the competitive learning organization: a quest for the holy grail

52 MANAGEMENT DECISION 31,8

The only source of sustainable competitive advantage for a company may lie in its ability to learn faster than its competitors.

The Competitive Learning Organization: A Quest for the Holy Grail

Ashok Jashapara

Management Decision, Vol 31 No 8, 1993, pp 52-62 © MCB University Press Limited, 0025-1747

Introduction In an increasingly turbulent environment, organizations are becoming more interested in new ways of gaining and sustaining competitive advantage. Environmental changes are leading to an ever-increasing rate of change in products, and services and redundancy of many work practices resulting from advances in electronics and communications. Handy's notion of discontinuous change in the environment has added to the confusion and helpless paranoia found among many firms[1]. Many of them have resorted to the traditional "snap-shot" approaches to strategic change with which they feel comfortable, even though they may know instinctively that these approaches have serious limitations.

In a recent study in the United Kingdom, which examined the process of strategic change in four industries and service sectors, Pettigrew and Whipp[2] showed that strategic change and competition need to be viewed as continuous processes rather than steady state affairs. The study recognized the fundamentally creative nature of the

strategic change process. In line with Langlois[3], the research highlighted the impermanence of a firm's strategic position and the fragility of the bases of competition. The unpredictable nature of these processes had led the more successful firms to develop learning processes at all levels of the organization. They found that competitive performance was linked to a firm's ability to adapt to major changes in the environment and, by implication, its level of learning.

The acceptance of competition and strategic change as compound processes leads to the notion that the firm's driving force results from an amalgam of imperatives which shift with time[4]. Increasingly, these processes highlight the importance of learning at all levels to maintain a competitive edge. Learning, for its own sake, is unlikely to achieve these goals unless it is focused. The learning focus will shift with time depending on the firm's understanding of the competitive forces at play. These combined notions have given rise to the concept of the "competitive learning organization", which can be comprehensively defined as a continuously adaptive enterprise which promotes focused individual, team and organizational learning through satisfying changing customer needs, understanding the dynamics of competitive forces and encouraging systems thinking (see Figure 1).

The two components of a "competitive learning organization", namely the different levels of learning and the learning focus, are in sympathy with Pettigrew and Whipp's[2] view of competition and strategic change. 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.

This rather simplistic portrayal of a complex process can be viewed metaphorically as a firm's continual quest for the "Holy Grail". A competitive learning organization is seen as an ideal rather than a steady-state condition. It is unlikely that many firms will be able to maintain a position of continual strategic change and continual competitive analysis in response to the changing environment. Instead, firms are more likely to go through phases such as "competitive learning", "teaching" or "static" organizations, discussed later in this article.

The capacity of a firm to identify and understand the nature of competitive forces and how they change with time will contribute towards its competitive standing. The current popular strategy and competition literature has a number of weaknesses in this regard. The "institutionalist" writers such as Lewchuk[5] and Nelson[6] come closest to the realization that a firm's competitive position is dynamic as a result of its experience and learning over time. They recognize the

THE COMPETITIVE LEARNING ORGANIZATION: A QUEST FOR THE HOLY GRAIL 53

impermanence of competition and its innate nature as a process through people's day-to-day learning.

In contrast, the popular "excellence and turnaround" literature such as Peters and Waterman[7] and Taylor[8] offers rather prescriptive approaches to the problems of ailing firms. The weakness in these managerial remedies is the over-emphasis on the firm at the expense of understanding the fluctuating nature of the competitive environment. The other popular strategy writings of today come from writers in the "industrial organization" tradition such as Porter[9] and Caves[10]. This approach confines itself to the firm/industry level of analysis with little acknowledgement of the contribution of the national economy to a firm's competitiveness or the recognition of competition as a varying process across time.

The weakness in the current strategy literature has been overcome by adopting a triptych approach to learning focus. This is based on the assumption that there is no blueprint and that organizations build their own unique solutions to their problems. The emphasis lies in an understanding of the interplay of competitive forces over time[11], the satisfaction of changing customer needs[12] land the importance of systems thinking[13]. These bases of competition have been chosen for a number of reasons. First, the interplay of competitive forces demonstrates the moving and changing nature of competition through time. Competition is viewed in its wider context including the level of the firm, the industry and the national economy[2]. Second, the growing importance of the total quality movement as a competitive base is acknowledged and addresses the perceived[12] as well as the traditional

conformance needs of the customer. In some industries, certain aspects of quality are becoming an assumed qualification for membership. The value of systems thinking[13] is given prominence in the learning focus to minimize the narrow focus among firms by fostering a holistic view of the world in terms of seeing wholes, interrelationships and processes of change. It is important to recognize the dynamic nature of the triptych approach where the learning focus may also change with time in response to the changing environment. In a future scenario, the primary motive of a firm may change to philanthropic values such as quality of life and a sustainable existence rather than profit maximization. In this case, the learning focus would be modified to accommodate the changing conditions.

