Link Org Lrn Perf Sucss

Linking organisational learning to organisational performance and success: Singapore case studies

Roland Yeo Temasek Polytechnic, Singapore

Keywords

Interviewing, Learning, Performance indicators

Abstract

This paper addresses the development of organisational learning, which involves various groups of people and different stages. It further explores the link between organisational learning and performance outcomes, providing an insight into the various interpretations of organisational success associated with learning. The study was conducted through in-depth interviews and data were collected from four Singapore organisations from the private and public sectors. Data were subsequently analysed using qualitative techniques of content analysis, particularly within-case analysis, cross-case analysis, matrix displays and pattern matching. Findings addressed most of these issues adequately but revealed that there were several aspects on the linkage between learning and performance that had not been mentioned in the literature. The main contribution of this theory-building study is the development of an empirically confirmed, theoretical and practical model of the influences of organisational learning on organisational performance and success.

Received: April 2002 Revised: October 2002

Leadership & Organization Development Journal 24/2 [2003] 70-83 # MCB UP Limited [ISSN 0143-7739] [DOI 10.1108/01437730310463260]

[ 70 ]

Introduction The concept of organisational learning has, in the past decade or so, begun to make an important contribution in organisational studies and management practice. It was in the 1980s that a few companies started realising the potential power of corporate learning for increasing organisational performance, competitiveness and success. It has been asserted that there is a need for organisations to learn faster and respond to the rapid change in the environment; otherwise, they simply will not survive (Heaton and Harung, 1999; Harung et al., 1999; Garratt, 1999). Owen (1991) goes so far as to term learning the business of business. In this backdrop, this paper addresses the following research problem (RP) and research issues (RI): RP: How and why does organisational learning influence organisational performance? RI1: How is organisational learning developed?

This is motivated by the belief that organisational learning results from the understanding of changes that occur in the external environment and then the adaptation of beliefs and behaviour that are compatible with those changes. Inherent in the process are a new way of thinking, new attitudes and consequently a new pattern of behaviour brought about by organisational learning (Schein, 1999). Besides, there is a constant interaction between adaptive and generative trends that are characteristic of the behavioural and cognitive learning approach respectively. At the core of these approaches is the importance of promoting creative individualism within organisations so as to make people feel empowered. In turn, employees will be challenged to find better ways of meeting organisational goals and values (Schein, 1999; Robbins, 1994).

Behavioural perspective

The above questions are based on a theoretical framework on organisational learning and development, acting as a prior theory for this research (Yeo, 2002). The theoretical framework is essentially founded on two significantly distinct, yet a common set of, principles for learning, that is, the perspectives of cognitive and behavioural learning (Cherrington, 1991).

In the behavioural perspective, learning is regarded as a process of modifying current behavioural patterns to respond to some immediate situation or experience. This perspective is associated with adaptive learning in that action is an expected outcome from some form of learning. There needs to be a change in the way an individual does something. Because learning takes place on the job as well as prior to it, organisational leaders are often concerned with the way they teach their employees to behave in ways that are most beneficial to the organisation. Leaders often attempt to mould individuals by guiding their learning process in gradual stages (Robbins, 1994). The behavioural learning perspective is derived from the behaviourist theory, suggesting that learning necessarily leads to the shaping of behaviour. According to prominent

The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister

The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0143-7739.htm

RI2: How appropriate are the three stages of learning (i.e. single-loop, doubleloop and triple-loop learning)? RI3: What factors influence learning during the three stages? RI4: How does organisational learning influence organisational performance?

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

behaviourist theorist Skinner (1972), this behavioural change is a relatively permanent change that occurs as a result of experience or practice. This belief is based on the stimulus and response in learning where learning objectives need to be prescribed to bring about specific behavioural outcomes. Unlike the cognitive learning perspective which will be discussed next, the behavioural perspective does not take into consideration the processes of motivation, thinking and emotional development of individuals (Cole, 1995; March and Simon, 1994).

Cognitive perspective Cognitive learning theory suggests that learning occurs largely through vicarious experience as opposed to direct experience set out by behavioural learning theory. In this cognitive perspective, people learn by imitating and observing others, and through symbolic associations using mental images, symbols and ideas (Cherrington, 1991). Learning is regarded as a complex process which involves mental-mapping, the use of intuition and imagination, and problem solving. It is more than responding to minute details and solving minor problems. Cognitive learning is the ability to make sense of the environment, develop new understanding and see things in perspective (Cole, 1995; Sadler, 1994). In contrast with behavioural learning, cognitive learning is concerned with the motivational, thinking and emotional aspects of learning. This perspective is closely linked to generative learning as it requires a fresh way of looking at things such as a better process of managing something or a creative way of responding to something. According to Senge (1990), generative learning is a means of creating rather than coping, the latter being part of adaptive learning. In order to create appropriately, one needs to understand the systems and observe a shared vision. One of the main contributors of cognitive learning is Rogers (1969) who believes that such learning should give rise to insight. This is when links between issues are understood and problems are solved creatively.

Gaps in the linkage between organisational learning and performance measures From the literature, knowledge acquisition is very much associated with organisational learning, leading to competence. Because the process of learning is volatile and knowledge acquisition occurs at several levels, any attempt to measure intangibles can be

