Analysis of The Learning Organisation

The aim of this report is to analyse ‘The Learning Organisation’ or TLO. The specific objectives are to examine whether TLO is fact or fiction and to convey this through secondary research.

1.1 Introduction to the Learning Organisation:

A universal definition of TLO is elusive, however the concept is clear (Lassey 1998). The concept of TLO assumes that employees are willing and capable of learning (Brand and Finger 1999). It also makes the assumption that change is inevitable when an organisation learns and in order to survive, an organisation must learn and adapt to new consumer demands quicker than its competitors (Brand and Finger 1999). Goad (2010) suggests that an organisation can learn just like an individual can and by continuously learning, an organisation will gain continuous success.

This report will study the characteristics of TLO, to get a clearer understanding of the meaning of TLO and what exactly learning organisations are about.

1.2 The Scope:

This paper covers the definition of TLO and its characteristics. The report discusses the origin of TLO. It provides a brief outline of the benefits and problems/barriers associated with TLO. The main body of the assignment refers to the five disciplines of TLO coined by Peter. M. Senge; system thinking, personal mastery, mental modes, building shared vision and team learning. The report also discusses the views of Pedler et al (1991), some of TLO gurus.

1.3 Methodology:

In this report, the authors use secondary research data-collection methods. This includes the use of the library database, the internet, books from the course reading list and research books, journals and articles. The combination of data resources provides qualitative and quantitative information.


2.1 Definition:

The Learning Organisation is becoming increasingly wide spread. There is little agreement on the exact definition of The Learning Organisation (Gunnigle et al 2006).

According to Pedler et al (1991), it is a term used by a company that ‘facilitates the learning of all its members and continually transforms itself’ (Armstrong 2009). A Learning Organisation promotes employee initiative, teaches its staff constantly and encourages learning among each other. It also upholds the idea of the sharing of knowledge between employers and employees, creating a more educated workforce. Pedler et al believe that The Learning Organisation has a climate where people are encouraged to reach their full potential (Gunnigle et al 2006). Watkins and Marsick (1992) suggest the organisations have the capacity to learn because of total employee involvement and shared vision.

Each of these definitions agrees that it is necessary for individuals to develop and expand their knowledge before the organisation can learn (Lassey 1998).

A Learning Organisation results in a very ‘close-knit’ work environment where employees welcome change and adapt new ideas easily to ensure the achievement of goals.

2.2 Background of the Concept:

The importance of learning was first speculated by Chinese philosopher, Confucius (551 – 479BC). He alleged that everyone would gain advantage from learning. Confucius once stated –

‘Without learning, the wise become foolish; by learning, the foolish become wise’ and,

‘Learn as if you could never have enough of learning, as if you might miss something’ (Janakiraman 2008).

The concept of The Learning Organisation was developed immediately after the Second World War, however it took some time before it was actually taken on by companies (Wilson 2005). Chris Arygris, who is the James Bryant Conant Professor of Education and Organisational Behaviour at Harvard University, was an early researcher of the concept and he published a book on the topic in the late 1970’s (Smith 2001a and Janakiraman 2008). However the concept was not applied until the 1990’s, when it was popularised by modern day gurus such as Pedler and Senge. Pedler et al published ‘The Learning Company: A Strategy for Sustainable Development’ in 1991, and Senge created ‘The Fifth Discipline: The Art and Practice of Learning Organisations’ in 1990.

2.3 Characteristics of the Learning Organisation:

Each Learning Organisation demonstrates many characteristics. Hence, many authors have different perspectives of the characteristics of a Learning Organisation.

Fargo and Skryme (1995) have identified the following as features of a learning organisation:

‘Learning Culture’ – An organisation which promotes learning

‘Processes’ – Processes that encourage interaction between staff

‘Tools and Techniques’ – ‘Methods that aid individual and group learning, such as creativity and problem solving techniques’ (Fargo and Skryme 1995).

Lassey (1998:9) suggests that the following are characteristics of The Learning Organisation:

‘Learn from mistakes’ – In contrast to a traditional organisation, employees are never punished for mistakes in their work, just taught how to resolve them. This, in turn, encourages continuous learning (Goad 2010).

‘Adapt working practices’ – Workers follow rules and perform tasks in accordance to these rules/working practices.

‘Train employees’ – Educate staff to perform to their best potential.

Manage, coach, and develop staff (Lassey 1998) – Give staff confidence to offer their own ideas and solutions of achieving goals.

‘Encourages Experimentation’ – Learn through trial and error.

Lassey (1998) lists Decentralisation of Authority to employees as a feature of The Learning Organisation – This means that workers are delegated power and this power gives them an opportunity to advance and develop skills (Goad 2010).