The nature of learning in an organization will depend on one's definition of an organization[14]. Does one view the organization as a group, an agent, a structure, a system, a culture or as a political entity? This article examines the organization as a dynamic system and explores the nature of individual, team and organizational learning. The level and flow of communication is assumed to promote double-loop learning and assist in the distribution of learning and knowledge throughout the organization.

The Emergence of a Competitive Learning Organization There are several conceptual models which have been developed on the nature of a "learning organization". Most models have been built on the assumption that the


ability of a firm to learn faster than its competitors may be its only form of sustainable competitive advantage[15]. However, most current models have lacked emphasis on the competitive dimension of the organization. The closest model in this respect is the one developed by Senge[13], who identifies this dimension through developing the notion of a shared vision. The achievement of a shared vision may be as elusive as the quest for the Holy Grail, particularly in large organizations. It is difficult to envisage how a sense of shared vision could respond to a continually changing environment and provide the necessary competitive edge. Senge[13] provides a valuable contribution to the learning arena through his other disciplines of personal mastery, mental models, team learning and systems thinking. The learning outputs, such as new knowledge, are not acknowledged explicitly nor is the distribution of learning throughout the organization[16].

In many models, there is a tendency to promote certain aspects of learning rather than to examine their ability to provide a competitive edge. In this respect, Revans[17] and Honey[18] provide simplistic approaches to learning organizations through action learning and behavioural approaches to learning. Other authors such as Pedler et al.[19] and Attwood and Beer[20] have a tendency towards prescriptive approaches, the latter being influenced by the excellence and turnaround movements. Pedler et al.[19] have recognized the limitations of their original mechanistic approach and begun to develop a model of a learning company as an energy flow. The new model begins to acknowledge the fluctuating nature of internal processes in response to the changing external environment.

Some authors such as Nonaka[21] and Ashton[22] have provided novel approaches to learning. Nonaka[21] has contributed the use of figurative language, symbolism and metaphors for developing an individual's tacit or explicit knowledge. These knowledge creation tools may aid an organization during phases of innovation but may have their limitations during phases of efficiency. Ashton's[22] model focuses primarily on organizational learning and suggests that double-loop learning can be promoted through questioning the organization's assumptions and values.

The closest existing model to a "competitive learning organization" is the one adopted by Garratt[23] which contains a three-level hierarchy of policy, strategy and operations. Garratt's[23] model, by definition, assumes a hierarchical organizational structure and ignores the influence of double-loop learning in other settings such as professional organizations and adhocracies[11]. There is a large emphasis placed on the "business brain" to evaluate the different levels of learning rather than promoting learning as a collective responsibility. This dimension has been fostered in the framework of a

"competitive learning organization" through a generic view of learning as shown in Figure 2. The framework has developed the notion of a learning focus to counteract some of the weaknesses in many current models relating to the dynamic nature of competition (see Figure 3).

Individual Learning In its most basic form, learning may be conceived as a process incorporating a four-stage cycle[24]. The process is both active and passive, concrete and abstract. Kolb et al.'s[24] learning cycle revolves around concrete experience, followed by observation and reflection, which leads to formation of concepts and generalizations, which leads to hypothesis to be tested in future action, which in turn leads to new experiences. The learning cycle is continuously recurring. In some organizations, there can be a tendency towards an action-fixated non-learning cycle[23] where the reflection stage is ignored. In difficult situations, there can be a tendency to try harder rather than to question the underlying assumptions.

There are two goals in any learning process. One is to learn the specifics of a particular subject matter and the other is to learn about one's strengths and weaknesses as a learner. Bateson[25] coined the phrase "deutero-learning" for the latter goal of "learning to learn" and becoming more skilled at problem solving. The outputs of the learning process can be seen as the acquisition of knowledge, skills and a change in attitudes of the individual learner. The framework of a "competitive learning organization" adopts a pluralistic approach to learning rather than a confined approach with influences from various authors. This allows the richness of different approaches to flourish in an organization depending on the circumstances and the nature of the individuals.


