Introduction

In business management, a learning organisation is an organisation that facilitates the learning of its
members and continuously transforms itself.

The concept was coined by Peter Senge and his colleagues. Acc. to Senge “learning organization is a
group of people working together collectively to enhance their capacities to create results they really
care about.”

For eg:

 Pizza Hut: It constantly invents and implements new technology and by recognizing the lifetime
value of their customers, it treats them as long-term assets.
 Microsoft: It successfully made the massive shift in mindset from desktop to Internet when its
marketplace changed.
 Johnson & Johnson: Driven by its famous credo, it constantly improves products and invents new
ones, always with the user at the centre of its focus.
 Apple: It perceives unrecognized marketplace needs and creates new products to fill them.
 Toyota Motor Co.: It uses lean manufacturing and continuous improvement to make small but
never-ending improvements in products and processes.

What’s common to all these successful companies is their foundation of solid basic principles and values,
as well as their continuous learning to keep them thinking and acting ahead of their competition. They
constantly create markets, market approaches, products and greater customer value constantly, and they
never squander the market advantage they have worked so hard to acquire by letting their competition
think or act ahead of them or faster than they can. As long as these companies remain true learning
organizations, it’s safe to assume their future success.
 Literature review
The term "learning organization", not be confused with organizational learning, was popularized
by Peter Senge. It describes an organization with a perfect learning environment, perfectly in
tune with it’s goals. Such an organization may be a place "where people continually expand their
capacity to create the results they truly desire, where new and expansive patterns of thinking are
nurtured, where collective aspiration is set free, and where people are continually learning to see
the whole (reality) together." (Senge 1992).

Many authors and theorist have tried to define Learning Organizations.

o Senge considers that learning organizations are those organizations where people
continually expand their capacity to make the results they really desire, where new and
expansive patterns of thinking are nurtured, where collective aspiration is ready free, and
where people are continually learning to determine the whole.
o Pedler, et al. (1991) saw a learning organization as a vision, and not simply as a
training of individuals. It facilitates transformation of all members of the
organization and also the organization as such, through continuous
learning. It's essentially a top-down approach.
o Watkins and Marsick (1992), on the opposite hand, characterized learning
organization because the process of total employee involvement to introduce collective
accountability and alter through the principles of shared values. It's characterized as
bottom-up approach.
o Easterby-Smith and Araujo (1999) made a distinction between the technical and social
variants of learning organization. The technical variant looks at the issues of the
learning organization as a technical option. Here, organizational interventions
are supported measures like the ‘learning curve’. Learning curve analyses historical data
on production costs against the cumulative output of a specific product.

Although theorists of learning organizations have often drawn on ideas from organizational
learning, there has been little traffic in the reverse direction. Moreover, since the central concerns
have been somewhat different, the two literatures have developed along divergent tracks. The
literature on organizational learning has concentrated on the detached collection and analysis of
the processes involved in individual and collective learning inside organizations; whereas the
learning organizations literature has an action orientation, and is geared toward using specific
diagnostic and evaluative methodological tools which can help to identify, promote and evaluate
the quality of learning processes inside organizations. (Easterby-Smith and Araujo 1999: 2; see
also Tsang 1997).

Peter Senge introduced the following dimensions that covers the concept of Learning organizations:
  Systems thinking: The notion of treating the organization as a complex system composed of
smaller (often complex) systems. This requires an understanding of the whole, as well as the
components, not unlike the way a doctor should understand the human body. Some of the key
elements here are recognizing the complexity of the organization and having a long-term focus.
Senge advocates the use of system maps that show how systems connect.
 Personal mastery: Senge describes this as a process where an individual strives to enhance his
vision and focus his energy, and to be in a constant state of learning.
 Mental models: "Deeply ingrained assumptions, generalizations, or even pictures and images that
influence how we understand the world and how we take action" (Senge 1990). These must be
recognized and challenged so as to allow for new ideas and changes.
 Building shared vision: Shared vision is a powerful motivator. A leader's vision does not
necessarily become shared by those below him. The key here is to pass on a picture of the future.
To influence using dialogue, commitment, and enthusiasm, rather than to try to dictate.
Storytelling is one possible tool that can be used here.
 Team learning: The state where team members think together to achieve common goals. It builds
on shared vision, adding the element of collaboration.

Many consultants and organizations have recognized the importance of organizational learning –
and the notion of the ‘learning organization’ has been a central orienting point in this. In this
sense the learning organization is an ideal, ‘towards which organizations have to evolve in
order to be able to respond to the various pressures [they face] (Finger and Brand 1999: 136).

In a competitive world, organizations must transform the workplace into a dynamic and effective

place to optimize the talent of the people and to align them with the organizational business
goals. However, the method isn't simple. Organizations are the configuration of complex systems
and strategies; hence, the learning imperatives for various domains are different.

However, the objective remains same, that is, “to maximize the performance by using the

learning principles”. Hence, organizational emphasis should be to support and maximize long-
term effective and sustainable learning. We cannot, however, make redundant the technical or
task-related skills. These are essential but not the absolutes within the new-age economy. To
sustain itself in an exceedingly competitive global market, a company should adapt to the
changing environments and make their people capable of undertaking new tasks and
responsibilities. Continuous capacity building of the people in organizations would only be
possible when organizations follow the learning management principles.

Thus, in its true sense, a learning organization should support the development, process skills
and attitudes to boost the performance in a competitive business situation. Learning develops
organizational intellectual capital, which can be considered an only sustainable competitive
strength for any organization.

Organizational learning is the most significant intervention tool for Organizational Development.

Learning reinforcement develops people and makes them capable of problem solving. Thus, a
learning organization evolves by developing the capability to adapt to changes.
Theoretically, learning organizations have two dimensions. The primary dimension views it as a
process for individual and collective learning within a corporation. The second dimension
considers it as a diagnostic and evaluative tool to spot, promote, and evaluate the standard of
learning processes inside organizations.

The end objective of these dimensions is the same, i.e. to transform the organization into an ideal
learning organization.