Another feature Lassey (1998:9) proposes is ‘Routine Reviews of Activities’ -Frequent check-ups allow the organisation to pin-point problems and fix them.

Encourage Workforce to Ask Questions and Lend Suggestions – New ideas are always welcome (Goad 2010) which improves the work process in organisations.

Decisions are based on previous experiences or ’empirical data’ (Lassey 1998:9) – Learning Organisations use what they have already learned to make decisions.

‘Work is Across Departmental Boundaries’ (Lassey 1998:9) – This encourages teamwork and improves communication in organisation.


Born in 1947, Peter Senge graduated in engineering from Stanford. He then undertook a master’s degree in social systems modelling at Massachusetts Institute of Technology, (MIT), and achieved a PhD in management. He is currently a senior lecturer in MIT.

Senge has researched The Learning Organisation in great depth. He is responsible for ‘The Fifth Discipline: The Art and Practice of The Learning Organisation’, and he also co-authored a number of other books which are linked to his views first seen in ‘The Fifth Discipline’.

Peter Senge is the chair and co-founder of the Society for Organisational Learning (SoL). This is a non-profit organisation based in Cambridge. SoL dedicates their time to researching the development of people within their companies and their attitudes towards each other.

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(This information on Peter Senge was sourced from (Smith 2001b))

3.1 Senge’s Views

3.11 Systems thinking:

This is the identification of the connection between things, viewing an organisation holistically rather than in section and focussing on processes (Torrington et al 2005). Mastering systems thinking means conquering the main obstacles to building ‘the process-managed enterprise’ (Smith and Fingar 2005:1). Torrington et al (2005:246) also highlight that continuous connections must be made and the ‘implications that actions have elsewhere in the organisation’ must be considered to achieve systems thinking.

3.12 Personal Mastery:

‘Organizations (sic) learn only through individuals who learn. Individual learning does not guarantee organizational (sic) learning. But without it no organizational (sic) learning occurs’ (Senge 1990: 139). Calcutt et al (2005) refer to ibid: 7, who mention that ‘personal mastery is the discipline of continually clarifying and deepening our personal vision, of focusing our energies, of developing patience, and of seeing reality objectively’. ‘It goes beyond competence and skills, although it involves them. It goes beyond spiritual opening, although it involves spiritual growth’ (ibid.: 141 in Smith 2001b).Mastery is a unique skill which is ‘not about dominance, but rather about calling'(Smith 2001b).

Personal mastery is a person’s ability to better themselves, not only for their own benefit but for the benefit of the organisation. The more able one is to analyse the world around them at a personal level they will be a benefit to the firm as they have a clearer perspective of the environment and wider organisational community.

3.13 Mental Models:

Mental Models is the name given to assumptions held by employees and organisations (Smith 2001b). Within a learning organisation, these models are challenged (Wikipedia 2010).

These are ‘deeply ingrained assumptions, generalisations, or even pictures and images that influence how we understand the world and how we take action’ (Senge 1990: 8).

It is important for employees to develop new skills in order for organisations to develop a capacity to work with mental models. Smith (2001b) cites Senge 1990, who believes ‘moving the organisation in the right direction and achieving goals involves working with sorts of internal politics and game playing that dominate traditional organisations’. It also involves the distribution of work responsibly and fairly while maintaining co-ordination and control.

3.14 Building Shared Vision:

Peter Senge (in Smith 2001b) says that building shared vision is inspired by leadership, and that leadership has influenced the organisation for over thousands of years.

Shared vision is seen as uplifting and it encourages experimentation and innovation. He says that when there is a genuine vision that workers can believe in and not just a ‘vision statement’ then workers are encouraged to learn, they want to achieve something and can excel and learn (Calcutt et al 2009).

Many leaders have personal visions and when this is the case usually workers don’t see this and can become frustrated and the benefits cannot be seen in comparison to a shared vision.

Senge (in Gregory 2010) believes that visions have to be translated into shared visions. The skills involved mean that you have to find a common vision for the future that workers can make a commitment to in the long term, he states commitment and enrolment instead of compliance (Senge N.D). In other words, workers will be committed to this vision and invest their time in it rather than just following the guidelines of their job and what they’re required to do (Smith 2001b). In doing this leaders seem to realise how bad and counter-productive it is to dictate a vision rather than sharing one. This can lead to the stale and effortless approach some workers can have towards achieving an organisational goal. This would be in stark contrast to the effort put in by workers to achieving a shared goal in which they see a future.

Visions work because of constant reinforcement of the vision. Smith (2001b) indicates that constant clarity and enthusiasm, as small goals are reached, and the constant updating of information about how goals are going, can push this and rub off on others in the organisation. Soon, everyone is involved, excited and working hard towards these goals. As the vision becomes clearer and more in sight the more enthusiasm for its benefits grow (Smith 2001b). The more an organisation can grow and put into place ‘system thinking’, the more likely it is bringing the original vision to fruition (Smith 2001b). This method allows energy and focus for learning. It creates a common identity and keeps a learning process on track.