Revans[26] developed the notion of "action learning" from recognizing that learning for managers means taking effective action rather than recommending or making an analysis of a given situation. He based his notion of learning on the simplistic mathematical equation:

Learning L = P (Programmed learning) + Q (Questioning insight).

Mumford[27] has suggested that the effectiveness of action learning could be improved through following his four Is: interaction, integration, implementation and iteration. Out of these factors, interaction is likely to provide the greatest organizational benefits in communicating the products of learning as discussed later in this article.

A major barrier to learning can result from a lack of appreciation of our styles of learning[28]. As the direction of learning is governed by one's felt needs and goals, each individual's learning style is likely to be unique. Honey and Mumford[28] have developed a learning styles questionnaire based on Kolb et al.'s[24] learning cycle and put forward four individual learning styles: activist, pragmatist, reflector and theorist. The learning styles questionnaire is seen as a self-development tool to help individuals to improve their learning through understanding the strengths and weaknesses of their own learning styles.

This notion of "deutero-learning" is taken further by Senge[13] in his disciplines of personal mastery and mental models. In personal mastery, the individual develops his/her learning through a creative tension of his/her future vision and current reality. Various methods such as meditation, imagery and visualizations are suggested to cope with beliefs of powerlessness and unworthiness which may hinder one's learning. In

examining our mental models, Senge[13] highlights the learning barriers resulting from our defensive routines. Argyris[29] shows how these defensive routines can be particularly strong among smart people and professionals who behave incongruently between their "espoused theories" (what they say) and their "theories-in-use" (their mental models). The defensive reasoning arises from the high aspirations for success among smart people and an equally high fear of failure which may lead to embarrassment and feelings of vulnerability and incompetence.

Nonaka[21] sees the main output of the learning process as tacit or explicit knowledge. The art of creating new knowledge is seen as tapping these tacit and highly subjective insights, intuitions and hunches. The uses of figurative language, symbolism and metaphors are seen as powerful management tools to help managers to articulate their intuitions and insights and convert tacit to explicit knowledge. Strategic rotation is another tool to aid learning and help employees to understand the business from a multiplicity of perspectives.

The learning environment is likely to influence the nature of individual learning in an organization[30]. Pedler et al.[19] recognize the need to foster environments which encourage experiments, learning from mistakes and questioning ideas, actions and attitudes. Senge[13] reinforces the need for risk-taking and a climate which practices forgiveness for our mistakes rather than penalizing the individual. In the West, we have an underlying culture of hiding our mistakes in fear of future penalties. As Shakespeare reminds us in Measure for Measure:

They say best men are moulded out of faults and, for the most, become much more the better for being a little bad.

Team Learning The learning goals for team learning remain the same, namely, learning the specifics of a particular subject matter and learning about one's strengths and weaknesses as a team learner. The former goal is served equally using Kolb et al.'s[24] learning cycle to explore the processes of team learning. However, the latter goal of learning is much more difficult. Each individual has a unique way of participating in teams and groups which will depend on his/her own personal needs and goals and several external factors.

The largest single piece of research on team learning has been conducted by Belbin[31] through experiments on numerous management teams attending courses at Henley Management College over a five-year period. He discovered that most individuals have a tendency towards a dominant or secondary team role given the team circumstances. These team roles vary from team


leadership roles such as "chairman" or "shaper" to creativity roles such as "plant" or "resource investigator" (see Table I). Each team role has its own strengths and weaknesses. Belbin[31] showed that successful teams were composed of members offering a wide coverage of team roles and a fair spread of mental abilities. Contrary to what might be expected, he found that teams composed wholly of individuals with high mental abilities performed rather poorly due to their intense rivalry and an over-emphasis on analysis and counter-analysis.

Other factors promoting successful teams included a good chairperson, a strong "plant" and a good match between the members' team roles and their responsibilities in the team. In some successful teams, the team players compensated for their less-than-ideal distribution of talents by recognizing their shortcomings and assigning team members to cover the missing roles in the teams. This development of self-knowledge is fostered in Senge's[13] disciplines of personal mastery and mental models.