problematic. Organisations already employ a mix of performance measures and what needs to be explored is a broader spectrum which takes into account non-traditional, especially non-financial approaches to performance measurement (Martin, 2000; Oakland, 1999). Even so, very little conceptual and empirical attention has been given to the relationships that may exist between organisational learning and performance (Chaston et al., 1999; Hedges, 1997). The difficulty could be due to the fact that such cause-and-effect relationships are not necessarily straightforward and hardly clearly defined. It must be realised that the effects occur over many steps and interventions to create the learning organisation may be complex. To make claims that certain elements result in improved organisational performance requires taking into account several layers of causal relationships. Fundamentally, interventions may change many aspects of an organisation where learning outcomes are not immediately apparent. One of the most obvious factors is that systems theory has made it apparent that many factors affect organisational outcomes. This is an example of multiple causation. Perhaps, the full effects on outcomes will only be realised after a long period of time as organisational outcomes are both time- and space-delayed. In addition, there are many intervening variables involved such as factors like environment, leadership and organisational structure, which may influence outcomes. Furthermore, the scope is wide as interventions are likely to involve all levels of employees, embracing a huge set of competencies (Swanson and Holton, 1999; Dixon, 1999). Another factor for the weak linkage between organisational learning and performance could be due to a phenomenon known as myopia of learning. This is when organisations tend to ignore the long run, ignore the larger picture and overlook failures (Levinthal and March, 1993). These problems impede learning and restrict performance outcomes. For instance, if a management development initiative focuses merely on an isolated dimension of managerial work, it is likely to produce a narrow outcome. Hence, it is important to examine the personality of the individual, his/her professional competence at specific tasks and competence in dealing with the organisation's culture and environment. The appropriate management of knowledge and intellectual capital is also vital in sustaining an organisation's competitive advantage and

[ 71 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

performance (Marquardt, 2000). Sometimes, the problem lies in the misalignment of goals between individuals, teams and the organisation. This is when the three levels of goal are not unified by a shared vision, resulting in independently unrelated goals. Such a situation frequently disintegrates collective performance, reducing the organisation's competitive advantage (Coad and Berry, 1999; McKenna, 1999). In summary, this paper is predicated on a view that current approaches to evaluation are inadequate. First, this is due to the understanding that organisational performance can be assessed both objectively (formally) and subjectively (informally) depending on the context in which learning variables are examined (Hedges, 1997). Second, the impact of individual learning on performance standards across the entire organisation is complex, requiring a longitudinal approach through a combination of qualitative and quantitative methodologies which are at present not adequately investigated (Swanson and Holton, 1999; Dixon, 1999). After all, the process of learning is dynamic and the pace at which learning takes place is not necessarily incremental or linear. Furthermore, the level at which learning operates is often complicated by different groups of people in different circumstances and at different times. For this reason, current approaches attempting to measure learning outcomes fail to account for this complexity and dynamism (Chaston et al., 1999; Coad and Berry, 1998). Perhaps one way of examining learning outcomes is to investigate the interaction processes between individuals (characterised by experiences and skills), teams (characterised by composition and structure) and finally organisation (characterised by business situation, culture and physical conditions) (Hacker, 2000). Only then can a more logical explanation of the linkage between organisational learning and performance be achieved. Considering the complexity of explicating this link empirically due to, for instance, multiple causation, this study has adopted a qualitative approach involving indepth interviews to seek possible answers to the research problem and issues.

Research design This study utilised case study as a method of confirming or disconfirming the above research issues. The use of case studies as a research tool, as exemplified by Yin (1994), should investigate a contemporary

[ 72 ]

phenomenon within its real-life context when boundaries between phenomenon and context are not clearly evident and in which multiple sources of evidence are used. Case study research not only should be looked upon as a data collection tactic or solely as a design feature; it also should serve as part of a comprehensive research strategy. In-depth interviewing and evidentiary documents were used as primary and secondary sources of data collection from the four case organisations respectively. These organisations were classified in two dimensions: type (public or private) and size (medium or large). Further, this study satisfies Yin's exemplification of case study research in that there has been a lack of empirical exploration in the relationship between learning and organisational success. It investigates a contemporary phenomenon but the boundaries between the phenomenon (organisational learning) and context (organisational performance) are not clearly evident (Yin, 1994). Besides, despite the limited attempts in explaining the performance outcomes of organisational learning, few have adopted a more qualitative approach in accounting for the behavioural aspect of learning (Swanson and Holton, 1999; Chaston et al., 1999; Levinthal and March, 1993; Dixon, 1999). Hence, this study aims to provide an insight into the various interpretations of organisational success associated with learning, bridging the gap between the two (phenomenon and context). The findings can then be used to further develop a more in-depth study or case analysis of potential or successful learning organisations, satisfying Yin's (1994) definition of case study as part of a comprehensive research strategy. This study was not totally inductive as deduction based on prior theory forms part of this research. Therefore, this research lies somewhere between a purely exploratory or inductive approach (Eisenhardt, 1989) and a deductive or explanatory approach (Yin, 1993). Data triangulation was achieved in this research through the use of multiple sources of data collection, consisting of in-depth interviews and documents. This research also used evaluator triangulation by discussing the data with colleagues and academics in order to identify unclear or ambiguous descriptions. These triangulation methods resulted in this research achieving construct validity. This is when results obtained from the use of measures fit the theories around which the test is designed (Yin, 1994). Second, two academics reviewed the draft case analysis, satisfying investigator triangulation, during the data analysis and report-writing phase. By

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

adopting this technique, ambiguous descriptions were detected and clarified, thereby addressing construct validity and increasing the overall quality of case study research (Yin, 1994). Third, internal validity was achieved through the tactics of withincase analysis, cross-case analysis and pattern matching. Fourth, the findings of this research developed analytical generalisation by the application of replication logic through the use of multiple case studies, satisfying external validity in its research design. The qualitative orientation of this study is an attempt to balance the otherwise quantitative research on organisational learning apparent in the existing literature (see, for example, Goh and Richards, 1997; Zairi, 1999; Van Deusen and Mueller, 1999). That said, some form of quantitative analysis was utilised in this study as a means of providing a more objective evaluation of the thematic patterns of the rich qualitative data. This largely occurred at the data codification stage where simple numeric figures were assigned to represent the number of mentions apparent in the interviewees' responses. More importantly, the relevance of an intangible notion like organisational learning can only be realised through insight gained from understanding both the cognitive and behavioural patterns of individuals. These two aspects of learning are the underlying theories that govern this research.

