A REPORT

On

IMPACT OF ORGANIZATIONAL LEARNING ON PERFORMANCE

Submitted By:

Waqas Ali Khan MBA 14104

Submitted To:

Superior University

30/04/2014

ABSTRACT:

The learning culture concept is getting popular now a day’s because of its application in this modern era and without a doubt there is an immense impact on learning culture on the functioning of any industry, organization and sector. As long as the success of any organization is based on the data of the employee that work for it, these activities can and, indeed, should continue. Nevertheless, individual scholarship is simply a prerequisite for organizational learning. Managers usually use the information within the manner that a layman can use his or her skills, the materials and tools that are at hand to satisfy the blood line of a specific scenario. Organizational performance includes the particular output or outcomes of a corporation as measured against its meant outputs the goals and performances.

INTRODUCTION

A lot of Historians labored above the concept associated with mastering corporations that had been coming forward in the course of the 20th century, however 21st century corporations face swiftly modifying the environment, active constructions as well as globalization idea, most of these include the sturdy effect on the organizational mastering or learning (Muhammad Sohaib, Muhammad Ihsaan, Jahanzaib Yousaf, and Abdul Majeed, 2008). In a rapidly changing global and uncertain atmosphere organizations should got to develop its capability of learning culture so as to encourage the functioning grade of learning (Muhammad Sohaib, Muhammad Ihsaan, Jahanzaib Yousaf, and Abdul Majeed, 2008). The arrangements, causing plenty of issues of environmental constraints, there needs to be some form of modification which have to be realistic and should be undergone by proper procedures of organization learning, organizational learning is always self motivated because it invariably conveys the essentials of organizational growth, expansion and innovation (Wageeh A. Nafei, Nile M. Khanfar, Belal A. Kaifi, 2011). After new data are made or non inheritable, data management mechanisms have to be in a position to manage the routes into the organization’s remembrance in an extraordinary way that brought up its effects and long period reusability (William R. King, 2010). The rising phase of organization learning analysis introduces a viewpoint that learning is not only the attitude of the individual; learning may also happen on a bunch level and is expedited by an organizational climate that has the environment and motivation for learning (Lorraine S. Nemeth, 1997). Organizational learning is the only approach that can be undertaken using the maximum data by deploying the right methods to gain the maximum output (William R. King, 2010).

Researchers have measured structure information in a very sort of ways that. One approach measures organizational information by measure psychological feature of structural members and organizational learning occurs in a very context which incorporates the organization and also the external atmosphere within which the governing body is surrounded (Hodgkinson & Sparrow, 2002). These roles of members, tools, and tasks and their networks are the first mechanisms in systems through that structure learning happen and the data are made, captured,

and onward. Member’s are the media through that learning typically occurs in organizations. Individual members additionally function data repositories in organizations (Gherardi, 2006, Levitt & March, 1988, Miner & Haunschild, 1995). From an associate organizational learning perspective, organizational rules will be taught to be formalized routines, and convention production and alter may well be imagined to be outcomes of structure learning processes, structure learning as a 2 stage method within the 1st level, organizations adapt their behavior once performance falls wanting aspirations, and in the second phase, they accommodate their dreams to achieve performance (Martin Schulz, 2001).

ORGANIZAITONAL LEARNING IMPACT ON PERFORMANCE

PERFORMANCE

INFORMATION DISTRIBUTION

INFORMATION INTERPRETATION

INFORMATION ACQUISITION

LITERATURE REVIEW:

INFORMATION ACQUISITION:

The idea of acquisition is often easier to explain in terms of the transfer of property rights, however, not very easy once the property being acquired is as unclear as information and also the acquirer as ambiguous as a company (Brian R. Gaines, 2014) The main meaning of the subject is to decrease the knowledge acquisition ambiguity and lots of authors take into account organizational learning because the basic side of competition and make a bundle with the knowledge gaining and performance development through sharing between knowledge and industry outcome have usually been unspoken, there's slightly pragmatic proof to hold up this angle, particularly in conditions of transformation financial outcomes. (Tomislav Hernaus, 2006). Organizational learning may be a complicated method that refers to the event of latest information retaining of that data and has the potential to bring positive outcomes in the behavior, sturdy knowledge society are sensible as making, getting and sharing information, furthermore as at behavior to replicate fresh data and approaching (Miha Skerlavaj, 2010). The approaches, however, terribly totally different agree that advanced routines can cause the acquisition of latest data as a result of the interpretations fabricated from ideas among the organization. The behavior of the data in seeking system is thus important to the successful acquisition and transfer of information because it can confirm what's out there to be taken and whether or not it's been brought in from outside or whether or not it's a statement of a thought already in a situation (Deborah Blackman, Steven Henderson, 2010). The acquisition of recent organizational information is important to new venture success. So as to base choices on the foremost up-to-date data, organizations should place systems into place to extend their capability to raised perceive data within the external atmosphere. A method of getting and exploitation outside data in environmental scanning (Thaddeus McEwen, 2004). Businesses gain information from its interior and outside sources, firms will obtain knowledge of the exterior atmosphere through varied ways, as a new worker and collaborating with different organizations (McGraw-Hill, 1996).

