In business management, a learning organization is a company that facilitates the learning of its members and continuously transforms itself. The concept was coined through the work and research of Peter Senge and his colleagues.
There is a multitude of definitions of a learning organization as well as their typologies. Peter Senge stated in an interview that a learning organization is a group of people working together collectively to enhance their capacities to create results they really care about. Senge popularized the concept of the learning organization through his book The Fifth Discipline. In the book, he proposed the following five characteristics:
Systems thinking. The idea of the learning organization developed from a body of work called systems thinking. This is a conceptual framework that allows people to study businesses as bounded objects. Learning organizations use this method of thinking when assessing their company and have information systems that measure the performance of the organization as a whole and of its various components. Systems thinking states that all the characteristics must be apparent at once in an organization for it to be a learning organization. If some of these characteristics are missing then the organization will fall short of its goal. However, O'Keeffe believes that the characteristics of a learning organization are factors that are gradually acquired, rather than developed simultaneously.
- Personal mastery. The commitment by an individual to the process of learning is known as personal mastery. There is a competitive advantage for an organization whose workforce can learn more quickly than the workforce of other organizations. Learning is considered to be more than just acquiring information; it is expanding the ability to be more productive by learning how to apply our skills to our work in the most valuable way. Personal mastery appears also in a spiritual way as, for example, clarification of focus, personal vision and ability to see and interpret reality objectively. Individual learning is acquired through staff training, development and continuous self-improvement; however, learning cannot be forced upon an individual who is not receptive to learning. Research shows that most learning in the workplace is incidental, rather than the product of formal training, therefore it is important to develop a culture where personal mastery is practiced in daily life. A learning organization has been described as the sum of individual learning, but there must be mechanisms for individual learning to be transferred into organizational learning. Personal mastery makes possible many positive outcomes such as individual performance, self-efficacy, self-motivation, sense of responsibility, commitment, patience and focus on relevant matters as well as work-life balance and well-being.
- Mental models. Assumptions and generalizations held by individuals and organizations are called mental models. Personal mental models describe what people can or cannot detect. Due to selective observation, mental models might limit peoples’ observations. To become a learning organization, these models must be identified and challenged. Individuals tend to espouse theories, which are what they intend to follow, and theories-in-use, which are what they actually do. Similarly, organizations tend to have 'memories' which preserve certain behaviours, norms and values. In creating a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust. To achieve this, the learning organization needs mechanisms for locating and assessing organizational theories of action. Unwanted values need to be discarded in a process called 'unlearning'. Wang and Ahmed refer to this as 'triple loop learning'. For organizations, problems arise when mental models evolve beneath the level of awareness. Thus it is important to examine business issues and actively question current business practices and new skills before they become integrated into new practices.
- Shared vision. The development of a shared vision is important in motivating the staff to learn, as it creates a common identity that provides focus and energy for learning. The most successful visions build on the individual visions of the employees at all levels of the organization, thus the creation of a shared vision can be hindered by traditional structures where the company vision is imposed from above. Therefore, learning organizations tend to have flat, decentralized organizational structures. The shared vision is often to succeed against a competitor; however, Sengestates that these are transitory goals and suggests that there should also be long-term goals that are intrinsic within the company. On the other hand, the lack of clearly defined goals can negatively affect the organisation, as it cannot attain its members trust. Applying the practices of a shared vision creates a suitable environment for the development of trust through communication and collaboration within the organization. As a result, the built shared vision encourages the members to share their own experiences and opinions, thus enhancing effects of organizational learning.
- Team learning. The accumulation of individual learning constitutes team learning. The benefit of team or shared learning is that staff grow more quickly and the problem solving capacity of the organization is improved through better access to knowledge and expertise. Learning organizations have structures that facilitate team learning with features such as boundary crossing and openness. In team meetings members can learn better from each other by concentrating on listening, avoiding interruption, being interested in and responding. As a result of development, people don't have to hide or overlook their disagreements. By those they make their collective understanding richer. Team learning is at its best: The ability to think insightfully about complex issues, the ability to take innovative, coordinated action and the ability to create a network that will allow other teams to take action as well. Team's focus is on transferring both quiet and explicit information across the group and creating an environment where creativity can flourish. Team learn how to think together. Team learning is process of adapting and developing the team capacity to create the results that its members really want. Team learning requires individuals to engage in dialogue and discussion; therefore team members must develop open communication, shared meaning, and shared understanding. Learning organizations typically have excellent knowledge management structures, allowing creation, acquisition, dissemination, and implementation of this knowledge in the organization. Team learning requires discipline and routines. Discipline in team helps members and leaders to use tools such as Action-Learning-Cycle and Dialogue. Team learning is only one element of learning cycle. For the cycle to be complete, it has to include all five principles which are mentioned above.