INTRODUCTION We are living in a world of uncertainty and turbulence. The 11,933,572 patents issued since 1971 exceeded the number of patents issued in the previous 180 years (U.
S. Patent and Trademark Office, U.S. Patent Activity Calendar Years 1790 to the Present, March 26, 2007).
World population increased from 3 billion in 1959 to 6 billion by1999, doubling in 40 years (U.S. Census Bureau, “Latest Estimates and Projections of World Population, July 2007). According to authors Albert J.
Viscio and Bruce A. Pasternack a large portion of companies have dropped off the Fortune500 list since 1970 (Viscio and Pasternack, 1996, strategy + business, p. 47). In order to survive in this environment, organizations must adapt, learn, and adapt again.
The management techniques and theories encountered in this course provide insight on these matters. This thesis focuses on one, the concept of organizational learning. WHY I CHOSE THIS TOPICMy thesis focuses on organizational learning because it is relevant to businesses hoping to endure and thrive in a rapidly changing, dynamic world. Twentieth century business models, characterized by centralization and a “command and control” leadership approach, are giving way to decentralized structures, knowledge-based decision making (as opposed to hierarchical decision-making), and responsive networks of systems and people who can more efficiently meet customer demands.
The goals of innovation, competitiveness, efficiency, and marketplace dominance are the same as they have ever been. The means to accomplish these objectives, however, has changed dramatically and organizational learning figures heavily into the equation.My interest in organizational learning goes beyond my fascination with the functioning of a business. Efficient management, anticipating the future, and learning to quickly adapt to changing conditions are life skills that will serve me beyond the boundaries of my professional career.
Moreover, my family is closely connected to the business and industry that serves as the case study for my treatment of the topic. In many ways my future is pledged to this field and thus it is personally important to me to be prepared for its requirements. Developing a level of mastery associated with the topic of learning organization will position me for success as I transition from graduate school to my professional career. THE BOUNDARIESThe company that I am focusing on operates in several markets with a multitude of target groups.
In order to manage the scope of this work it is necessary to center my attention on the company’s insurance business in one of its markets: Greece. This will allow me to study organizational learning in a specific business; I intend to demonstrate how the lessons of one organization can be generalized to different industries and markets.THE COMPANYThe International Life Group is the evolution of the company “ANDRIATIKI”, which represented at Greece the Italian insurance company RAS ANDRIATICA. The group has been operating since 1956 and the previous year (2005-2006) celebrated 50 years of presence in the Greek insurance market.
Furthermore this year was important also because the group entered the final phase for its initial listing on the Athens Stock Exchange, which will give a new boost and prospects to Group’s business plan for the future.In Financial figures, by the end of the year 2004-05, the Group’s consolidated turnover had increased by 20%, also the main two insurance companies, International Life S.A and International Hellas S.A increased their sales by 16%.
The Group’s total assets have reached 131 million euros and its total income 55 million. Another important figure is the increase of 316% of sales points since 2002 as a result of a strategy based on a multi-channel distribution system. (International Life Annual Reports 2005,2006)International Life began trading in the early 90’s and presently the group is one of the 13 insurance and financial groups that are active in the Greek Market. All these years, International Life is an organization that is innovative and operates with firm and wavering values.
The group continually invests in human resources by building lasting relationships with customers and partners. According to the group the values it represents and functions according to are straight forwardness, honesty, dynamism, friendliness, protection, ethics and reliability. The strategic tactics of the group are the continuous improvement of added value provided to clients through quality and speed of reimbursements and issuing of contracts, flexibility and human-oriented approach at all customer service levels and product and services innovation. Focusing at those tactics, International Online S.
A founded at the glance of 21st century (2000). International Online is an IT company; it offers integrated products and services, combining information technology with up-to-date electronic communication. Further designs and develops specialized software for enterprises and organizations, aiming in increasing their productivity, decentralization and continuous development them, with a low operational cost. (Annual Report 2005)The organization focuses on life insurance, property and casualty insurance, mutual funds, asset management, investments and securities and IT applications.
It is also worth mentioning that the organization is a multi award winning one. It has been placed among the best 10 companies in Greece for 2 consecutive years at the ‘Best Workplaces 2005 and 2006’ contest and was characterized as a business worth working at.In terms of structure, International Life Group (Inlife) consists of 13 companies, active in 3 different sectors: the Insurance, the Investing and the Technological Sector.Looking at the size and the position of the group, questions are borne like: How did they manage to be on top? How do they keep their position on top? What are the techniques implemented in order to achieve this success?The hypothetical nature – but very likely to arise- of those questions/situations, will give us the opportunity to examine a vast majority of theoretical patterns that the International Life Group could implement so to sustain or expand it’s position at the market.