In distinction to information creation, information gaining needs the hunt for gratitude of and incorporation of probabilistic important information, typically as of not only inside but external the organization information gaining determine on information flow – information formation, gaining, modification, storage, transport, distribution and use of goods and services. This part helps structure, flow concerning improvement, entity education, cooperative wisdom and cooperative deciding (William R. King, 2010). Organizational learning method may be a series of 3 steps: data, gaining, informed understanding, and behavioral and psychological feature

transpose. Corporations which got raised a powerful knowledge society are sensible as making, deed and passing data, furthermore as a behavior to replicate new data and insight (Tomislav Hernaus, 2006). A small work of interrogation of the impact of management education, culture and creativity that is naturally mistreated isn't simply information required, acquire and pass along, however, somewhat an exact positioning of attitudes and morals required for innovations to occur (Miha Skerlavaj, 2010). The contention is that this restriction results in a great deal of what's publicized as data acquisition, if truth be told being information gathering, which whether or not this info typically will be translated into operational data is additional problematic than often supposed (Deborah Blackman, Steven Henderson, 2010). External information acquisition is that the generator of intelligence for the firm. Market signals are known, and information on these signals is understood to organize new knowledge. The interpretation could be a central factor in the accomplishment and creation of recent structure data (Thaddeus McEwen, 2004). Data acquisition methods involve the depth psychology of proof and inductive causative reasoning and information regarding acquisition by a company presents some abstract and word issues, and it's necessary to own operational definitions of the notions concerned (Brian R. Gaines, 2014)

INFORMATION DISTRIBUTION:

Information just fit in with people, organizations could change just through representative turnover, it infers that learning is converted through its entry into an organizational learning taking in as the authoritative courses of action pointed at increasing the value of the information obtained and imparted all around the firm (Francois Therien, 2010). Research compelling elements of organizational learning taking in Concluded that have been recognized 9 fundamental variables in authoritative taking in. These components incorporate Systems considering, group taking in, mental models, perfect and vision center, aptitude and mastery personals, trying different things with new methodologies, gain from past meetings, gaining from others, and meting out information to others (Shahram Gilaninia, Mir Abdolhasan Askari Rankouh, Milad Abbas Poor Gildeh, 2013). If staff believed they may constitute a contribution to the overall presentation, they may build up a great deal of helpful perspective in the management of information distribution (Jessica Keyes, 2008). Learning offering alludes to spread and diffusion of information. In other words, information management is the practice to increase the value of data by catching inferred information and changing over it to express learning, by separating, putting forth, recovering and dispersing information and by constructing and examining new information (Mariel Alejandra Alet, Omar Chiotti1, María Rosa Galli, 2003). Organizational learning is a determined by the authoritative activities, information procurement, knowledge distribution, data elucidation, and memory that intentionally or unknowingly influence on the positive promotion of the organization (Shahram Gilaninia, Mir Abdolhasan Askari Rankouh, Milad Abbas Poor Gildeh, 2013). In organizational learning, the learning administration frameworks incorporate existing segments at both infrastructural and substance

levels, connecting people and data frameworks connected with community, information concentrated errands. Legal documents that handle unequivocal substance, and also functions that empower imparting and disseminating unsaid substance, must be transiently and spatially coordinated (Mariel Alejandra Alet, Omar Chiotti1, María Rosa Galli, 2003). Organizational climate among the context of however information distribution, adjust interested in the company method, plus in addition the amount of that information distribution was appeared to profit the way of managing deals and resolve to support data distribution (Jessica Keyes, 2008).

