Introduction

An organization, by its most basic definition, is an assembly of people working together to achieve common objectives through a division of labor. An organization provides a means of using individual strengths within a group to achieve more than can be accomplished by the aggregate efforts of group members working individually. Business organizations are formed to deliver goods or services to consumers in such a manner that they can realize a profit at the conclusion of the transaction. Over the years, business analysts, economists, and academic researchers have pondered several theories that attempt to explain the dynamics of business organizations, including the ways in which they make decisions, distribute power and control, resolve conflict, and promote or resist organizational change. As Jeffrey Pfeffer summarized in New Directions for Organization Theory, organizational theory studies provide "an interdisciplinary focus on

• the effect of social organizations on the behavior and attitudes of individuals within them

• the effects of individual characteristics and action on organization

• the performance, success, and survival of organizations

• the mutual effects of environments, including resource and task, political, and cultural environments on organizations and vice versa

• concerns with both the epistemology and methodology that undergird research on each of these topics

Definition

Organizational theory is the systematic study and careful application of knowledge about how people - as individuals and as groups - act within organizations. It is also Study of organizational designs and organizational structures, relationship of organizations with their external environment, and the behavior of managers and technocrats within organizations. It suggests ways in which an organization can cope with rapid change. Organization theory tends to be more macro oriented than organization behavior and is primarily concerned with organization structure and design.

Future organizations must be capable of changing relative to a quickly changeable world. It may be relevant to include relations to society and the influence on and from other organizations. And naturally, there are also relations between the organization’s own teams and individuals. Thus, an organization may be viewed from different angles.

APPLICATIONS OF ORGANIZATION THEORY

Strategy/FinanceThose who want to improve the value of a company need to know how toorganize to achieve organizational goals; those who want to monitor andcontrol performance will need to understand how to achieve results bystructuring activities and designing organizational processes.

MarketingMarketers know that to create a successful corporate brand they need toget the organization behind the delivery of its promise; a thoroughunderstanding of what an organization is and how it operates will maketheir endeavors to align the organization and its brand strategy morefeasible and productive.

Information technology

The way information flows through the organization affects work processesand outcomes, so knowing organization theory can help IT specialistsidentify, understand and serve the organization’s informational needs asthey design and promote the use of their information systems.

Operations

Value chain management has created a need for operations managers tointerconnect their organizing processes with those of suppliers, distributorsand customers; organization theory not only supports the technical aspectsof operations and systems integration, but explains their socio-culturalaspects as well.

Human resources

Nearly everything HR specialists do from recruiting to compensation hasorganizational ramifications and hence benefits from knowledge providedby organization theory; organizational development and change are particularlyimportant elements of HR that demand deep knowledge of organizationsand organizing, and organization theory can provide content for executivetraining programs.

CommunicationCorporate communication specialists must understand the interpretiveprocesses of organizational stakeholders and need to address the manyways in which different parts of the organization interact with each otherand the environment, in order to design communication systems that areeffective or to diagnose ways existing systems are misaligned with theorganization’s needs.

HISTORY

The Greek philosopher Plato wrote about the essence of leadership. Aristotle addressed the

topic of persuasive communication. The writings of 16th century Italian philosopher Niccolò

Machiavelli laid the foundation for contemporary work on organizational power and politics. In

1776, Adam Smith advocated a new form of organizational structure based on the division of labour.

One hundred years later, German sociologist Max Weber wrote about rational organizations and

initiated discussion of charismatic leadership. Soon after, Frederick Winslow Taylor introduced the

systematic use of goal setting and rewards to motivate employees. In the 1920s, Australian-born

Harvard professor Elton Mayo and his colleagues conducted productivity studies at Western Electric's

Hawthorne plant in the United States.

