Introduction
Continuous development is a significant factor impacting long-term business success. Hence, organizational learning has become a prominent topic in business management. Organizational learning can have a positive impact both on individual employees and on the organization as a whole. In the context of this essay, the focus will be on the benefits of organizational learning for companies and the role of HR in it.
The assumption on which the research is based is that HR is an integral part of any company that shares the responsibility for its development with the company’s leaders. The paper intends to explain the background of the topic and provide justification for the importance of organizational learning. Additionally, the research in the field will be analyzed for claims concerning the relationship between HR and organizational learning. Finally, the conclusion will offer recommendations for HR practice concerning organizational learning.
Background
As a research and practice topic, organizational learning fits into the fields of management, leadership, and human resource development. As explained by Storberg-Walker (2009), organizational learning is an integral element of organizational development along with knowledge sharing and generation. Organizational learning emerged as an innovative way for companies to create value and sustain competitive advantage (Kearns, 2015; Lee et al., 2011).
Although there was some struggle to adopt a clear definition of organizational learning, “most researchers would agree with defining organisational learning as a change in the organisation’s knowledge that occurs as a function of experience” (Argote, 2011, p. 439). In other words, organizational learning is the process of increasing a company’s knowledge base.
As a result of the increased interest in organizational learning, various scholars focused their efforts on defining the different aspects of organizational learning. As a result, the concept of a learning organization was born, which is considered among the guiding principles in organizational learning practice. The most obvious definition of a learning organization is that it is “an entity, an ideal type of organisation, which has the capacity to learn effectively and therefore to prosper” (Easterby-Smith and Lyles, 2011). Hence, learning organizations can generate and improve knowledge while also using it to their advantage.
Consequently, the definition of the New Learning Organisation was coined, which is currently used by institutions focusing on HR and personnel development. The Chartered Institute of Personnel and Development defines the New Learning Organisation as a living ecosystem that continuously transforms itself rather than as a fixed entity (Daly and Overton, 2017). From this perspective, an organization needs to not only facilitate learning and use knowledge to its advantage but also to remain agile and flexible enough to use knowledge for comprehensive organizational development (Daly and Overton, 2017).
This definition is particularly suitable for the modern world, where business and market environments experience changes that are often unpredictable, and a company’s success depends mainly on its ability to adjust.
The research also supported scholars’ understanding of the factors that distinguish learning organizations from other entities. As such, clarity of purpose is central to the New Learning Organisation, as it facilitates learning and development on all organizational levels (Daly and Overton, 2017; Lamb et al., 2017).
Additionally, the characteristics of the New Learning Organisation involve intelligent decision-making, holistic people experience, continual engagement, agile digital infrastructure, and a thriving ecosystem (Daly and Overton, 2017; Lamb et al., 2017). Together, these characteristics provide organizations with opportunities to elevate their potential through learning and apply knowledge for lasting success.
Importance of Organisational Learning
The importance of organizational learning for companies is rooted in the belief that organizations can benefit from acquiring and accumulating knowledge. As Leonard (2016) puts it, business success and the capacity for innovation depend on employees’ knowledge and skills. Research confirms this view by supporting the connection between organisational learning and competitive advantage. According to Easterby-Smith and Lyles (2016), organisational learning provides a foundation for developing innovative products and services, as well as for improving current products using employees’ knowledge and experience.
Studies by FernĂĄndez-Mesa and Alegre (2015) and by Ning and Li (2018) show that the practical application of organizational learning practices has a direct effect on innovation capacity and innovation efficiency. Based on research evidence, organizational learning is seen as an essential aspect of value creation, regardless of the context and industry in which an organization operates (Kang, Morris, and Snell, 2007; North and Kumta, 2018). Therefore, by promoting organizational learning, HR can help their organizations to build and sustain competitive advantage.
Another relationship that is pivotal to the application of organizational learning is that with efficiency. Because organizational learning involves compiling knowledge and intellectual resources of a large number of people, it can help organizations to improve the efficiency of operations and processes. Saadat and Saadat (2016) explain the process by showing that organizational learning “can lead to improving public and team learning in an organisation, improving organisational activities, improving individual and group behaviours and finally, efficiency, effectiveness and productivity” (p. 224).
Kasemsap (2017) also notes that organizational learning can be successfully applied to various corporate functions, enhancing productivity and efficiency. This means that organizations engaging in continuous learning are likely to be more cost-effective, which, combined with the increased capacity innovation and competitive advantage, translates into better performance.
Lastly, it is essential to note that organizational learning provides a foundation for sustaining all of these benefits in the long term. The nature of organizational learning practices is continuous, meaning that, over time, organizations can build more and more knowledge and experience (Kearns, 2015). Furthermore, organizational learning contributes to firms’ resilience in the light of changes in the external environment.
Organisational resilience is the key to firms’ long-term performance as it reflects the organization’s capacity to develop effective responses to potentially dangerous circumstances, thus transforming and surviving advanced market and economic challenges (Kayes, 2015). Organizational learning facilitates resilience by providing organizations with a way to gather new information and build on existing knowledge to develop innovative solutions to problems (Kayes, 2015).
