Why Organizational Learning Really Begins with March

Authored by Daniel T. Murphy

Today’s landscape of organizational learning (OL) research can be traced back to ideas put forth by pioneers such as March (1991), Senge (1990), Argyris and Schon (1996), and Schwandt (1997). March may be the best example. One of March’s (1991) key contributions is that he challenged follow-on scholars to study how variables such as socialization rate, speed of learning, and turnover impact OL, and have either positive or negative consequences on an organization’s performance as an explorer or exploiter.

March’s legacy can be seen within recent studies in four different countries. Granerud and Robson (2011) conducted a quantitative case study of 13 Danish OHS 18001-certified manufacturing companies, examining how Occupational Safety and Health Management Systems (OSHMS) certification enhances or hinders OL, continuous improvement (CI), and organizational performance. Hung, Lien, Yan, Wu and Kuo (2011) conducted a quantitative study of 1,139 technology industry companies in Taiwan, exploring the relationship between Total Quality Management (TQM), OL and innovation. Real, Roldan and Leal (2014) conducted a quantitative study of 140 randomly selected companies in the Andalusia province of Spain, studying the influence of entrepreneurial orientation and learning orientation on OL. Doiron (2014) conducted a quantitative study of 1,100 individuals on 72 project teams exploring the relationship between OL and organizational identification at the project team level. Like March, all four scholars developed and tested hypotheses to understand the impact of variables on OL. Hung et al. (2011) developed four hypotheses, Real et al. (2014) five hypotheses, and Doiron (2014) five hypotheses. Granerud and Robson’s (2011) study was also hypothesis-based, but did not report the specific hypotheses developed.

While all four studies were conducted in the “spirit” of March, each was grounded in a different theoretical framework. Granerud and Robson’s (2011) study was grounded on Ellstrom’s (2001) five levels of OL: organizational; reproductive; basic productive; advanced productive and creative. Hung et al.’s (2011) study was grounded on a simple three element conceptual framework developed by the researchers. Real et al.’s (2014) study was developed from Crossan and Berdrow’s (2003) and Crossan, Lane and White’s (1999) “4I” model where OL occurs through institutionalization, integration, interpretation and intuition across the organization, its groups and its individuals. Doiron’s (2014) study was grounded on in Ashforth, Harrison, and Corley’s (2008) and Ashforth, Rogers, and Corley’s (2011) theory that OL enables organizations to maintain, refocus, or transform identity in response to environmental changes, and provides sensemaking to the members of the organization.

For the most part, the four studies did not have significantly contrasting definitions of OL, though each emphasized a particular thought leader’s definition. For example, Granerud and Robson (2011) suggested an aggregated definition of OL based on at least seven definitions from scholars such as Levitt and March (1988), Argyris and Schon (1996), Ellstrom (2001), and Anand, Ward, Takakonda and Schilling (2009). In Granerud and Robson’s (2011) study, OL occurs when ideas, techniques and experiences, whether from within the organization or from the outside, are shared and applied to improve performance. Hung et al. (2011) also suggested an aggregated definition with elements from Argyris and Schon (1996), Wang, Yang and McLean (2007), Inkpen (1998), and Dodgeson (1993), but mostly from Senge (1990), emphasizing OL as a dynamically balanced relational process in which organizations acquire external knowledge and adjust their activities. Relying on their own definition of OL from a previous study, Real et al. (2006) believe OL is generated at the heart of the organization via its individuals and groups, and that it drives the generation and development of capabilities that enable the organization to improve its performance and results. Doiron relied mostly on Schwandt (1997), suggesting OL is a system of actions, actors, symbols, and processes that enables an organization to transform information into knowledge, thus improving adaptability.

The most important takeaways from these studies are the practical insights that can help organizations adapt, innovate and compete in their respective industries. Granerud and Robson’s (2011) findings suggest certification programs can help companies become better exploiters (March, 1991). However, companies should not expect certification programs to drive innovation and exploration, unless the certification program is coupled with internal processes that are specifically designed to drive innovation and exploration. From Hung et al. (2011), we learn that, while TQM alone can help a company become a better exploiter (March, 1991) OL might be combined with TQM to help an organization keep exploitation and exploration balanced. The study by Real et al. (2014) suggests companies with entrepreneurial cultures can gain competitive advantage against other entrepreneurial companies through structured OL programs. And, in larger entrepreneurial companies, OL has a greater propensity to take root. Finally, Doiron (2014) teaches us that team identification results in positive outcomes such as improved cooperation, extra effort, higher job satisfaction, increased job involvement, stronger motivation, lower turnover, and higher performance. Organizations can achieve such benefits by increasing project team learning across multiple dimensions. Taken together, the four studies underscore March’s key message from more than 25 years ago, that organizations can work purposefully to adjust organizational levers, and that those levers can have positive inputs on OL and ultimately organizational performance.