Though it traces its roots back to Max Weber and earlier, organizational studies is generally

considered to have begun as an academic discipline with the advent of scientific management in the

1890s, with Taylorism representing the peak of this movement. Proponents of scientific management

held that rationalizing the organization with precise sets of instructions and time-motion studies would

lead to increased productivity. Studies of different compensation systems were carried out.

Modern organization theory is rooted in concepts developed during the beginnings of the

Industrial Revolution in the late 1800s and early 1900s. Of import during that period was the research of

German sociologist Max Weber (1864-1920). Weber believed that bureaucracies, staffed by bureaucrats,

represented the ideal organizational form. Weber based his model bureaucracy on legal and absolute

authority, logic, and order. In Weber's idealized organizational structure, responsibilities for workers are

clearly defined and behavior is tightly controlled by rules, policies, and procedures.

Weber's and Fayol's theories found broad application in the early and mid-1900s, in part

because of the influence of Frederick W. Taylor (1856-1915). In a 1911 book entitled Principles of

Scientific Management, Taylor outlined his theories and eventually implemented them on American

factory floors. He is credited with helping to define the role of training, wage incentives, employee

selection, and work standards in organizational performance.

After the First World War, the focus of organizational studies shifted to analysis of how human

factors and psychology affected organizations, a transformation propelled by the identification of

the Hawthorne Effect. This Human Relations Movement focused on teams, motivation, and the

actualization of the goals of individuals within organizations.

Prominent early scholars included Chester Barnard, Henri Fayol, Frederick Herzberg, Abraham

Maslow, David McClelland, and Victor Vroom.

The Second World War further shifted the field, as the invention of large-scale logistics

and operations research led to a renewed interest in rationalist approaches to the study of

organizations. Interest grew in theory and methods native to the sciences, including systems theory, the

study of organizations with a complexity theory perspective and complexity strategy. Influential work

was done by Herbert Alexander Simon and James G. March and the so-called "Carnegie School" of

organizational behavior.

The focus on human influences in organizations was reflected most noticeably by the integration

of Abraham Maslow's "hierarchy of human needs" into organization theory. Maslow's theories

introduced two important implications into organization theory. The first was that people have different

needs and therefore need to be motivated by different incentives to achieve organizational objectives.

The second of Maslow's theories held that people's needs change over time, meaning that as the needs

of people lower in the hierarchy are met, new needs arise. These assumptions led to the recognition, for

example, that assembly-line workers could be more productive if more of their personal needs were

met, whereas past theories suggested that monetary rewards were the sole, or primary, motivators.

In the 1960s and 1970s, the field was strongly influenced by social psychology and the emphasis

in academic study was on quantitative research. An explosion of theorizing, much of it at Stanford

University and Carnegie Mellon, produced Bounded Rationality, Informal Organization, Contingency

Theory, Resource Dependence, Institutional Theory, and Organizational Ecology theories, among many

others.

Starting in the 1980s, cultural explanations of organizations and change became an important

part of study. Qualitative methods of study became more acceptable, informed by, anthropology,

psychology and sociology. A leading scholar was Karl Weick.

There are so many organizational theories since 1900. Some most significant theories which made important contribution were

Scientific Management Theory

Scientific Management originated in the beginning of the 20th century, and Frederick W. Taylor was the primary contributor. Scientific Management was based on an idea of systematization where attempts were made to enhance the efficiency of procedures to best effect via scientific analyses and experiments. Taylor believed that it was possible to prescribe the processes that resulted in maximum output with a minimum input of energy and resources. Thus, Taylor’s starting point was the individual work process, which had considerable consequences throughout the system. The structure had to be adapted to the focus that was put on work processes, and in doing so; the manager lost his governing role as he was subjected to scientifically calculated solutions. Therefore, it was necessary to establish a staff of specialists who were capable of determining the optimum work processes. Since the employee and his handling of work processes was the starting point, Taylor’s approach is categorized as a bottom up approach.

