful companies, continuously creating knowledge, distribute it and use it in new technologies and products rapidly.

Dimensions of Organizational Learning

There are lots of studies about organizational learning in the literature however a few of them consists of an implementation or case study so there is not a common opinion about how organizations can learn or how this learning can be measured (Kululanga et. al., 2001; Templeton et. al., 2004). For that reason organizational learning process can be divided into different dimensions which can be considered as core areas. This dimensional separation is important in terms of measuring and tracking organizational learning using managerial tools.

In 1997 Goh and Richards defined five dimensions for organizational learning such as, (i) distinction of mission and purposes, (ii) loyalty for leader and empowerment, (iii) experience and awarding, (iv) knowledge transfer and (v) team working and problem solving. In 2002 Calantone et al. stated in their study that organizational learning has four dimensions and these are loyalty for learning, shared vision, open-mindedness and sharing knowledge inside the organization. Alegre and Chiva (2008) considered dimensions in another view of point and divided into five such as experience, taking risks, environmental adaptation, dialog, participation of decisions. In 2011 Sanchez et al. investigated dimensions in terms of knowledge management and defined them into four categories. These are having knowledge, sharing knowledge, interpretation of knowledge and organizational memory. As it is mentioned before it is quite similar with organizational learning process.

Developing a valid and reliable measurement system for organizational learning can help researchers to answer lots of important questions about modern organizations. At the same time it will simplify the transition from theoretical studies to applied studies. As it is mentioned before there is not a common opinion about measurement system in spite of its importance.


Organizational learning is not a new concept and it gained importance in the 1950s after World War II when economic models become more dominant at firms strategies. March and Simon stated in their book named “Organizations” in 1958 that economic models were not enough to determine organizational decision outcomes because of environmental constraints. The focus on organizational learning was sharpened in the Cyert and March’s (1963) study “A Behavioral of the Firm” (Schulz, 2001). According to Cyert and March organizations learn through experiences in order to adapt themselves to

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environmental conditions. After this study, several studies published about organizational learning. In 1996, Crossan and Guatto reviewed the literature of organizational learning because of the increasing interest of concept. According to Crossan and Guatto (1996), in 1970s there are 19, in 1980s there are 50 and between the years 1990-1994 there are 184 studies based on organizational learning (Biçkes, 2011). This statistical data clearly reveals that organizational learning gaining importance and it is not wrong to say that organizational learning approaches are developing day by day.

Organizational Learning Approaches

Generally traditional and modern organizational learning approaches are considered as basic two models (Güney, 2007). Traditional approaches define an information flow from manager to employee whereas modern approaches define a flow between managers and employees interactively. Apart from these basic approaches, there are more specific models such as Dibella’s organizational learning approaches and Ulrich, Von Glinow and Jick’s approaches.

Dibella’s Organizational Learning Approaches

Dibella’s (1995) approaches can be classified into three categories as follows;

• Normative Approach: This approach based on the idea that learning occurs as a conclusion of collective actions under specific circumstances. Learning is not a chance or coincidence. It can only provide by development or use of special abilities and contribute to organizational improvements. In this approach, main role of leaders is creating basic conditions for learning.

• Progressive Approach: According to this approach, organizations can learn through normative approach or they can use some evolutionary or transformative ways of learning. Dibella (1995) stated that organizations can improve according to their age, size, experience and life cycle stages. For that reason, progressive approach takes a long time and learning is based on achieving some stages.

• Ability Based Approach: The main idea is that learning depends on organizations respond ability to change. In other words, learning does not need any prerequisites. According to this approach, any of learning types superior each other. Organizations can learn and improve with experiences which are results of their strategic selections and maturation levels.

Ulrich, Von Glinow and Jick’s Approaches

In their study Ulrich, Von Glinow and Jick (1993) analyzed 380 companies in different regions in the world and as a result they stated four different approaches about organizational learning as follows;

• Learning by Continuous Improvements: Organizations that lean with continuous improvements try to learn the stage that they are included before passing the next one. Their aim is to be a leader in a specific product or method (Rheem, 1995). In this approach main role of a leader is creating ideas which provide continuous improvement. Companies that adapt this approach to their organization have more bureaucratic structure however they can coordinate different ideas when they face to face with changing conditions.