Research execution In this research, 12 interviews were conducted in a total of four cases of two dimensions. They are private-big, privatemedium, public-big, and public-medium. ``Big'' refers to over 1,000 employees while ``medium'' refers to between 500 and 1,000 employees. The reason why small organisations were not considered was that the internal organisational structure is often less apparent, roles less defined and the level of group interaction less dynamic. With too narrow a structure, the notion of individual, team or organisation goal is likely to be unclear, weakening the validation of the theoretical framework and, subsequently, the research issues. For each case, three interviews were conducted with both male and female interviewees, all within the supervisory or management level. One of the criteria used to select interviewees was that they have to be in the position of reviewing, deciding and endorsing organisational policies to some extent.

For this research, evidence was drawn mainly from in-depth interviews and documents. For instance, company newsletters and Web site information were of particular importance to this research as these documents provided confirmatory/ disconfirmatory evidence for the statements made by interviewees. In addition, documents enabled the researcher to make inferences, providing relevant clues for investigation. This research also used two pilot case studies as a pilot test of the intended data collection instrument and to provide some conceptual clarification of the research design. These dual sources of information helped to ensure that this research reflected significant issues and questions relevant to contemporary cases (Yin, 1994). All field notes, interview protocols, interview transcripts, collected documents and materials were coded. The coding technique was carried out for both positive and negative incidents relating to each category of the topic of interest.

Case background information The cases will be referred to as case A through to case D in order to facilitate discussion and satisfy ethical considerations. The interviewees within each case will be identified as, for example, A1 (case A, first interviewee) and D4 (case D, fourth interviewee). Respondents from all four cases claimed that their organisations were aspiring to be learning organisations with some preliminary efforts in place to promote strategic learning. These organisations were committed to people development with such policies as reviewing human resources practices, developing staff, improving the effectiveness of training and achieving better business results. As learning organization was a relatively new concept in Asia, particularly Singapore, none of these organizations could justifiably claim that they were high performers. However, the respondents would regard their organisations as moderate performers as some of the learning initiatives implemented had led to an increase in employees' professional competency and a decrease in employee turnovers. Their assertions were verified through company reports and corporate Web sites. The first set of two cases was from the private sector. Case A represents a large organisation in the media industry. Case B represents a medium-sized organisation in the management and information technology consulting industry. The next two cases were

[ 73 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

from the public or government sector. Case C represents a large organisation in the productivity and quality management industry. Finally, case D represents a medium-sized organisation in the information industry. All interviewees selected were senior management personnel with adequate experience in making policy decisions with regard to organisational learning and development. Table I presents a summary of their professional backgrounds.

Findings The findings are mainly presented in two forms: quantitative data evident in Tables II to IX and qualitative data evident in interview excerpts to confirm or disconfirm the research issues. As a means of quantifying qualitative data, two different techniques were used in the process of crosscase analysis, namely: putting information in different arrays to make a matrix of categories; and tabulating the frequency of different events and putting information in chronological order (according to Yin, 1994). The numbers in each cell in the Tables represent the number of mentions given by the interviewees and indicate the level of importance for each factor. In presenting the qualitative data, quotations from the interviewees are presented in quotation marks identified by its case alphabet. During the analysis of each case, reference is made to the level of importance given to each factor. This level was determined using the scale presented in Table II. Comments provided by all respondents were largely based on their experience implementing actual learning policies and programmes; in which case they had to provide evidence by means of policy statements, newsletters or company reports. All of them were able to provide evidentiary support despite the confidentiality of the information in some cases. However, there

Table I Background information and coding cases and interviews used in this research Type

Big

Size

Medium

Private A (Media) B (Consulting) A1: human resources B1: human resources A2: editorial B2: customer relationship marketing A3: training B3: management consulting Public C (Quality and productivity) D (Information) C1: planning and corporate development D1: public communications C2: human resources D2: human resources C3: corporate planning D3: research and planning [ 74 ]

Table II Level of importance given to each factor Number of mentions

Level of importance

1-4 5-6 7-9 10-11 12

Minor Somewhat Very Highly Critically

Note: 12 is the maximum number of interviews were comments that were based on the desired expectations of the respondents; in which case they had to provide examples and/or analogies to support their views. Some of the quotations presented in this paper were based on desired expectations rather than actual practices as some of the issues discussed involved a variety of other factors. As an example, the findings in Table X present a list of possible learning outcomes and these were views that were based on desired expectations more than actual practices.

Discussion of findings How is organisational learning developed?

The opening question was a broad and general question designed to establish rapport and asked the interviewees to share their views or experiences on organisational learning. From the responses, several common themes emerged in the following ways. First, there was a general observation that a learning organisation promotes sharing and learning of information and experience from one another in an open and flexible manner. Second, the direction and contents of learning are influenced by the organisation's mission and vision to a large extent. This perspective is further reinforced by the belief that systems thinking is key to the development of organisational learning. Third, the extent and capacity of learning should be driven by top management with a strong commitment to develop learning initiatives. Fourth, learning prepares the organisation for competition with the external environment, helping it gain competitive advantage over time. Fifth, there is a time factor associated with organisational learning such that the learning organisation is a future state or event. The next question asked the interviewees to rate a range of activities involved in organisational learning and the findings are presented in Table III. Based on the number of responses for ``5'' (most important) and ``4'' (very important), it can be seen that learning

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

climate was rated as the most important consideration in the development of organisational learning, followed by a flexible reward system, and inquiry and dialogue. To substantiate the view on learning climate, interviewee A1 commented: ``People need to learn in a safe environment and it is acceptable to fail and learn from those failures''. In response to a flexible reward system, interviewee D1 felt that rewards satisfy the needs of individuals, while interviewee C3 emphasised that inquiry and dialogue are an integral part of the learning process where ``questions and feedback help to clarify issues and offer solutions efficiently''. Participatory policy making was viewed as one of the least important considerations as ``it is the job of the top management who should be able to communicate the organisation's vision clearly to all employees'' (interviewee B2). Table IV presents a number of factors that strengthen, weaken, recover and terminate learning. The term ``recover'' is taken to mean revive learning. The responses listed were based on common mentions by all 12 interviewees. With reference to the level-ofimportance scale in Table II, the two highly important factors that strengthen learning are strong management commitment to learning (11 mentions) and clear communication of vision, mission and outcomes (ten mentions). These are consistent with the earlier views that strategic direction of top management is of utmost importance to organisational learning. On the other hand, the two very important factors that weaken learning were observed to be an absence of concerted effort (nine mentions), and the lack of reward and recognition (9 mentions). The first factor is in

