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The relationship between learning capability and organizational

performance: A meta-analytic examination

Article  in  The Learning Organization · March 2012

DOI: 10.1108/09696471211201461

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TLO
19,2 The relationship between
learning capability and
organizational performance
92
A meta-analytic examination
Swee C. Goh, Catherine Elliott and Tony K. Quon
Telfer School of Management, University of Ottawa, Ottawa, Canada

Abstract
Purpose – The purpose of this paper is to present a meta-analysis of a subset of published empirical
research papers that measure learning capability and link it to organizational performance. It also
seeks to examine both financial and non-financial performance.
Design/methodology/approach – In a search of published research on learning capability and
organizational performance, the authors identified 33 articles that met criteria for inclusion in the
meta-analysis. Both objective and perceptual measures of organizational performance were considered
to be acceptable. The data were analyzed using the Hunter and Schmidt meta-analysis software.
Findings – The findings support a positive relationship between learning capability and
organizational performance, with stronger results for non-financial than financial performance. This
has significant implications for justifying the investment in building a learning capability in
organizations. Recommendations for managers are provided, such as the use of learning capability
measures and the need to measure performance.
Research limitations/implications – The paper discusses the implications of these results for
further theory building and development to advance knowledge in the field. This includes addressing
the need for new research designs, the issue of causality, potential mediating effects and the impact of
context in better understanding this complex relationship. It suggests that research is also needed to
increase our understanding of how to effectively build this learning capability.
Originality/value – This meta-analysis provides empirical evidence to support the value of building
a learning capability in organizations.
Keywords Learning capability, Performance, Meta-analysis, Learning processes,
Organizational performance
Paper type Research paper

The Learning Organization
Vol. 19 No. 2, 2012
pp. 92-108
q Emerald Group Publishing Limited
0969-6474
DOI 10.1108/09696471211201461
Introduction
The field of the learning organization has amassed an extensive body of literature over
the past 40 years, and the proliferation of research shows no signs of abating (Bapuji
and Crossan, 2004). Various authors have referred to the growth in research as
“exponential” (Crossan and Guatto, 1996), “phenomenal” (Bapuji and Crossan, 2004)
and “volcanic” (Easterby-Smith et al., 2000). However, this growth only began in the
1990s (Crossan and Guatto, 1996), although the discussion goes as far back as
Cangelosi and Dill (1965). Despite this growth, prior to 1996 there was no empirical
The authors gratefully acknowledge the help of Pat Forsberg on the revisions and editing of this
paper. They would also like to thank the anonymous reviewers for their excellent feedback and
suggestions that have considerably improved the manuscript. Support for this research was
provided by a grant from the Telfer School of Management, University of Ottawa.
work that measured the learning organization construct, other than a few case studies Learning and
(Stata, 1989). Beginning in 1997, two published studies by Watkins et al. (1997) and by organizational
Goh and Richards (1997) reported validated measures for measuring the learning
organization. Since then (1998-2010) there has been a growing body of empirical performance
literature, which is the focus of this paper (Bapuji and Crossan, 2004; Templeton et al.,
2004; Friedman et al., 2005).
In this paper, we examine this growing body of research on the learning 93
organization more closely to determine whether there is significant empirical evidence
of a link between learning capability and organizational performance. We begin by
situating the focus of the paper in the broader literature on the learning organization,
and then we review the relevant empirical research that examines the relationship
between learning capability and performance, both financial and non-financial. In the
methodology section we discuss the selection of papers included in our meta-analysis
and the results arrived at using the Hunter and Schmidt (2004) software (A list of
references used in the meta-analysis can be found in the Appendix). We conclude with
a discussion of the implications and limitations of the study and also explore the
potential for future research directions in the field.