Scientific Management was quickly adopted by large mass-producing industrial companies. Henry Ford is the most outstanding example of what is characterized as the ‘industrial revolution’. From studies of time and carefully determined educational skills, cars were now constructed by mass production in fixed, machine-like procedures, which created a new ism – Fordism.

Hence, Scientific Management has had a decisive and long impact on the industrial practice and on the theoretical ideas of organizations in general. Later on, the theory was criticized by both employees and managers as scientific time studies disregarded their own common sense and judgment. As a result of this resistance and the spread of other views of humanity, Scientific Management is no longer prevalent as a managerial ideology. However, it still functions as a guideline for technical procedures, not only in the industrial sector, but also in the service sector.

Bureaucracy Model Theory

Max Weber is described as the father of sociology, and he has made great efforts to elucidate conditions in Western civilization. He developed an understanding of bureaucracy. Bureaucracy is fundamental as it represents a basic pattern which exists in many variants.

Weber is different from Taylor and Fayol in that he has a broader approach to organizations as he includes the social and historical perspective. He believes that the understanding of organizations and their structure can be found in the historical context, and he develops a normative ideal for bureaucracy, which is reflected in his view of e.g. the public employee.

According to Weber, the public employee must act as if the superior’s interests were his own and thus stay in his bureaucratically assigned role9. Bureaucracy must consist of neutral professional public employees so that the organizational hierarchy can function as smoothly and effectively as possible. Weber established a number of criteria for bureaucracy:

According to Weber, bureaucracy is: “A specific administrative structure, which is based on a legal and rule oriented authority”

Bureaucracy has the following characteristics :

• Established distribution of work between the members of the organization• An administrative hierarchy• A rule-oriented system, which describes the performance of the work• Separation of personal possessions and rights for the office• Selection of staff according to technical qualifications• Employment involves a career

Additional to the emphasis on the hierarchical aspect of obedience, Weber perceives goal-rational action as the optimum form of behavior. Acting goal-rationally is an ideal approach, which considers goals, means and side effects. These three factors must be weighed in relation to each other; means in relation to goals, goals in relation to side effects, and finally, different possible goals in relation to each other. In doing so, factors of emotion and value are not included in decision-making but are underlying rationality perceptions with a lower degree of rationality. The fascination with goal-rational action is also expressed in Weber’s different perceptions of authority:

• Traditional authority. Based on historically created legitimacy where authority is hereditary and based on dependant subordinates.

• Legal, rule-oriented authority. The bureaucratic type of authority, based on normative rules for career, hierarchy etc.

• Charismatic authority. The personal authority, based on a type of ‘seduction’ and hence, thedevotion of supporters.

Administrative Theory

Around the same time as Taylor, Henri Fayol developed another approach within the rational perspective, which inverts the focus of Scientific Management. Now, administrative processes rather than technical processes were rationalized. The administrative principles in the form of the management’s hierarchical pyramid structure were to function as the basis of the part of the organization that involved activities, i.e. a top down approach.

Although Fayol’s thoughts appeared at the beginning of this century, they were not widespread outside France until 1949 when his studies were translated. Several different theoretical contributions to this administrative approach are concerned with two overall principles, viz. coordination and specialization – which have more specific underlying demands:

Coordination: Hierarchical pyramid

• All employees are accountable to one superior only.

• A superior can only have the number of subordinates which heor she can manage (limited ‘span of control’)

• Routine work must be performed by subordinates so that the superior can attend to special tasks.

Specialization: Distribution of activities in working groups

Formation of homogeneous groups according to: Purpose (Marketing or development department) Process (Typing, punching out beer bottle caps) Customer (Large, medium and small customers) Geography (Different service according to country or region)

Thus, coordination is based on a hierarchical pyramid structure in which the members of the organization are linked to each other, and there must be clarity in the administrative structure. Specialization, on the other hand, is concerned with ways of grouping the organization’s activities most effectively in separate entities or departments. This is referred to as the principle of departmentalization where homogeneous or related activities are grouped in one entity. As it appears from both coordination and specialization, they express a high degree of formalization, which is one of the principal themes of the rational perspective.

