ARTICLE #2Applied InsightTools, techniques, and framewoeks for.docx

ARTICLE #2
Applied Insight
Tools, techniques, and framewoeks for managers
Putting leadership development at the heart of a major
operations-improvement effort paid big dividends for a global
industrial company.
Few companies can avoid big, periodic changes in the guts of
their business. Whatever the cause- market maturation, a tough
macro-economic environment, creeping costs, competitive
struggles, or just a desire to improve -- the potential responses
are familiar: restructure supply chains; rethink relationships
among sales, marketing, and other functions; boost the
efficiency of manufacturing or service operations (or sometimes
close them). Such changes start at the top and demand a
relentless focus on nitty-gritty business details from leaders up
and down the line.
Too often, however, senior executives overlook the "softer"
skills their leaders will need to disseminate changes throughout
the organization and make them stick. These skills include the
ability to keep managers and workers inspired when they feel
overwhelmed, to promote collaboration
across organizational boundaries, or to help managers
embrace change programs through dialogue, not dictation.
One global industrial company tackled these challenges by
placing leadership development at the center of a major
operational-improvement program that involved deploying a
new production system across 200 plants around the world.
While the need for operational change was clear -- the
performance of the company's factories was inconsistent and in
many cases far below that of competitors in terms of efficiency,
productivity, and cost -- so too were
the organizational obstacles. Drives for improvement, for
example, carried a stigma of incompetence; current performance
was considered "good enough"; conflict tended to be passive-

aggressive or was avoided entirely; and shop floor employees
felt that they were treated as cogs and that their supervisors
were enforcers. The effect of all this on employees was
disengagement, a lack of trust in senior management, and a
pervasive fear of making mistakes -- a worry reinforced by the
company's strong culture of safety and of risk aversion.
These challenges were impossible to ignore, and that was
probably a blessing in disguise: the senior team had to look
beyond technical improvements and focus on helping the
company's leaders to master the personal
behavioral changes needed to support the operational ones. To
that end, the company mounted an intense, immersive, and
individualized leadership program.1
The results are still unfolding, but after three years the company
estimates that the improvement program has already boosted
annual pretax operating income by about $1.5 billion a year.
Furthermore, executives see the new leadership behavior as
crucial to that ongoing success. Indeed, the senior executive
who launched the program believes that without the inclusion of
leadership development, it would have made only half the
impact it actually did. She adds that the company has seen a
tenfold return on its investment in each of the dozens of leaders
trained thus far.
Scenes from the front lines of change
In this article, we'll share the stories of three such leaders and
examine how the changes they made in their leadership styles
contributed to improved business results. Then we'll step back
and offer a few general leadership-development principles that
we hope will be useful to other organizations contemplating
large- scale, transformational changes.
Making sourcing more efficient
An executive we'll call Annie is the company's director of
sourcing and logistics. Her charge: to help the sourcing
operation improve its performance, from the mid- to the first
quartile, without additional resources. Annie and her supervisor
(the group's vice president) concluded that the way to achieve

this goal was to create a single global sourcing system instead
of relying on the existing patchwork of regional and divisional
ones. This approach would improve efficiency, take advantage
of cheaper sources, and cut interaction costs.
But that meant engaging a global group of stakeholders, many
of whom preferred acting independently. Some even mistrusted
one another. The vice president knew that this problem would
be very difficult for Annie; as he put it, "she used to move too
fast, and people would miss her train." Somehow, Annie had to
build the skills -- and quickly -- to engage her colleagues on a
journey where turning back was not an option.
Annie realized she needed to engage them not just intellectually
but also emotionally, so they would become committed to the
new approach and understand why it was better, even though
many saw it as threatening to their autonomy and their ability to
tailor services to local needs. Annie also recognized that she
had a strong tendency to do all the work herself to ensure that it
was done quickly and correctly. Learning to overcome that
inclination would help her to articulate a more inspiring vision
and bring more people on board. Along with a colleague who
was going through leadership training at the same time, Annie
worked on a number of skills, such as how to keep discussions
focused on solutions and how to build on existing strengths to
overcome resistance. She also developed 20 coaching vignettes,
which helped her bring to life the mind-sets and behavior that
had to change. These moves helped Annie establish the new
vocabulary she needed to encourage colleagues to identify and
eliminate issues that were getting in the way of the new
sourcing approach.
As more than 1,000 employees across four regions adopted the
new system, operational efficiencies quickly started to appear.
What's more, the effort encouraged interpersonal interactions
that helped some employees overcome longstanding barriers to
collaboration. The vice president highlighted the way the effort
had encouraged North American employees to begin openly
addressing issues they had with colleagues at a logistics service