Senge's notion of team learning is based on our capacity for conversation. In his view, effective teams have an

ability to balance dialogue and discussion. In discussion, different views are presented and defended whereas, in dialogue, different views are presented as a means towards discovering a new view. Each communication vehicle has its own place. Discussions are useful in decision-making situations whereas dialogues allow complex issues to be explored. This notion of conversation is developed further by Nonaka[21] in the use of slogans and metaphors to express the inexpressible and articulate the team's tacit knowledge based on hunches and intuitions. In the extreme, Nonaka[21] encourages frequent dialogue and communication to build a redundant organization through members of the organization sharing overlapping information.

Currently, there is little research on learning environments which aid or hinder team learning. In his experiments, Belbin[31] found that the ideal team size was six members. If the teams were larger, there was a tendency towards competition for talking space with continuous interruptions and monologues. If the teams were smaller, they became vulnerable to the smallest changes affecting their cohesion. The most favoured table

Table I. The Nature of Team Roles

Type

Company worker

Chairman

Shaper

Plant

Resource investigator

Monitor/evaluator

Team worker

Completer/finisher

Source:[31]

Typical features

Conservative, dutiful, predictable

Calm, self-confident, controlled

Highly strung, outgoing, dynamic

Individualistic, serious-mind, unorthodox

Extrovert, enthusiastic, curious

Sober, unemotional, prudent Socially oriented, rather mild, sensitive

Painstaking, orderly, conscientious anxious

Positive qualities

Organizing ability, practical common sense, hard working, self-discipline A capacity for treating and welcoming all potential contributors on their merits without prejudice. A strong sense of objectives Drive and a readiness to challenge inertia, ineffectiveness complacency or self-deception Genius, imagination, intellect, knowledge

A capacity for contacting people and exploring anything new. An ability to respond to challenge Judgement, discretion, hard-headedness An ability to respond to people and to situations, and to promote team spirit A capacity for follow through. Perfectionism

Allowable weaknesses

Lack of flexibility, unrespon-siveness to unproven ideas

No more than ordinary in terms of intellect or creative ability

Proneness to provocation, irritation and impatience

Up in the clouds, inclined to disregard practical details or protocol Liable to lose interest once the initial fascination has passed

Lacks inspiration or the ability to motivate others Indecisiveness at moments of crisis

A tendency to worry about small things. A reluctance to "let go"


shape was a round table which conveyed a feeling of openness and lack of status. In contrast, Nonaka[21] believes that the most potent environmental pressure to improve team effectiveness is to use competing teams to develop different approaches to the same project.

Organizational Learning The nature of organizational learning will depend to a large extent on one's definition of an organization[14]. If one views the organization as a political entity, the level of organizational learning will depend on political theory and theory of socio-political movements. In a similar way, if one views the organization as a culture, the level of organizational learning will depend on studies connected with anthropology, ethnomethodolgy and phenom-enology. Argyris and Schon[14] have developed a generic notion of organizational learning as single- or double-loop learning which cuts across the organizational definitions.

Single-loop learning is where individuals respond to changes in their internal or external environment by detecting and correcting errors so as to maintain the central features of the organizational norms. In contrast, double-loop learning is where the current organizational norms and assumptions are questioned to establish a new set of norms. Ashton[22] sees double-loop learning as the domain of senior managers concerned with strategy whose role is to examine the underlying assumptions and governing values of the organization. The dominant role of senior managers in organizational learning is based on the assumption of a hierarchical organization with little power for the individual to influence the norms and values. Garratt[23] makes this assumption in his model for a learning organization based on the notion of double-loop learning where the "business brain" incorporating the strategy function fulfils this role. In the current framework of a "competitive learning organization", double-loop learning is encouraged through com-munication channels and continual questioning of norms between individuals, teams and senior management.

The size of the organization will have some bearing on organizational learning. In the extremes, organizational learning will be similar to individual and team learning. The "deutero" aspect of organizational learning is developed by Hedberg[32] who recognizes the importance of values, myths and hierarchies in understanding organizational learning. This perception is reinforced by Fiol and Lyles[33] who view organizational learning as "the process of improving actions through better knowledge and understanding". This view accom-modates the notions of individual and team learning. This dichotomy persists in Revans'[26] definition of organizational learning which bears remarkable similarities to individual action learning:

Organizational learning L = P (Programmed learning) + Q (Questioned learning).

Communication: The Vital Link The by-products of the learning process at various levels are likely to include new knowledge, skills and changed attitudes. The creation of these by-products has little value to the organization unless they are distributed. Boisot[16] believed that organizations learn through a process of organizational knowledge creation ("codi-fication") and distribution ("diffusion").