Fayol and others were pioneers in the creation of administrative theory, and therefore, they were later subjected to severe criticism for over-simplifying administrative conditions.

Maslow- Hierarchy of Needs Theory

Maslow believed that human needs could be classified in a hierarchy of five basic needs:

• Self-actualization needs: Need to realize one’s deepest creative and productive potential.• Esteem needs: Need for self-esteem, self-respect and appreciation from others.• Social needs: Need to socialize with other people, need for relationships based on emotions,

need for friendships. • Safety needs: Need for physical and psychological stability and safety.• Physiological needs: Primary needs; water, food and a home.

The idea of the hierarchy is to show that needs on a given level must be satisfied before the needs on the next level become interesting. Or expressed in another way, the ‘lowest’ unsatisfied need will be the most dominant for human behavior.

At a first glance, Maslow’s Hierarchy of Needs seems appealing, but it is important to note that the model is only to a lesser degree supported by empirical research. However, there seems to be consensus that needs are arranged hierarchically.

Maslow’s Hierarchy of Needs has been criticized from a cross-cultural perspective. In some cultures, safety needs and social needs will exert significantly greater influence on motivation than self-actualization needs. There is in fact good reason to assume that the needs hierarchy is structured differently in different cultures. However, it is important to keep in mind that Maslow imagined his needs theory as a humanist perspective on human motivation in general – not as a model which could form a basis for empirical testing.

Mc Gregor Theory X and Theory Y

Douglas McGregor, an American social psychologist, proposed his famous X-Y theory in his 1960 book 'The Human Side Of Enterprise'. Theory x and theory y are still referred to commonly in the field of management and motivation, and whilst more recent studies have questioned the rigidity of the model, Mcgregor's X-Y Theory remains a valid basic principle from which to develop positive management style and techniques. McGregor's XY Theory remains central to organizational development, and to improving organizational culture.

McGregor's X-Y theory is a salutary and simple reminder of the natural rules for managing people, which under the pressure of day-to-day business are all too easily forgotten.

McGregor maintained that there are two fundamental approaches to managing people. Many managers tend towards theory x, and generally get poor results. Enlightened managers use theory y, which produces better performance and results, and allows people to grow and develop.

Theory X ('authoritarian management' style)

• The average person dislikes work and will avoid it he/she can.• Therefore most people must be forced with the threat of punishment to work towards

organisational objectives.• The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and

wants security above all else.

Theory Y ('participative management' style)

• Effort in work is as natural as work and play.• People will apply self-control and self-direction in the pursuit of organisational objectives,

without external control or the threat of punishment.• Commitment to objectives is a function of rewards associated with their achievement.• People usually accept and often seek responsibility.• The capacity to use a high degree of imagination, ingenuity and creativity in solving

organisational problems is widely, not narrowly, distributed in the population.• In industry the intellectual potential of the average person is only partly utilised

Open Systems Theory

Traditional theories regarded organizations as closed systems that were autonomous and isolated from the outside world. In the 1960s, however, more holistic and humanistic ideologies emerged. Recognizing that traditional theory had failed to take into account many environmental influences that impacted the efficiency of organizations, most theorists and researchers embraced an open-systems view of organizations.

The term "open systems" reflected the newfound belief that all organizations are unique—in part because of the unique environment in which they operate—and that they should be structured to accommodate unique problems and opportunities. For example, research during the 1960s indicated that traditional bureaucratic organizations generally failed to succeed in environments where technologies or markets were rapidly changing. They also failed to realize the importance of regional cultural influences in motivating workers.

Environmental influences that affect open systems can be described as either specific or general. The specific environment refers to the network of suppliers, distributors, government agencies,

and competitors with which a business enterprise inter-acts. The general environment encompasses four influences that emanate from the geographic area in which the organization operates. These are:

Cultural values, which shape views about ethics and determine the relative importance of various issues.