The prescriptive/normative perspective

Given its growing momentum over the last two decades, the study of the learning
organization “is no longer in its infancy” (Shipton, 2006, p. 211). But there is little
common agreement on the meaning of what and how an organization learns, and an
increasing diversity of views has led to further confusion. For example, there is broad
acceptance that there are two different bodies of literature – organizational learning
and the learning organization (Fiol and Lyles, 1985; Easterby-Smith et al., 1999; Tsang,
1997; Yeo, 2005). Yet, despite this acceptance, however, there is still some confusion
among researchers and writers about where to situate their research in these growing
bodies of literature. There have been many excellent reviews of the literature (Bapuji
and Crossan, 2004; Friedman et al., 2005; Ortenblad, 2002; Shipton, 2006), and the
purpose of this paper is not to reiterate them or attempt to resolve differing views.
Rather, its purpose is to examine a distinct “slice” of the empirical literature that has
emerged: the link between learning capability and organizational performance.
This is an important body of literature, as it attempts to answer a critical question
that has both conceptual and practical considerations: Does developing a learning
organization lead to improved organizational performance and effectiveness? The
question of this relationship is fundamental and has made the concept of the learning
organization so appealing (Senge, 1990). While academics, managers, and consultants
alike have presumed that positive performance benefits accrue from building an
organization’s capability to learn, the question remains as to whether empirical
evidence supports such a link and the strength of this association. The studies that do
measure the relationship between learning capability and organizational performance
are precisely the body of empirical literature that we examined in this meta-analysis.
To situate our study, we adopted the approach used by Shipton (2006) in the most
recent review of the literature. Her paper examines the similarities and differences
among approaches in the field and places the literature on two axes. The vertical axis
represents a prescriptive/normative focus at one end of the continuum and an
explanatory/descriptive focus at the other. The horizontal axis represents individual
TLO learning (within the organizational context) at one end and organization-level studies at
19,2 the other. The resulting framework is a four-quadrant model that positions the
literature on two key dimensions: the researcher’s approach or perspective, and the unit
of analysis. See Shipton (2006) for more details on the model (see Figure 2, p. 235).
Using Shipton’s typology, the literature covered in our review would fall into
quadrants one and two. Most of the studies have a normative and prescriptive stance
94 and can be considered to be primarily in the learning organization literature. That is,
their focus is on what Shipton (2006) describes as “an empirical investigation of
whether or not measures and practices that have been designed to promote learning are
associated with increased organizational effectiveness and performance. Also the
literature attempts to capture what are the dimensions and outcomes that one can
expect where organizational learning is working well and to develop robust scales to
capture these dimensions” (p. 237).
In this paper we will use the term learning capability, which falls into the learning
organization literature and has a more normative/prescriptive focus. Learning
capability can be described as the managerial practices, mechanisms, and management
structures that can be implemented to promote learning in an organization. The basic
premise underlying the research literature that we analyzed is that a positive
relationship exists between an organization’s learning capability and its performance.