3.15 Team learning

This is the final discipline of The Learning Organisation that Senge identifies in his book. Torrington et al (2005) believe teams are a ‘place where different views and perspectives are brought together.’ Teams are essential in contemporary organisations because they promote individual learning, which is a fundamental process in order for an organisation to learn (Anderson 1996). Teare and Dealtry (1998:55) propose that a variety of ‘learning styles and preferences encourage individuals to learn from each other and play to the various strengths in any given group.’ Anderson (1996:35) makes a reference to Kanter, who suggests that innovation thrives in organisations where teamwork is used and these organisations ‘practice “integrative thinking”.’


Mike Pedler is a management teacher and consultant specialising in learning, action learning, organisation development, leadership & management issues (Pedler 2010). Pedler (2010) smentions on his staff profile that he has a particular interest in public service issues and questions. He is considered one of the gurus of The Learning Organisation and co-wrote the book ‘The Learning Company: A Strategy for Sustainable Development’ in 1991 with Burgoyne and Boydell.

4.1 Pedler et al Views:

Pedler et al (1991) identified 11 different characteristics listed by Torrington et al (2005):

1. ‘A Learning Approach to Strategy

2. Participative Policy Making

3. Informating (sic)

4. Formative Accounting and Control

5. Internal Exchange

6. Reward Flexibility

7. Enabling Structures

8. Boundary Workers as Environmental Scanners

9. Inter-company Learning

10. A Learning Climate

11. Self-development opportunities for all’

They grouped those under 5 main topics.


Looking in


Looking out

Learning opportunities’ (Torrington et al 2005)

1. Strategy:

According to Torrington et al, there are two characteristics within this theme; they are ‘a learning approach to strategy’ and ‘participative policy making’.

Under strategy it is believed that a learning approach to strategy should be applied. This can be introduced by doing 3 simple steps:

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Strategy Formation

Strategy Implementation

Evaluation and improvement

These three stages are learning opportunities for the firm as by using feedback programmes it helps the firm carry out step 3 in detail as the feedback is the evaluation of the approach and the detail of the feedback can help the firm implement the improvement needed.

Participative policy making infers that everything is shared with all persons within the organisation and customers, suppliers and the whole business community have some involvement with the policy. Pedler believed that the aim of the policy was to ‘delight customers’. He also believed that the differences of opinions and values that are revealed in the participative process of the policy are ‘productive tensions’.

2. Looking in:

There are four characteristics within this theme, they are:

Informating (sic)

Formative accounting and control

Internal exchange

Reward flexibility

Informating (sic) means using technology to inform and give power to employees; this is made widely available to all employees. It is believed that this information should be used to understand the circumstances and what is going on within the business. This stimulates learning instead of being used to punish, reward or control employees (Torrington et al 2005).

Formative accounting and control is another system of learning for the business. This is done by designing accounting, budgeting and reporting systems which will best suit the organisation and their employees understanding of the subjects (Torrington et al 2005).

Internal exchange is a scheme of the business for each internal unit of the business seeing themselves as customers and suppliers of the other units.

Reward Flexibility is the hardest characteristic to apply to any business as its key idea is for the question: ‘why do some employees receive more money than others?’ Torrington et al (2005) believe it is a debate to be brought out into the open within the organisation and many different alternatives are discussed and tested.

3. Structures:

Enabling structures suggests that roles are freely structured in row with the needs of internal suppliers and customers, and that the roles are structured in a way that allows for personal growth and experimentation. Internal boundaries can also be flexible.

4. Looking Out:

There are two characteristics within this theme, they are:

‘Boundary workers as environmental scanners

Inter-company learning'(Torrington et al 2005).

Boundary workers as environmental scanners believes that the role of any worker involved with people outside the organisation whether it is the suppliers, customers or the neighbours of the business should be involved with the data collection of the firm.

Torrington et al (2005) propose that inter-company learning involves joining with suppliers, customers and sometimes competitors, in the market, in training experiences, research and development and job exchanges for the organisation. They also believe that benchmarking in some circumstances can be used to learn from other organisations.

5. Learning Opportunities:

There are two characteristics within this theme, they are:

A learning climate

Self-development opportunities for all

A learning climate in an organisation is important as it encourages employees to:

Experiment and learn from experiences

Question current ideas, attitudes and actions

Try out new ideas.

The Learning environment also allows for mistakes to be made because not all new ideas will work out. Instead the firm is focused on the continuous improvement and the involvement of customers, suppliers and the neighbours of the organisation(Torrington et al 2005)..

The learning climate advises that feedback is always requested, acknowledged and the outcomes are acted upon.