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• Learning by Gaining Abilities: In this approach, organizations gain new abilities through people and groups. Learning is an important part of company strategy. Companies motivate their personnel to find new ways for jobs, research and development. There is not a bureaucratic structure but it can cause inadequacy of learning.

• Learning by Experience: Organizations that learn by experience investigate new ideas continuously. Main purpose is achieving the best company level in the market through new ideas and methods to new production techniques and products. Companies that adapt this approach to their organization do not have bureaucratic structure because it decreases the competitive ability of the firm.

• Learning by Measuring Limitations: Companies that adapt this approach prefer examine other companies’ studies, benchmarking and getting knowledge outside enterprises. For that reason they can find many options for one problem but these options can bring coordination, sharing and implementation problems.

Organizational Learning Levels

Organizational learning is generally occurring in different levels in an organization. Researches reveal that learning has different levels and types (Subramaniam, 2005). In some studies, organizational learning levels can be named as organizational learning types but both of them are about which level is learning belong. There are different classifications according to different researchers. Generally it is possible to separate learning levels into three level; adaptive learning, re-constructivist learning and process based learning.

Argyris and Schön (1978) divided learning levels into three sub groups as it is mentioned before, single loop learning, double loop learning, and deuteron learning. Cyert and March (1963) mentioned only one type of learning level, adaptive learning, in their study. In 1981 Bateson separated learning levels into two classes as type 1 and type 2 which are refer to adaptive learning and process based learning respectively. Hedberg (1981) defined three classes for learning levels as corrective learning, turnover learning and turnaround learning. In 1985 Fiol and Lyles considered two main groups as low degree learning and high degree learning. This approach will be basic for future assumptions. Pautzke (1989) stated that there are three classes for learning but this must be separated for their purposes as increasing efficiency, learning from experiments and changings in information structure. However in 1990 Senge classifies learning levels into two groups as adaptive and creative learning. Generally Senge’s study is considered as a cornerstone for organizational learning issue and from this study researches start to classify organizational learning levels into three groups with including Senge’s creative learning level which is known re-constructivist learning today.

Argyris and Schön’s Learning Levels

The most popular classification about organizational learning levels is belongs to Argryis and Schön. According to this classification organizational learning separated as single loop, double cycle and deutero levels. Single loop model explains learning models in the current mental framework; double loop model explains learning as changes and developments in current mental framework and deuteron explains learning of learning models.

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Argyris stated that single loop learning is implemented if a problem tried to sole with passed routines or existing policies rather than finding core problems. In other words, disparities and mistakes can find and solve with current policies and values without changes in the single loop learning model (Ozgener, 2000). Generally there is a reactive approach in the organization and point of view is superficial. Learning reveals after a mistake or a problem occurs. When organizations are face to face with unexpected situations current solution techniques generally are not enough to solve problems. At this point double loop model is needed. If main organizational values, purposes, policies and standard routines are investigated during current problem solution procedure and all these processes can partially or fully changed then learning can be considered as double loop. This model tests norms, structures and techniques that are used in current situations and reveals mistakes.

Deuteron is a learning process of tracing both single and double loop models. In this approach, solutions that are developed against to small problems in organizations and approaches for long term strategy development are considered together. Organization members search ideal conditions for learning, benchmarked with existing ones and discover accelerant factors and boundaries of organizational learning.

Fiol and Lyles’s Lower and Higher Degree Learning Levels

According to Fiol and Lyles’s learning level approach organizational learning has two different levels such as low and high degree learning levels. Fiol and Lyles entitled single loop learning level as lower level learning and double loop learning as higher lever learning (Marlene, 1985).

Lower learning level occurs in a specific organizational structure and set of rules. This learning level is a consequence of routine and repeat and consists of relations structure. This learning level has no power on permanent improvements in the organizations. On the other hand, a higher learning level consists of all rules and norms in the organizations and aims to revise and arrange them. Generally it effects long term procedure of organizations.

Senge’s Learning Levels

In 1990, Senge separated learning levels into two classes as adaptive and creative learning levels. Adaptive learning levels are based on solving problems with current abilities. According to this learning level, organizations interested in only basic assumptions of the situation and do not investigate core problems. However, creative learning based on the idea that organizations are continuously analyzing definitions and solution techniques for problems, receiving feedbacks and doing some experiments. In other words, organizations constantly create new solution ways and use this new ways in problems. Creative learning which is about innovation and creativity directly is forced companies to have a new vision for business world.