Learning capability and organizational performance

Studies of the learning organization and its link to performance typically use measures,
mostly survey-type instruments developed to capture learning capability. These
measures are then linked to a set of performance measures. Earlier empirical work on
this topic showed that learning capability had no relationship to objective financial
performance but a significant and positive relationship to job satisfaction (Goh, 2001).
However, another study by Yang et al. (2004) showed that there is a positive
relationship between learning capability and financial performance. These initial
empirical studies did not establish conclusively that there is a positive relationship
between learning capability and financial performance.
A group of studies, with a marketing perspective has also examined the relationship
between learning capability and performance (Baker and Sinkula, 1999; Calantone et al.,
2002; Hanvanich et al., 2006, Hult et al., 2003; Jimenez-Jimenez et al., 2008; Keskin, 2006;
Lin et al., 2008). They suggest that a combination of market orientation and learning
capability can lead to improvement in the overall performance of an organization such
as financial performance and non-financial performance such as market share,
innovation, or sales growth. These studies generally showed a positive link between
those performance measures and learning capability.
A number of international studies have also looked at this relationship, using
organizations from India (Jashapara, 2003; Khandekar and Sharma, 2006), Spain
(Lopez et al., 2005; Prieto and Revilla, 2006), Malaysia (Rose et al., 2009) and Taiwan
(Chen, 2007; Hsu et al., 2009; Hung et al., 2010; Lin et al., 2008; Rhodes et al., 2008; Wu
and Fang, 2010). Additional studies have focused on learning capability and
performance in small manufacturing organizations (Spicer and Sadler-Smith, 2006),
small businesses (Ruiz-Mercader et al., 2006), and inter-firm relationships and strategic
alliances ( Jiang and Yuan, 2008; Wu and Cavusgil, 2006). Others have examined the
relationship among firm strategy, learning capability, and performance (Flores et al.,
2008; Wang, 2008). All of these studies reported a positive association between learning Learning and
capability and various measures of performance. organizational
There appears to be no clear consensus in the literature on an appropriate or
consistent measure of organizational performance or effectiveness as it relates to performance
learning capability. The measures employed in the literature include objective financial
measures such as return on investment (ROI) and return on assets (ROA); perceptual
non-financial measures such as profitability, productivity, flexibility/adaptability, 95
competitiveness, and innovation; and, in some cases, a mix of both financial and
non-financial measures (Panayides, 2007).
Some literature also suggests that a strong learning capability actually results in
more immediate, non-financial outcomes such as employee innovation, efficiency (Hult
et al., 2003; Kontoghiorghes et al., 2005; Spicer and Sadler-Smith, 2006; Wu and Fang,
2010), and job satisfaction (Goh, 2001; Rose et al., 2009). Another frequently mentioned
outcome is organizational innovation or innovativeness (Aragon-Correa et al., 2007;
Garcia-Morales and Llorens-Montes, 2006; Hurley and Hult, 1998; Jimenez-Jimenez
et al., 2008; Kontoghiorghes et al., 2005; Lin et al., 2008; Llorens Montes et al., 2005;
Mavondo et al., 2005; Tanriverdi and Zehir, 2006; Wang, 2008).
There is clearly a significant body of recently published literature that tests this
relationship and is amenable to meta-analysis. They all posed the same two questions:
Is there a significant positive relationship between learning capability and
organizational performance? If so, how strong is the relationship?
Based on 33 empirical studies that link learning capability with performance, our
meta-analysis tested two hypotheses:
H1. There is a positive relationship between learning capability and financial and
non-financial performance.
H2. There will be a significantly stronger relationship between learning capability
with non-financial than with financial performance.

Methods
Literature search
To identify a potential list of articles on the learning organization, measurement, and
performance that could be included in the meta-analysis, we carried out a literature
search using the on-line ABI/Inform Global database, without limiting the results.
Using the keywords organizational/organisational learning, learning
organization/organisation, and measurement or performance, we identified articles
published from 1998 to June 2010. We were confident that this twelve-year period
would yield the majority of the studies, for three reasons: this body of research
literature is relatively recent; our initial reviews identified very few empirical studies
carried out prior to 1998 that examined the relationship between learning capability
and performance; and in reviewing the articles we carefully assessed the reference lists
to identify additional (or original source) articles. In total, this first phase identified 103
articles.
Our next step was to thoroughly review the list of articles generated by the search.
If the title of the article included the term learning, organizational/organisational
learning, or the learning organization/organization, we carefully read the abstract to
determine whether objective or perceptual performance measures were used in the
TLO study. If the paper clearly used performance measures, it was included in the potential
19,2 list of studies for the meta-analysis. Once this review was complete, 54 articles
remained.

Criteria for inclusion

96 Each of the 54 articles was then read in more detail to determine whether it met our
criteria for inclusion in the meta-analysis. To be included, studies had to be published
in an academic, peer-reviewed journal, measure the relationship between
organizational performance and learning capability, report the sample size, and
provide Pearson correlation coefficients for the variables of interest – learning
capability and performance. We included articles that used objective measures and/or
perceptual measures of organizational performance. The former included financial
measures such as profitability or growth, for example, return on investment (ROI),
return on equity (ROE), or sales growth. The latter included participants’ ratings of
organizational performance, both financial (e.g. perceptions of sales growth, market
share, competitiveness), and non-financial (e.g. perceptions of innovation or job
satisfaction). A total of 33 papers met our criteria. An additional eight papers did not
include useable statistics and we contacted the authors by email to request additional
data (Pearson correlations). Those whose studies were published more than six years
ago were not contacted (n ¼ 4). After two reminders, three responded to ask the reason
for our request and only one provided data that was not useable. The remaining nine
articles were excluded for other reasons: similar or identical datasets were used;
statistical techniques did not derive direct relationships between organizational
performance and learning capability (e.g. several paths or indirect paths were
identified in SEM); other, incompatible statistical techniques were used (e.g. Spearman
Rank Order); learning capability was too narrowly defined (e.g. intellectual capital); or
performance measurements were not provided.