Self-development opportunities for all require that at all levels within the organisations that facilities and resources are made available for the self-development of all employees. It also requires there be a selection of support available to the employees in helping them develop, this can be done through:





Feedback’ (Torrington et al 2005).


The learning organisation is seen as an ideal with ‘towards which organisations have to evolve in order to be able to respond to the various pressures they face’ (Finger and Brand 1999: 136).

It is said that the one of the main benefits to an organisation being a ‘learning’ organisation is that it is continuously transforming and changing. That it will be in a continuous process of transformation. That as the world around us changes we must learn to guide, understand influence and manage these changes and this will be integral to a learning organisation (Smith 2001c).

A learning organisation will invent and develop learning systems. This means that it will be a system which brings about its own continuous transformation. Senge said that learning organisations are organisations 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 see it as a whole together.

Pedler said that the learning company is a vision of what might be possible. It is not brought about simply by training individuals; it can only happen as a result of learning at the whole organisation level. A learning company is an organisation that facilitates the learning of all its members and continuously transforms itself.

Watkins and Marsick (1992) said that ‘learning organisations are characterized (sic) by total employee involvement in a process of collaboratively conducted, collectively accountable change directed towards shared values or principles’. Learning is beneficial to almost every organisation.

Another theorist that is of great importance to this subject is Sandra Kerka her views on the learning organisation give great emphasis on benefits of what it means. Nakpodia (2009) quotes her statement: ‘the learning organisation could be used in order to create such an organisation whereby it could; provide continuous learning opportunities, use learning to reach their goals and link individual performance with organisational performance’. ‘It could also foster inquiry and dialogue, making it safe for people to share openly and take risks and embrace creative tension as a source of energy and renewal. Learning Organisations are continuously aware of and interact with their environment’ (Kerka 1995).

A company needs to deal with a changing climate. If it does not do so it will find it immensely difficult and will not succeed. Every company needs to learn how to cope with rapid and unexpected changes that previous programmes cannot. It needs to be flexible so that it can deal with changing situations as they occur, and to allow staff to deal with customer needs instead of being stuck using preferred set in stone methods.

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Problems can arise in any type of organisation but the problems of the learning organisation are more specific to certain topics.

Within a learning organisation, barriers can slow down or temporary reverse the progress of the learning process. Many of these barriers arise from an organisation not applying and fully understanding the aspects of the learning organisation. Once these mistakes have been realised the organisation can begin to reverse them.

One problem encountered by some organisations is that they find it hard to implicate personal mastery. This is because as a concept it is vague and its benefits cannot be measured. Some think that personal mastery is a threat to the organisation (Smith 2001b). They think this because if employees don’t all engage with a shared vision, they won’t be as productive for the firm and help it grow.

Another problem is some organisations fail to encourage a learning culture and this can be a barrier to an employee’s ability to learn (Torrington et al 2005). An organisation should operate where an environment is created where employees can become empowered and gain knowledge through learning experiences. By not engaging in a learning environment the organisation puts at risk those who resist and feel threatened by change most vulnerable.

The size of the organisation can also be a barrier to the topic of internal knowledge sharing. When the numbers of employees exceeds a certain amount the sharing decreases severely because of the size of the organisational structure in the firm, this causes the number of inter-employee relations to decrease rapidly, reduces the relationships between units in the firm and the communication in the firm as a whole is ineffective.


A wide range of concerns regarding the concept of The Learning Organisation remain, however the authors have come to the conclusion that The Learning Organisation is fact. It can only be achieved if all employees are willing to learn and have the same objectives. They must use their full potential and work together as a group.

It is evident from the authors’ findings that the introduction of a Learning Organisation can be achieved in the long-run. It takes time for an organisation to learn from mistakes and make progress. Easterby-Smith (in Torrington et al 2005) highlights that in order for an organisation to learn and develop; there must be a diverse workforce. This will increase innovation and creativeness in an organisation because each individual provides a different perspective.

Learning is beneficial to companies. According to Senge (2009), the main advantages of a Learning Organisation are;

Maintaining levels of motivation for staff

Having the knowledge to better deal with customer relations

Improving quality of productivity

Improving organisations image by becoming more people friendly

Increasing the pace of change within the organisation

Senge (1990) highlights successful learning organisations, such as AT&T Corp, Intel Corp, Harley Davidson, Hewlett-Packard, Toyota, Ford Motor Co, and FedEx. All of these are well known and established organisations, proving that Learning Organisations can be achieved.

In conclusion, the Learning Organisation is fact. It is not something that can be achieved over night but it is possible because we all have the ability to learn. Team work is essential in a Learning Organisation because it improves communication across departments. Learning improves the chances of successful change in organisations which is vital for it to compete and survive.


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