Dynamic capability and knowledge management
Proponents of the learning organisation maintain that the cultural shifts noted above provide organisations with advantages. Productivity is increased and, because of the emphasis on being outward looking and on whole systems sensibility, organisational adaptability is improved. Creative adaptation or ‘dynamic capability’ arises from the genuine rather than rhetorical enactment of learning organisation principles, in the presence of other enabling organisational features noted below.
A genuine internal commitment to a learning organisation approach is a necessary but not a sufficient condition for developing dynamic capability. For an organisation to ensure dynamic capability, first it must become a learning organisation in practice, and second it must be confident and opportunistic about applying what it has learned. Team members need to have trust in one another and enjoy the managerial mandate to exploit opportunities as they arise, or experiment with new conditions emerging from the shifting external context that situates the organisation.
Thus, the rhetoric of a learning organisation can be tested on a case-by-case basis (as we do below in regard to English NHS organisations) against what the organisation actually practices. For example, the ill-fated Rover automobile company claimed to be a learning organisation but only established one main feature (maximising the individual learning of its workforce) [45]. By contrast, Chaparral Steel in the USA, a more stable and successful company in the 1990s, reportedly demonstrated its learning organisation credentials and accrued the benefits of dynamic capability [46]. Such claims also are made for BP [47] and, in more guarded terms, for other firms [48]. A critical difference between these companies was that Rover outsourced its attempt at becoming a learning organisation, whereas the other two developed it from their own senior managers. The latter championed and oversaw fidelity to the learning organisation model as a corporate rather than a brought-in managerial initiative. We return to the importance of leadership in a learning organisation later.
Research and development are one aspect of a learning culture. Successful knowledge management, a concomitant or implication of a learning organisation, also is said to increase dynamic capability . Ownership of intellectual property is a commercial advantage in itself, as is the capacity to deny that knowledge to competitors, but its main use is the utilisation of knowledge to achieve an organisation’s operational goals and strategic aims. The most obvious example of this is knowledge-based decision-making at all levels in an organisation. (The existence of this very journal testifies to the logic discussed here.)
It is generally assumed that the creation of learning organisations requires the combination of all the conditions listed above, not just some of them.
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