Coding of studies
For each study, we recorded the learning capability variable name(s), sample size,
number of Pearson correlation coefficients, the values of the coefficients and means,
and the value(s) of the performance measure(s). With respect to the learning capability
measure, some studies reported the data as a global measure, whereas others reported
it as a measure with a number of components or dimensions. In keeping with other
meta-analyses (e.g. Dirks and Ferrin, 2002) where studies reported the Pearson
Correlation for component measures, we calculated the mean of all the correlations
between these components and performance (Hunter and Schmidt, 1990). We then
categorized all of the organizational performance measures as financial
performance-objective (FPO), financial performance-perceptual (FPP) or non-financial
performance (NFP). A descriptor was also assigned (e.g. NFP-job satisfaction). Once all
of the organizational performance measures were coded, the descriptors were reviewed
and grouped according to similarity. The result was six overall types of organizational
performance measures. To ensure reliability, the studies were coded independently by
two authors and the descriptors were discussed before final assignments were made.
Statistical procedures Learning and
Following Allen et al. (2004), we employed first what Hunter and Schmidt (2004) organizational
referred to as a “bare bones” meta-analysis, which corrects for sampling variation only,
and a subsequent analysis to correct for artifacts such as the reliabilities of the performance
measures used in the studies. Using the Hunter and Schmidt meta-analysis software,
we first calculated:
.
the sample-size weighted mean observed correlations (Mwr); 97
.
the sample-size weighted standard deviations (SDwr) of the observed
correlations;
.
the standard deviations (SDp) of the correlations after removing sampling
variance;
.
the percentage of the variance of the observed correlations due to sampling error
variance; and
.
the 10th percentile of the estimated correlations, which is called the lower bound
of the 80 percent credibility interval.

In addition, we calculated the mean correlation (Mr) and the standard error of the mean
correlations corrected for sampling variance (SEp), from which we derived the 95
percent confidence interval (CI) for the true mean correlation. Finally, k is the number
of studies with a correlation or a mean correlation to the type of performance measure,
and N is the total sample size of these studies. Following Allen et al. (2004), we also
calculated the number of studies averaging null results that would result in reducing
the weighted mean correlation to 0.01 (the fail-safe k).
The analysis correcting for individual artifacts calculated the following:
.
the sample-size-weighted true mean correlation corrected for artifacts (rho);
.
the standard deviation of the sample-size-weighted correlations corrected for
artifacts (SDrho);
. the standard error of the true mean correlation corrected for artifacts (SErho);
.
the percentage of the variance due to artifacts;
. the 10th percentile of the corrected correlations, which is the “lower 90 percent
credibility value”.
Again, we calculated the 95 percent confidence interval for the true mean correlation
corrected for artifacts.