My relationship with the organization cannot be recognized as direct. I have never been worked in the business, but I will have the appropriate access as I mentioned above through a family member that is currently employed by Inlife. LITERATURE REVIEWLearning is defined as the act of gaining knowledge or skill according to Webster’s New Universal Unabridged Dictionary. Peter Senge describes “learning organizations” as “organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.
” (Senge, The Fifth Discipline, p. 3) Such organizations sense changes in the environment and adapt accordingly. This sounds simple but, as the aforementioned disappearance of so many previously successful companies demonstrates, it is quite challenging.Application of organizational learning is seen by managers as a powerful approach to increase the productivity of an organization.
It consists of four important constructs. These interdependent constructs serve to help the organizational learn much as an organism learns to adapt to its environment. We will now explore these constructs.Knowledge Acquisition, which itself consists of five sub processes, a) drawing knowledge available at the organization’s birth, b) learning from experience, c) learning by observing other organizations, d) grafting on to itself components that possess knowledge needed by the organization and e) noticing and searching for information about the organization’s environment and performance.
Information Distribution, which involves storing, retrieving, and sharing information throughout the organization. Information distribution includes the interaction of human networks and technological networks.Information Interpretation, which involves “meaning-making” by people in the organization. For example, rising oil prices is good news for British Petroleum and bad news for Christopoulos, S.
A., a small plastics manufacturer whose profit margin goes down with rising raw material costs. Thus, context significantly affects information interpretation.Organizational Memory, which includes a data orientation (remembering facts, events, past attempts at change, etc.
) and an emotional orientation (reminiscing about the past, attributing a present-day feeling to a general remembrance of a past situation).(James G. March, 1991)The current day concept of organizational learning has roots in other fields. Cybernetics, a combination of mathematics, communications theory, engineering, social and medical science, gave rise to designs with adaptive capabilities based on negative feedback.
These designs are capable of sensing, monitoring and scanning the environment. Then it relates the information from the environment to predetermined operating norms and, in the presence of deviations, takes corrective actions. This mode is known as “single-loop learning.”Argyris and Schön, in their book Organizational Learning: A Theory of Action Perspective, suggest that learning involves the detection and correction of error.
When error is detected most people respond using a single-loop learning approach. They do not challenge existing beliefs and assumptions.Single-loop learning is short-term in nature. The organism, machine, or organization makes adjustments based upon immediately available data; there is no long-term cognition or skill acquisition built into this mode.
For example, a simple robot relying solely upon single-loop learning will continue to bump into walls, back up, turn, and move in another direction. There is no provision for mapping its environment so the simple robot can navigate in the future without bumping into the same place in the wall. Thus is revealed the limitation of single-loop learning.In a manufacturing organization, single-loop learning is the primary mode employed to remove defects by inspection.
In such a system, single-loop learning can be used as one component of a more sophisticated, and economically viable, approache. For example, if data is collected about the cause of removal of a defective part, the organization can look for patterns and make adjustments to production systems up stream to prevent the defects from occurring. So, single-loop learning can be effective if used in conjunction with other means. By itself, however, single-loop learning does not contribute to long-term organizational learning.
In fact, in can be a barrier to true organizational learning.A general illustration can shed light on this limitation of single-loop learning. An organization relying upon single-loop learning can convince itself of its proficiency. They come to believe they are effective at solving problems because of the “fire drill” feeling frequently generated in single-loop learning situations.
They detect a problem, quickly take corrective action, and wait for the next problem. No inquiry is made about the assumptions and operating norms that may be contributing to the constant stream of fire drills. Managers can be heard to say, “We work in a rapidly changing industry and are good at dealing with the frequent problems and pressures that arise every day.” Businesses stuck in this single-loop mode are in danger of missing the larger environmental shifts that may put in jeopardy their very existence.
Something more robust than single-loop learning, then, is needed to institute organizational learning. Key to this more robust approach is the willingness and ability to challenge the existing paradigm. Thomas Kuhn, in his seminal work, The Structure of Scientific Revolutions, showed that the willingness to challenge assumptions and beliefs was fundamental to the creation of new scientific theories. Researchers have since demonstrated the applicability of Kuhn’s thinking to organizations.