Economic conditions, which include economic upswings, recessions, regional unemployment, and many other regional factors that affect a company's ability to grow and prosper. Economic influences may also partially dictate an organization's role in the economy.

Legal/political environment, which effectively helps to allocate power within a society and to enforce laws. The legal and political systems in which an open system operates can play a key role in determining the long-term stability and security of the organization's future. These systems are responsible for creating a fertile environment for the business community, but they are also responsible for ensuring—via regulations pertaining to operation and taxation—that the needs of the larger community are addressed.

Quality of education, which is an important factor in high technology and other industries that require an educated work force. Businesses will be better able to fill such positions if they operate in geographic regions that feature a strong education system.

The open-systems theory also assumes that all large organizations are comprised of multiple subsystems, each of which receives inputs from other subsystems and turns them into outputs for use by other subsystems. The subsystems are not necessarily represented by departments in an organization, but might instead resemble patterns of activity.

An important distinction between open-systems theory and more traditional organization theories is that the former assumes a subsystem hierarchy, meaning that not all of the subsystems are equally essential. Furthermore, a failure in one subsystem will not necessarily thwart the entire system. By contrast, traditional mechanistic theories implied that a malfunction in any part of a system would have an equally debilitating impact.

Contingency Theory

Contingency theories are a class of behavioral theory that contend that there is no one best way of organizing / leading and that an organizational / leadership style that is effective in some situations may not be successful in others. In other words: The optimal organization / leadership style is contingent upon various internal and external constraints.

These constraints may include: the size of the organization, how it adapts to its environment, differences among resources and operations activities, managerial assumptions about employees, strategies, technologies used, etc.

Four important ideas of Contingency Theory are:

• There is no universal or one best way to manage • The design of an organizations and its subsystems must 'fit' with the environment

• Effective organizations not only have a proper 'fit' with the environment but also between its subsystems

• The needs of an organization are better satisfied when it is properly designed and the management style is appropriate both to the tasks undertaken and the nature of the work group.

In contingency theory of leadership, the success of the leader is a function of various contingencies in the form of subordinate, task, and/or group variables. The effectiveness of a given pattern of leader behavior is contingent upon the demands imposed by the situation. These theories stress using different styles of leadership appropriate to the needs created by different organizational situations.

Fiedler’s contingency theory: Fiedler’s theory is the earliest and most extensively researched. Fiedler’s approach departs from trait and behavioral models by asserting that group performance is contingent on the leader’s psychological orientation and on three contextual variables: group atmosphere, task structure, and leader’s power position. This theory explains that group performance is a result of interaction of two factors. These factors are known as leadership style and situational favorableness. In Fiedler's model, leadership effectiveness is the result of interaction between the style of the leader and the characteristics of the environment in which the leader works.

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Organization ecology / Population ecology Theory

Introduced in 1977 by Michael T. Hannan and John H. Freeman in their American Journal of Sociology piece The population ecology of organizations and later refined in 1989, organizational ecology examines the environment in which organizations compete and a process like natural selection occurs. This theory looks at the death of organizations (firm mortality) and the birth of new organizations (organizational founding), as well as organizational growth and change.

Organizational ecology contains a number of more specific 'theory fragments', including:

Inertia and change Niche width

Resource partitioning

Density dependence

Age dependence

Organizational ecology has over the years become one of the central fields in organizational studies, and is known for its empirical, quantitative character. Ecological studies usually have a large-scale, longitudinal focus (datasets often span several decades, sometimes even centuries).

Inertia and Change

This theory fragment holds that organizations that are reliable and accountable are those that can survive (favored by selection). A negative by-product, however, of the need for reliability and accountability is a high degree of inertia and a resistance to change. A key prediction of organizational ecology is that the process of change itself is so disruptive that it will result in an elevated rate of mortality.

