The Role of Organizational Learning in Improving Organizational Performance

This article discusses the importance of organizational learning in improving organizational performance. It explains the process of organizational learning and its impact on the performance of an organization. It also discusses the challenges faced by organizations in transforming into a learning organization and the factors that influence organizational performance.

The Role of Organizational
Learning in Improving
Organizational Performance

Table of Contents
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REFERENCES................................................................................................................................9

The performance and development of the organization depends upon the efficiency of the
organization. Organizational effectiveness refers to the measurement of efficiency of an
organization to achieve its goals and objectives by effective utilization of resources and man
force. The goals and objectives of an organization is achieved by effective leadership.
Leadership plays an essential role in setting of directions, creating strategies and implementing it
in effective and efficient manner. Training and development also plays important role in
improving the efficiency of employees and helps in learning new skills and gaining knowledge.
Organizational learning is very essential to improve the performance of organization by
developing skills in its employees and making them aware of new and upgraded technology
leading to efficient working of employees. The enhancement in the performance of organization
helps in sustainable growth and development.
Organizational learning is the process of transferring knowledge within the organization.
There is a rapid and continuous changes in the organization and its environment so people within
the organization needs to gain knowledge so that they can efficiently adapt those changes.
Organizational learning enables the people within the organization to gain knowledge related to
functions of organization and use this knowledge to adapt the changes taking place in
environment and increase its performance. For achieving long term success, organization as a
whole needs to learn and adapt. Organizational learning helps the organization to boost the
ability to analyse and respond to the internal and external changes that are impacting the
performance of organization (Waruwu and et.al., 2020). Organizational learning involves three
process i.e. knowledge creation, retention and transfer. Knowledge creation is the first step
towards organizational learning. Managers of the company needs to regularly analyse and
understand the business, customers and environment. Creating or taking in of knowledge and
information is the initial stage for learning. After creation of knowledge managers need to retain
and store such knowledge for the future reference of employees. Effective system is used by
manager to store this knowledge so that it is easily accessible to employees. The final step of
organizational learning is transfer of knowledge from individuals to organizational community.
This can be done by conducting training or publishing information on websites of organization
so that it can be accessed by each and every individual within the organization.
Organizational learning can be gained through different communities. Individual
community is the smallest community which includes only a single member. Individual

employee gain knowledge and learn new skills which enhance his efficiency and overall
performance. Employee is encouraged to share his knowledge to others so that it can be
beneficial for organization (Mu and et.al., 2021). Group leaning community is the second
learning community where a team or group is encouraged to learn new skills and gain
knowledge. In this all members of the group are involved in gaining knowledge, taking actions
and getting feedbacks. The members use this feedback to modify future actions. This group
learning process enables the members to develop awareness about each other which helps them
to coordinate efficiently. Organizational learning community involves organization as a whole. It
includes gaining knowledge and collecting information that are relevant for the functioning of
organization (Bilan and et.al., 2020). This knowledge and information helps to modify the
strategies which would help organization in adapting the changes in environment and increase its
performance. Organizational learning enables the organization in changing the procedure and
encourages individual to increase his productivity which will boost the performance of individual
as well as of the organization..
Learning organization is the place where the members of organization are encouraged to
learn new skills and to think out of box and to coordinate with other employees. There are five
disciplines that must be kept in mind while introducing learning organization. System thinking is
the body of work from where idea of learning organization has developed. This method of
thinking is used by organization where company is assessed and a system is used to measure the
performance of the organization (Reese, 2020). Personal mastery emphasizes on person's ability
and expertise to learn new skills and gain knowledge. Company has competitive advantage if its
employees' learning ability is faster than that of its competitors. Personal mastery enables many
positive outcomes like individual performance, self motivation, commitment, sense of
responsibility, etc. Metal model is the explanation to individual and organization's thought
process and assumptions. Metal model helps to identify the abilities of an individual. To become
a learning organization, it needs to identify such metal models. The organization whose
employees have metal model ability helps them to work in a team by sharing their ideas and
views.
The forth discipline is building shared vision. This is the ability of employees to
understand the vision of organization and leaders in such a way that they are able to take part in
the progression and growth of organization. The shared vision encourages the individual to share

