The approach described above in the HRD strategy has been rejected by a number of organisations as far too mechanistic, controlling and inefficient. Writers such as Senge (1990) and Pedler et al. (1997) have put forward the concept of the learning organisation, in which learning and HRD are central functions of the organisation. In such an organisation the learning process is so embedded that learning and development become subconscious acts through which the business of the organisation operates. In this way its adherents claim that HRD becomes automatically strategic.
A clear definition of the learning organisation is elusive. Pedler et al. (1997) suggest that it is a vision of what might be possible when organisations go beyond merely training individuals towards developing learning at the whole organisation level. Their definition states:
Dixon (1994) added to the concept, suggesting that organisational learning, a key characteristic of a learning company, can be defined as the intentional use of learning processes at the individual, group and system level to continuously transform the organisation in a direction that is increasingly satisfying to its stakeholders.
The concept has gained popularity in recent years because of the turbulent and increasingly competitive business environment. The impact of new technology and changing organisational forms that cater for customer needs mean dealing with continual change. This has led to what learning organisation (LO) adherents feel is not an add-on HRD system that is a lowly function driven by corporate strategy, but one that is central to the strategy of the organisation.
The ability to respond swiftly to product and market developments is crucial. There has also been an increasing recognition of the importance of utilising not just the physical abilities of employees but also their mental powers. Senior managers are becoming aware that if their people are their greatest resource, they are also the source of any longer-term competitive advantage.
This realisation has led to increased competition for skilled, flexible, adaptable staff, and to the development of organisational programmes that attempt to fully utilise the talents and knowledge of the workforce. It is also being recognised that international competitiveness means raising the standards of training to world-class levels. Failure to meet these pressures leads to organisational stagnation and ultimately organisational death.
A learning company is one that looks beyond mere survival. By developing an ability to constantly adapt its operations it is able to sustain market leadership. Such companies not only change with differing contexts but learn from their people and their environments while ‘contributing to the learning of the wider community or context of which they are part’ (Pedler et al., 1997: 4). As leading-edge organisations they move beyond the visions of their founders or the conservatism of many companies formed in the same era or culture, evolving through an allegiance between internal and external environments. Thus for Pedler et al. (1988: 4) a learning organisation is one that:
While it is not possible to construct a model of a learning company, principally because there is no predetermined structure, Pedler et al. (1997: 15–17) identify 11 key characteristics that a learning company must possess:
Another concept that emerged in the 1990s was the knowledge-managing organisation. It is also known as the knowledge-based organisation or the knowledge-creating company (Nonaka, 1991). The process by which it is carried out is often known as knowledge management (Mayo, 1998). A definition of knowledge management offered by Mayo (1998: 36) states that the following processes are essential:
This list contains elements not greatly different from the learning organisation concept, and some observers claim that in effect they are the same phenomenon. Both concepts rely heavily on the exchange of knowledge and the desire of employees to be receptive to knowledge and learning – employees are the repositories of the organisation’s knowledge and wisdom. As Tom Watson, former president of IBM, states: ‘If you burnt down all our plants and we just kept our people and our files, we would soon be as strong as ever.’
This underscores and adds to the strength of HRM and HRD departments, many of which have been preaching for years that ‘our people are our greatest assets’, often with the reality not living up to the slogan. While the visionary concepts of knowledge management and the LO are inspiring, the reality is that, like most large-scale initiatives, implementation of such systems requires a massive change of attitude in most organisations that is not always easy to achieve.
Success rests in creating a high-trust organisation where knowledge is readily exchanged. In practice, there are many barriers. Knowledge is seen as power, and jealously guarded. Its possession and use can further ambitions. A culture of openness may be difficult to achieve, particularly in organisations where suspicion has been the norm. Knowledge management thus has serious implications for communication structures, employee involvement systems, reward systems and industrial relations.
There are many examples of companies that claim to be, or are on their way to being, learning organisations, including Anglia Water, Transco, IBM, Analog Devices, Nokia, GM, ICL, Xerox, and Hanover Insurance.
Despite its relatively new entrance on the corporate scene, there have already been a number of critical studies that have highlighted the weaknesses of LO. Garvin (1993) partly blames academics such as Senge, whose writings are often ‘reverential and utopian (and) filled with near mystical terminology. Paradise, they would have you believe, is just round the corner.’ He continues: Sloman (1999) believes that ‘the concept of the learning organisation should be redefined or declared redundant’.
The language and vocabulary of the learning organisation need to make sense to the hard-pressed line manager, and for these reasons alone the concept ‘is in urgent need of review’.
An international study carried out by Chase (1997) for the Journal of Knowledge Management examined approaches to creating knowledge-based organisations. He found that while organisations acknowledge ‘the importance of creating, managing and transferring knowledge, they have so far been unable to translate this need into organizational strategies.
Mayo (1998: 38), cited in Chase’s work, believes that ‘most organisations are also struggling to use information technology to support implementation’ and a learning organisation. Chase’s survey also pointed out that the biggest obstacles to creating a knowledge-based organisation were the existing company culture, lack of ownership of a problem, lack of time, inappropriate organizational structure, lack of senior management commitment, inappropriate rewards and recognition, and an emphasis on individuals rather than team work.
Lähteenmäki et al. (1999) have pointed to a number of criticisms that can be leveled at the concept:
Lähteenmäki et al. (1999), in summing up a number of research projects, emphasized these reasons for failure:
They suggest some recommendations in moving towards a learning organisation:
There are no easy prescriptions for creating a learning organisation; it takes a considerable time to engender the right attitudes and conditions in the change process. Those organisations that can learn these lessons not only are well on the way to becoming learning organisations, but also are more likely to have the skills, competences and, above all, the right attitudes for survival in our increasingly competitive globalised environment.
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