Mintzberg's[34] study on the nature of managerial work identified the five tools of communication used by most managers as mail, telephone, unscheduled meetings, scheduled meetings and tours. The conceptual framework is built on the assumption that these vehicles of communication are most likely to assist in the distribution of learning and knowledge throughout the organization.

The most favoured and employed medium by managers is verbal communication. The varied personal backgrounds of individuals means that there is a marked potential for distortion in the communication process. Mehrabian and Weiner[35] found that words account for only 7 per cent of meaning in communications, 55 per cent of meaning comes from facial expressions and posture, while 38 per cent comes from vocal intonation and inflection. The act of communication can be differentiated by its contents, our thoughts and feelings and the process: the verbal and/or non-verbal signals.

The effectiveness of the communication process can be improved through promoting active listening skills. Active listening involves being non-evaluative, paraphrasing thoughts or feelings, reflecting impli-cations and underlying feelings and inviting further contributions. Barriers to communication can result if an unequal standing is adopted between the speaker and listener similar to the defensive routines suggested by Argyris[29]. Non-verbal cues which can aid communi-cation include eye-contact, body posture leaning towards the speaker, head nodding and receptive signals.

The Learning Focus: Dynamics of Competitive Forces In any learning organization, it is increasingly important that individuals should understand the dynamics of competitive forces rather than leaving it to the domain of pure strategists. This allows individuals to contribute to the creative nature of the strategic change process and to understand the impermanence of a firm's strategic position and the fragility of the bases of competition[2]. A firm's competitive base is likely to result from its own


unique solution to its problems rather than mimicking solutions from rival firms or using prescribed formulae. A generic framework is required which allows individuals at grass-roots level to understand the dynamics of competitive forces and how they can contribute to the ongoing dialogue to improve the firm's competitive standing.

The current popular frameworks from the excellence and turnaround movements such as Peters and Waterman[7] and the industrial organization approaches such as Porter[9] have their limitations in failing to emphasize the process dimension and the fluctuating nature of competitive forces through time. This weakness has been overcome by a recent framework by Mintzberg[11] which allows the dynamics of the competitive forces to be understood in any effective organization. Mintzberg[11] does not provide a blueprint for organizations but rather an understanding of the interplay of competitive forces.

Mintzberg[11] proposes a system of seven forces in any organization, as shown in Figure 4. The force for direction is concerned with strategic vision and may relate to organizations in startup or turnaround situations. The force for efficiency is concerned with standardization and formalization of processes and may relate to bureaucratic organizations where rationalization and restructuring are major foci. The force for proficiency is concerned with tasks requiring high levels of knowledge and skill and may relate more to professional organizations. The force for concentration is concerned with concentrating efforts on serving certain markets particularly in large diversified organizations. The force for innovation is concerned with discovering new things for the customer and may relate to adhocracies comprising skilled experts or multi-disciplinary projects.

The internal catalytic force comprises forces of co-operation and competition. The force for co-operation is concerned with the pulling together of ideologies such as norms, beliefs and values. Dominant forces of co-operation may result in ideological organizations such as Israeli kibbutzim. The force for competition is concerned with the pulling apart of politics and may relate to political organizations where conflictive in-fighting takes over. There may be limits to the levels of co-operation because ideology discourages change and, if individuals perceive a need for change, they may be forced to challenge the ideology which breeds politics.

In a competitive learning organization, there is a recognition that these forces are rarely static and vary continuously through time. A state of "configuration" occurs when one force dominates and the organization is drawn towards a coherent established form. However, configuration may lead to the problem of "contami-nation" where the dominant force undermines other equally valid forces. For instance, in the current recession, a company may focus its learning on efficiency through rationalization and various cost-cutting exercises even though a competitive analysis shows an urgent need for innovation in the marketplace. The dominant force may act to hinder change in the organization.

In some periods, the organization may go through states of "combination" of different forces where no single force dominates. This may result in periods of "conversion" from one form to another. For example, an adhocracy may develop a highly successful product and may settle down into a bureaucracy to exploit it. The state of "combination" may result in problems of "cleavage" where two or more forces may confront each other and eventually paralyse the organization. The internal forces of competition and co-operation can be important catalysts to manage the problems of "contamination" and "cleavage".

