Many researchers (including, Yu, Wantao et al (2013), Jones, (2000), Hary Sastrya Wanto and Ruswiati Suryasaputra (2012)) emphasize the importance of organisational learning for organisational performance. They state that organisations and management effectiveness towards organization’s performance objective is directly related to or dependent on organisational learning capabilities. Referring to Smith (2001), Sidharta Chatterjee (2013) indicated that organisational learning helps organisations to successfully implement new strategies, sustain competitive advantage over other firms, and enables them to develop and adapt to the growing uncertain economic environment.

The achievement of managerial actions in an organisation depends on the quality of the organisational learning and its process that helps managers to choose their business strategies and segments, (Shmuel Ellis et al (2012).

An organisational learning builds a culture that enhances organisational abilities towards a performance improvement and knowledge creation within firms, (Simone T. A. Phipps et.al (2012).

Organisational learning is a key factor in defining strategic leadership and competitive advantage. This leads to a conclusion that, organisational learning focused companies exercise better strategic leadership that can enhance competitive advantage, profitability and corporate performance of a business, (Phapruke Ussahawanitchak, Mahasarakham (2012)).

Phapruke Ussahawanitchakit, et al (2012) highlighted and further analysed "organisation learning promotes firms to gain the development of more technological distinctive competencies and provide the achievement of better business performance. Similarly, organisational learning is an ability of firms to respond suitably to changes to match the continuous changes in the external environments in order to maintain long-term competitiveness, create more competitive advantage, achieve greater performance, and gain superior survival (Montes et al., 2005). It introduces new ideas, products, services, systems, policies, programs, and processes in dynamic environments. Hence, it definitely supports creativity, inspires new knowledge and ideas and increases ability to understand and apply it (Aragon-Correa et al., 2007). It has a positive relationship with strategic leadership and competitive advantage."

In summary, based on the different authors research documents, organisational learning:

  • brings significant positive effect employee behavior towards organisational effectiveness that contributes to the positive performance of the organization.
  • helps firms to successfully implement new strategies, maintain competitive advantage over other firms, enables them to develop structural insights whose action outcomes help organizations to adapt to uncertainties in economic environment,and enables organizations with effective decision making to manage uncertainty, (Sidharta Chatterjee, 2013).
  • brings significant positive effect on organisational performance that significantly and positively related to financial performance of the organization, (Yu, Wantao et al (2013)),
  • has significant effect towards competitive strategy that in turn significantly affects a firm’s performance positively. “The better competitive strategy is the higher company performance will be”, Hary Sastrya Wanto, Ruswiati Suryasaputra (2012).
  • enables organisations to show better outcomes and show organisational effectiveness enhanced by learning. “Organisational learning constitute an important condition for choosing the right organisational structure and implementing it (Ellis et al., 2002).” Shmuel Ellis et al 2012.
  • introduces team learning, embraces the principle of cooperation and collaboration, which enables successful group efforts and creative outcomes, and helps in the enhancing of organisational abilities and the improvement of performance levels through effective management and the application of created knowledge (Song, 2008). Simone T. A. Phipps, et al (2012)

OL Cycle with an apple tree.jpg

Figure 1.

"Like theories, the tree’s roots are invisible, and yet the health of the root system determines the health of the tree. The branches are the methods and tools, which enable translation of theories into new capabilities and practical results. The fruit is that practical knowledge. The tree as a whole is a system." Senge and Kim May 1997.



Hary Sastrya Wanto et al : Information Management & Business Review, September 1, 2012

Phapruke Ussahawanitchak , Mahasarakham, Journal of International Business & Economics , January 2012

Senge and Kim May 1997 reflections | volume 12, Number 4
Shmuel Ellis et al, Knowledge & Process Management, April 2012

Simone T. A. Phipps, et al, Journal of Organizational Culture, Communications & Conflict Date: June 2012

Sidharta Chatterjee (Oct. 2013), Source: IUP Journal of Knowledge Management Date: October 2013

//__Yu, Wantao__//, et al, //__International Journal of Production Economics__//. Nov2013, Vol. 146 Issue