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A Model for Organizational

Learning Capability

- Dr. V. Thanikachalam

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Business Context•Industry

Characteristics

•Business Strategy

•Business Culture

Learning Capability•Generation of ideas (ability to generate ideas via different learning styles)

•Generalization of ideas (ability to move ideas across boundaries)

•Learning disabilities (Barriers to generate and generalize ideas)

Business Performance•Innovations

•Competitiveness

Primary relationshipSecondary relationship

MODEL OF ORGANIZATIONAL CAPABILITY

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Relationships• Building blocks of learning

capability• Business context learning

capability• Those between learning capability

and business performance

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Business Context (Antecedents of Learning Capability)• Contextual variables that may

influence• Industry characteristics• Business strategy• Business culture

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Industry Characteristics• Market concentration• Customer relationships• Supplier relationships• Technological Interdependence• Environmental predictability• Industry type

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Business Strategy• Advertising• Brand identification• Building employee commitment• Competitive pricing• Cost reduction• Developing operating technology

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Business Strategy….• Developing /refining existing products• Differentiating products or services

from those of competitors• Improving relationships with

customers• Innovation in marketing techniques

and methods

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Business Strategy…• New products or services

development• Operating efficiency• Providing specialized products

or services• Quality of products or services

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Business Culture• Clan culture• Adhocracy culture• Hierarchical culture• Market culture

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Clan Culture• Empowerment of employees to

act• Participation, open discussion• Assessing employee concerns

and ideas• Human relations, teamwork,

cohesion

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Adhocracy Culture• Flexibility• Decentralization• Innovation and change• Expansion, growth, and

development• Creative problem solving processes

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Hierarchical Culture• Control, centralization• Predictable performance

outcomes• Stability, continuity, order• Routinization, formalization and

structure

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Market Culture• Task focus• Accomplishment• Goal Achievement• Efficiency• Productivity• Outcome

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Market Culture…• Excellence• Quality• Direction• Objective setting• Goal clarity

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Consequences of a Company’s Ability to Learn• Innovativeness• Competitiveness• Morale• Commitment of employees• Customer Satisfaction• Market share

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Competitiveness• Ability of a business to

compare in its niche or market position

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Components of a Company’s Competitiveness• Financial performance in the

last three years• MIS• Customer buying criteria• Customer relations• Distribution channels

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Components of a Company’s Competitiveness…• Divestitures• Financial Management• Globalization• Government relations• Human Resource Practices• Marketing and sales

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Components of a Company’s Competitiveness…• Mergers / acquisitions• Organizational structure• Production capability• Research and Development

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Innovativeness

• Cycle time for innovation• Reputation as an innovator• Willingness to take risks• Willingness to experiment

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Learning Capability

• Influenced by context• Influence on performance• Linchpin for managerial action

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Organizational Learning Capability• The capacity to generate and

generalize ideas with impact across multiple organizational boundaries, through specific management initiatives and practices

• Based on generation of ideas, generalization of ideas, and identification of learning disabilities.

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To Compete in Today’s Rapidly Changing Environment• Corporations need to

strengthen their learning capability

• Simultaneously manage all three building blocks.

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Business Performance

• Influenced by learning capability

• Business context influences the learning capability

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Implement the Model and Review