Organizational Learning CHAPTER TWO Organizational Learning © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. LEARNING OUTCOMES Define organizational learning and describe a learning organization Explain the five disciplines of a learning organization Discuss the principles of a learning organization Discuss the four key dimensions that are critical for creating and sustaining a learning organization Define a learning culture Define knowledge and give examples of explicit and tacit knowledge © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. LEARNING OUTCOMES Describe the meaning and types of intellectual capital Define knowledge management and explain how knowledge is acquired, interpreted, disseminated, and retained in organizations Define communities of practice and describe what organizations can do to create them Define workplace learning, informal learning, and formal learning Describe what organizations can do to facilitate informal learning Describe the multilevel systems model of organizational learning © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. INTRODUCTION Organizations that are going to thrive – survive – and be globally competitive need to embrace a culture where learning is fostered – and is experimented with – at all levels in the organization © 2013 by Nelson Education Ltd.

ORGANIZATIONAL LEARNING Organizational learning is a process of creating, diffusing, and applying knowledge in organizations Focuses on continuous learning and a systems approach to distributing and sharing knowledge Dynamic process of creating and sharing knowledge © 2013 by Nelson Education Ltd.

LEARNING ORGANIZATION A learning organization: Acquires, organizes, and shares information and knowledge Uses new information and knowledge to change its behaviour in order to achieve its objectives and improve its effectiveness Is able to transform itself by acquiring and disseminating new knowledge and skills organization-wide and at all levels © 2013 by Nelson Education Ltd.

LEARNING ORGANIZATION A learning organization: Has an enhanced capacity to learn, adapt, and change its culture Has the ability to make sense of and adapt and respond to its environment – internal/external Learning results in continual improvements in: Work systems Products and productivity Services Management and employee behaviour Efficiency and effectiveness © 2013 by Nelson Education Ltd.

LEARNING ORGANIZATION Five Disciplines: Personal Mastery Building a Shared Vision Mental Models Team Learning Systems Thinking © 2013 by Nelson Education Ltd.

LEARNING ORGANIZATION Principles Everybody is considered a learner People learn from each other Learning is part of a change process Continuous formal and informal learning Learning is an investment © 2013 by Nelson Education Ltd.

LEARNING ORGANIZATION © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. KNOWLEDGE Sum of what is known; a body of truths, information, and principles Synthesis of information – facts, theories, and mental representations Can be found in employee minds or transferred/stored in organization systems Can be tacit or explicit © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. KNOWLEDGE More than just information! It is: Information that has been edited Put into context Analyzed in a way that makes it meaningful, and therefore valuable to the organization © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. EXPLICIT KNOWLEDGE Things that you can buy or trade: Patents or copyrights and other forms of intellectual property Can be written into procedures or coded into database Is transferred fairly accurately Only 20% of corporate knowledge is explicit © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. TACIT KNOWLEDGE Learned from experience and insight – intuition, know-how, little tricks, judgment, and wisdom: 80% of corporate knowledge Almost impossible to transfer Well-known example: Decision-making behaviour of dealers in financial markets Is said to be instinctual © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. INTELLECTUAL CAPITAL An organization’s knowledge, experience, relationships, process discoveries, innovations, market presence, and community influence © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. INTELLECTUAL CAPITAL Is like intelligence The source of innovation and wealth production Has to be formalized, captured, and leveraged to produce a more highly valued asset Knowledge of value Not like other assets – it grows with use Contributes to continued learning Is recognized by many organizations as a valuable asset © 2013 by Nelson Education Ltd.

INTELLECTUAL CAPITAL – TYPES Human Capital Knowledge, skills, and abilities of employees Renewal Capital Intellectual property © 2013 by Nelson Education Ltd.

INTELLECTUAL CAPITAL – TYPES Structural Capital Formal systems and informal relationships –Allow employees to: –Communicate, solve problems, and make decisions Relationship Capital Organization’s relationships with suppliers, customers, and competitors: Influence how they do business © 2013 by Nelson Education Ltd.

INTELLECTUAL CAPITAL – TYPES Customer Capital Value of an organization’s relationships with its customers © 2013 by Nelson Education Ltd.

INTELLECTUAL CAPITAL CYCLE “As more investments are made in human capital, the employees are more capable and committed to increasing renewal and structural capital, leading to more productive relationship capital, resulting in better financial performance.” © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. KNOWLEDGE MANAGEMENT Creation, collection, storage, distribution, and application of compiled “know what” and “know how” Knowledge management/infrastructure refers to systems and structures that integrate people, processes, and technology Why is this important? © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. WHY? To ensure that important knowledge is: Coded Stored Is readily available Not lost © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. MANAGING KNOWLEDGE Acquisition Environment scanning: External: External information from other organizations, customers, industry watchers, marketplace Internal: Internal individuals, teams, departments © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. MANAGING KNOWLEDGE Interpretation Mental models Learning occurs when employees form views of the organization and its environment Deeply engrained assumptions, generalizations, or images that influence how we understand and take action © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. MANAGING KNOWLEDGE Dissemination Providing task information and know-how to: Help and collaborate with others to solve problems Develop new ideas Implement policies and procedures Use formal systems grounded in technology Easily transmitted Exchange ideas quickly and efficiently © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. MANAGING KNOWLEDGE Intranet: Critical component for managing knowledge Employee questions can be answered in hours instead of weeks Can be like an instant coach © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. MANAGING KNOWLEDGE Retention Important to compile, store, and retrieve information residing in employee’s minds and systems Intellectual Inventory (knowledge repositories) Built to encourage use and facilitate interaction © 2013 by Nelson Education Ltd.

COMMUNITIES OF PRACTICE Groups of employees who: Share similar concerns and problems Meet regularly to share their experiences and knowledge Learn from each other and identify new approaches for working and solving problems © 2013 by Nelson Education Ltd.

COMMUNITIES OF PRACTICE Wenger & Lave identify three characteristics: Domain (shared interest) Community (interaction, discussion, sharing, exchanging, and mutual assistance) Practice (practitioners with resources and tools they use to solve problems) Are typically informal, self-organizing, and form naturally – but can be created, fostered, and nurtured in organizations © 2013 by Nelson Education Ltd.

COMMUNITIES OF PRACTICE Three things to focus on if COPs to be nurtured: Identify potential COPs that will enhance organization’s strategic capabilities Develop an infrastructure to support and enable members to share their expertise Assess the value of the organizations COPs © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. WORKPLACE LEARNING Workplace learning: Process of acquiring job-related knowledge and skills through both formal training programs and information social interactions among employees Informal learning: Learning that occurs naturally as part of work and is not planned or designed by the organization Formal learning: Learning that is structured and planned by the organization © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. WORKPLACE LEARNING Formal learning (training and development): Key part of the knowledge-acquisition process Approximately 30% of how employees learn Informal learning: Approximately 70% of how employees learn By trial & error Spontaneous, immediate, and task-specific © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. WORKPLACE LEARNING © 2013 by Nelson Education Ltd.

MULTILEVEL SYSTEMS OF ORGANIZATION LEARNING © 2013 by Nelson Education Ltd.

© 2013 by Nelson Education Ltd. SUMMARY Discussed learning and knowledge management Described the five disciplines and principles of a learning organization as well as the four dimensions necessary for creating and sustaining a learning organization Discussed different types of knowledge in organizations and intellectual capital Described knowledge management practices Described multilevel systems model and connection of organizational learning to training and development © 2013 by Nelson Education Ltd.