Sonia Nongmaithem

Research Scholar

Organizational Learning and Leadership: Moderating effect of Organizational Culture

 

In recent years, the focus of most of the organizational studies has been on the ability of organizations to respond suitably to the continuous changes in the external environment (Llorens-Montes et al., 2005) because organizations are open systems which function in dynamic environment and their successful survival depends on their ability to learn and adapt to pressures as well as prospects presented by such environment (Burke, 2002; Katz & Kahn, 1978). Though various factors, such as, economic conditions, bad strategic decisions, changing technology, etc., play a role in �organizational demise� (Hannah & Lester, 2009); yet, Argyris and Schon (1978) as well as Mintzberg, Ahlstrand and Lampel (1998) suggest that this demise is often a result of an organization's failure to learn and subsequently adapt. Hence, it has been assumed that organizational learning is an important determinant of long-term performance and survival for organizations (DeGues, 1988; Garvin, 1993; Yukl, 2009).

 

However, despite the abundance of literature on this concept, �there was lack of cumulative and integrative work� (Lipshitz, Popper & Friedman, 2002). Therefore, taking clues from the gaps in the conceptualization of organizational learning so far, an attempt was made in this research work to provide a basis for strengthening the conceptualization of organizational learning by adopting a process-oriented view of organizational learning (e.g., Argyris & Schon, 1978; Crossan, Lane & White, 1999) because learning is seen as a continuous process which helps an organization to adapt successfully to the volatile external environment. It is also a way of improving and furthering the core competence of organizations, especially for knowledge driven organizations (Prahalad & Hamel, 1990). Therefore, the present research has attempted to provide a consolidated framework of organizational learning by adopting a process-oriented view of organizational learning and by incorporating conducive contextual factors which will allow the organizations to develop the learning processes. Formulating the framework necessitated to study the differences in organizational learning processes because organizations, functioning in different environments, adopt different organizational learning processes to remain competitive and also to be successful (Argote, 1999; Ellis & Shpielberg, 2003). Moreover, it is also important to explore how contextual factors like leadership, strategy and organizational culture affect these processes as these factors are seen as essential for initiation and effective implementation of organizational learning processes in organizations. Leaders play the most crucial role for initiating and instituting organizational learning in the organization (Ellis, Caridi, Lipshitz & Popper, 1999; Popper & Lipshitz, 2000) as leadership is often required in order to change the existing thinking and practice present in the organization in order to enable learning to take place. Leaders can directly encourage and facilitate collective learning by what they say and do and they can indirectly influence it by creating cultures, systems and structures that foster the absorption, assimilation and application of knowledge (Kavanagh & Ashkanasy, 2006).

 

However, to date, there is limited systematic research directly linking leadership and learning (Popper and Lipshitz, 2000; Berson, Nemanich, Waldman, Galvin & Keller, 2006). Some attempts have been made to deal with this subject (Senge, 1990b; Schein, 1993; Davenport and Prusak, 1998; Edmondson, 1999; Lipshitz et al., 2002), mostly at the conceptual level. For example, theoretical work by Vera and Crossan (2004) systematically linked strategic leadership and organizational learning. A few studies have, however, examined leadership roles in learning in certain settings such as hospitals, community clinics (e.g., Edmondson, 1999; Popper & Lipshitz, 2000; Amitay, Popper & Lipshitz, 2005). These empirical works are very few at this point of time, and they deal with a very small and selective number of leadership and organizational learning variables. Additional aspects of leadership that is conducive to organizational learning have yet to be analyzed and empirically investigated (Amitay et al., 2005).

