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With the Help of Organisational Examples Critically Discuss the Role of Learning Organisations in Terms of Enhancing Performance

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“The only sustainable competitive advantage is an organisation’s ability to learn faster than the competition” (Senge 1990:1) Peter M. Senge is a pioneer in the field of learning organizations and the author of “The Fifth Discipline: The art and practice of the learning organization“ (Senge 1990) which was declared as one of the most powerful books in the past 75 years by Harvard Business Review in 1997 (Smith 2001). The book illustrated that the only way to gain competitive advantage is through making an organisation a learning one. However, is the learning organisation approach really linked to an organisation’s competitive advantage and the one and only approach to enhance an organisation’s performance and, therefore, run a successful company? Or is it more like a brilliant theory but not a viable one in practice? By highlighting the main characteristics of a learning organisation and using organisational examples, this essay will critically discuss and analyse its role in terms of enhancing performance. Learning organisations are companies that aim at improving their performance by providing their employees with on-going learning opportunities. As they are utilising learning to achieve their objectives, learning can be seen as part of an organisation’s strategy. They make their employees learn constantly and, therefore, learning must become an essential component of employees’ work (Bratton and Gold 2007) In order to achieve that, learning organisations invest an enormous amount of money in training activities. Jack Welch, the then-CEO of General Electric, for example, invested about one billion dollars annually in training and learning activities in the 1990s (General Electric 2013) These training activities do not solely consist of formal, traditional instructions, but focus on both formal and “formalized informal learning” activities, such as individual coaching or on-demand training (Bersin 2012). The improved training activities of learning organisations aim to facilitate the learning of all organisational members in terms of individual as well as team and organisational learning (Karimi 2011). The most important learning opportunity an organisation can provide is to allow their employees to fail and make mistakes. If employees get punished for making mistakes, they will stay at the point they already are and, therefore, not push their borders (Bersin 2012). As thinking outside the box creates innovation and “the wisdom of learning from failure is controvertible” (Edmondson 2011), it is extremely important for an organisation to permit their employees to do mistakes. Besides its improved training activities, learning organizations are also characterized by their remarkable knowledge management: As they foster inquiry and dialogue, their employees are supposed and motivated to share their knowledge throughout the company rather than keeping their knowledge secret (Karimi 2011). That does not mean that learning organizations keep employees from gaining expertise in distinct areas, but exactly the opposite: Expertise needs to be promoted so that people get specialized in distinct areas. By sharing expert knowledge, learning organisations provide their knowledge, make it accessible to the whole company and are able to make use of it. This requires an over-averaged organizational communication. A collective knowledge pool enables the organisations to be open to external influences and react to them swiftly, which is essential to survive in this fast-changing and competitive environment (Bersin 2012). The highlighted principles of learning organisations are also reflected in Peter M. Senge’s five disciplines, an organisation has to be in control of these disciplines in order to become a successful learning organisation. These disciplines are personal mastery, team learning, shared vision, mental models and systems thinking (Bratton and Gold 2007). To bring it back to Peter M. Senge’s quote, the above mentioned principles highlighted, that learning organisations do enhance their organisational performance through being innovative and creative, on one hand, and because of their ability to react to environmental changes quickly on the other hand, this enables them to gain a competitive advantage towards their competitors (Karimi 2011). However, are there companies that had success in building a learning organisation? Is it easy to implement the theory in practice? The following part will be illustrating and analysing organisational examples. An example for the learning organisation is Apple. The company, with its then-CEO Steve Jobs leading the way fostered and encouraged its employees to use their creativity to invent innovative, customized products instead of imitating their competitors through “me-too” products. Consequently, Apple was able to gain a competitive advantage and thereby outdistance its long-run rival Microsoft in 2010. Apples main advantage was having the innovative and visionary CEO Steve Jobs. Mr Jobs always had a clear vision of where he wants Apple to be in the future. Mr Jobs and the higher management team were able to transfer their vision and passion to the employees clearly, thereby building a shared vision for all those who work for Apple. Also, Apple connected working with an enjoyable ambience as they staged team meetings in cafés, which fostered their employees’ team learning, even after the passing of the great visionary Steve Jobs, the current CEO Tim Cook has also endorsed the learning organisation principles through to all Apple stakeholders (Fotovati and Sarvari 2012). Another example for the learning organisation is the American company General Electric. Its former CEO Jack Welch believed that the learning organisation is the best form of an organisation as “an organisation’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage” (Cuccureddu 2013). During 1990s an initiative known as Work-out was created by Mr Welch to remove rigid barriers by eliminating poorly structured hierarchy. This is an example of the system thinking theory by Peter M Senge. By reducing the hierarchical structure employees will be empowered. Jack Welsh believed that sometimes the best ideas come from those who are not an expert in the field. The Work-out initiative was achieved by undertaking fundamental changes with all the hierarchical levels of the organisation. Employees were encouraged to conduct town meetings to provide a platform to challenge or propose their ideas, so that everyone had an equal input into the decision making process. In tough competitive market conditions every organisation should use all the resources at hand to become successful, Jack Welsh identified that the key to success was working together across different levels of departments. Mr Welsh also ensured that proposals from all employees were heard fairly regardless of their ranks or superiority within the organisation. This initiative propelled General Electric to become one of the first major boundary-less organisations (Yadav 2013) Taking the above analysis into account, it showed that learning organisations such as Apple, General Electric and Toyota Motor Company are able to enhance their performance and gain a sustainable competitive advantage by redesigning their organisations into learning ones. Hence, if companies are successful in the implementation of the learning organisation’s principles, they are bound to greatly improve their performance and outdistance their competitors. However, exactly this implementation is difficult; the learning organisation concept is undoubtedly a desirable concept in theory, but its theory-loaded configuration makes it hard to implement into practice as it does not provide managers with a clear guidance and suggestions on how to achieve transforming an organisation into a learning one (Bearwell and Clayton 2010, Beardwell and Claydon 2010). Hence, I think managers play a key role when it comes to success or failure in implementing the theory into practice. Taking the examples used above, both Apple’s and General Electrics’ success is attributed to their manager’s way of implementing the principles of learning organisations. As every organisation is unique and differs from each other, each manager needs to find an individual way that is adapted to the organisation’s needs to implement the characteristics of a learning organisation. Therefore, it is ultimately up to the organisation’s manager for a successful implementation. Also, it is important to consider that the high emphasis on training activities in learning organisations causes great costs, and it is doubtful if especially small and midsize companies are able to provide these resources for training activities. Even for organisations which do not have the resources to invest in becoming a learning organisation, the inflamed discussion about the learning organisations changed the thinking about the importance of workforces and workplace learning. (Bratton and Gold 2010) Finally, I think Peter M. Senge’s notion is right by saying a learning organisation is the only way to gain a competitive advantage, but it is important for companies to understand that this does not imply that there is one way or concept of achieving it. Each organisation needs to identify its own techniques of implementation. Hence, I think the learning organisation concept should be seen as an overall guidance rather than a rigid set of rules that is viable for every organisation.…...

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