Proposal: Draft #1

Learning Organization Systems Dynamics Modeling: An Exploratory Study

Introduction:

The concept of “Learning Organization” has been popularized by Peter Senge and his 1990 book, “The Fifth
Discipline”. His vision stimulated business and organization theorist to look further in organizational development in
terms of “learning”. Since then, the idea of gaining strategic advantage through learning and knowledge has been
diversified. Three fields of study are recognized as major fields of research in organizational development; learning
organization, organizational learning and knowledge management. All of these fields are believed to have direct effects
on organization performance. Many studies have shown some correlations between performance and theoretical
practices. The studies know what happened and “what” are the outputs but they cannot explain “how” these theoretical
concepts; learning and knowledge, have effects on organizations.

Learning Organization (LO), Organizational Learning (OL) and Knowledge Management (KM):
The Similarities and Differences

Goh’s review (2001) defines the differences between learning organization and organizational learning as both are the
same but different from different perspectives. Organizational learning (OL) can be viewed from a “capability”
perspective, how capable organization is in learning while learning organization (LO) is an “organization” that has a
capability to develop, change and adapt to gain strategic advantage. Kezar’s explanation (2005) approaches OL from
another angle, education. OL is rooted deeply into learning process. And in the field of learning, only individuals, not
organizations can learn. In OL field, there remains active debate about whether this is an interrelated process between
the individual and group level or whether group level can have independent thought and learning. The focus of OL
clearly on “learning process” in individual level which is a part of LO’s concepts, therefore OL cannot be separated from
LO but, in fact, it’s an important body of knowledge that would support LO in its process.

Another closely related field to LO is Knowledge Management (KM). Bennet (2004) explains KM from the basic concept
of knowledge based on Sveiby (1997) as “..knowledge is best understood as the capacity to take effective action..”.
Another view of KM is Loermans’ literature review on Swann et al (1999) that relates KM and LO in organization
context as
“.. any process or practice of creating, acquiring, capturing, sharing and using knowledge,
wherever it resides, to enhance learning and performance in organizations..”
The term “wherever it resides” implies essences of KM; tacit and explicit knowledge which are not in any context of LO.
The scope of knowledge and its process in KM clearly distinguish itself from LO concepts. However, Brown and
Woodland, from OL school claimed simply that learning is the process of acquiring knowledge while Allee (1997) from
KM school suggested that each aspect of knowledge has a corresponding learning activity that supports it. Or on the
other hand, knowledge creation is a final result of learning process and conversely, learning occurs when we talk about
creating, sharing and using knowledge. It is quite interesting that Davenport, Prusak and Svieby, KM masters, in late
1990, did not mentioned LO or OL in their literature when Peter Senge, in 1990, also did not state the term knowledge
in his early LO study while all of these are intertwined and related in both context and process.

LO, OL and KM are all focusing in their own domains; organizational change, learning process and managing
intellectual assets. These are all important to organizational development therefore the knowledge of and studies in
these three fields can be drawn to explore learning organization in broader perspective. In this study, the concepts of
LO and its theory will be used as a basis and relevant knowledge of OL and KM will be used as supportive reasoning or
theories in the exploration.

Disciplines in “The Fifth Disciplines”: Principles of Learning Organization

Within Senge’s model (1990), learning organizations use five disciplines in creating learning in organization: personal
mastery, mental models, shared vision, team learning and system thinking. Most of the disciplines represent ways to
overcome threats to learning. “The Fifth Discinpline”, Systems thinking is based on a notion that there is a set of
relationships, within and outside organization. These complex relationships and variables or determinants can be
described and can lead to awareness, understanding and learning for organization which might be stuck in the
misguided mind-set of direct, local, and simple causal relationship. The use of systems thinking is for organization to
think and solve problem systematically in all levels of individual, group and organization.

Personal mastery is an individual process of learning, being open-minded, taking upon new challenges and learn. This
is a driving force of organizational learning as Senge (1990) notes, “From their quest for continual learning (through
personal mastery) comes the spirit of the learning organization”. Organization will not learn and evolve if individuals
cannot or do not make a commitment to learn and see their lives as a creative journey. Personal mastery links
individual performance to organizational performance. Mental models or ways of thinking and seeing things direct
people’s behavior. Mental model reflects how individual reacts to change. Positive mental models will be beneficial to
learning by individual and group when individual has reflection skills to express how they think and they believe. The
effects of both individual’s metal model and personal mastery will be collectively reflected in “Team Learning” which
people learn and work together to achieve the same goals based on their “shared vision”. Shared vision refers to
leader’s ability to instill a common purpose, which provide forces and energy for learning.

These 5 disciplines provide concepts of how learning can support organization but their framework for research is still
vague and the notion of LO has generated tremendous debate. The proponents of LO concept suggest that it “may
provide the catalyst which is needed to push forward, in an holistic way, the many strands, ideas, and values with which
organizations must now concern themselves” (Ellinger, Yang 2004). Despite the numerous accounts and suggestions
that discuss why presumably works, there are few concrete studies exist that clarify how it works in achieving
performance improvement. Ellinger (2004) suggests that there are little data supporting the claim that
performance improvement is directly related to the adoption of practices associated with LO. Major research
challenge is to establish the relationship between characteristics, processes and performance. Along these
processes, new measures have to be developed to capture intrinsic characteristics of learning and
organizational factors.