References

Anand, G., Ward, P., Takikonda, M., & Schilling, D. (2009). Dynamic capabilities through continuous improvement infrastructure. Journal of Operations Management 27(6), 444-461. doi: 10.1016/j.jom.2009.02.002

Argyris, C., & Schon, D. (1996). Organisational learning II. Boston, MA: Addison Wesley Publishing.

Ashforth, B. E., Harrison, S. H., & Corley, K. G. (2008). Identification in organizations: An examination of four fundamental questions. Journal of Management, 34(3), 325-374. doi: 10.1177/0149206308316059

Ashforth, B. E., Rogers, K. M., & Corley, K. G. (2011). Identity in organizations: Exploring cross-level dynamics. Organization Science, 22(5), 1144-1156. doi: 10.1287/orsc.1100.0591

Crossan, M. M., & Berdrow, I. (2003). Organizational learning and strategic renewal, Strategic Management Journal, 24(1), 1087–1105. doi: 10.1002/smj.342

Crossan, M. M., Lane, H. W., & White, R. E. (1999). An organizational learning framework: From intuition to institution. Academy of Management Review, 24(3), 522-537.

Dodgeson, M. (1993). Organizational learning: A review of some literature. Organizational Studies, 14(3), 375-394.

Doiron, J. A. (2013). The cross-level relationship between project team learning and project team identification: A social action perspective. (Unpublished doctoral dissertation). The George Washington University, Washington, DC, United States.

Ellstrom, P. E. (2001). Integrating learning and work: Problems and prospects. Human Resource Development Quarterly, 12(4), 421-435. doi: 10.1002/hrdq.1006

Granerud, L., & Robson, S. (2011). Organisational learning and continuous improvement of health and safety in certified manufacturers, Safety Science, 49(1), 1030-1039. doi: 10.1016/j.ssci.2011.01.09

Hung, R. Y., Lien, B. Y, Yang, B., Wu, C., & Kuo, Y. (2011). Impact of TQM and organizational learning on innovation performance in the high tech industry. International Business Review, 20(1), 213-225. doi: 10.1016/j.ibusrev.2010.07.001

Inkpen, A. C. (1998). Learning and knowledge acquisition through international strategic alliances. The Academy of Management Executives, 12(4), 69-80.

Levitt, B., & March J. G. (1988). Organizational learning. Annual Review of Sociology, 14(1), 319-340.

March, J. G. (1991). Exploration and exploitation in organizational learning. Organizational Science, 2(1), 71-87.

Real, J. C., Roldan, J. L. Leal, A. (2014). From entrepreneurial orientation and learning orientation to business performance: Analysis the mediating role of organizational learning and the moderating effects of organizational size. British Journal of Management, 25(1), 186-208. doi: 10.1111/j.1467-8551-2012.00848.x

Real, J. C., Roldan, J. L. Leal, A. (2006). Information technology as a determinant of organizational learning and technological distinctive competencies. Industrial Marketing Management, 35(1), 505–521. doi: 10.1016/j.indmarman.2005.05.004

Schwandt, D. R. (1997). Integrating strategy and organizational learning: A theory of action perspective. Advances in Strategic Management, 14(1), 337-359.

Senge, P. M. (1990). The fifth discipline. New York, NY: Doubleday.

Wang, X., Yang, B., & McLean, G. N. (2007). Influence of demographic factors and ownership type upon organizational learning culture in Chinese enterprises. International Journal of Training and Development, 11(3), 154-165. doi: 10.1111/j.1468-2419.2007.00278.x

 

 

Article citation Evidence Framework

(OL theory/definition)

Evidence Source

(where/who/how did they get their evidence)

Evidence-based Findings; Practical Insights
Granerud, 2011

 

Theme: Certification as a variable

Studied: How Occupational Safety and Health Management Systems (OSHMS) certification affects OL, continuous improvement (CI), and performance.

OL Definition: Ideas, techniques and experiences, from within the organization and outside, are shared and applied to improve performance. Definition based on 7+ definitions from scholars such as Levitt and March (1988), Argyris and Schon (1996), Ellstrom (2001), and Anand, Ward, Takakonda and Schilling (2009).

Grounded: On Ellstrom’s (2001) five levels of OL: organizational; reproductive; basic productive; advanced productive and creative.

Quantitative: 13 Danish manufacturing companies.

Four phased data collection approach: (1) preliminary visits and interviews; (2) OSHMS assessment by independent auditor; (3) workshop; and (4) on-site interviews, including semi-structured one-on-one, group, written and electronic documentation review, and participant observation.

Hypotheses and data analysis not described in the article.