Enhancing the information distribution power of the economy through cooperative networks and also the diffusion of technology and providing the providing conditions for the structural modification at the farm level to maximize the advantages of engineering for producing. (ocde, 1996). We characterize knowledge management as the process of managing learning. All things weighed, we restrain information management to the drills that don't increase the value of learning and learning administration is concerned with the securing and correspondence of learning and distribution of knowledge (Francois Therien, 2010). An interesting event in any association is distributing information to places where it is required and might be connected and once more, workstation based data framework spares an undeniably important role to run, alongside paper-based frameworks and vis-a-versa social collaboration. In view of their open capacity, information distribution is important for more beneficial outcomes (Brian T. Pentland, 1995).

Knowledge has become a lot of necessary for organizations than other monetary resources, market situation, technology, or the other company quality, people might come back and pass away, however valuable information cannot be lost or the organization starves to death. The information system refers to the management of gaining and generated information or the company and it includes the gaining, creation, storage, distribution, and use of information (McGraw-Hill, 1996). Interim knowledge transfer is excused by the method through that single firm is associated with the expertise of another and the information transfer will be reckoned a method within which a company recreates and maintains a fancy, causally ambiguous set of routines during a new setting (Eric W. K. Tsang, 2009).

INFORMATION INTERPRETATION:

The basic conflict between individual stimulus-response learning and intentional psychological feature learning, the companies learning approach considers learning not just as adoption to contingencies, however, as learning through insights, understanding and interpretation (Peter Pawlowsky, 2001). The necessary planning of patterns of interpretation that they are wide verity, high stability, subtlety and negatively are mentioned below, together with consideration on methodology (Martina Fuchs, 2013). They spread up the idea's conceptualizing collective information bases of organizations that are the outcomes of learning from direct expertise, learning from interpretations like stories, paradigms, frames of reference, culture and learning from the expertise of others (Peter Pawlowsky, 2001). Interpretation looks to play a very

important role, however patterns of interpretation are advanced, jointly shared mindsets and mutual rules that are neither accidental concepts nor selective individual opinions and patterns of interpretation approach challenges the discussion close information in financial based results it guarantees to clarify the mindsets that guide economic selections, ways to and activities in an broader manner, focusing specially on the role of interpretation ( Martina Fuchs, 2013).

PERFORMANCE:

Organizational learning will impact the performance of workers and their satisfaction with new technology implementation and structure impact is assessed by changes of organizational performance on margin of profit, price effectiveness, competitive advantages, client satisfaction, sales turnover, and effectiveness of administration processes (Vincent Chou, 2007). Organizations which change their knowledge flow correspondingly force raise their output. Organizational education (OL) is measured likely on the top encouraging theme in the contemporary administrative prose. Organizational knowledge course is an arrangement of three stages: information gaining, knowledge, understanding, and behavioral and cognitive changes. Organization depending on the best learning philosophy is good at creating, gaining and transferring knowledge, as well as at altering behavior to reflect innovative knowledge and vision. (Tomislav Hernaus).

Organizational learning replicates in ‘accompanying changes’ (Garvin, 1993). If no interactive or cognitive changes happen, organizational learning has in fact, not happened and the only thing that leftovers unused is probably for improvements (Tomislav Hernaus).

In order to survive with the present external opportunities and threats, it is contended that organizations have to study, that is, attain new knowledge and skills that will recover their prevailing and future performance. Therefore, researchers endorse that the most effective strategy of associating and improving a company’s competitive edge and performance is organizational learning. (Islam Mohamed Salim, 2011). Research also designates that the consequences of organizational learning on firm performance is expected to be both direct and unintended because the creation of the advanced culture through learning allows the firm to accomplish an improved competitive situation and above-average performance (Islam Mohamed Salim, 2011).

There are noteworthy and meaningful correlations between complete organizational learning and its subscales with structural performance. Overall organizational learning and its sub-scales have a momentous role in organizational performance. The most significant finding of this research is the empirical evidence about the presence of strong, statistically substantial, positive affiliation between organizational learning and organizational performance. In other words, organizations which ripen their learning processes correspondingly will upturn their performance. The study also exposed, and confirmed some earlier conclusions, that financial measures only are not good predictors of organizational performance. (Somaye, Maryam, Fakhroldin, Shahram and Sabri, 2013).