line with a common perspective discussed earlier that organisational learning operates by systems thinking through a collective effort. The second factor on reward was earlier rated as one of the key considerations of organisational learning. As for factors that recover learning, a supportive environment (6 mentions) was regarded as somewhat important. This is further reinforced by the observation that a lack of commitment and support from top management (6 mentions) is somewhat an important factor that terminates learning. These two perspectives complement each other, reinforcing the earlier point that strong management commitment to learning (11 mentions) is essential to the development of a learning organisation. As can be seen in Table V, the key personnel that direct organisational learning would be the chief executive officer, senior management and supervisors (11 mentions, highly important). The next significant group of personnel perceived to be very important in driving learning would be the human resource department (8 mentions). As interviewee C2 commented: ``Learning programmes are part of human resource (HR) functions. More importantly, HR designs reward and recognition systems, is responsible for communicating corporate values and mission, and helps promote an open culture''. This comment clearly summarises the key characteristics of organisational learning discussed in this section. Two very important benefits of learning were observed to be better financial performance and increased knowledge creation and innovation (8 mentions each), the latter being associated with the cognitive development of

Table III Level of importance of organisational learning activities in each of the four cases

Activities Learning climate Self-development Inquiry and dialogue Flexible organisational structure Team-building Flexible reward system Participatory policy making Systems thinking Learning strategies Case totals

A (Private) Rating 5 4 3 2 3 2 1

± ± 1

± 1 ±

1 1 2 1 1 1 13

± ± 1 2 ± 1 5

1 2 ± ± 2 1 7

Cases

1

B (Private) Rating 5 4 3 2

5

C (Public) Rating 4 3 2

1

± ± ±

± ± 1

2 2 1

1 ± 2

± 1 ±

± ± ±

1 ± ± ± ± ± 1

± ± ± ± ± ± 1

2 1 3 1 1 ± 13

± 1 ± 2 1 2 9

1 1 ± ± 1 1 5

± ± ± ± ± ± ±

5

D (Public) Rating 4 3 2

1

Grand totals Rating 5 4 3 2 1

1

± ± ±

3 1 1

± ± 1

± 2 ±

± ± ±

± ± 1

1 1 1

2 1 ±

± 1 2

± ± ±

± ± ±

9 6 4

3 1 4

± ± ± ± ± ± ±

± ± ± ± 2 ± 7

± 1 1 1 2 1 ± 1 1 ± 1 1 6 7

2 1 ± 1 ± 1 5

± ± ± 1 ± ± 2

1 ± 1 1 1 ± 7

± 2 3 ± 2 ± ± ± 1 1 ± 1 9 7

± ± ± 2 ± 2 4

± ± ± ± ± ± ±

4 2 6 3 5 1 40

± 5 5 4 3 4 29

± 5 2

± ± ±

± ± 2

5 3 ± 4 1 ± 1 ± ± 1 3 1 4 ± ± 4 3 ± 26 10 3

Notes: 5 = most importamt, 4 = very important, 3 = important, 2 = fairly important, 1 = least important [ 75 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

Table IV Factors that strengthen, weaken, recover and terminate learning Rows Factors 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Factors that strengthen learning Strong interface between training programmmes and work Strong management commitment to learning Staff empowerment Strong team spirit Open culture promoting trust and respect for one another Clear vision, mission and outcomes communicated Factors that weaken learning Absence of concerted effort Lack of reward and recognition Weak leadership Information overload Narrow/myopic human resource policies Factors that recover (revive) learning Frank assessment and sincerity to change for the better Supportive environment Strong leadership and clear directions Recognition that learning is a competitive advantage Assistance from external consultants Factors that terminate learning No commitment and support from the top management Lack of need Getting punished or penalised unnecessarily Entrenched habits Poor incentives Case totals

A

Cases B C

D

2 3 1 2 1 2

2 3 ± 1 1 3

1 3 1 ± 1 2

± 2 ± 1 3 3

5 11 2 4 6 10

1.25 2.75 0.5 1.0 1.5 2.5

2 1 3 ± 2

3 3 1 3 1

2 2 1 1 ±

2 3 1 ± 2

9 9 6 4 5

2.25 2.25 1.5 1.0 1.25

1 2 1 2 1

± ± 2 1 1

± 2 ± 1 ±

1 2 1 ± ±

2 6 4 4 2

0.5 1.5 1.0 1.0 0.5

2 ± 2 1 1 32

1 1 ± 2 1 30

2 1 1 ± ± 21

1 ± 2 1 ± 25

6 2 5 4 2 108

Grand totals Mean

1.5 0.5 1.25 1.0 0.5 27.0

Note: Cell numbers represent number of mentions; ``mean'' indicates the average number of mentions in each case organisation

Table V Key personnel that drive organisational learning (OL) and benefits of OL Rows Factors 1 2 3 4 5 6 7 8 9 10 11 12

Key personnel Human resource department CEO, senior management and managers Employees themselves Benefits of learning Enhance personal development Allow organisation to stay ahead of changes Allow organisation to be proactive by introducing products and services Promote new knowledge creation and innovation Build more open organisations to attract talent Improve quality of people Improve financial results of organisation Increase confidence in job functions and work improvement Case totals

A

Cases B C

D

3 3 1

2 3 1

1 3 ±

2 2 1

8 11 3

2.0 2.75 0.75

2 1

1 1

1 2

3 ±

7 4

1.75 1.0

1 2 1 ± 2

3 3 ± 1 2

2 2 ± 1 2

1 1 1 1 2

7 8 2 3 8

1.75 2.0 0.5 0.75 2.0

1 17

1 18

± 14

2 16

4 65

1.0 16.25

Grand totals Mean

Notes: Cell numbers represent number of mentions; ``mean'' indicates the average number of mentions in each case organisation [ 76 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

individuals. The next two very important benefits can be seen to be introduction of new products and services and enhanced personal development (seven mentions each), the latter being associated with both the cognitive and the behavioural aspects of individuals. In brief, organisational learning is developed when every individual adopts a systems perspective where shared vision is communicated and practised throughout the organisation. Three key considerations have been identified to be important to the developmental process. They are a conducive learning climate, a flexible reward system, and constant enquiry and dialogue among employees.