From an abstract point of view, organizational learning denotes a change in organizational knowledge. By the end of the 1990’s “the learning organization” and the concept of “organizational learning” had become indispensable core ideas for managers, consultants and researchers. For any business or organization, it is understood, the ability to learn better and faster than its competitors is an essential core competency.

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Fiol and Lyles (1985) stated that there are four main categories as precessor for organizational learning such as structure, culture, strategy and environment. Although this classification can be considered a general view for many researchers, it is directly clarifies the main relationship with change and learning. The underlying reason is that change is become a precessor itself for organizational learning and thus organizational learning can be considered as a powerful tool to manage change. From this point of view investigating ever precessor in detail is important to reveals the linkages between change and learning.

Hedberg (1981) and Chandler (1962) stated that organizational structure is a key player of deciding how learning is going to carry out. Many researchers emphasized that decentralized organizational structures are more effective in more innovative environments and rapidly changing conditions (Shipton et al., 2002). Organizations formed up their actions in a specific belief and value frameworks. Organizational culture can be defined as a powerful leverage that guides organization members according to their perception of actions and symbols (Gizir, 2008). When this definition is investigated in detail, it is clear that organization members are face to face with two common problems, providing internal integration to effectively work and adjusting outside environment. To cope with this problems organization members get through a collective organization learning process which provide an organizational culture. Strategic position of a company has partially effective on learning capacity. At the same time, this strategic posture creates a momentum for organizational learning. In other words, strategy affects learning in terms of defining limitations for evaluation of decision options of detecting and interpreting environment.

Learning for Change

Rapid changes in environmental factors have increased complexities and ambiguities at organizations, thus posing serious challenges to managers. It has been stated that change in people occurs at three aspects of cognition, emotions and behavior in the literature. The emotional aspect refers to the tendency of an individual for enjoying the changes within an organization. Cognitive aspect includes an extent of understanding for the individual and tendency of taking advantage of it for the organization. The behavioral aspect refers to the extent an individual performs certain activities in order to support new changes (Jafari & Kalanaki, 2012).

Most researchers tried to define a relationship between organizational learning and change management. The underlying reason is learning creates a great opportunity if it is manage well in the company and the organizational learning process can be used as a change management tool to sustain competitive advantage. Jafari and Kalanaki (2012) conduct a study to reveal the relationship between organizational learning and readiness to change. The results obtained from study indicate that there is significant correlation between the dimensions of learning organization and readiness to change. Therefore, in the ever changing world, in order to be consistent and adopt to changes, the managers need to develop strategies that would both respond to the needs and the changing environmental and time conditions as well as to meet the newly emerging needs of the organizational staff. With this regard, learning organizations could be among the survival and growth instruments (Jafari and Kalanaki, 2012).

In the studies performed about learning organization until today, learning organization with various variables such as organizational culture, motivation, job satisfaction, performance, personality, employee turnover, individual learning, team learning has been research subjects. However today, leaders have difficulties in transforming their organizations into learning organizations despite all its attraction (Atak and Erturgut, 2010). Learning and organizational learning concept can’t be imposed, it requires an internal desire to learn and change. The concept of the organizational learning is easily understood by academics

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however applying the learning organization to improve company practices and performance may present a challenge. In this regard, tangible benefits from applying the concept of the learning organization may not be understood by executives and managers (Albert, 2005). A related dilemma may be determining how to begin a change process focused on becoming a learning organization. Moreover, executives, managers, and key staff in many companies may have low commitment to embrace a concept that they do not fully understand. For that reason, managers could benefit from actual descriptions of companies that have successfully applied the concept of the learning organization to increase their competitive capability (Albert, 2005).

Nowadays rapidly changing conditions creates a knowledge economy concept. This new concept has information, intelligence, brainpower, intellectual capital and new idea focused loops for achieving competitive advantage with providing additional options to customers (O’Keeffe, 2006). These new changes in importance levels of production factors are directly become a precessor for organizational learning. What is more, business environment changes rapidly and companies should track new trends and create differences among its rivals. Both adaptations of changing environmental conditions and determining right future decisions depends on high level of knowledge and the way of having this knowledge is learning.