In essence, the competitive learning organization is one which balances the above forces most gracefully at any time. This ideal emphasizes the creative nature of strategic change and the unpredictable and fluctuating demands on the organization. In these terms, Peters and Waterman[7] promote the force for efficiency through their "stick to the knitting" approach, whereas Porter[9] warns about getting stuck in the middle between "cost leadership" (force for efficiency) and "differentiation" (force for innovation).

The Learning Focus: Satisfaction of Changing Customer Needs As competition has intensified, there is a growing recognition of the strategic importance of the customer as

THE COMPETITIVE LEARNING ORGANIZATION: A QUEST FOR THE HOLY GRAIL 5 9

a powerful competitive weapon. The dominant notion of quality can be seen as a firm's ability to satisfy changing customer needs. The Profit Impact of Marketing Strategies (PIMS)[36] studies have been particularly influential in showing a clearer link between quality and profitability. They have shown that companies with a higher quality have a higher Return on Investment (ROI) for any given market share and that the gains in quality were also associated with market-share gains.

Quality can be separated along two dimensions, namely, conformance and perception. Most of the quality gurus such as Juran, Feigenbaum and Deming have focused on conformance quality in line with the popular total quality movement. Conformance quality is internally focused on matching requirements to specifications, service standards and lower costs. In contrast, perceived quality is externally focused on "delighting" customers, exploring what customers value and fostering customer care.

The quality movement of Juran, Feigenbaum and Deming has predominantly centred on statistical controls on quality. Juran forwarded the notion of quality as avoidable and unavoidable costs resulting from practices such as product defects or inspections. Feigenbaum proposed the use of "interfunctional teams" to achieve higher quality. Other branches of quality emerged such as "reliability engineering" and, in its extreme form, as "zero-defects", a total absence of failures. The collective views of quality were purely defensive and internally focused on meeting the conformance needs of the customer.

An integral view combining conformance and perceived quality has been examined by Garvin[12] on product quality and Berry et al.[37] on service quality. For product quality, Garvin differentiates quality into eight dimensions. The conformance aspects of his quality dimensions relate to performance, reliability, durability and serviceability. Performance refers to the product's primary operating characteristics which may mean prompt service in a service business. The service quality dimension of "assurance" relates most closely to Garvin's "performance" in conveying trust and confidence to the customer. The dimension of reliability features both in product and in service quality. In product terms, reliability is measured by failure rates and is closely associated with the durability dimension which is a measure of the product's life. The service aspects of reliability are the abilities to perform the service dependably and accurately. The final aspect of conformance quality is serviceability. This dimension refers to the speed, courtesy, competence and ease of product repair. Responsiveness is the most similar aspect of service quality to serviceability and refers to the willingness to help customers and provide a prompt service.

The perceived quality dimension of Garvin's product quality refers to features and aesthetics. The Berry et al. equivalents in service quality terms are tangibles and empathy. Features are the "bells and whistles" of products and services which supplement their basic functioning. In service quality terms, this dimension refers to the tangibles such as appearance of facilities, equipment, personnel and communication materials. The aesthetic dimension relates to how the product looks, feels, sounds, tastes and smells. It is a matter of individual preference. The personalized nature of the aesthetic dimension can be viewed similarly to the empathy dimension of service quality referring to the caring for and individualized attention to customers.

In a competitive learning organization, the various dimensions of quality will be examined closely to see how best the firm can respond to the changing conformance and perceived needs of the customer. It is unlikely that the firm will compete on all dimensions of quality without the need for exorbitantly high prices. Instead, the firm is more likely to devote its continuous efforts on market research and exploring effective quality niches to establish it reputation for excellence relative to its competitors.

The Learning Focus: Systems Thinking The dynamic nature of the competitive environment demands an integrated view of seeing the processes of change rather than the dominant tendency towards "snapshots". A discipline which helps to develop our capacity for putting pieces together and seeing wholes is systems thinking[13]. Systems thinking can be defined as our ability to analyse a problem in the full setting of the interconnecting elements such as Mintzberg's[11] framework demonstrating the dynamics of competitive forces.

Systems thinking assumes that multiple causes have contributed to the current situation and that a single action will also have multiple outcomes, some of which may be unintended. This mode of thinking allows one a framework to see the interrelationships between things and the patterns of change rather than static "snapshots". Systems thinking helps to differentiate between two types of complexity: "detail" and "dynamic" complexity. Detail complexity refers to the use of many variables whereas dynamic complexity occurs when cause and effect are not close in time or space and the obvious interventions do not produce the expected outcomes. Systems thinking can help individuals to develop an understanding of the processes of change and how they affect the organization. In essence, systems thinking provides the integrating force throughout the organization.