Measures
Learning capability. In all of the empirical studies that we reviewed for this study, most
of the researchers developed their own measures to capture learning capability. Some
of these measures include dimensions such as knowledge transfer, an experimenting
culture, a learning orientation, knowledge acquisition and sharing, teamwork and
group-problem solving, shared vision, and leadership that supports learning and
open-mindedness. This suggests that learning capability has been reported by many
researchers to be a multi-dimensional construct. Although developed by different
researchers, these measures have significant overlaps. From a scale measurement
perspective, although indicated as multi-dimensional by some authors of these papers,
TLO the reported scale development results generally show high and significant positive
19,2 inter-correlation values between the dimensions. This suggests that these scales
measuring learning capability can be considered to be unidimensional (Chakrabarty
and Roge, 2002; Goh et al., 2007). We therefore argue that since there are significant
overlaps between the different scales and high inter-correlations among the
dimensions of these measures, it is appropriate to use the reported single measure of
98 learning capability in these studies and aggregate them for the meta-analysis.
Organizational performance. Financial measures of performance, reported as the
dependent variable in the studies we examined, tended to be perceptual. Only three
studies used objective accounting financial information such as ROA, ROI, sales, or
income growth (Di Michna, 2009; Keskin, 2006; Milia and Birdi, 2009). Overall, most of
the financial measures were very general. For example, surveys were typically sent to
senior officers (CEO/Presidents, Vice-Presidents, senior managers), asking for
subjective ratings of the organization’s financial performance relative to other
organizations in the industry or to competitors, growth in profits or sales, market
share, return on capital or overall profitability. The reason given for using perceptual
measures rather than objective financial data were that confidentiality or
unavailability made the latter difficult to obtain from respondents (e.g. the firms
were not publicly traded corporations). However, the most frequently cited reason for
using perceptual measures was the evidence of their strong correlation to actual
measures of financial performance (Covin et al., 1994; Dawes, 1999; Dess and Robinson,
1984).That is, perceptual measures were considered to be a valid proxy measure for
actual financial performance (Dawes, 1999).
We classified financial performance measures (FPP) that had subjective ratings of
profitability, profit growth, sales growth, ROI, and ROE as “financial performance
measures.” We further classified a category of financial performance under
“competitiveness.” Those considered as “competitiveness” measures included
perceptual ratings of relative performance against competitors. We also classified
non-financial performance measures (NFP) used in these studies under four categories:
innovation, efficiency, job satisfaction, and other. Where “innovation” or
“innovativeness” or “innovation capacity” were clearly stated as a dependent
measure, we classified it in the first category. Where a dependent variable was reported
as “operational efficiency” or “cost reduction,” we classified it as “efficiency.” Job
satisfaction measures were usually clearly stated as such. The category “other”
included dependent measures that did not seem to fit the other three variables.

Results
We stated in H1 that there is a positive relationship between learning capability and
financial and non-financial performance. Table I shows the results for overall financial
performance (Mwr ¼ 0.37, k ¼ 30, 95% CI ¼ 0.33 to 0.42), as well as for its components
of financial performance (Mwr ¼ 0.36, k ¼ 26, 95% CI ¼ 0.30 to 0.42) and of
competitiveness (Mwr ¼ 0.33, k ¼ 8, 95% CI ¼ 0.25 to 0.41). Of the three studies that
used objective measures of financial performance, the average correlation was slightly
lower at 0.29. In the case of overall non-financial (perceptual) performance, the results
show that there is also a positive relationship between learning capability and
non-financial performance (Mwr ¼ 0.47, k ¼ 19, 95% CI ¼ 0.41 to 0.53). In addition, the
lower 90 percent credibility values were all positive and the fail-safe k values were all
 Percentage
variance due to Lower 90 percent
Dependent variable K N Mr Mwr SDwr SDp SEp sampling 95 percent CI CV Fail-safe k

Financial 30 8,688 0.35 0.37 0.132 0.122 0.024 14.8 (0.33, 0.42) 0.21 1083
Financial performance 26 7,782 0.34 0.36 0.151 0.142 0.030 11.1 (0.30, 0.42) 0.18 918
Competitiveness 8 2,282 0.34 0.33 0.114 0.101 0.040 21.4 (0.25, 0.41) 0.20 254
Non-financial 19 6,115 0.45 0.47 0.130 0.123 0.030 11.2 (0.41, 0.53) 0.31 874
Innovation 10 3,152 0.47 0.46 0.131 0.123 0.041 11.7 (0.38, 0.54) 0.30 450
Efficiency 6 1,600 0.39 0.37 0.157 0.148 0.064 11.4 (0.25, 0.50) 0.18 218
Job satisfaction 3 1,626 0.48 0.48 0.184 0.181 0.106 3.2 (0.27, 0.69) 0.25 141
Other 7 2,711 0.37 0.38 0.122 0.114 0.046 12.7 (0.29, 0.47) 0.24 260
Notes: k ¼ number of correlations; N ¼ total sample size for studies combined; Mr ¼ mean unweighted correlations; Mwr ¼ sample-weighted mean
correlations; SDwr ¼ standard deviation of the sample-weighted correlations; SDp ¼ standard deviation of correlations corrected for sampling error;
SEp ¼ standard error of the mean correlations; percent variance sampling ¼ percentage of variance due to sampling; CI ¼ confidence interval for the true
mean correlation; the lower 90 percent CV (credibility value) is the 10th percentile value of the correlations corrected for sampling error; fail-safe k ¼ the
number of studies averaging null results that would be needed to reduce the sample-weighted mean correlation to 0.01
organizational

