Organizational learning

The notion of Organizational Learning (OL) has become very prominent in the near past. Managers see OL as a powerful tool to improve the performance of an organization. Thus, it is not only the scholars of organization studies who are interested in the phenomenon of OL but also the practitioners who have to deal with the subject of OL.

Generally, one can distinguish between two different processes of organizational change that are associated with OL:

  • adaptive learning, i.e. changes that have been made in reaction to changed environmental conditions and
  • proactive learning, i.e organizational changes that have been made on a more willful basis. This is learning which goes beyond the simple reacting to environmental changes.

    In general, it is assumed that adaptive learning comes along with a lower degree of organizational change. This means that adaptive learning is seen as a process of incremental changes. What is more, adaptive learning is also seen as more automatic and less cognitively induced than proactive learning. The inferiorities of adaptive learning compared to proactive learning are also expressed by the different labels which have been used to describe these two types of OL: „Single-Loop versus Double-Loop Learning“ (Argyris and Schön, 1978), „Lower Level versus Higher Level Learning“ (Fiol and Lyles, 1985), „Tactical versus Strategic Learning“ (Dodgson, 1991) „Adaptive versus Generative Learning“ (Senge, 1990).

    Cyert and March (1963) started the discussion about OL. In their view OL is mainly an adaptive process in which goals, attention rules (or standard operating procedures), e.g. which parts of the environment the organization should listen to, and search rules that stir the organization in a particular way to find problem-solutions are adapted to the experiences that are made within the organization. Cyert and March did not concentrate on the question whether these experiences were made because of environmental changes. Rather they focus on the problem solving quality of the attention- and search rules. So even in stable environments, organizations can learn how to adjust their procedures in order to better perform.

    Within the behavioral school of James March (e.g. Levitt and March, 1988; Levinthal and March, 1988; Levinthal and March, 1993) it was always emphasized that OL is executed on the basis of rules. Organizational decisions depend on certain rules. The experiences which have been made within the organization determine the contents of these rules. If the rules no longer fit the experiences they have to be altered. This process of rule change can be affected by different disturbances, e.g. false interpretation of events or the impediment of the realisation of personal insights (March and Olsen, 1975). These affections of the process of learning reveal that OL can only be regarded as a limited rational process.

    See also: organization studies: behavioral, organization studies: cognitive, standard operating procedures

    Literature: Argyris and Schön (1978), Cyert and March (1963), Dodgson (1991), Fiol and Lyles (1985), Levinthal and March (1988), Levinthal and March (1993), Levitt and March (1988), March and Olsen (1975), Senge (1990)

    Entry by: Klaus Beck

    November 10, 1997
    Direct questions and comments to: Glossary master