How appropriate are the three stages of learning?

One of the questions asked was ``What are the characteristics of a learning organisation?'' and prompts relating to individual, team and organisational learning were used to elicit response on the existence of the three stages of learning. A very high percentage of the interviewees felt that the three stages of learning do exist in organisations, although it was generally agreed that the third stage, namely organisational learning, is a collective effort. This implies that ``both individual learning and team learning are subsets of organisational learning'' (interviewee B3). Further, it was pointed out by the majority of the interviewees that learning at the organisational level cannot occur without the proper institutionalisation of individual and team learning. It was generally acknowledged that organisational learning imbues a systems perspective where shared understanding of the corporate vision is essential to the success of learning initiatives. As commented by interviewee A2: ``Without clear direction from senior management, learning at the individual or team level may be truncated as learning goals become confusing and diverse''. Individual and team learning goals should be aligned with those set out by the organisation. This way, ``organisational learning will be focused on the overall vision and mission of the organisation without being distracted by external circumstances'' (interviewee B3). There was another consensus that learning goals are not static; they are in fact constantly challenged by a variety of factors. As expressed by the majority, this is largely due to the dynamic interaction of the three stages of learning. It was generally agreed that the relationship between the various stages is not necessarily straightforward. As expressed by interviewee D2: ``The relationship is also not clearly demarcated to

determine when learning becomes individual, team or organisational''. This is especially so when learning is associated with single-loop, double-loop or triple-loop learning, where learning is taken to be a problem-solving process. The ways in which the problem is approached, analysed and solved all impact on the extent of learning. There is perceivably a link between the relevance of different goals to the capacity of learning. As is apparent in Table VI, all interviewees converged on the view that organisational goals are very important to the development of organisational learning. Overall, both individual and team goals were also viewed as important criteria for influencing the capabilities of learning at the relevant stages. In brief, the three stages of learning are appropriate for the development of learning organisations. Owing to the flexibility with which they interact, learning outcomes vary according to circumstances. However, it has been discovered that learning capacity is closely linked to different goals associated with the various learning stages.

What factors influence learning during the three stages?

The five factors associated with Senge's (1990) ``fifth discipline'' prove to be critical in influencing organisational learning based on the data collected. However, an additional factor, teamwork, was identified and allowed the respondents to rate its importance in this study. Overall, the level of importance given to each factor can be seen in the total number of mentions. As can be seen in Table VII, teamwork (12 mentions) was regarded as the most important factor among the five as ``teamwork leads to cross-fertilisation of ideas and a sense of belonging which influences learning'' (interviewee B2). Similarly, both personal skills and vision (ten mentions each) were also regarded as the next very important factors, followed by mindset (nine mentions). As expressed by interviewee C2: ``Personal skills increase a person's competence in handling the job well. Learning will largely be driven by personal motivation derived from the ability to achieve more at work''. To interviewee A3, personal skills should be contributed to areas in line with the direction of the organisation's vision ultimately. Her belief was that ``I learn what appeals to me and I try to make it work for me first and see how it can contribute to the company's overall performance''. The next important factor is mindset which ``all boils down to habits, attitude, beliefs and expectations'', as commented by

[ 77 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

Table VI Importance of different goals influencing learning capabilities during the three stages of learning A Goals Individual Team Organisational Case totals

VI 2 1 3 6

B

I

MI

VI

I

MI

VI

± 2 ± 2

1 ± ± 1

1 3 3 7

2 ± ± 2

± ± ± ±

2 2 3 7

Cases C Rating I MI ± 1 ± 1

1 ± ± 1

D

Grand totals

VI

I

MI

VI

I

MI

1 2 3 6

1 1 ± 2

1 ± ± 1

6 8 12 26

3 4 ± 7

3 ± ± 3

Notes: VI = very important; I = important; MI = moderately important Table VII Importance of factors influencing organisational learning A Factors Personal skills Mindset Working environment Teamwork Job scope Vision Case totals

VI 3 2 1 3 2 2 13

B

I

MI

VI

I

MI

VI

± ± 2 ± ± ± 2

± 1 ± ± 1 1 3

2 3 2 3 1 3 14

1 ± 1 ± 1 ± 3

± ± ± ± 1 ± 1

3 2 2 3 ± 2 12

Cases C Rating I MI ± ± 1 ± 1 1 3

± 1 ± ± 2 ± 3

D

Grand totals

VI

I

MI

VI

I

MI

2 2 1 3 ± 3 10

1 1 2 ± 2 ± 6

± ± ± ± 1 ± 1

10 9 6 12 3 10 50

2 1 6 ± 4 1 14

± 2 ± ± 5 1 8

Notes: VI = very important; I = important; MI = moderately important interviewee D2. It is the cognitive state of every individual, which subsequently governs a specific set of behavioural pattern. Mindset is central to the development of organisational learning theory as it deals with both the social psychology (cognitive) and social science (behavioural) perspectives (Yeo, 2002). Next, working environment was also regarded as essential to organisational learning such that ``an employee may be motivated to learn if his or her peers are all doing well and learning at a fast pace due to some social factor. The need to keep up with the Joneses is apparent among employees'' (interviewee B1). A healthy environment promotes team learning where members learn and influence one another to bring about positive outcomes. Further, ``there are two elements associated with working environment, psychological and physical. It also depends on whether they are supportive or detrimental. It can either foster learning or make it more difficult. For example, a supportive team environment can help ameliorate a difficult job, while a destructive team environment can make it more difficult'', as expressed by interviewee A1. On the other hand, job scope was seen as the least important of the six with five respondents rating it only moderately important. According to interviewee D1:

[ 78 ]

``What is more important is the clarity of job scope which in turn affects how the department learns in relation to the rest of the organisation''. As interpreted by several respondents, job scope does not necessarily determine an individual's capacity to learn. For instance, ``job scope is important for the higher level employees rather than lower ones as their jobs may be routine and repetitive'' (interviewee B2). Hence, it can be seen that job scope does not play a significant role in influencing organisational learning. These factors motivated by Senge's (1990) ``fifth discipline'' relate to Argyris and Schon's (1978 and 1996) learning-loop theory in the following ways. First, organisational learning occurs when engaging individuals reflect upon and develop their own thinking processes as characterised by individual mindset (rated ``very important'' by nine respondents, third highest among the six factors). Second, organisational learning is a process when members actively use data to guide their behaviour in such a way as to promote the ongoing adaptation of the organisation (Edmonson and Moingeon, 1998). Using data is to seek and attend to taskrelevant information, particularly for assessing the collective performance and progress against goals. Here, two factors, teamwork (rated ``very important'' by 12

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

respondents) and corporate vision (rated ``very important'' by ten) relate to collective performance and goals respectively. Guiding behaviour involves choosing actions based on data-driven observations as well as actions designed for testing inferences. In the data presented in Table VII, personal skills which guide these actions, are rated ``very important'' by ten respondents. Adaptation refers to change by an organisation in response to external changes, including both problems and opportunities. Working environment, rated ``very important'' by six respondents, is concerned with such an adaptation. In essence, these factors relate to an iterative cycle of action and reflection, described by Argyris and Schon (1978 and 1996), as integral to effective organisational learning processes. In brief, there is a general perception that all six factors discussed here influence learning at the three levels to a large extent. None felt that there are factors that apply specifically to any particular stage of learning. A quick cross-case analysis also reveals a high level of consistency in the number of responses across the four case organisations. For instance, the total number of response rated as very important for all six factors is 13 for case A, 14 for case B, 12 for case C and ten for case D. Most importantly, the data analysed here have contributed to the body of knowledge to a certain extent as the priority of these factors is essential to the implementation of learning strategies in any organisation.

How does organisational learning influence organisational performance? As is apparent in Table VIII, organisational performance has been defined as involving both financial and non-financial outcomes.

At the core are bottom-line, targets and turnover, being the main concern of all organisations. This financial aspect of performance was rated critically important (12 mentions) to organisations. Other very important financial indicators include productivity and efficiency (nine mentions) and customer satisfaction (eight mentions), which are linked to quantity, quality and sale of products, in turn affecting market share. Two very important non-financial indicators indicated are employee satisfaction and skills level (seven mentions each). In essence, organisational performance can be defined at several levels. At the highest level, it refers to how well the organisation has performed through goals or targets set in relation to its vision and mission. For example, it can be the productivity growth of the manufacturing sector. At the lower levels, organisational performance can be measured against operational targets such as defect rate, turnaround time, skills level and satisfaction of employees. The relevance and importance of both financial and non-financial outcomes are also reflected in Table IX, indicating the ratings of a variety of performance measures. As can be seen in columns ``5'' and ``4'' of the grand totals (indicating most and very important respectively), financial measure was rated by all 12 interviewees, while products and services, and human resources both recorded ten responses. The next very important indicator rated with nine responses is markets, relating closely with products and services leading to financial outcomes. Human resources can be measured by attrition rates, although employee satisfaction is harder to quantify. Even then, this is a highly important nonfinancial performance indicator as ``happy

Table VIII Definitions of organisational performance Rows Definitions

A

Cases B C

D

1 2 3 4 5 6 7 8 9 10 11

3 2 1 ± 2 2 1 1 1 1 14

3 3 ± ± 2 2 2 3 3 ± 18

3 2 ± 1 1 2 ± 3 1 1 14

Bottom-line, performance targets, turnover Productivity and efficiency, turnaround time, defect rate Public image and perception of organisation Employee attrition Employee satisfaction Skills levels of employees Management of resources Customer satisfaction Creative and innovative products and services Internal capabilities, e.g. agile teams Case totals

3 2 1 1 2 1 2 1 1 ± 14

Grand totals Mean 12 9 2 2 7 7 5 8 6 2 60

3.0 2.25 0.5 0.5 1.75 1.75 1.25 2.0 1.5 0.5 15.0

Notes: Cell numbers represent number of mentions; ``mean'' indicates the average number of mentions in each case organisation [ 79 ]

staff are infectious and will be motivated to perform even better,'' as remarked by interviewee B1. As perceived by the majority of the interviewees, the way that organisational learning influences performance is not necessarily straightforward. For instance, interviewee A3 commented that ``learning leads to excitement and excitement will boost energy and performance to do the job well above expectations,'' suggesting how nonfinancial aspects of learning lead to financial outcomes in the end. This is so when ``the ability of an organisation to deliver and delight its customers, both external and internal, is crucial to performance success. Aspects associated with performance include leadership, culture and values, for example, whether there are customer focus, creativity and imagination in the product design, and management of resources in such areas as human, financial and information'' (interviewee D3). As reinforced by interviewee C2, ``organisational learning should not be for learning's sake. It is for the purpose of organisational performance; it facilitates the whole process of pursuit in search of excellence''. In brief, organisational learning influences organisational performance by increasing employee competence through upgrading of skills and knowledge to match the job requirements set out by the corporate vision and mission. Through a combination of reward and recognition system, employee satisfaction can be enhanced to handling greater responsibilities and challenges. This will ensure better management of resources to produce creative and innovative products and services to face external challenges. With strong internal capabilities such as agile teams and motivated individuals, productivity and efficiency in production and customer service will be greatly enhanced.

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

All these will in turn lead to increase in sales and financial outcomes.

