1. CHANGE AND ORGANIZATIONAL LEARNING
Károly Balaton
Institute of Management

2. ORGANIZATIONAL LEARNING
Organizational learning is the process in which organizations identify, analyse and correct their previous mistakes (Argris and Schön).
Important characteristics of organizational learning are changes in behaviour, and better performance by increased knowledge and understanding.
Knowledge acquired during the change process is coded in the memory of organization.

3. SINGLE-LOOP AND DOUBLE-LOOP LEARNING
Single-loop learning involves learning from the consequences of previous behavior. Learning results from feedback generated by a process of observing the consequences of action and using this knowledge to adjust subsequent action in order to avoid similar mistakes in the future and develop successful patterns of behavior.
Double-loop learnig involves sysems that can monitor and correct behavior and determine what appropriate behavior is. Double-loop learning requires that the system question its own underlying assumptions and values and risk fundamentally changing the terms of its own organizing.

4. LEARNING BY EXPLORATION AND EXPLOITATION
Learning by exploitation: learning is based on past experiences of the organization. It is characterized by terms of refining, improvement, adjustment. This type of learning is useful for short term efficiency goals.
Learning by exploration: future oriented learning connected to experimentation. It may result in innovation, renewal, reorientation .
For longer term success a balance between exploitation and exploration is necessary.

5. LEVELS OF ORGANIZATIONAL LEARNING
Business level learning: learning in specific product-market areas and accumulating knowledge for improving business unit performance.
Organizational level learning: Cristallation of knowledge accumuated at business level learning which leads to new assumptions and strategic directions.
Business level learning is going on continuously in organizations.
Organizational level learning is a discontinuous process where the knowledge accumulated leads to a new understanding of the business of the company.

6. LEARNING AND ADAPTATION
Single-loop learning leads to reactive adaptation: the organization implements changes in its procesdures based on the perceived consequences of environmental changes.
Double-loop learning: the organization changes not only the procedures but the strategies and structures of the organization as well; that is: the organization is capable of implementing preactive changes.
Deutero learning: the learning of learning. The organization learns how to learn. It leads to initiations to change the future direction of changes in the environment: proactive adaptation is connected to deutero learning.

7. LEARNING AND INNOVATION
Innovation includes introduction of new products, technologies, entering into new markets, renewing organizations and business systems.
Innovation is connected to learning by experimentation and to strategic learning at the level of the whole organization.
Incremental innovation is mainly connected to learning by exploitation, while radical innovation is connected to learning by exploration.

8. THE LEARNING ORGANIZATION
Principles of learning organization:
Systems thinking
Personal mastery
Cognitive schemes
Formulation of common vision
Group learning

9. ORGANIZATIONAL LEARNING AND STRATEGIC CAPABILITY
Organizational capabilities are products of learning processes.
The resource-based view regards firms as learning organizations.
A firm’s strategy is shaped by its administrative heritage.
Tacit knowledge is accumulated in a long term learning process.
In innovation-driven fields, firms are engaged in learning races. These contest proceed on parallel tracks, one involving learning from collaborations, the other concerns learning how to collaborate.

10. LEARNING IN BIOTECH COMPANIES
Finding solutions to the problem of learning how to learn is critical for both small and large firms. Biotech companies have created organizational capabilities well out of proportion to their relatively small size by building on relationships with external parties to gain access to resources, knowledge, and skills to support every organizational function from R&D to distribution.

11. CRISES AND LEARNING
Cumulative or linear learning along the current trajectory can take place under normal circumstances.
Discontinuous or nonlinear learning, however, takes place normally when a firm perceives a crisis and deploys strategy to resolve the critical situation.
In such cases, the firm must invest heavily in the acquisition of new tacit and explicit knowledge as well as in knowledge conversion activities to overcome the crisis in the shortest possible time.

12. ABSORPTIVE CAPACITY
Organizational learning is a function of an organization’s absorptive capacity.
Absorptive capacity requires learning capability and develops problem-solving akills.
Learning cpability is the capacity to assimilate knowledge (for imitation), whereas problem-solving skills represent a capacity to create new knowledge (for innovation).