Theories about inertia and change are fundamental to the research program of organizational ecology, which seeks a better understanding of the broader changes in the organizational landscape. Given the limits on firm-level adaptation, most of these broader changes thus come from the entry and selective replacement of organizations. Hence organizational ecology has spent considerable effort on understanding the mortality rates of organizations.

Niche theory

The theory fragment on niche width distinguishes broadly between two types of organizations: generalists and specialists. Specialist organizations maximize their exploitation of the environment and

accept the risk of experiencing a change in that environment. On the other hand, generalist organizations accept a lower level of exploitation in return for greater security .

Niche theory shows that specialisation is generally favoured in stable or certain environments. However, the main contribution of the niche theory is probably the finding that “generalism is not always optimal in uncertain environments” The exception is produced by environments which “place very different demands on the organization, and the duration of environmental states is short relative to the life of the organization” .

Thus, the niche theory explains variations in industrial structure in different industries. The theory shows how different structures in different industries (generalist vs specialist organizations) are shaped by relevant environments.

Resource partitioning

The relationship between generalists and specialist organizations is further developed in the resource-partitioning model which includes predictions about the founding and mortality rates of both specialists and generalists as a function of market concentration.

The theory can be illustrated by describing two environments. Environment A stands for an unconcentrated mass market and environment B represents a concentrated mass market. In environment B, generalists will always attempt to address the center of the market where most resources peak. After all, in the center of the market these generalists can thrive by exploiting economies of scale. claims however that “in environment B, despite the very concentrated generalists market, the resource space outside this market [i.e. in the periphery of the market] is larger than in environment A, where the generalist market is less concentrated” .The abundance of resource in the periphery can then become hospitable to specialist organizations, and the market becomes effectively partitioned. Carroll concluded that “more available resources should translate into better chances of success for specialists when they operate in the more concentrated market”.

Density dependence

Organizational ecology also predicts that the rates of founding and the rates of mortality are dependent on the number of organizations (density) in the market. The two central mechanisms here are legitimation (the recognition or taken-for-grantedness of that group of organizations) and competition. Legitimation generally increases (at a decreasing rate) with the number of organizations, but so does competition (at an increasing rate). The result is that legitimation processes will prevail at low numbers of organizations, while competition at high numbers.

The founding rate will therefore first increase with the number of organizations (due to an increase in legitimation) but will decrease at high numbers of organizations (due to competition). The reverse holds for mortality rates. Thus, the relationship of density to founding rates has an inverted U shape and the relationship of density to mortality rates follows a U-shaped pattern.

Age dependence

How an organization's risk of mortality relates to the age of that organization has also been extensively examined. Here, organizational ecologists have found a number of patterns:

Liability of newness. Here, the risk of failure is high initially but declines as the organization ages. Liability of adolescence. The risk of mortality will be low at first as the organization is buffered

from failure due to support by external constituents and initial endowments. But when these initial resources become depleted, the mortality hazard shoots up and then declines following the liability of newness pattern.

Liability of aging. Here, the risk of failure increases with organizational age. This could be due to a liability of senescence (internal inefficiences arising from the aging of the organization) or a liability of obsolescence (a growing external mismatch with the environment).

This theory identifies three important concepts: information processing needs, information processing capability, and the fit between the two to obtain optimal performance. Organizations need quality information to cope with environmental uncertainty and improve their decision making. Environmental uncertainty stems from the complexity of the environment and dynamism, or the frequency of changes to various environmental variables.

Typically, organizations have two strategies to cope with uncertainty and increased information needs:

• develop buffers to reduce the effect of uncertainty• implement structural mechanisms and information processing capability to enhance the

information flow and thereby reduce uncertainty.