Existing LO Models:

In learning organization research field, there are 3 approaches/models that try to detect and explain LO characteristics
and effects; 1) model of competitive learning organization, 2) LO input/output model and 3) DLOQ, dimension of
learning organization questionnaire.

1) Hosley, Lau, Levey and Tan (1994) look at business organization and conclude that two important components of
competitive learning organization are: the different levels of learning and the learning focus. When the learning focus is
linked to the firm’s ability to understand the changing nature of competitive forces and the levels of learning are linked
to the firm’s ability to manage
and mobilize its resources
through time for a given
competitive response. These
assertions lead to their
framework of “model of
competitive learning
organization”. The model
shows the principles of LO
based on Senge’s concepts
QuickTimeª and a
TIFF (LZW) decompressor
and how they interact. Still, it
are needed to see this picture. lacks of quantitative
measures that determine
effects of each components
and actions. However model
provides a dynamic picture of
how learning in different
domains affects
organization’s reactions to
the environment.

model of competitive learning organization

2) LO input/output model, Blackman Organizational Learning

Outputs
Process Inputs Organization
(2005) demonstrates using case
studies that input/output model of LO Radical New New People- Competitive
Structures/New Centered Culture Advantage
based on Shrivastava’s typology of
Leadership Encouraging
LO (4 perspectives of: adaptation, Challenge
developing knowledge of action Enable Continuous
outcome relationship, assumption Monitored Learning
Opportunities Systems Thinking Knowledge
sharing, and institutional experience)
could explain the process of and
relationship among activities. The Personal Mastery Sharing New Mental
model captures the sequences of Models
Information/Knowled
actions in LO and with interviews, the
ge Generation and Transformational
study shows the patterns of LO that Sharing Shared Vision Change
occur along the process but not the
reverse interactions or measurable
magnitudes. LO input/output Model
3) DLOQ: “Dimension of learning organization questionnaire”
was developed in 1996 by Watkins and Marsick. Based of 7
dimensions of LO, DLOQ has gained popularity as a tool to
detect LO characteristics in organization. The questionnaire
consists of 60 questions with six-choices Likert scale type
covering activities in all 3 levels: individual, group and
organization.
7 Dimensions of Learning Organization
1-create continuous learning opportunities
2-promote inquiry and dialogue
3-encourage collaboration and team learning
4-establish systems to capture and share learning
5-empower people toward collective vision
6-connect the organization to its environment
7-use leaders who model and support learning

Deficiencies in Existing Studies:

These 3 models are only examples of attempts to detect and measures LO’s characteristics and learning. They also
include interactions among activities and actions which are essentials to learning process. By defining their own
“dimension” and actions or activities that represent LO’s characteristics, these models are useful within their
frameworks which is, in fact, sufficient in explaining LO behavior. Besides interaction, what missing in these models is
the dynamic dimension of the organization. The term “dynamic” from business dynamics perspective, Sterman (2004).
refers to “the understanding of the historical behavior and of the key concepts and variables and what might be their
behavior in the future”.

The concept of organizational dynamic is intrinsically embedded in original Senge’s (1990) abstract LO model as he
states that “..organization concept indicates that organization continuously need to change internally, as well as, adapt
to changes they encounter under different circumstances”. As Senge looks at organization as a continuous changing
organism, it is essential to understand the past, the present and the future of organization due to LO process and
variables. In other word, dynamic dimension in this proposed study is taking time dimension into the model to:
1) Indicate effects of time (delay or duration of activities or actions) on the process of LO
2) Predict or forecast changes based on different circumstances and environments

To include time dimension into the study requires an instrument that is not a typical research tool, systems modeling.
Similar to economics, the data from the real world is gathered and put into a model or equation, and researcher studies
a model and data from different angles to determine and explore relationships, factors or variables of interest. By using
the systems dynamics (or business dynamics) approach (Sterman, 2004), it is also possible to model the organization
to determine the causal relationships among actions or activities of LO and organizational outcomes or performance.
Furthermore, Leadership, Technology and Social Interaction which cannot be clearly defined in other models might be
visualized in this systems modeling and the results would be beneficial to researcher in understanding more of interplay
among learning factors and environment.

Theoretical Framework:
Three theoretical grounding for this research are
1) Watkins and Marsick conceptualization of the LO (2006), DLOQ. Its validity has been tested and there are numerous
studies done based on this questionnaire.
2) Sterman’s Business Dydnamics, Modeling Techniques and Concepts

Research Questions:
- What is LO in the form of Systems Dynamics modeling?
- What are measures that determine action-effects relationship in learning organization?
- What are the effects of time in each step of organizational learning process? and
- Is model able to predict or simulate LO accurately?

Applications and Implications of the Study:

- Another perspective of Learning Organization, a Model which can be simulated to explain an interactions among
variables
- An exploration of different environments and circumstances
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