Through reconstruction of prior assumptions and reevaluation of prior facts organizations put themselves in position to perceive the opportunities created by a changing environment, rather than see such changes as a threat to the status quo and respond defensively.Chris Argyris, in his book Reasoning, Learning, and Action: Individual and Organizational (1982), described how organizational defensive routines prevent organizational learning. In the attempt to avoid embarrassment or threat, people do not deal with the very conditions that bring about the embarrassment or threat. In so doing they miss the opportunity to learn and adjust their behaviors and choices.
The application of the theories of Kuhn and Kurt Lewin led Chris Argyris to describe “double-loop learning.” Double-loop learning occurs when error is detected and corrected in ways that involve challenging and modifying an organization’s underlying assumptions, norms, policies and goals. Pushing against the basic assumptions that define what it perceives to be true and relevant enables an organization to move into new territory and chart a different course. The behavioral attributes of this mode are the following:Environmental scanning in order to detect any variationsDevelopment of the ability and habit of questioning, challenging and changing operating normsDevelopment of the ability to allow a new strategic direction to emergeA review of literature in the broad field of management theory and science reveals a tremendous volume of material available for study.
A search on the term “management” at Amazon.com on March 6, 2008, revealed a total of 738,947 books listed. If one assumes many of the titles are duplications, electronic papers, and other irrelevant materials, an estimate of 75,000 to 125,000 titles might be reasonable. In spite of the plethora of management books and related scholarly articles, few sources attempt link organizational learning to sales management and marketing strategy formulation.
The fundamental dissertation question, how an organization learns to learn, is discussed in only a handful of references. Still fewer deal with the question of how organizational learning is put into practice.In addition to the books cited in this literature review are many scholarly and academic journals: Global Business Review, Management Learning, Human Relations, Organization Science, Economic and Industrial Democracy, Management Communication Quarterly, Journal of Applied Behavioral Science and Journal of Management Education.An important article in this context is Akella’s “Learning Organizations: Managerial Control Systems” published in Global Business Review in 2007.
This article is critical of learning organizations and argues that the supposed benefits of such an organization (shared decisions, open dialogue, high levels of trust and cooperation, commitment of employees) may impede learning itself. While describing such pitfalls it also sheds light on the leadership qualities required when instituting organizational learning. Another such important article is E. P.
Antonacopoulou’s “The Relationship between Individual and Organizational Learning: New Evidence from Managerial Learning Practices” published in Management Learning in 2006. This paper draws similar conclusions as Adella’s although it is mainly focused on the human resources function (personnel department).However, here are criticisms directed towards the parameters of a learning organization and this aspect of negative feedback is equally important for the study. A very important text in this context is the text by C.
Hardless, M. Nilsson and U. Nulden titled “Copernicus: Experiencing a Failing Project for Reflection and Learning” published in Management Learning in 2005. Again, there are positive sides of a learning organization and to understand the realm of the positive side the article by M.
Easterby-Smith, E. Antonacopoulou, D. Simm and M. Lyles’ Constructing Contributions to Organizational Learning: Argyris and the Next Generation again published in Management Learning in December 2004.
Then again, there are counter arguments related to the issue and A. Contu, C. Grey, and A. Ortenblad’s Against Learning published in Human Relations in 2003 provides those parameters.
A. E. Akgun, G. S.
Lynn, and J. C. Byrne’s Organizational Learning: A Socio-Cognitive Framework published in Human Relations on 2003 covers the significance of organizational learning from the point of view of socio economic considerations. This is a very essential parameter of the study because as it is the social and economic conditions that determine the extent of development of organizational learning.
Employees concerned about basic needs (food, clothing, shelter) will have less capacity to engage in organizational learning versus those employees who are in a position to use their work as a self-actualizing force in their lives. In the former instance, work may be seen as a means to provide for the basic necessities of life. Such a condition does not give rise to the motivation required to engage in organizational learning. In the latter case, employees who experience their work as contributing to a higher order need will have the additional emotional capacity available to engage more deeply in their work; such a deeper level of engagement is a prerequisite for the uptake of organizational learning.
S. Tempest’s “Intergenerational Learning: A Reciprocal Knowledge Development Process that Challenges the Language of Learning” published in Management Learning on June 1, 2003 looks into the aspects of basic learning capacities of an individual and as a community as a whole. This is a paramount study as it enumerates a possibility of constructing a matrix that would be organize the measures needed for implementing organizational learning. Such a matrix would enable the estimation of the feasibility of implementing organizational learning under a given scenario or condition.