 

It has also been observed that organizational culture acts as a system of social control and can influence employees� attitudes and behaviour through the values and beliefs propounded by the leaders (Flynn & Chatman, 2001; Schein, 1991, Sinha, 2008). DeLong and Fahey (2000) argued that culture is a key component of knowledge management and organizational learning. Moreover, for organizational culture to function effectively as a managerial control mechanism, the organizational culture and the formal organizational structure must be harmoniously interrelated (Worley, Hitchin & Ross, 1996) as well as aligned with the demands and predispositions of the environment in which the organizations operates (Kampas, 2003). Thus organizational culture, in addition to the capability to integrate daily activities of employees to reach the planned goals, can also help organizations adapt well to external environment for rapid and appropriate response (Daft, 2001), which is a very important characteristic of organizational learning. Different authors have stated that cultures and values facilitate organizational learning and this shows the importance of culture in fostering organizational learning. Therefore, the researcher has raised certain questions in this regard in order to consolidate and construct a concrete body of the relationship between organizational culture and organizational learning,

 

Apart from organizational culture, strategy is also an important component for effective implementation of organizational learning (Fiol & Lyles, 1985; Francis & Mazany, 1996) as it influence the firm�s learning by providing a boundary to decision making and a context for the perception and interpretation of the environment (Fiol & Lyles, 1985), so the researcher has also attempted to study how different types of strategies affect the organizational learning processes.

 

Since organizational learning provides the opportunities as well as the systems and mechanisms to the organizational members to acquire, create and utilize knowledge, it is considered as an important source of core competence of the organizations as it leads to better performance and in turn affects the satisfaction of the workforce (Gardiner & Whiting, 1997). Hence, an attempt was made to explore its effect on the job satisfaction of the organizational members.

 

Therefore, from the review of literature on organizational learning and the various factors which affect it as well as its outcome, the following research questions were framed and the present research attempted to answer them -

 

1. What are the differences in organizational learning processes across organizations?

2. What are the different leadership styles or combination of leadership styles that facilitate organizational learning?

3. What is the impact of top management leadership style on organizational learning?

4. Are there certain kinds of culture that are the prerequisite for organizational learning?

5. Which kind of culture promotes learning that is beneficial to the organization?

6. What is the role of strategies in the effective implementation of organizational learning process in an organization?

7. What is the impact of all these factors on the success of the organization?

 

As evident from the review of literature, different organizations follow different organizational learning processes (Argote, 1999; Ellis & Shpielberg, 2003). But the imminent question is what the differences in these processes are. Study 1 made an attempt to study the differences in organizational learning processes across different Indian organizations, that is, banking sector and academic institute. Another point which it attempted to explore is the relationship between these different organizational learning processes and job satisfaction because different researchers have assumed the important positive outcomes of organizational learning, but there are only few empirical studies that have tried to explore its links with job satisfaction (Chang & Lee, 2007; Chiva & Alegre, 2009).

 

As already stated, this study was carried out on two samples. The first sample was drawn from banking sector in Guwahati city of Assam. The data were collected from 57 employees (male = 47 and female = 10) who had the minimum educational qualification of graduation. The mean and SD of the age of the employees and tenure in the present job were M = 39.67 years, SD = 11.41 and M = 11.88 years, SD = 11.38, respectively. The second sample were collected from 83 faculty members (male = 77, female = 6) who had the educational qualification of doctorate degree. The mean and SD of the age of the faculty members and tenure in the present job were M = 36.40 years, SD = 5.15 and M = 3.87 years, SD = 3.13, respectively. The subjects of both samples were contacted personally and were requested to fill the questionnaire, which consisted of measures of organizational learning and job satisfaction. Organizational learning measure comprise of 24 items that were framed by the researcher using dimensions drawn from the study by Mehra and Dhawan (2003). Factor analysis yielded four dimensions of organizational learning, namely, Essential Processes of Organizational Learning, Interaction, Flexibility and Innovativeness. Job satisfaction is measured through Schnake�s (1983) 11 items scale, having 3 dimensions- Social Satisfaction, Extrinsic Satisfaction and Intrinsic Satisfaction.

 

It was found from Study 1 that there are differences in the organizational learning processes across different organizations on all the four dimensions of organizational learning, namely, Essential Processes of Organizational Learning, Interaction, Flexibility and Innovativeness. However these differences depend on the need and demand of the environment in which the organization is functioning. As found in this study, the banking sector where the environment is quite turbulent, organizational learning exceed as compared to that of the academic institute which function in a fairly stable environment.