A classic example of the first strategy is building inventory buffers to reduce the effect of uncertainty in demand or supply; another example is adding extra safety buffers in product design due to uncertainty in product working conditions. An example of the second strategy is the redesign of business processes in organizations and implementation of integrated IS that improve information flow and reduce uncertainty within organizational subunits. A similar strategy is creating better information flow between organizations to address the uncertainties in the supply chain.

Learning organization Theory

A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning Organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A

Learning Organization has five main features; systems thinking, personal mastery, mental models, shared vision and team learning.

Definition

There are varying definitions of a Learning Organization in published literature, although the core concept between them all remains clear and has been summarised by Pedler et al. as, “an organization that facilitates the learning of all its members and continuously transforms itself". Pedler et al later redefined this concept to “an organization that facilitates the learning of all its members and consciously transforms itself and its context”, reflecting the fact that change should not happen just for the sake of change, but should be well thought out. Some definitions are broader and encompass all kinds of organizational change rather than just change through learning , whereas others include specifics about how a Learning Organization works. Senge defines Learning Organizations as “Organizations 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 learn together

Characteristics of a Learning Organization

Learning Organization exhibits five main characteristics; systems thinking, personal mastery,

mental models, a shared vision and team learning.

Systems thinking

The idea of the Learning Organization originally 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 employ this method of thinking when assessing their company and will have developed information systems that measure the performance of the organization as a whole and of its various components. Systems thinking also states that all the characteristics listed must be apparent at once in an organization for it to be a Learning Organization. If one or more of these characteristics is missing then the organization will fall short of its goal. However O’Keeffee ] believes that the characteristics of a Learning Organization are factors that are gradually acquired, rather than developed simultaneously.

Personal mastery

Personal mastery is the commitment by an individual to the process of learning. There is a competitive advantage for an organisation whose workforce can learn quicker than the workforce of other organisations. Individual learning is acquired through staff training and development, however learning cannot be forced upon an individual if he or she is not receptive to learning. Research has shown 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 Organisation has been described as the sum of individual learning, but it is important for there to be mechanisms by which individual learning is transferred into organisational learning.

Mental models

Mental models are the terms given to ingrained assumptions held by individuals and organisations. To have become a Learning Organisation, these mental models must have been challenged. Individuals tend to espouse theories, which they intend to follow, and theories-in-use, which is what they actually do. Similarly, organisations tend to have ‘memories’ which preserve certain behaviours, norms and values. In the creation of a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust. To achieve this, the Learning Organisation will have mechanisms for locating and assessing organisational theories of action. If there are unwanted values held by the organisation, these need to be discarded in a process called ‘unlearning’. Wang and Ahmed refer to this as ‘triple loop learning.’

Shared vision

The development of a shared vision is important in incentivising the workforce to learn as it creates a common identity that can provide focus and energy for learning . The most successful visions build on the individual visions of the employees at all levels of the organisation and the creation of a shared vision is likely to be hindered by traditional structures where a company vision is imposed from above. As a result, Learning Organisations tend to have flat, decentralised organisational structures. The topic of shared vision is often to succeed against a competitor, however Senge states that these are transitory goals and suggests that there should also be long term goals that are intrinsic within the company.

Team learning

Team learning is the accumulation of individual learning. The benefit of sharing individual learning is that employees grow more quickly and the problem solving capacity of the organisation is improved through better access to knowledge and expertise. Learning Organisations have structures that facilitate team learning with features such as boundary crossing and openness. Team learning requires individuals to engage in dialogue and discussion, therefore it is important that team members develop open communication, shared meaning and understanding. Learning Organisations also have excellent knowledge management structures, which allow creation, acquisition, dissemination, and implementation of this knowledge throughout the organisation.

Benefits

There are many benefits to improving learning capacity and knowledge sharing within an

organization. The main benefits are;

Maintaining levels of innovation and remaining competitive

Being better placed to respond to external pressures

Having the knowledge to better link resources to customer needs

Improving quality of outputs at all levels

Improving corporate image by becoming more people orientated

Increasing the pace of change within the organization