performance
non-financial
performance

financial and
learning capability and
relationship between
Meta-analysis of the
Learning and

99

Table I.
TLO in the hundreds. Finally, all the subcategories show 95 percent confidence intervals
19,2 that exclude zero, indicating that the true mean correlations are significantly greater
than zero. We conclude that there is support for H1.
In H2 we stated that learning capability will have a stronger relationship to
non-financial performance than to financial performance. The results show this to be
true (financial, Mwr ¼ 0.37, versus non-financial, Mwr ¼ 0.47). Taking into account the
100 number of studies and the distribution of the correlations, statistically the difference is
significantly non-zero with a p-value of 0.01. For the subcategories the differences are
also in the predicted direction. For example, even the overall perceptual measures of
financial performance (Mwr ¼ 0.36) is lower than the non-financial performance
categories of innovation (Mwr ¼ 0.46) and job satisfaction (Mwr ¼ 0.48). For the
one-sided test that is appropriate for H2, statistically only the difference between
financial performance and innovation in their correlations with learning capability is
significantly greater than zero ( p ¼ 0.03). Overall, there is support for H2.
In the bare bones analysis we have described, we did not correct the correlations for
individual artifacts in summarizing the studies included in our meta-analysis. The
Hunter and Schmidt (2004) procedure also allows for an approach to correct for
individual artifacts such as the reliabilities of the measures used. In our analysis, we
recorded all the reported reliabilities of both the independent and the dependent
measures in each study.
Where more than one reliability coefficient was reported for a given measure, we
calculated a simple average (Feldt and Charter, 2006). Cronbach’s alpha ranged from
0.8 to 0.9 in most of the studies. For those that did not report reliabilities we used the
default value of one for the analysis. Table II shows, after correcting for artifacts, the
mean true score correlations (rho), the standard deviation of the true score correlations
(SDrho), the standard error of the true score correlations (SErho), the percentage of the
variance of the correlations due to artifacts, and the 95 percent confidence interval
values for the mean correlation.
As expected, correcting for reliabilities resulted in an upward revision of the
sample-size weighted mean correlation (Mwr) to the estimated true mean correlation
(rho) reported in Table II for all the performance variables, both financial and
non-financial. For financial performance the result was positive (rho ¼ 0.42, k ¼ 30,
95% CI ¼ 0.36 to 0.47), and for non-financial performance it was also positive and
higher (rho ¼ 0.53, k ¼ 19, 95% CI ¼ 0.46 to .59). Taking into account the number of
studies, the standard deviations, and the distributions of the correlations, the difference
is statistically significantly non-zero with a p-value of 0.02. This correction for artifacts
(reliabilities) shows the robustness of the two analyses, further supporting both H1 and
H2.