 

Therefore, after having found the answer to the research question related to the differences in the organizational learning processes, the researcher conducted Study 2A to answer the remaining research questions - (1) what are the different leadership styles which have impact on organizational learning and the nature of their relationships, (2) what are the certain kind of organizational culture which are prerequisite for organizational learning and what is its impact on organizational learning, (3) how do the different strategies adopted by the organization affect organizational learning, and finally (4) what is the impact of these variables on job satisfaction. Specific hypotheses were framed in reference to these questions.

 

Two different samples participated in this study. The first one comprised of middle level managers (N = 286) from 15 different organizations (13 public sector and 2 private sector) located at Delhi, Bangalore and Kolkata. Their mean age was 41.5 years (SD = 10.0) while the second sample consisted of top management of the organizations such as Executive Director and General Manager (N = 29, Male = 27, Female = 2) who had the decision making power. Their mean age was 49.6 years (SD = 5.85). Data was collected through two sets of questionnaires. Set 1 comprised of four sections - Multifactor Leadership Questionnaire (Bass & Avolio, 2004), organizational learning (Ellis & Globerson, 1996), organizational culture (adapted from Hofstede, 1990) and job satisfaction (Schnake, 1983). While Set 2 consists of measure of business strategy (Venkatraman, 1989).

 

The results of this study showed that there were positive relationships between leadership (transformational and transactional leadership) and organizational learning. It was influenced by organizational culture characterized by concern for the welfare of the employees. This type of culture encourages the employees to come out with ideas and opinions, to adhere to the rules and regulations of the organizations and to work for the benefit of the organization by putting their maximum effort and even taking risks. There was also the influence of business strategy that is characterized by both analytic and proactive approach, on this relationship between leadership and organizational learning.

 

Then the qualitative study (Study 2B) was conducted to augment the results of quantitative studies (Study 1 and Study 2A). For this study, interviews were conducted on the top management of the organizations such as Executive Director and General Manager of 13 different public sector organizations from which data for Study 2A were collected. This study was basically designed to explore answers to the following questions (most of them were extensions of the questions in Study 1 and Study 2A) from the top management�s point of view � (1) whether there is sharing of knowledge and information amongst the members of the organization, (2) what are the mechanisms that facilitate such processes, (3) whether these processes have impact on the performance of the organizations in terms of profitability of the organizations, (4) what are the role of leaders, organizational culture and strategies in terms facilitating these processes, and finally (5)� whether the organizations, through these processes, are able to learn and then create knowledge base which would help the organization in innovation, in the future.

 

It was observed from the results of this study that organizational learning is taking place in these organizations and they adopted various formal (structured) and informal (unstructured) mechanisms to facilitate this process. The formal mechanisms included training, seminars, meetings, periodicals, guideline books, newsletters, and bulletins. There was also the use of intranet and internet in disseminating information to the organizational members and also as a means of maintaining communications with them. While informal mechanisms comprised of interaction among members in a team, informal networks such as �supervisors� network�, �idea club�, etc. It was also found that leadership, comprising both transformational and transactional style, emerged as an important factor which influenced the learning and sharing of information and expertise that occurred in the organizations. While organizational culture present in their organizations comprised of characteristics such as transparency, accountability, trust, openness, accessibility of the leaders, etc. that are similar to the components of learning culture (Lucas & Kline, 2008; Popper & Lipshitz, 1998). The role of strategy was also evident in this study. It was observed that proactive strategy helped the organization to cope with the continuous changes in the external environment. One of the most important findings of this study was the impact of organizational learning on the performance of the organization.

 

 

Contribution and Implications

 

The present research was conducted with the purpose to strengthen the concept of organizational learning by adopting a process-oriented view and by establishing the impact of various contextual factors which affect its initiation and implementation in organizations. It has served the intended purpose to certain extent and following are its contributions and implications. This is divided into three parts- (1) theoretical contributions, (2) methodological contributions and (3) practical implications. These are described below-

 

(1) Theoretical contributions

 

�It was evident from the studies conducted in this research work that organizational learning is a multi-faceted process which is practiced by different organizations to different extent. Implementing this process and practicing it depends on various factors such as leadership style, organizational culture and strategy, beside others. It was observed that a leadership style comprising of characteristics of both transactional and transformational leadership style is the most effective one. Organizational culture characterized by concern for welfare of the employees and adherence to rules and regulations play crucial role. This type of culture also encourages the employees to come out with ideas and opinions, to adhere to the rules and regulations of the organizations and to work for the benefit of the organization by putting their maximum effort and even taking risks. There is also the influence of business strategy that is characterized by both analytic and proactive approach, on this relationship between leadership and organizational learning.