Organizational resilience depends highly on its human capital since employees are largely responsible for providing ideas and solutions. Since organizational learning, by concept, involves all employees within the organization’s ecosystem, it leverages human capital and contributes to resilience in this way, too (Kayes, 2015). Based on this information, HR’s actions contributing to organizational learning are pivotal to the long-term survival and prosperity of any company.
HR and Organisational Learning
To fully grasp the application of organizational learning in HR, it is essential to investigate the claims regarding the relationship between the two fields. Most research studies in the area consider the effect of organizational learning on various success factors and the effectiveness of different organizational learning strategies. Still, some studies allow for a more in-depth look into the relationship between HR and organizational learning. Recent literature in this topic area mostly focuses on two claims.
First of all, research suggests that organizational learning acts as a mediator between HR practice and success. In other words, the effectiveness of HR interventions depends on organizational learning capacity. A study by Chahal, Jyoti, and Rani (2016) focused on the Indian telecommunications sector found that high-performance HR practices, such as training, performance management, and empowerment, have a more significant impact on business performance in learning organizations. The study involved quantitative data gathered from six different private companies, and, although the sample size is rather large, it is unclear whether or not the claim would be valid for other organizational contexts and industries.
Another study in this area was performed by Jeong and Shin (2019), who studied HR practices during organizational change. The results were based on a very large sample of 454 Korean companies operating in 16 different industries, meaning that the results are likely to be reliable. The findings indicate the mediating role of organizational learning in the relationship between HR practices and organizational change (Jeong and Shin, 2019).
Learning organizations applying high-performance HR practices while undergoing transformations benefitted from increased organizational creativity, which supported the change process (Jeong and Shin, 2019). Hence, the study supports the mediating relationship between organizational learning and the effectiveness of HR practices.
The third study selected for the review of this topic area was conducted in Greek. In their research, Dekoulou and Trivellas (2015) focused on the influence of organizational learning on the primary outcomes of HR practice: job satisfaction and job performance. The study focused on 49 different companies in the Greek advertising sector, allowing for a rather large sample. Based on quantitative data collected from employees’ surveys, the study showed that organizational learning has a significant influence on job satisfaction and individual job performance on employees, regardless of the specific performance management practices applied by HR (Dekoulou and Trivellas, 2015).
Hence, the study contributes to other evidence on the mediating effect of organizational learning in HR practice. While two of the studies focused on companies operating in specific markets, the agreement between research outcomes in different settings and the overall quality of studies suggest that the claim is likely to be true in most environments.
Secondly, research also claims that certain HR practices can enhance organizational learning. Thus, HR involvement in organizational learning has a positive effect on the outcomes. A study by Jain and Moreno (2015) focused on a large public sector company in India and found that HR practices such as performance management, collaborative learning, teamwork, autonomy and freedom, and rewards for innovation improved organizational learning and contributed to both knowledge creation and financial performance.
As explained by the authors, these practices contributed to a learning culture in the organization, thus facilitating the accumulation and effective application of knowledge (Jain and Moreno, 2015). However, since the study only included one company, the results cannot be taken as a guarantee that the identified claim is correct.
A different study focused on the impact of recruitment on organizational learning. In their research, Jøranli (2017) applied a qualitative approach to gather data from 12 software firms in Norway. The results of the study point to the importance of recruitment to organizational learning. Specifically, the author shows that the recruitment of recent graduates contributes to long-term organizational learning, whereas selecting highly experienced applicants increases organizational learning in the short term (Jøranli, 2017). Despite the qualitative design, the model completed by the author can be applied to HR practice to support organizational learning. Nevertheless, the level of evidence provided is not sufficient to support the claim that HR practices have a significant impact on organizational learning.
Conclusion
On the whole, the paper explored the concept of organizational learning in the context of human resources. The background section provided the necessary definitions and discussed the idea of the New Learning Organisation. The analysis also clarified the importance of promoting organizational learning. Based on research, organizational learning can help companies to develop and sustain competitive advantage by increasing their capacity for innovation. In addition, organizational learning has a significant impact on performance as it may help to enhance processes and improve workers’ productivity.
Research also revealed that the benefits generated from organizational learning are sustainable in the long term. Moreover, organizational learning helps firms to build resilience, thus helping them to survive and prosper despite external threats and changes. These benefits make organizational learning crucial to modern companies, as the success of businesses today depends heavily on their innovation, operational excellence, and flexibility.
The two general claims observed in research on the relationship between HR and organizational learning are that organizational learning mediates the influence of HR practices on performance and that HR practices can contribute to organizational learning. When recent evidence is considered, there are some high-quality studies in support of the first claim. Still, the positive influence of HR practices on organizational learning is unclear.
The paper has important practical implications for employees, managers, and HR specialists. First of all, it shows the need to consider organizational learning as one of the critical predictors of long-term business success. Secondly, research shows that organizational learning depends on specific, modifiable characteristics of the organization. That is, addressing the individual aspects of organizational learning can help companies to become the New Learning Organisations, thus yielding the benefits discussed above.
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