their ideas and experiences which would help the organization in achieving its vision (Iqbal and
Ahmad, 2021). The last discipline is team learning which gives benefit to every individual in the
organization to learn more quickly. Team learning enables to solve the problems easily and helps
in gaining knowledge from each and every member of the team. This also helps in understanding
each other and enables effective coordination. Effective communication must be there among
team members so that it would be easy to adapt and develop team capacity which would result in
enhancing overall performance of organization. Learning organization depends on effective
implementation of all these five disciplines. Learning organization gives competitive advantages
to the organization. The continuous learning helps the organization to remain dynamic and adapt
the changes.
Learning organization helps in improving customer performance in organization which
would help to build strong customer base. Learning organization helps the organization to
enhance knowledge to link resources with its customers and improving quality of output. Long
term decision-making ability can be improved which would help in achieving long term goals of
organization (Malik and Garg, 2020). Though there are many benefits of learning organization
but organization faces many challenges in transforming itself into learning organization. It is a
time-consuming procedure and management may not have time to covert the culture of
organization into learning culture. To enable changes it is necessary to analyse the needs of
organization and challenges it is facing. An appropriate strategy needs to be built before
transforming and employees need to be made aware of such changes so that it can be easier for
employees to connect the training and every day problems. The other challenge is that learning
organization mainly focuses on professional development which has direct link with the
performance of organization (Chanani and Wibowo, 2019). Personal development is avoided as
its positive impact appears in long run. It is challenging for leaders if they do not consider
individual's vision and development as organization's shared vision.
Organizational learning and learning organization are similar as they are connected with
each other, but both are different. Organizational learning is the process by which organization
can gain knowledge and understanding whereas organization learning is the place which enhance
the learning in organization by implementing strategies. Organizational learning is the way by
which the objective of learning organization is achieved. Learning organization is the structure
which enables learning and adapt changes whereas organizational learning is the manner and

strategy through which learning is enabled and changes are implemented throughout the
organization. Both organizational learning and learning organization are similar as both
emphasizes on learning (Difference-Organizational learning and learning organization, 2022).
One is process of learning and other is initialization of learning. Learning organization is a wide
concept which includes organizational learning. A learning organization helps in organizational
learning through implementation of strategies. It is essential for organization to constantly learn
and gain knowledge to cope up with changing environment and future challenges. Learning
organization aims at continuous learning and gaining knowledge so that company can gain
competitive advantages.
Organizational learning impacts the organizational performance. Organizational
performance is the measurement and comparison of actual performance with the goals and
objectives of organization. It is the comparison of real output with intended or set output. The
organizational performance focuses on three outcomes i.e. shareholders value performance,
financial performance and market performance. Shareholders value performance refers to
measurement of value enriched to its shareholders. It is the measurement of value a person
possess by holding shares of organization (Abubakar and et.al., 2019). Financial performance
means measurement of organization's operations and policies in monetary term. It includes the
return on assets, investments, etc. which are an easier way to determine financial performance of
organization. Market performance refers to measurement of performance of organization's
product and services in the marketplace. It refers to the ability of organization to distribute its
products in the market in effective manner. These are the effective areas which enables the
organization to ensure that the goals and objectives are achieved. Organizations also use
balanced score card method to measure the performance of organization.
There are many factors that influence the performance of organization. Structure of
organization plays an essential role in the performance of organization as it determines the
profitability as it depends upon the work processes. Organization must have a proper structure as
without proper structure it won't be possible to decide reporting hierarchy and accomplish
organizational goals and objectives. The most significant factor that influence the performance of
organization is leadership (Organizational performance, 2022). This has direct impact on the
success and failure of business as it helps in taking consistent and rational decisions. Leadership
helps in boosting the morale of employees leading to increase in their productivity. The

environment of the workplace also impacts the organizational performance. The employees are
satisfied if organization has friendly work environment and this satisfaction enhances their
performance resulting into efficient organizational performance. The essential element required
for pleasant environment is the understanding among the employees and employer, effective
communication, safety, unbiased employer, etc. Motivation is the another factor which refers to
the process that encourages the employees to efficiently perform and move diligently towards the
set objectives and goals. The motivational factor for each individual is different and organization
needs to identify those factors to motivate the employees. Motivation can be in monetary as well
as in non monetary terms. Employees are motivated by giving promotions, benefits and
incentives to acknowledge their efforts (Ibrahim and Daniel, 2019). The performance of the
organization depends on the efficiency of its workforce. Organization needs to ensure that it has
skilled and talented employees who can efficiently carry out responsibilities of organization.
Individual skills is also an essential factor which comprises learning skills, communication and
social abilities.
Organizational learning is very important as it enables the organization to learn new skills
and gain knowledge which would help them to cope with the changing environment and future
challenges that may impact the performance of organization. The learning culture in the
organization enhance the employees' performance and helps them to coordinate with each other
in a team (Naqshbandi and Tabche, 2018). The organizational learning boost the morale of
employees resulting to employees satisfaction and also facilitates the career enhancement of
employees. This decreases the employees turnover due to which management of the organization
can focus on other important areas for development of organization. Learning enhances
leadership quality which enables successive planning and effective direction which ensures
achievement of organizational goals and objectives. Skilled and talented employees and efficient
management and leadership helps organization to increase efficiency and productivity.
Organizational learning includes the process of analysing and understanding environment in
which organization operates which would help organization to boost adaptability which would
ensure growth and increase profit margin.
Organizational learning promotes efficiency which helps to create a mindset of
continuous improvement which enhances organizational performance. It not only ensures
organizational development but also focuses on individual development (Choi, 2020). It helps in

