In this essay, the author ponders the importance of learning towards organizational stability and success. The author approaches this subject starting with the importance of networks in organizational learning, then proceeds to address the manner in which mature organizations facilitate strategic renewal by accessing external resources, and then finally on the role of absorptive capacity organizational learning.
The emergence of organizational learning is the key strategic management tool aimed at providing a competitive advantage to organizations. The same advantage is observed in effective corporate performance. However, in all instances of organizational learning, the significance of networks stands out as the most convenient and holistic way of obtaining knowledge. The reason for this assertion stems out from the fact that learning is a process that is engraved in an action that is collective in nature (Lazega, 2001). In other words, through networks individuals are able to obtain information bearing different perspectives for their ultimate synthesis.
The second reason in favor of networks in learning is based on the concept of dynamics (Škerlavaj and Dimovski p.49, 2007). This concept regards networks as being in a continuous state of evolution, which means that through networks learning is enhanced and made available in an updated format bearing different perspectives from different organizations, individuals, and geographical locations. Thus, by bringing together information from these different dimensions, organizations are able to obtain a greater scope of knowledge as opposed to knowledge acquired within the organization alone.
Strategic renewal according to Burgelman (1991) is a process that even though unplanned, leads an organization into a fundamental strategic transformation. Additionally, strategic renewal facilitates innovation, which is vital to progress, and organizational stability. Therefore, strategic renewal plays a significant role in enhancing the competitiveness of business enterprises. This is mainly because the organizations’ external and internal environment remains volatile. This calls for strategic renew in order to remain adept to the demands of time especially the changing customer tastes and preferences as well as technological advancement. Moreover, mature small and medium enterprises rely heavily on knowledge from external providers; that is, the suppliers, educational institutions and customers (Jones and Macpherson, 2006).
Therefore, by accessing this information and distributing it across the entire organization, strategic managers are able to reduce the cost of acquisition and the cost of time engaged in sourcing for the information. This is achieved by the 4I model (Crossan, Lane and White, 1999), which outlines interpreting, intuiting, integrating, and institutionalizing as the basic drivers in the acquisition of external knowledge. Under basis, it is believed that strategic decisions depend entirely on short-term knowledge, which comes mainly from external resource. Intuition influences the development of reason and influences the interpretation and overall process of acquisition of knowledge.
Absorptive capacity relates with the manner in which organization come to a point where they absorb new working procedures and new knowledge (Jones, 2006, p.3). Jones further observes those two dimensions under which absorptive capacity rests; this includes the realized and the potential. Whereas the potential acts as a yardstick for measuring the optimal capacity, the realized indicates the current situation as regards the process of organizational learning. Absorptive capacity is more concerned with organizations exploring knowledge rather than exploiting it. In other words, by exploring knowledge individuals are inclined towards applying it in its refined form through a process of assimilation (Jones, 2006, p.4).
Burgelman, R. A. 1991. "Intraorganizational Ecology of Strategy Making and Organizational Adaptation: Theory and Field Research.” Organization Science, 2(3): 239-262.
Crossan, M. M., Lane, H. W. & White, R. E. (1999) "An Organizational Learning Framework: From Intuition to Institution”, Academy of Management Review, 24 (3): 522-537.
Jones, O. & Macpherson, A. (2006) "Inter-Organizational Learning and Strategic Renewal in SMEs: Extending the 4I Framework.” Long Range Planning, 39: 155-175.
Lazega, E. (2001). The collegial phenomenon. Oxford: Oxford University Press.
Škerlavaj, M. and Dimovski, V. 2007, "Towards Network Perspective of Intra-Organizational Learning: Bridging the Gap between Acquisition and Participation Perspective.” Interdisciplinary Journal of Information, Knowledge, and Management v.2: 43-58.