Analysis: Across six dimensions: learning characteristics, level of learning; CI practice; CI performance; OHSMS adoption; and CI and OHSMS strategic application.

OHSMS certification supports lower (transactional/exploitative) levels of OHSMS-related CI.

More advanced (explorative) improvements are driven by firms’ processes, and/or are found in firms that do more than just the minimum requirements for OHSMS certification.

Best performing companies placed emphasis on employee participative routines, rather than on OHSMS reporting.

OHSMS certification may generate process improvements beyond the legal requirements

Key Takeaway: Certification programs can help companies become better exploiters (March, 1991), but should not be expected to drive innovation/exploration.

Hung, Lien, Yan, Wu and Kuo (2011)

 

Theme: TQM as a variable

Studied: Relationship between Total Quality Management (TQM), OL and innovation.

OL Definition: Dynamically balanced relationship in which organizations acquire external knowledge and further adjust activities. Authors reference multiple thought leaders, including Argyris and Schon (1996), Wang, Yang and McLean (2007), Inkpen (1998), and Dodgeson (1993), but mostly resting on Senge (1990).

Grounded: On three element conceptual framework developed by the researchers.

Quantitative: Likert questionnaire distributed to 1,139 technology industry companies in Taiwan.

Four hypotheses: (1) TQM positively relates to OL; (2) OL positively relates to innovation; (3) TQM positively relates to innovation; (4) OL mediates TQM and innovation.

Data from previous studies focused on TQM (leadership support, employee involvement, CI and customer focus), OL (culture and strategy) and innovation (product and process).

Analysis: Correlational and regression analysis with results presented in a structural equation table and graphic model.

TQM has a significant and positive impact on OL and innovation.

Future studies should include a broad sample of firms from other industries.

Key Takeaway: While TQM alone can help a company become a better exploiter (March, 1991) OL can be combined with TQM to help an organization keep exploitation and exploration balanced.

Real, Roldan and Leal (2014)

 

Theme: Entrepreneurial orientation as a variable

Studied: (1) Influence of entrepreneurial and learning orientation on OL; (2) Influence of OL on organizational culture and performance; and (3) How organization size influences entrepreneurial orientation and OL.

OL Definition: From authors’ prior article: OL generated by individuals and groups in the organization, and drives development of capabilities that improve performance. (Real, Leal and Roldan, 2006).

Grounded: On Crossan and Berdrow’s (2003) and Crossan, Lane and White’s (1999) “4I” model (OL institutionalization, integration, interpretation and intuition across organization, groups and individuals).

Quantitative: Study of 140 firms in Andalusia, Spain.

Likert survey to firms dependent on technology innovation.

Five hypotheses: (1) OL mediates entrepreneurial orientation and perceived business value (PBV); (2) OL mediates learning orientation and PBV; (3) Firm size moderates relationship between entrepreneurial orientation and OL; (4) Firm size moderates relationship between learning orientation and OL; and (5) Firm size moderates relationship between OL and PBV.

Analysis: Variance-based equation and partial least squares modelling to predict dependent variables in four dimensions (entrepreneurial, learning orientation, OL, PBV).

OL partially mediates the influence of entrepreneurial orientation on perceived business value.

Learning orientation has significant effect on PBV.

Entrepreneurial orientation has a greater positive influence on OL in larger firms.

Learning orientation has a greater influence on OL in small and medium-size firms.

Key Takeaway: Companies with entrepreneurial cultures can gain competitive advantage against other entrepreneurial companies through structured OL programs. OL has greater propensity to take root in larger entrepreneurial companies.

Doiron (2014)

 

Theme: Team identification (TI) as a variable

Studied: Relationship between OL and organizational identification at the project team level.

OL definition: OL is a system of actions, actors, symbols, and processes that enables an organization to transform information into knowledge, and improving adaptability. (Schwandt 1997)

Grounded: On Ashforth, Rogers, and Corley’s (2011) argument that OL enables organization to maintain, refocus, or transform identity in response to environment, and provides sensemaking to members.

Quantitative: Study of 1,100 individuals on 72 project teams using a Likert-based survey. Country not specified.

Five hypotheses: (1) Team learning is related to TI; (2) Team learning associated with culture is related to TI; (3) Team learning associated with strategy is related to TI; (4) Team learning associated with structure is related to TI; (5) Team learning associated with the environment is related to TI.

Analysis:   Hierarchical linear modeling.

Analysis supported all hypotheses.

Team learning is related to team identification.

Team learning associated with strategy, culture, structure and the environment is related to project team identification.

Key Takeaway: By increasing project team learning across multiple dimensions, organizations can achieve improved cooperation, extra effort, higher job satisfaction, increased job involvement, stronger motivation, lower turnover, and ultimately, improved performance.

 

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