Performance is an essential feature for SME existence and sustainability where performance factors such as revolution and organizational learning have been originated to outgrowth business expansion, technological advancement, and wealth conception in both start-up and present firms hence being a important aspect of supervision of the association and businesses. Whereas, those found to be deprived performers, absence of innovation, organizational learning, have restricted access to information on market prospects and healthy opportunities, high-priced business 2development services and deficiency of finance, adequate technical and administration support services. Organizational learning has strong impacts on a firm’s performance and its achievements that proffer it towards the growth. It is addressed that the connection between a firm’s organizational learning and its performance, emphasizing that learning generates new knowledge which can support firms respond rapidly to customers’ needs and industry variations. Some authors have also found in their previous researches that organizational learning yields auspicious and positive results in organizations. (Apolot Stella, 2012).

Several of researchers have revealed in their studies that organizations cannot survive and sustained their completive edge in the market without the organizational learning. To have a great positioning and edge in the global economy, companies have to align themselves towards the changes and have to learn recent trends of environment. (Jack Welch, 1994)

Hypothesis:

Hypothesis 1:

H1: there is relationship between information acquisition and performance

H0: there is no relationship between information acquisition and performance

Hypothesis 2:

H1: there is relationship between information distribution and performance

H0: there is no relationship between information distribution and performance

Hypothesis 3:

H1: there is relationship between information interpretation and performance

H0: there is no relationship between information interpretation and performance

Methodology

First hand data was collect by means of prearranged accepted and self-administered survey. The questions were close-ended. The investigator realized that the respondents had realistic approach on the complete course of the practice of organizational learning in different mode on employee performance. The likert scale was worn to assess sensitivity, feelings, ideals and actions and to facilitate make light of partisanship and compose promising use quantitative analysis. The respondent have to choose the value of consideration which is being available to him by the questionnaire which is most likely Strongly Disagree, disagree, Neutral, Agree, Strongly Agree and all these are assigned with the particular scales like 1, 2, 3, 4, 5.The questionnaire was developed and consisted of two parts. The initial section of inquiry was to hit into the important knowhow and the sketch of the respondents. This help the investigator to locale knowledge of that is targeted.

Research AreaThe follow a line of investigation sheltered all the employees in private organizations working in Pakistan. The learning area was limited to Lahore because it is the densely populated and one of the financial hub of Pakistan and a good number of the parent offices of the banks, different companies and organizations are beneath concern are to be found in Lahore.

Research AreaThe follow a line of investigation sheltered all the employees in private organizations working in Pakistan. The learning area was limited to Lahore because it is the densely populated and one of the financial hub of Pakistan and a good number of the parent offices of the banks, different companies and organizations are beneath concern are to be found in Lahore.

Sample SizeThe researcher used 300 employees of different perspective organizations.

Data AnalysisAfter the completion of the questionnaire filling phase the acquired data has been go through the SPSS software for the analysis and the interpretation of the data and after that the conclusion is given on its basis’s.

RELIABILITY ANALYSIS:

SR NO CONSTRACT NO OF ITEM CRONBACH’S ALPHA

1 ORGANIZATIONAL ACQUISITION

7 0.699

2 ORGANIZATIONAL DISTRIBUTION

6 0.745

3 ORGANIZATIONAL INTERPRETATION

5 0.779

4 PERFORMANCE 4 0.807

If we see the above table that is showing the reliability analysis of all the variables, the value of Cronbach's Alpha for each variable is more than 0.70 or near to it, which gives the authenticity of our respondent’s data. It also gives us the certificate to move forward in our study.

REGRESSION:

Coefficientsa

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig.B Std. Error Beta

1 (Constant) 11.810 .694 16.458 .000

OLA .012 .019 .009 3.171 .002

OLD .134 .012 .214 4.830 .001

OLI .856 .014 .981 63.280 .000

a. Dependent Variable: PRF

Regression analysis is shown in the above table. The main purpose of finding the regression analysis is that shows the equation that will be helpful to find the impact of between two variables. The regression analysis clearly shows that there is a immense impact of organizational learning on performance. The test also show ‘s the significance statistically which is less then 0.05.