A. Contu and H. Willmott’s “Re-Embedding Situatedness: The Importance of Power Relations in Learning Theory” published in Organization Science on May 1, 2003 emphasizes the importance of person-to-person communication in order to establish organizational learning. The article by T.
Huzzard titled “Discourse for Normalizing: The Learning Organization and the Workplace Trade Union Response” published in Economic and Industrial Democracy in August 1, 2001 adds insight to the argument through its discussion of the special case of a trade union. The presence of a trade union within an organization adds complexity to the implementation of organizational learning. Many exchanges among management and union members have tightly defined boundaries in the form of procedures outlined within a legal contract. A similar article in this context is R.
M. Bokeno and V. W. Gantt’s “Dialogic Mentoring: Core Relationships for Organizational Learning” published in Management Communication Quarterly on November 1, 2000.
It discusses the need for communication methods and principals while dealing with problems that arise when implementing organization learning.For the purpose of the study it is also important have a futuristic view of the dissertation question how an organization learns to learn and the aspect of learning organization techniques in relation to the Greek insurance company Inlife. Thus interventions or evaluation of futuristic concepts is important. Such an article was published by B.
G. Jackson in the Journal of Applied Behavioral Science on June 1, 2000 and is entitled “A Fantasy Theme Analysis of Learning Organization by Peter Senge.” On the other hand M. Reynolds’ “Critical Reflection and Management Education: Rehabilitating Less Hierarchical Approaches” published in Journal of Management Education, October 1, 1999 provides us with a data required for the study and it also presents the argument in the context of educational principals and is thus important for the dissertation question as a whole.
Among the several texts used is the one considered to be the seminal work in the field, The Fifth Discipline: The Art & Practice of The Learning Organization by Peter M. Senge published in 1990. It describes the overall parameters and theory of the subject and looks into the practical usage of the learning procedures within organizations. The work of Senge clearly draws upon that of Chris Argyris and Donald Schön.
For a treatment of the process of measuring learning modes is the book Ten Steps to a Learning Organization by Peter Kline and Bernard Saunders published in 1997. This book addresses one of the criticisms of Senge’s book, namely that while his descriptions were insightful, the reader was left with little clue as to how one would go about implementing or otherwise putting in place the elements of a learning organization. Kline and Saunders bridge this gap beautifully with this highly descriptive work.As a book published in 2006, building upon the themes in the previously mentioned article “A Fantasy Theme Analysis of Learning Organization by Peter Senge,” is Learning Organizations: Developing Cultures for Tomorrow’s Workplace by John Renesch and Sarita Chawla.
This book provides recent data and contemporary thinking related to organizational learning.Evaluative Inquiry for Learning in Organizations published in 1998 by Hallie S. Preskill and Rosalie T. Torres provides specific examples of the use of inquiry skills and habits to facilitate organizational learning.
In a similar vein, the book Improving Learning Transfer in Organizations by Elwood F., III Holton and Timothy T. Baldwin published in 2003 provides insight about the process of teaching, sharing information, and using lessons learned to inform future actions.Ralph Stacey, in his book Complexity and Emergence in Organizations, describes “complex responsive processes in organizations” and sheds light on how knowledge is created and transmitted within organizations.
Douglas B. Reeves provides a blueprint for a learning organization in his book Accountability in Action by published in 2004.Another text entitled Competency and the Learning Organization, published by Donald Shandler published in 2000 as a part of Crisp Professional Series, emphasizes “stagnation principals” and presents a framework for performance improvement. This emphasis on results is important; organizations implement organizational learning in order to improve their bottom lines, not for intrinsic benefits.
Another treatment of improving human performance can be found in the book entitled The Chief Learning Officer (CLO): Driving Value within a Changing Organization through Learning and Development by Tamar Elkeles and Jack Phillips published in 2006. This publication highlights the “changing landscape for learning and performance” (Elkeles, 2006, 6).In summary, the literature review provided a thorough evaluation and analysis of the origins and current thinking on organizational learning. It provided insight about the positive outcomes of implementing organizational learning.
It explored potential negative aspects arising from implementation of organizational learning. Finally, future trends were discussed.;;;;References:BooksPeter M. Senge; (Mar 21, 2006); The Fifth Discipline: The Art ; Practice of The Learning Organization; Allied PublicationsPeter Kline and Bernard Saunders; (Dec 1997); Ten Steps to a Learning Organization; Unit Book TrustKuhn, Thomas S.