The Evolution of the Competitive Learning Organization The competitive learning organization is seen as an ideal rather than an end product in many organizations. The fluctuating nature of the competitive environment and the fragility of the competitive bases will mean that many organizations will be able to maintain a "competitive learning" phase only for a limited period before moving into a "teaching" mode or a "static" mode. Greiner[38] provides a useful representation of organizational development (as shown in Figure 5) suggesting that there are several evolutionary growth periods in a company's life, each followed by a revolutionary crisis phase which signifies that the period of growth is over. In effect, each phase has fast growth followed by levelling off, followed by a crisis. These three phases can be likened to the three above-mentioned phases of a "competitive learning", "teaching" and "static" organization.

The static organization, as shown in Table II, is characterized by a lack of learning. Such organizations may view their workforces as costs to be minimized rather than assets to be developed. It is inevitable that such organizations will face an internal crisis through a lack of responsiveness to the external environment. This crisis may act to inhibit learning or result in transformation to help to develop into a "competitive learning" phase. This crisis can be seen as an opportunity for growth and learning or as the beginning of an eventual decline of the organization.

The learning in static organizations is likely to be sporadic with limited channels of communication to allow for the distribution of learning and new-found knowledge. Another characteristic of a static organ-ization is confusion in senior management about the

competitive focus of the organization which may result in problems of "cleavage"[11] and may eventually paralyse the firm.

If static organizations are able radically to appraise their underlying assumptions and values during the crisis, this may result in the emergence of a "competitive learning organization". Such an organization will place a high value on the learning of all its employees at individual, team and organizational levels. Double-loop learning will be encouraged with continuous emphasis on questioning one's underlying assumptions. The distribution of learning will be facilitated through open channels of two-way communication throughout the organization. Each employee will appreciate the need for focused learning and the dynamic nature of the learning focus to meet the shifting competitive environment.

However, it is unlikely that a focused learning phase can be sustained continuously. The problems of "contamination" and "cleavage"[11] may become evident where internal catalytic forces of "co-operation" and "competition" may become more dominant. In this case, the firm may slip into a "teaching organization" phase where the role of senior management becomes increasingly important. Learning soon becomes prescriptive and the domain of the personnel department rather than the responsibility of each learner. As these organizations are characterized by one-way com-munication from senior management to employees, there is little scope for an equal exchange of ideas and distribution of learning and knowledge from employees to senior management. In a similar way, most employees have a limited input to the changing needs of the learning focus which is determined solely by strategists in the organization. In time, employees may become blocked in their learning due to the lack of challenge and personal responsibility for their learning. In turbulent environments, the firm may develop into a "static" organization.

Conclusions The turbulent and unpredictable nature of the current environment has led many firms to explore new ways of gaining and sustaining competitive advantage. A recent UK study[2] has demonstrated the dynamic nature of competition and strategic change and how they need to be viewed as continuous processes rather than steady-state conditions. Their research has highlighted the impermanence of a firm's strategic position and the fragility of the bases of competition and the need to develop learning processes at all levels of the organization.

The need for learning as a competitive base has been highlighted by some commentators[15] who believe that


Table II. Development of a Competitive Learning Organization

Level of learning (individual, team, organizational) Rate of learning Learning focus Level of communication Flow of communication Organizational performance

Static organization

Poor Poor None Poor None Poor

Teaching organization

Fair Fair

Limited Fair

One way Fair

Competitive learning organization

High High High High

Two way High

the only source of sustainable competitive advantage is likely to arise from those companies which can learn faster than their competitors. This notion has given rise to the concept of the "learning organization". However, many current models of the learning organization have a tendency to promote certain aspects of learning rather than examining their ability to provide a competitive edge. Learning, for its own sake, is unlikely to fulfil this function. The need to address the competitive dimension of learning has given rise to the concept of the "competitive learning organization".

A conceptual framework of a "competitive learning organization" has been proposed which promotes learning at all levels through a learning focus which embraces the dynamic nature of the competitive environment. Such an organization can be viewed, metaphorically, in a "continual quest for the Holy Grail". In this respect, the Holy Grail represents a search for improved methods of learning at all levels of the organization and an understanding of the changing nature of the competitive bases which act as a focus for the learning.