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 1937.596 3 645.865 1.419E3 .000a

Residual 134.317 295 .455

Total 2071.913 298

a. Predictors: (Constant), OLI, OLA, OLD

b. Dependent Variable: PRF

These results show you the variance between groups and the variance within groups and it show that there is significant relationships Sig=0. 000

Correlations

Performance Information_ acq Information_ distr Information _inter

Performance

Pearson Correlation 1 .632** .851** .852**

Sig. (2-tailed) .000 .000 .000

N 300 300 300 300

Information_ acq

Pearson Correlation .632** 1 .553** .699**

Sig. (2-tailed) .000 .000 .000

N 300 300 300 300

Information_ distr

Pearson Correlation .851** .553** 1 .864**

Sig. (2-tailed) .000 .000 .000

N 300 300 300 300

information _inter

Pearson Correlation .852** .699** .864** 1

Sig. (2-tailed) .000 .000 .000

N 300 300 300 300

**. Correlation is significant at the 0.01 level (2-tailed).

Correlation is been shown in the above table. Where the chosen four variable is been examined. The results shows that they are absolutely correlated to performance (r=.852, p = .000, and r= .699, p= .000,r=.864,p=.000) accordingly. As we can see that there is a common association in between information distribution and information acquisition (r= .851, p = .000) so it shows that there is a active relationship between both of them, the variables –information acquisition, information distribution, information interpretaion– are positively correlated to performance (r= .852, p = .000, and r= .851, p= .000, accordingly). The results depict that the correlations are less then the significance value which is 0.05. so there will be no correlation rejected in the above case.

DISCUSION AND CONCLUSION:

A theoretical framework for analyzing organizational learning and used the framework to produce an outline of analysis on companies learning. Knowledge will flow out of the organization into the surroundings and is also embedded within the organization. Organizational learning has a great impact on the performance of different organization in such manner through which they can optimize their profit although it’s a slow process. Notably, once organizations have interaction during a new learning challenge, performance usually suffers, or seems to suffer, within the short term. Another implication that appears from the results of this study is that though learning organization formation facilitates modification, adaptation and innovation, and therefore organization growth and evolution, they're not as equally effective once it involves such bottom-line organizational performance as productivity, quality and gain. The fact that organizational learning will influence companies performance, however, there are more  variables that influence the general performance of those corporations.

FUTURE RESEARCH DIRECTION:

This research is based on non-financial performance, so there is a room for research on financial performance.

More variables can be added in it. More sample size should be taken into account.

LIMITATIONS:

As I’m a student so I don’t have enough time and resources. The sample size should be exceed from the chosen one.

REFERENCES:

Hammad Sohaib, Muhammad Ihsaan, Jahanzaib Yousaf, and Abdul Majeed, (2008). Factors Affecting the Organizational Learning: A Study of Banking Sector of Pakistan.

William R. King, (21010). Knowledge Management and Organizational Learning

Wageeh A. Nafei, (2011), Leadership Styles and Organizational Learning: An Empirical Study onSaudi Banks in Al-Taif Governorate Kingdom of Saudi Arabia.

Vincent Cho, (2007). A study of the impact of Organizational Learning on information system effectiveness.

Mariel Alejandra Alet, Omar Chiotti1, María Rosa Galli, (2003). A Distributed Knowledge Management Conceptual Model for Knowledge Organizations.

Thaddeus McEwen, (2004). Knowledge acquisition and organizational learning through environmental scanning.

Tomislav Hernaus, (2006). Relationship between organizational learning and organizational performance: The case of Crothia.

Hamdan Hasan Al-Onizat, (2012). How Learning Organization Supports the IntellectualCapital Field Study at Jordanian Banks.

Organization for economic co-operation and development, (1996).

Deborah Blackman and Steven Henderson, (2010). Does A Learning Organization Facilitate Knowledge Acquisition And Transfer?

Ehsan Rasoulinezhad, (2011). Measuring the Role of Knowledge Management Processes in the Commercial Banks of Iran.

Peter Pawlowsky, (2001). Organizational Learning in Various Environmental Conditions.

Martina fuchs, (2013). Knowledge and Patterns of Interpretation: Two Complementary Approaches for a Better Understanding of Mental Constructions in Economic Geography

Brian T. Pentland, (1995). Information and systems and organizational learning: The social epistemology of organizational knowledge systems.

Dr. Jessica Keyes, (2008). Identifying the barriers to knowledge sharing in Knowledge intensive organizations.

Lorraine S. Nemeth, (1997). Measuring Organizational Learning.

Brian R. Gaine, (2014). Organizational knowledge acquisition.

Miha Skerlavaj , (2010). Organizational learning culture, innovative culture and innovations in South Korean firms.

Shahram Gilaninia, Mir Abdolhasan Askari Rankouh, Milad Abbas Poor Gildeh, (2013). Overview in the importance of organizational learning and learning organization.

McGraw-Hill, (1996), Building the Learning Organization.

Martin Schulz, (2001). Organizational learning: Companions of organizational learning.

Erica Wiseman, (2007). The institutionalization of organizational learning.