center in India, for example, and to move beyond mistrusting
the workers there and resenting them for holding "exported
jobs." Such engagement skills spread across the network and
began to take hold.
As collaboration improved, the cost savings grew: within 18
months, the sourcing group had eliminated the need for 50
positions (and helped the workers who held them to get new
jobs elsewhere in the company). In the same time period,
benchmarking suggested that the group as a whole had achieved
first-quartile performance levels. What's more, the experience
strengthened Annie as a manager. "My answer might have been
right before," she says, "but it got richer.… I feel more
confident. It is not about needing to prove myself anymore. I
have much greater range and depth of influence."
Boosting yields at a factory
Conor, as we'll call one European plant manager, needed to
boost yields using the company's new production system. In the
past, the industrial giant would have assigned engineers steeped
in lean production or Six Sigma to observe the shop floor,
gather data, and present a series of improvements. Conor would
then have told plant employees to implement the changes, while
he gauged the results -- a method consistent with his own
instinctive command-and-control approach to leadership. But
Conor and his superiors quickly realized that the old way
wouldn't succeed: only employees who actually did the work
could identify the full range of efficiency improvements
necessary to meet the operational targets, and no attempt to get
them to do so would be taken seriously unless Conor and his
line leaders were more collaborative.
Workers were skeptical. A survey taken at about this time (in
2009) showed that plant workers saw Conor and his team as
distant and untrustworthy. Moreover, the company couldn't use
salary increases or overtime to boost morale, because of the
ongoing global economic crisis.
Conor's leadership training gave him an opportunity to reflect
on the situation and provided simple steps he could take to

improve it. He began by getting out of his office, visiting the
shop floor, and really listening to the workers talk about their
day-to-day experiences, their workflows, how their machines
functioned, and where things went wrong. They'd kept all this
information from him before. He made a point of starting
meetings by inviting those present to speak, in part to encourage
the group to find collective solutions to its problems.
Conor explained: "As I shared what I thought and felt more
openly, I started to notice things I had not been aware of, as
other people became more open. We'd had the lean tools and
good technology for a long time. Transparency and openness
were the real breakthrough." As the new atmosphere took hold,
workers began pointing out minor problems and additional areas
for improvement specific to their corners of the plant; within
just a few months its yields increased to 91 percent, from 87
percent. Today, yields run at 93 percent.
Closing a plant
Pierre, as we'll call him, was managing a plant in France during
the darkest days of the global financial crisis. His plant was
soon to close as demand from several of its core customers went
into a massive and seemingly irreversible tailspin. The company
was in a tricky spot: it needed the know-how of its French
workers to help transfer operations to a new production location
in another country, and despite its customers' problems it still
had €20 million worth of orders to fulfill before the plant
closed. Meanwhile, tensions were running high in France: other
companies' plant closures had sparked protests that in some
cases led to violent reactions from employees. Given the
charged situation, most companies were not telling workers
about plant closures until the last minute.
Pierre was understandably nervous as he went through
leadership training, where he focused intently on topics such as
finding the courage to use honesty when having difficult
conversations, as well as the value of empathic engagement.
After a lengthy debate among company executives, Pierre
decided to approach the situation with those values in mind. He

announced the plant closing nine months before it would take
place and was open with employees about his own fears. Pierre's
authenticity struck a chord by giving voice to everyone's
thoughts and feelings. Moreover, throughout the process of
closing the plant, Pierre recounts, he spent some 60 percent of
his time on personal issues, most notably working with his
subordinates to assist the displaced workers in finding new jobs
and providing them with individual support and mentoring
(something other companies weren't doing). He spent only about
40 percent on business issues related to the closure.
This honest engagement worked. Over the next nine months, the
plant stayed open and fulfilled its orders, even as its workers
ensured that their replacements in the new plant had the
information they needed to carry on. It was the only plant in the
industry to avoid violence and lockouts.
Lessons observed
While every change program is unique, the experiences of the
industrial company's managers offer insights into many of the
factors that, we find, make it possible to sustain a profound
transformation. Far too often, leaders ask everyone else
to change, but in reality this usually isn't possible until they
firstchange themselves.
Tie training to business goals.
Leadership training can seem vaporous when not applied to
actual problems in the workplace. The industrial company's
focus on teaching Pierre to have courageous conversations just
as the ability to do so would be useful, for instance, was crucial
as Pierre made arrangements to close his plant. In the words of
another senior executive we spoke with, "If this were just a
social experiment, it would be a waste of time. People need a
'big, hairy goal' and a context to apply these ideas."
Build on strengths. The company chose to train managers who
were influential in areas crucial to the overall transformation
and already had some of the desired behavior -- in essence,
"positive deviants." The training itself focused on personal
mastery, such as learning to recognize and shift limiting mind-