 

Thus, the framework proposed in this research work has been supported. This framework also lends support to some aspects of the �multi-facet model of organizational learning� proposed by Lipshitz et al., (2002).� Organizational learning mechanisms identified in this study bear resemblance to those described by them in �structural facet of organizational learning�.� Besides, the role of culture, i.e., the �learning culture� proposed by these scholars in their model has been supported in the studies reported in Chapter 3. Such culture comprises of characteristics such as transparency, accountability, trust, openness, accessibility of the leaders, etc which was also observed from the responses of the top bosses in the qualitative study.

�

(2) Methodological contribution

 

���������� It is worth mentioning that an off-shoot of this research work is the development of a scale for measuring organizational learning.� Though, it was not the main purpose of the present research, however, the non-accessibility to standard complete tool for measuring organizational learning during the initial period of commencement of this research work compelled the researcher to develop the questionnaire based on the dimensions of Mehra and Dhawan (2003). Factor analysis of this scale yielded four dimensions reported in Study 1 (essential processes of organizational learning, interaction, flexibility and innovativeness). The reliability coefficients were satisfactory. Interestingly, this scale has shown consistent reliability in subsequent use of this scale for project works by the under-graduate students, enrolled in the Organizational Behaviour course, in the institute where the researcher works as a Ph D scholar.

 

���������� It is also important to note that there are very few studies which have employed the qualitative method (for e.g., Lipshitz & Popper, 2000) in order to explore the concept of organizational learning and its correlates. Therefore, Study 2B is contribution to that limited number of such qualitative study. Moreover, this method has its own value as it helps to explore a concept in-depth and to obtain detailed descriptions and views on the concerned topic (Creswell, 1998).

 

(3) Practical implications

 

This research work has tried to highlight the crucial role that different styles or combination of the different styles of leadership plays in creating a conducive culture which will foster organizational learning. Both Transformational and Transactional leadership have their role to play in fostering organizational learning. Therefore, top management of organizations should have the knack to understand the need of the hour and the situation and try to use the different leadership style. For example, Contingent Reward leadership behaviour should be used when there is a need for a clear picture about the requirements of the job. Such leader is effective as he rewards the employees in exchange for satisfactorily carrying out the assignment and further motivates the subordinates to engage in activities which will contribute to their growth as well as of the organization. Moreover, it helps to establish a relation between the leaders and the followers, which is based on trust, dependability, and perceptions of consistency of leader�s behaviour (Avolio & Bass, 1991). This, in a way would contribute to maintaining a congenial culture in the organization which will foster the members to be more open, accountable and trustworthy. It also provides the ideal condition that facilitates more sharing of knowledge and experience and more open interaction among the organizational members. All these aspects contribute to organizational learning.

 

However, Laissez-faire and Management-by-Exception leadership styles termed as �passive/corrective leadership� (Avolio et al., 1999; Den Hartog et al., 1997) are passive and neither is there an attempt to motivate the followers nor timely response to their needs. The leader intervenes only when things have gone wrong. These leadership styles may not be the appropriate way to lead organizational members because these types of behaviours are �highly dissatisfying� (Avolio, 1999). Therefore, top management in organizations should be wary of these styles and try to avoid using these styles to the extent it is possible.

 

In this endeavour of instituting organizational learning in organizations, business strategy also plays a critical role as the strategy adopted by the top management decides what type of organizational learning will be fostered in the organization. It was evident from this research work that organizational learning would be fostered in organizations whose strategies focus on innovation, seek new opportunities and is future oriented and think ahead of contemporaries. Such organizations also try to search deeper for the root cause of problems and find the best possible solutions. They also focus on improving market position faster than its competitors.