; (1962, 1970, 1996) The Structure of Scientific Revolutions; 3d edition; University of Chicago PressArgyris, Chris; (1982); Reasoning, Learning, and Action: Individual and Organizational; Jossey-BassArgyris, C., ; Schön, D.; (1978); Organizational Learning: A Theory of Action Perspective, Addison Wesley.John Renesch and Sarita Chawla; (Mar 30, 2006); Learning Organizations: Developing Cultures for Tomorrow’s Workplace; Croft PublicationsHallie S.
Preskill and Rosalie T. Torres; (Oct 20, 1998); Evaluative Inquiry for Learning in Organizations; Croft PublicationElwood F., III Holton and Timothy T. Baldwin; (Aug 25, 2003); Improving Learning Transfer in Organizations; Alliance PublicationsRalph Stacey; (Mar 27, 2001); Complex Responsive Processes in Organizations: Learning and Knowledge Creation; Howard LtdDouglas B.
Reeves; (Jul 25, 2004); Accountability in Action; 2nd Ed. Hager & LeeDonald Shandler; (April 15, 2000); Competency and the Learning Organization; Crisp Professional SeriesTamar Elkeles and Jack J. Phillips; (Oct 23, 2006); The Chief Learning Officer (CLO): Driving Value Within a Changing Organization Through Learning and Development; Titmus GroupBruce LaRue, Paul Childs, Kerry Larson, and Marshall Goldsmith; (Dec 27, 2005); Leading Organizations from the Inside Out: Unleashing the Collaborative Genius of Action-Learning Teams; Croft PublicationJournalsD. Akella; Learning Organizations: Managerial Control Systems; Global Business Review, February 1, 2007; 8(1): 13 – 28.
E. P. Antonacopoulou; The Relationship between Individual and Organizational Learning: New Evidence from Managerial Learning Practices; Management Learning, December 1, 2006; 37(4): 455 – 473.C.
Hardless, M. Nilsson, and U. Nulden; ‘Copernicus’: Experiencing a Failing Project for Reflection and Learning; Management Learning, June 1, 2005; 36(2): 181 – 217.M.
Easterby-Smith, E. Antonacopoulou, D. Simm, and M. Lyles; Constructing Contributions to Organizational Learning: Argyris and the Next Generation; Management Learning, December 1, 2004; 35(4): 371 – 380.
A. Contu, C. Grey, and A. Ortenblad; Against Learning; Human Relations, August 1, 2003; 56(8): 931 – 952.
A. E. Akgun, G. S.
Lynn, and J. C. Byrne; Organizational Learning: A Socio-Cognitive Framework; Human Relations, July 1, 2003; 56(7): 839 – 868.S.
Tempest; Intergenerational Learning: A Reciprocal Knowledge Development Process that Challenges the Language of Learning; Management Learning, June 1, 2003; 34(2): 181 – 200.A. Contu and H. Willmott; Re-Embedding Situatedness: The Importance of Power Relations in Learning Theory; Organization Science, May 1, 2003; 14(3): 283 – 296.
T. Huzzard; Discourse for Normalizing What? The Learning Organization and the Workplace Trade Union Response; Economic and Industrial Democracy, August 1, 2001; 22(3): 407 – 431.R. M.
Bokeno and V. W. Gantt; Dialogic Mentoring: Core Relationships for Organizational Learning; Management Communication Quarterly, November 1, 2000; 14(2): 237 – 270.B.
G. Jackson; A Fantasy Theme Analysis of Peter Senge’s Learning Organization;Journal of Applied Behavioral Science, June 1, 2000; 36(2): 193 – 209.M. Reynolds; Critical Reflection and Management Education: Rehabilitating Less Hierarchical Approaches; Journal of Management Education, October 1, 1999; 23(5): 537 – 553.
Note to Mr. Sandalis: the paragraphs below deal with Inlife. They were originally found in the Literature Review section but seemed out of place. I edited them and put them at the end in hopes that you would find it useful.
;The Greek insurance company Inlife aspires to institute “double-loop learning” into their overall organizational learning framework. Like most organizations so attempting this ambitious endeavor, Inlife has experiences successes and challenges in its efforts.Inlife aspires to become the insurance company of choice among its target markets and sees organizational learning as a key management practice for accomplishing this lofty goal. It believes that constantly challenging its business assumptions in service of customers will play a pivotal role in its growth.;
