Organizational Learning

Organizational learning is the process by which an organization gains new knowledge about and responds to its environment, goals, and processes. Despite general agreement that organizations can learn and that learning is vital for organizations to survive in dynamic environments, there is little agreement about [Page 643]several central questions: Who learns, organizations or individuals in organizations? What is the learning process? What is learned?

Organizational learning is not simply the aggregation of individual learning, nor is it something that occurs in the absence of individual learning. Herbert Simon wrote in 1997 that an organization's collective knowledge (both facts and procedures) is composed of two subsets, knowledge in the minds of its individual members and knowledge in its files and records. Learning is how the organization acquires this knowledge. Learning happens when an organization discovers that its actions have led to an intended outcome or when the organization identifies and corrects a mismatch between intended and actual outcomes. In both conceptions, individuals perform the actions that lead to learning, but it is the organization that develops roles, a culture and structure, routines, and values to direct its members' decision making.

Organizational learning can be thought of in a number of ways, depending on how an organization is conceived. If it is thought of as a group, learning is the acquisition of facts through the interaction of individuals performing a task. If it is a collective actor, learning is the development of action plans and the incorporation of information into its files. If an organization is a formal structure, it learns by adapting its roles and responsibilities to shifts in its environment. If it is a culture, learning is a process of socialization or the development of shared norms, values, and decision premises.

Another way to distinguish types of organizational learning is by what is learned. The frequent distinction here is between single-loop and double-loop learning (though the analogy should not be carried too far). Single-loop learning occurs when a mismatch between the intended and actual outcomes is observed and corrected without questioning the assumptions or values that gave rise to the actions and the expected outcomes. A common analogy for this kind of learning is a thermostat that reads air temperature and, if necessary, generates the proper airflow to reestablish the desired equilibrium. The mismatch may occur because a task demanded more time and energy than expected or because performance falls short of a priori expectations. In response, an organization may learn new facts about the state of the world, new procedures to accomplish the desired task, new methods of communicating about current states of the world, or new methods for coordinating members' actions.

Double-loop learning occurs when the underlying assumptions or values are questioned by the organization. If the thermostat were to ask why it was programmed to maintain a temperature of 70 degrees or why it was programmed to monitor air temperature and not air quality, then it would be engaged in double-loop learning. Double-loop learning leads to new understandings of causal relationships, new norms or values to guide member behavior, and new organizational goals. The process of questioning assumptions may happen because of conflict among individuals and subgroups within the organization or because of pressure from outside the organization.

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