creating a friendly and efficient work culture where employees have effective communication
and coordination ability so that they can solve any problem which may impact the performance
of organization (Rehman, Mohamed and Ayoup, 2019). This enables employees to work in a
team which helps employees to understand each other that ensures no conflicts among them.
Organizational learning makes employees aware of upgraded technologies which helps them to
effectively cope with changing technologies. The learning culture helps in meeting present and
future needs of skilled and talented employees in the organization which may impact the future
performance of organization. The organizational learning culture helps the employees the ways
through which their performance can be improved which motivates them towards effective and
efficient working (Antunes and Pinheiro, 2020). Improvement in employees' performance can
increase the overall organizational performance. Organizational learning increases the
productivity of the organization which helps in increasing profit margin as customers get
satisfied by the quality of products and customer services resulting into sustainable growth and
development of the organization. The learning culture impacts the performance of organization
i.e. effective and efficient learning culture ensures improved organizational performance.
Organizational learning is a continuous process that must be implemented in every
organization to ensure improvement in organizational performance. Many organization stop the
tempo of continuous learning when it achieves initial success. This is the reason of failure of
organization after achieving initial success. Organizational learning is a very important factor for
the success and failure of business. This enables organization to adapt continuous changes in the
environment and helps to become more competitive and innovative. It helps to create, retain and
transfer knowledge for future survival and growth of organization.

REFERENCES
Books and Journals
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structure on innovation capacity: Evidence from Indonesia private schools.
EduPsyCouns: Journal of Education, Psychology and Counseling. 2(1). pp.378-397.
Mu, T. and et.al., 2021. The role of task conflict in cooperative innovation projects: An
organizational learning theory perspective. International Journal of Project
Management. 39(3). pp.236-248.
Bilan, Y. and et.al., 2020. Sustainability and economic performance: Role of organizational
learning and innovation. Engineering Economics. 31(1). pp.93-103.
Reese, S., 2020. Taking the learning organization mainstream and beyond the organizational
level: an interview with Peter Senge. The Learning Organization. 27(1). pp.6-16.
Iqbal, Q. and Ahmad, N. H., 2021. Sustainable development: The colors of sustainable
leadership in learning organization. Sustainable Development. 29(1). pp.108-119.
Malik, P. and Garg, P., 2020. Learning organization and work engagement: The mediating role
of employee resilience. The International Journal of Human Resource Management.
31(8). pp.1071-1094.
Chanani, U. L. and Wibowo, U. B., 2019. A learning culture and continuous learning for a
learning organization. KnE Social Sciences. pp.591-598.
Naqshbandi, M. M. and Tabche, I., 2018. The interplay of leadership, absorptive capacity, and
organizational learning culture in open innovation: Testing a moderated mediation
model. Technological Forecasting and Social Change. 133. pp.156-167.
Choi, I., 2020. Moving beyond mandates: organizational learning culture, empowerment, and
performance. International Journal of Public Administration. 43(8). pp.724-735.
Antunes, H. D. J. G. and Pinheiro, P. G., 2020. Linking knowledge management, organizational
learning and memory. Journal of Innovation & Knowledge. 5(2). pp.140-149.
Abubakar, A. M. and et.al., 2019. Knowledge management, decision-making style and
organizational performance. Journal of Innovation & Knowledge. 4(2). pp.104-114.
Ibrahim, A. U. and Daniel, C. O., 2019. Impact of leadership on organisational performance.
International Journal of Business, Management and Social Research. 6(2). pp.367-374.
Rehman, S. U., Mohamed, R. and Ayoup, H., 2019. The mediating role of organizational
capabilities between organizational performance and its determinants. Journal of Global
Entrepreneurship Research. 9(1). pp.1-23.
Online
Difference-Organizational learning and learning organization, 2022 . [Online]. Available
through: <https://www.researchgate.net/figure/Differences-between-organizational-
learning-and-learning-organization_tbl1_251714479>
Organizational performance, 2022. [Online]. Available through:
<https://www.iedunote.com/organizational-performance>