Discussion
One of the major claims made in the learning organization literature is that building a
learning capability can result in improved organizational performance. The results of
our meta-analysis show that empirical research supports this claim and that there is a
significant positive relationship. Therefore, having a learning capability has positive
payoffs for an organization with respect to a number of desired performance outcomes.
As we hypothesized, the results show that there is evidence of a positive relationship
between learning capability and financial performance. The results need to be qualified
 Percentage
variance due to Lower 90 percent
Dependent variable k N rho SDrho SErho artifacts 95%CI Credibility Value

Financial 30 8,688 0.42 0.151 0.027 12.7 (0.36, 0.47) 0.220

Financial performance 26 7,782 0.41 0.175 0.033 9.6 (0.34, 0.47) 0.183
Competitiveness 8 2,282 0.36 0.124 0.043 18.0 (0.27, 0.44) 0.197
Non-financial 19 6,115 0.53 0.148 0.033 9.9 (0.46, 0.59) 0.337
Innovation 10 3,152 0.51 0.173 0.046 7.8 (0.42, 0.60) 0.283
Efficiency 6 1,600 0.39 0.162 0.067 10.5 (0.26, 0.52) 0.182
Job satisfaction 3 1,626 0.50 0.198 0.110 2.9 (0.28, 0.71) 0.242
Other 7 2,711 0.42 0.147 0.051 9.9 (0.32, 0.52) 0.232
Note: k ¼ number of correlations; N ¼ total sample size for studies combined; rho ¼ sample-size-weighted true mean correlation corrected for artifacts;
SDrho ¼ standard deviation of the sample-size-weighted correlations corrected for artifacts; SErho ¼ standard error of the estimated true mean
correlation; percent variance sampling ¼ percentage of variance due to artifacts; CI ¼ confidence interval for the true mean correlation corrected for
artifacts; the lower 90 percent CV (credibility value) is the 10th percentile value of the correlations corrected for artifacts
organizational

non-financial
performance

performance, correcting
for artifacts
financial and
learning capability and
relationship between
Meta-analysis of the
Learning and

101

Table II.
TLO in one respect: only three of the studies reported objective financial data (which we
19,2 combined with the perceptual financial data). In the case of the non-financial data, both
innovation and job satisfaction had the highest correlations with learning capability.
Not surprisingly, being a learning organization seems to have a positive impact not
only on financial performance but also on employee attitudes toward their work and
job satisfaction.
102
Practical implications
An implication for managers is that the results of this meta-analysis can provide a
stronger business case for investing time and resources into developing a learning
capability in an organization. The results of our meta-analysis suggest that there are
positive benefits that can accrue to an organization in developing a learning capability,
such as increases in innovation capacity, competitiveness, and job satisfaction of
employees. When building this learning capability, managers should assess these
financial and non-financial performance measures to support their argument that
learning capability can be linked to tangible results.
Another implication is that most of these studies have developed diagnostic
instruments that can be used to assess an organization’s learning capability. Managers
can use these instruments to benchmark their organizations and determine their level
of learning capability. The instruments can also help managers identify not only the
managerial practices that need to be implemented or improved but also the level of
effort and resources that might realistically be required to build a stronger learning
capability. This can provide managers with a practical and concrete approach to
building a learning capability and also a means to obtain feedback, learn, and
demonstrate progress to the organization.
These implications should be considered tentative at this juncture, as causality has
not been clearly established. However, from a management practice perspective,
building a learning capability should be beneficial, generating a number of
non-financial performance outcomes such as job satisfaction, innovation capacity,
competitiveness, and improved financial performance of the organization.