Competitive advantage can only measure with the values that companies serve to their customers. The main power that underlies behind the value creation is development of abilities. Basic abilities are collective information that belongs to organization that starts change or simplifies adaptation for change through behavioral models, organizational processes and systems. If an organization cannot define basic abilities, they are going to miss interesting opportunities or try to catch redundant ones. Abilities that are defined in a right way are become powerful competitive weapon (Eren et al., 2005). To sustain competitive advantage companies should develop themselves continuously via learning.

In today’s world customers have the power of selecting between many options and this purchasing power creates a rapidly changing environment. Customers want to buy more qualified products with lower prices when and where they want to buy. For that reason customers are the main focus point of every company and in modern management paradigm they become a key player. Thus customer oriented structure must be obtained from production to after sales services. This obligation requires effective information management system and learning process.


Firms’ adaptation to changing environmental conditions is one of the most important topics in every century. For that reason, companies use several techniques to adapt their processes to changing conditions for gaining advantages in their market. According to type of the company and the sector it belongs, effected quality tools can vary but here the key point does just not understand the business environment and companies’ strategies; it also understands the culture of company. Competitive intensity is getting higher when the number of rivals in the market is high in such an environment which has finite resources. In other words, as stated by Porter, when there is high price competition and high level of advertising competitive intensity is apparent. Several studies prove that companies must have organic structures in today’s business conditions and organizational learning is getting much more importance day by day. If a company wants to have higher business performance level, first the importance of learning should be realized then learning dimensions should be determined and they have to ask that how they can improve these learning dimensions via using quality tools.

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Companies should realize that being a faster learner gains a significant advantage for a long term survival in their market. As mentioned before, being an organic organization is directly affect dynamic capabilities and certainly performance of firms. As organizational learning one of the most important key factor for organic organizations, it directly becomes a key player for gaining advantages. Organizations need to govern processes of learning and change in order to adapt their dynamic capabilities to normal circumstances and thus keep pace with environmental development

Managerial processes would vary from one organization to other on the other hand for a better understanding the role of managerial processes it is important to examine how organizations learn and share, how they develop and manage alliances and relationships, how they innovate. More detailed study about dynamic capabilities and organizational learning reveals the strong relationship between these two key players of managerial processes. Managerial processes are mutually exclusive but they are directly affected from organizational learning and dynamic capabilities and their common issues which are organizational structure and business environment.


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Change Management: Minimizing resistance to organizational change through involvement of key players and stakeholders. Change management is the process, tools and techniques to manage the people-side of business change to achieve the required business outcomes and to realize that business change effectively within the social infrastructure of the workplace.

Environmental Change: A change in precipitation or global temperatures. Natural occurrences or human activity can cause differences to the characteristics of an environment. In terms of organizational learning environmental changes consists of changes in business environments which can be defined as factors such as: clients and suppliers; its competition and owners; improvements in technology; laws and government activities; and market, social and economic trends.

Globalization: Worldwide integration and development in technology and all related areas. Globalization creates a pressure on developing companies/countries to follow rapidly changing technology via technology management processes.

Intellectual Capital: Collective knowledge of the individuals in an organization or society. This knowledge can be used to produce wealth, multiply output of physical assets, gain competitive advantage, and/or to enhance value of other types of capital. Intellectual capital includes customer capital, human capital, intellectual property, and structural capital.

Organizational Culture: The values and behaviors that contribute to the unique social and psychological environment of an organization. Organizational culture includes an organization’s expectations, experiences, philosophy, and values that hold it together, and is expressed in its self-image, inner workings, interactions with the outside world, and future expectations. It affects the organization’s productivity and performance, and provides guidelines on customer care and service, product quality and safety, attendance and punctuality, and concern for the environment.

Organizational Learning: Organizational learning is the process by which an organization gains new knowledge about its environment, goals, and processes. It is more than the sum of the information held by employees. Organization-wide continuous process that enhances its collective ability to accept, make sense of, and respond to internal and external change. It requires systematic integration and collective interpretation of new knowledge that leads to collective action and involves risk taking as experimentation.

Strategic Management: Strategic management consists of the analysis, decisions, and actions related to R&D and technological improvements and organizations undertake in order to create and sustain competitive advantages among its rivals in terms of strategic management of technology.


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