The model has adopted a dynamic triptych approach to learning focus which assumes that organizations build their own unique solutions to their problems. The learning focus encompasses the need to understand the dynamics of competitive forces[11], the satisfaction of changing customer needs[12] and the importance of systems thinking[13]. Strategic change is seen as a continual process in such organizations through ongoing learning which is focused on the changing competitive bases in the environment. Communication plays a vital role as a messenger of learning throughout the organization to help to distribute the by-products of learning such as new knowledge, skills and changed attitudes.

The competitive learning organization is seen as an ideal. In the process of strategic change, organizations may go

through phases such as "competitive learning", "teaching" or "static". Static organizations are characterized by their lack of learning or focus whereas teaching organizations are characterized by the dominant role of senior management in the learning function.

The importance of learning as the major competitive base and the concept of the "competitive learning organization" is likely to have a major impact on organizations in years to come. As predicted by Lessem on the general concept of the "learning organization":

It is my view, in the final analysis, that over the course of the next 25 years the learning organization will supplant the business enterprise as the critical entity within the national and international economy, if not within society as a whole[39].

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New Institutional Economics, Cambridge University Press, Cambridge, 1986, pp. 135-51.

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11. Mintzberg, H., "The Effective Organization: Forces and Forms", Sloan Management Review, Winter 1991, pp. 54-67.

12. Garvin, D.A., "Competing on the Eight Dimensions of Quality", Harvard Business Review, November-December 1987, pp. 101-9.

13. Senge, P., The Fifth Discipline – The Art and Practice of the Learning Organization, Century Business, London, 1990.

14. Argyris, C, and Schon, D., Organizational Learning: A Theory of Action Perspective, Addison-Wesley, Reading, MA, 1978.

15. De Geus, A., "Planning as Learning", Harvard Business Review, March/April 1988.

16. Boisot, M., Information and Organizations, Fontana, London, 1987.

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18. Honey, P., "The Learning Organization Simplified", Training and Development, July 1991, pp. 30-3.

19. Pedler, M.J., Burgoyne, J.G. and Boydell, T.H., The Learning Company, McGraw-Hill, New York, NY, 1991.

20. Attwood, M. and Beer, N., "Towards a Working Definition of a Learning Organization", in Pedler, M., Burgoyne, J., Boydell, T. and Welshman, G. (Eds), Self-development in Organizations, McGraw-Hill, New York, NY, 1990.

21. Nonaka, I., "The Knowledge-creating Company", Harvard Business Review, November/December 1991.

22. Ashton, D., "Are Business Schools Good Learning Organizations? – Institutional Values and Their Effects in Management Education", Personnel Review, Vol. 17 No. 4, 1988, pp. 9-14.

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28. Honey, P. and Mumford, A., The Manual of Learning Styles, 2nd ed., Peter Honey, Maidenhead, 1986.

29. Argyris, C., "Teaching Smart People How to Learn", Harvard Business Review, May/June 1991.

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31. Belbin, M., Management Teams: Why They Succeed or Fail, Heinemann, London, 1981.

32. Hedberg, B., "How Organizations Learn and Unlearn", in Nystrom, P., and Starbuck, W. (Eds), Handbook of Organizational Design, Oxford University Press, New York, NY, 1981.

33. Fiol, C.M. and Lyles, M.A., "Organizational Learning", Academy of Management Review, Vol. 10 No. 4, 1985, pp. 803-13.

34. Mintzberg, H., The Nature of Managerial Work, Harper & Row, New York, NY, 1973.

35. Mehrabian, A. and Weiner, M., "Decoding of Inconsistent Communications", Journal of Personality and Social Psychology, Vol. 6, 1967, pp. 109-14.

36. Buzzell, R.D. and Gale, B.T., The PIMS Principles: Linking Strategy to Performance, The Free Press, New York, NY, 1987.

37. Berry, L.L., Zeithaml, V.A. and Parasuraman, A., "Five Imperatives for Improving Service Quality", Sloan Management Review, Summer 1990, pp. 29-38.

38. Greiner, L.E., "Evolution and Revolution as Organizations Grow", Harvard Business Review, July/August 1972, pp. 37-46.

39. Lessem, R., Total Quality Learning: Building a Learning Organization, Basil Blackwell, Oxford, 1991.

Ashok Jashapara is Senior Lecturer at the School of Construction, Housing and Surveying, University of Westminster, London, UK.

the competitive learning organization: a quest for the holy grail

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