Conclusions and implications of the study The four research issues

First, findings relating to the first research question on the developmental process of organisational learning reveal that there is indeed a time factor associated with learning. It further suggests that learning is preparing the organisation for the future rather than meeting immediate needs. Second, findings relating to the second research issue on the appropriateness of the three learning stages, namely individual, team and organisational, suggest that, although they take place within organisations, their relationship is complex and dynamic. Hence, these stages should be integrative in their approach where learning is incorporated into the work processes. The third research issue focuses on the factors influencing learning and two critical factors have been identified to motivate learning significantly. They are the strategic positioning of the organisation based on its vision and mission, and effective leadership in providing clear directions to achieve organisational goals. Finally, the fourth research issue is concerned with the relationship between learning and performance, and the findings suggest that non-tangible performance outcomes such as employee attitude, motivation and commitment are essential cognitive and behavioural evidence of organisational learning.

The research problem

As discussed earlier, organisational learning impacts on performance in different ways. As perceived by all 12 interviewees, bottom-line is crucial to organisational success, which is

Table IX Level of importance of organisational performance measures in each of the four cases

Measures

A (Private) Rating 5 4 3 2

Financial Budgetary Use of assets Operational Markets Products and services Human resources Case totals

1 ± 2 ± 2 2 2 9

2 ± ± 3 ± ± ± 5

± 3 ± ± 1 1 ± 5

± ± ± ± ± ± 1 1

1 ± ± 1 ± ± ± ± 1

B (Private) Rating 5 4 3 2 3 ± ± 2 1 ± ± 2 1 1 1 1 3 ± ± 3 ± ± 2 1 ± 14 5 2

± ± ± ± ± ± ± ±

Cases 1 ± ± ± ± ± ± ± ±

5

C (Public) Rating 4 3 2

3 ± 1 ± ± 2 ± 1 2 1 2 1 1 1 7 7

± ± ± 1 1 ± 2 ± ± ± ± ± 1 ± 6 1

D (Public) Rating 5 4 3 2

1 ± 1 ± ± ± ± ± 1

1 1 2 3 2 ± 1 10

Notes: 5 = most important, 4 = very important, 3 = important, 2 = fairly important, 1 = least important [ 80 ]

2 ± 1 ± 1 1 2 7

± 1 ± ± ± 1 ± 2

± 1 ± ± ± 1 ± 2

1 ± ± ± ± ± ± ± ±

Grand totals Rating 5 4 3 2 1 8 4 4 4 7 7 6 40

4 1 5 4 2 3 4 23

± 4 2 4 2 2 1 15

± 2 ± ± 1 ± 1 4

± 1 1 ± ± ± ± 2

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

often evaluated on the basis that the organisation has a sound and viable business plan. An alternative view was expressed by interviewee A2: ``Financial performance also depends on whether the organisation can get the best value out of every individual employee to think and function as if he is in the business himself or herself. For instance, the Ritz Carlton hotel was reputed to have that kind of a corporate culture of empowerment, which accounts for their consistent financial success''. Organisations with strong financial performance and cultural diversity seek to be the choice of talented employees. An example is Bill Gates who attracts the best brains for Microsoft. Through constant learning and innovation, the organisation is able to produce a series of competitive products which in turn impact on its financial outcomes. Organisational learning also leads to competitive advantage such that organisations will be ``doing the right thing at the right time. Organisations must be constantly on their toes to strike when the iron is hot'' (interviewee C2). This requires learning from competitors and other external environments to continue developing new innovative products and services to meet market demands. In this sense, performance determines the perceived value of the organisation's products measured in terms of creativity, quality and reliability compared with products of competitors. As can be seen in Table X, there are proportionate returns between organisational learning and performance. Valuable lessons learned should translate into results, whether tangible or intangible. For instance, one of the perceived highly important outcomes associated with organisational learning is a change in

mindset (ten mentions). This refers to the cognitive aspect of individuals where learning leads to a change in attitude, enabling the ability to transform knowledge and experience into competitive edge (nine mentions, very important). As an example, translating knowledge into specific outcomes involves new ways of doing things (seven mentions), thereby producing the right products and performing better than the competitors (six mentions). Further, individuals will also react quicker to business changes (seven mentions) and think of strategies to manage the changes. With collective effort and a shared vision of the corporate goals, greater commitment will be enhanced from the employees (six mentions). These various cognitive and behavioural patterns exhibited by individuals work towards the achievement of financial results for the organisation (eight mentions), which will in turn benefit them financially as bonuses and other incentives. In line with the definition that organisational learning is a process which requires individual cognition and supports organisational adaptiveness (Edmonson and Moingeon, 1998), the data presented in Table X lend importance to this assertion in the following ways. At a glance, the five learning outcomes given the highest number of mentions relate to both the cognitive and behavioural aspects of human development. First, the two highest rated outcomes, namely ``change in mindset'' (ten mentions) and ``the ability to transform knowledge and experience into competitive edge'' (nine mentions), deal primarily with the cognitive development of individuals in facilitating organisational learning. Second, the next two

Table X Relationship between organisational learning and performance Rows Learning outcomes 1 2 3 4 5 6 7 8 9 10 11

Able to transform knowledge and experience into competitive edge Better ways of doing things Able to produce the right products and do better than the competitors Better financial results Faster learning curve and fewer mistakes Change in mindset Learned responses and quicker response to business changes Greater commitment from employees Greater commitment from management Organisation becomes more agile and responsive to external challenges Case totals

A

Cases B C

D

2 2

1 2

3 2

3 1

9 7

2.25 1.75

1 3 2 2

3 2 1 3

1 2 1 2

1 1 2 3

6 8 6 10

1.5 2.0 1.5 2.5

2 1 ±

1 2 2

2 1 2

2 2 ±

7 6 4

1.75 1.5 1.0

2 17

2 19

1 17

± 15

5 68

1.25 17.0

Grand totals Mean

Notes: Cell numbers represent number of mentions; ``means'' indicates the average number of mentions in each case organisation [ 81 ]