Limitations and future research directions

Due to methodological considerations of this meta-analysis, we have excluded a
significant number of studies that report links between learning capability and
performance; as a result, the effect sizes may have been impacted. However, the
excluded studies all report significant positive relationships between learning
capability and financial or non-financial performance, but not in the format required
for this study (Pearson correlation coefficients).
Another potential limitation is the perceptual nature of both the learning capability
and performance measures reported in the majority of the studies. Therefore, common
method variance has been cited as a potential problem (Podsakoff et al., 2003).
However, recent studies have shown that any bias due to common method variance is
often only minor (Spector, 2006; Meade et al., 2007). In fact, two of the studies in our
meta-analysis examined this issue (Flores et al., 2008; Jiang and Li, 2008) and found no
evidence of common method variance.
Future research may want to further investigate some of the practical implications
for managers, such as how to effectively implement and sustain a learning capability.
For example, Qualitative longitudinal studies that examine how organizations learn Learning and
and can build a learning capability through an organizational change lens could organizational
provide very useful recommendations for practice. This research evidence will add
significantly to a more solid base for practice on how to build a learning capability performance
(Rerup and Feldman, 2011).
Although the meta-analysis has established that there is a significant relationship
between learning capability and performance, as stated earlier, the issue of causality 103
remains. In the future, researchers may want to address the issue of causality using
field experiments. Our meta-analytic examination of the literature found very little
empirical work using such a design (Lien et al., 2007). With the large number of
validated scales that can be used to assess learning capability, this is a very feasible
research design for pre and post intervention studies on learning capability and
performance. If the proper controls are in place, these studies can contribute
significantly to theory building and can more clearly address the causal link between
learning capability and organizational performance.
Another potential area for further research is to explore whether non-financial
performance factors, such as innovation capacity, may have significant moderating or
mediating effects on the link between learning capability and financial performance
(Alegre and Chiva, 2008; Baron and Kenny, 1986). Research with this more complex
multi-variable approach can contribute to further theorizing about how other factors
can play an important role in either mediating or moderating the effects of learning
capability on an organization’s financial performance.
Lastly, the issue of context can be another potentially productive extension to the
body of research reviewed in this meta-analysis. Our analysis was based on the
average strengths of the correlations between learning capability and performance as
reported by these studies. Obviously some of the relationships were stronger in some
studies and weaker in others. Further research may want to explore why this may be
the case. For example, can the strengths of this relationship be partially explained by
context? Is it possible that organizations that are smaller or are in the service industry
can benefit more from developing a learning capability than, for example, public sector
organizations where performance is often more difficult to measure and define and is
not as crucial to survival? Research that explicitly examines the role of context in this
literature can also add significantly to theory building in the field.

Conclusion
The findings of this meta-analysis based on 33 empirical studies indicate that there is a
significant positive relationship between learning capability and organizational
performance. Further empirical research is warranted and necessary to gain a deeper
understanding of this complex relationship. Our meta-analysis, however, was not an
attempt to over-simplify research on the learning organization into a two-variable
study of learning capability and performance. Rather, we wanted to achieve a more
focused look at a relationship of prime interest in the learning organization literature.
Through this meta-analytic examination, we hoped to advance the debate about the
learning organization and to gain a better understanding of the relationship between
learning capability and organizational performance. Furthermore, we identified areas
for future research and provided several practice implications for managers. Further
empirical investigation into the relationship between learning capability and
TLO performance can increase our understanding of the complex relationships between
19,2 these two constructs and provide a stronger foundation to advance theory development
in the study of the learning organization.

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Appendix
List of references used in the meta-analysis
Aragon-Correa et al. (2007); Baker and Sinkula (1999); Calantone et al. (2002); Chen (2007); Di
Michna (2009); Flores et al. (2008); Garcia-Morales and Llorens-Montes (2006); Goh (2001);
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(2006); Kontoghiorghes et al. (2005); Lin et al. (2008); Llorens Montes et al. (2005); Lopez et al.
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et al. (2009); Ruiz-Mercader et al. (2006); Spicer and Sadler-Smith (2006); Tanriverdi and Zehir
(2006); Wang (2008); Wu and Cavusgil (2006); Wu and Fang (2010); Yang et al. (2004)
TLO About the authors
Swee C. Goh is Professor of Organizational Behaviour and Interis Research Fellow at the Telfer
19,2 School of Management, University of Ottawa. Professor Goh’s main research interests are in the
areas of performance management and measurement, organizational learning, knowledge
management and evaluation capacity building. Swee C. Goh is the corresponding author and can
be contacted at: goh@telfer.uottawa.ca
Catherine Elliott is an Assistant Professor at the Telfer School of Management, University of
108 Ottawa. She teaches organizational behaviour and human resources and conducts research in
organizational learning and performance management in public sector institutions.
Tony K. Quon is an Associate Professor at the Telfer School of Management, University of
Ottawa. He teaches multivariate statistical methods, business and technology forecasting, and
business statistics and is interested in applying statistics to a wide range of management
problems.

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