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

highest rated outcomes, namely ``better ways of doing things'' and ``learned responses and quicker response to business changes'' (both seven mentions each) are concerned with the behavioural changes of individuals as a result of cognitive input. Third, ``faster learning curve and fewer mistakes'' (six mentions) is a combination of cognitive and behavioural outcomes as a result of organisational learning. In essence, organisational learning is a process of acting, assessing and acting again in the form of an ongoing cycle of reflection and action that cannot be taken for granted, a common theme proposed by Senge (1990) and Argyris and Schon (1978 and 1996). In summary, the relationship between organisational learning and performance is intimate in that individuals learn to enhance their job processes which impact on team goals and organisational goals in return. As pointed out by interviewee B3, ``assuming the job requires new technology, naturally those who are quick to pick up new skills related to the technology will be at an advantage, improving work efficiency and producing greater outputs''. The way learning leads to performance is through collective effort with employees willing to apply knowledge and experience gained to their work to enhance outcomes. The main aim is to allow the organisation to be more agile and responsive to external changes. Overall, this study has successfully demonstrated the link between organisational learning and performance through the primary use of qualitative technique in the form of case study methodology and the secondary use of quantitative technique in the way rich textual data were codified in simple numeric form to enhance the objective outcomes of this research.

References

Argyris, C. and Schon, D. (1978), Organisational Learning: A Theory of Action Perspective, Addison-Wesley, Reading, MA. Argyris, C. and Schon, D. (1996), Organisational Learning II: Theory, Method, and Practice, Addison-Wesley, Reading, MA. Chaston, I., Badger, B. and Sadler-Smith, E. (1999) ``Small firm organisational learning: comparing the perceptions of need and style among UK support service advisers and small firm managers'', Journal of European Industrial Training, Vol. 23 No. 1, pp. 36-43. Cherrington, D.J. (1991), The Management of Human Resources, 3rd ed., Allyn & Bacon, Boston, MA. Coad, A.F. and Berry, A.J. (1998), ``Transformational leadership and learning orientation'', Leadership & Organization Development Journal, Vol. 19 No. 3, pp. 164-72.

[ 82 ]

Cole, G.A. (1995), Organisational Behaviour: Theory and Practice, DP Publications, London. Dixon, N.M. (1999), The Organisational Learning Cycle: How We Can Learn Collectively, 2nd ed., Gower, Aldershot. Edmonson, A. and Moingeon, B. (1998), ``From organisational learning to the learning organisation'', Management Learning, Vol. 29 No. 1, pp. 5-20. Garratt, B. (1999), ``The learning organisation 15 years on: some personal reflections'', The Learning Organization, Vol. 6 No. 5, pp. 202-6. Goh, S. and Richards, G. (1997), ``Benchmarking the learning capability of organisations'', European Management Journal, Vol. 15 No. 5, pp. 575-83. Hacker, M. (2000), ``The impact of top performers on project teams'', Team Performance Management, Vol. 6 Nos 5/6, pp. 85-9. Harung, H.S., Heaton, D.P. and Alexander, C.N. (1999), ``Evolution of organisations in the new millennium'', Leadership & Organization Development Journal, Vol. 20 No. 4, pp. 198-207. Heaton, D.P. and Harung, H.S. (1999), ``The conscious organisation'', The Learning Organisation, Vol. 6 No. 4, pp. 157-62. Hedges, P. (1997), Increasing Profitability by the Effective Use of Learning, Kogan Page, London. Levinthal, D.A. and March, J.G. (1993), ``The myopia of learning'', Strategic Management Journal, No. 14, pp. 95-112. McKenna, S.D. (1999), ``Maps of complexity and organisational learning'', The Journal of Management Development, Vol. 18 No. 9, pp. 772-93. March, J.G. and Simon, H.A. (1994), Organisations, 2nd ed., Blackwell, Malden, MA. Marquardt, M.J. (2000), ``Action learning and leadership'', The Learning Organization, Vol. 7 No. 5, pp. 233-40. Martin, B. (2000), ``Knowledge management within the context of management: an evolving relationship'', Singapore Management Review, Vol. 22 No. 2, pp. 17-36. Oakland, J.S. (1999), Total Organisational Excellence: Achieving World-class Performance, Butterworth-Heinemann, Oxford. Owen, H. (1991), Riding the Tiger: Doing Business in a Transforming World, Abbott, MD. Robbins, S.P. (1994), Management, 4th ed., Prentice-Hall, Englewood Cliffs, NJ. Rogers, C.R. (1969), Freedom to Learn: A View of What Education Might Become, C.E. Merrill, Columbus, OH. Sadler, P. (1994), Designing Organisations: The Foundation for Excellence, 2nd ed., Kogan Page, London. Schein, E.H. (1999), ``Empowerment, coercive persuasion and organisational learning: do

Roland Yeo Linking organisational learning to organisational performance and success: Singapore case studies Leadership & Organization Development Journal 24/2 [2003] 70-83

they connect?'', The Learning Organization, Vol. 6 No. 4, pp. 163-72. Senge, P.M. (1990), The Fifth Discipline: The Art and Practice of the Learning Organisation, Century Business, London. Skinner, B.F. (1972), Beyond Freedom and Dignity, Cape, London. Swanson, R.A. and Holton, E.F. III (1999), Results: How to Assess Performance, Learning, and Perceptions in Organisations, Berrett Koehler, San Francisco, CA. Van Deusen, C.A. and Mueller, C.B. (1999), ``Learning in acquisitions: understanding the relationship between exploration, exploitation and performance'', The Learning Organization, Vol. 6 No. 4, pp 186-93.

Yeo, R. (2002), ``From individual to team learning: practical perspectives on the learning organisation'', Team Performance Management, Vol. 8 No. 7/8, pp. 146-56. Yin, R.K. (1993), Applications of Case Study Research, Sage, Newbury Park, CA. Yin, R.K. (1994), Case Study Research: Design and Methods, Sage, Newbury Park, CA. Zairi, M. (1999), ``The learning organisation: results of a benchmarking study", The Learning Organization, Vol. 6 No. 2, pp. 76-81.

Further reading

Eisenhardt, K. (1989), ``Building theory from case study research'', Academy of Management Review, Vol. 14 No. 4, pp. 532-50.

[ 83 ]