sets, turning difficult conversations into learning opportunities,
and building on existing interpersonal strengths and managerial
optimism to help broadly engage the organization.
Ensure sponsorship. Giving training participants access to
formal senior-executive sponsors who can tell them hard truths
is vital in helping participants to change how they lead.
Moreover, the relationship often benefits the sponsor too. The
operations vice president who encouraged Annie, for example,
later asked her to teach him and his executive team some of the
skills she had learned during her training.
Create networks of change leaders. Change programs falter
when early successes remain isolated inorganizational silos. To
combat this problem, the industrial company deployed its
leadership-development program globally to create a critical
mass of leaders who shared the same vocabulary and could
collaborate across geographic and organizational boundaries
more effectively.
When Annie ran into trouble implementing the changes in some
of the company's locations in Asia, the personal network she'd
created came to her rescue. A plant manager from Brazil, who
had gone through the training with Annie, didn't hesitate to get
on a plane and spend a week helping the Asian supply chain
leaders work through their problems. The company allowed him
to do so even though this visit had nothing to do with his formal
job responsibilities, thus sending an important signal that
these changeswere important.
Another tactic the company employed was the creation of
formal "mini-advisory boards": groups of six executives, with
diverse cultural and business perspectives, who went through
leadership training together. The mutual trust these teammates
developed made them good coaches for one another. Pierre, for
example, reported getting useful advice from his board as he
finalized his plans to talk with his plant employees. The boards
also provide much-needed emotional support: "The hardest part
of being at the forefront of change is just putting your shoes on
every day," noted one manager we talked to. "Getting together

helps me do that."
ARTICLE #2
Scholars and practitioners have identified
transformational leadership and organizational culture as
important factors that influence the development of learning
organization. Yet, few studies have empirically examined the
impact of transformational leadership and organizational
culture on learning organization. This study proposes
hypotheses to understand the impact of
transformational leadership and organizational culture on the
development of learning organization. Data was collected from
the pharmaceutical sector and a comparison was drawn between
India and Nepal. Results indicate
transformational leadership and organizational culture have a
positive influence in the development of learning organization.
The implication of the findings and possible directions for
future research are discussed.
Keywords: Learning Organization,
Transformational Leadership, Generative and
Adaptive Organizational Culture, Pharmaceutical Sector, India
and Nepal.
INTRODUCTION
The concept of Learning Organization has received heightened
attention from scholars and others in recent years. As per Jones
and Hendry (1994) the term "Learning Organization" seems to
have been coined around 1988 by Hayes et. al. in the USA and
Pedlar et. al. in the UK but the origin of the word in the
literature can be traced back to the 1920s. But the concept
attracted much attention in the 1990's when Peter Senge (1994)
popularized this concept in his landmark book "The Fifth

Discipline."
In this era of competitive pressure, learning organization has
gained popularity as the capacity for change and improvement is
linked with learning and to obtain and sustain competitive
advantage, organizations must enhance their learning capability
and must be able to learn better and faster from their successes
and failures, from within and from outside (Marquardt, 1996).
The extant literature has identified a number of factors that
influence the development of learning organization. Fiol &
Lyles (1985) suggest that the organization culture, the strategy,
organization structure and the environment in which the
organization operates influence the development of learning
organization. Caudron (1993), Schien (1993), Garvin (1993),
Marquardt (1996) have identified the important
role culture plays in creating a learning organization.
Senge (1994) has identified a different role for leaders of
learning organization. Similarly, many authors have emphasized
the important role leadership plays in the development of the
learning organization (Johnson, 1998; Prewitt, 2003; Sadler,
2003). The concept of culture is also one of the major variable
and essential ingrethents in the development of a learning
organization. Barrett (1995), Hershey et. al. (2000) suggest that
a learning culturecharacterized by continuous learning from
experience, experimentation, questioning and dialogue, is the
only way to sustain a competitive advantage over the long term
in an increasingly complex and turbulent environment.
Against this background, this article aims to understand
the leadership style and the cultural transformation required to
facilitate the transition to a learning organization. The type
of leadership considered in this study is
"transformational leadership". Transformational leadership has
been the subject of extensive research in the past decade but
little research effort has been exerted to study the influence of
transformational leadership in the development of learning
organization. Much has been researched about organizational
culture and change. However, much less effort has been

expended in studying the cultural transformation required in
organizations making the transition to a learning organization.
In view of the current state of literature, this article seeks to
study the relationship between transformationalleadership style
and learning organization as well as the relationship
between organizational culture and learning organization. It
aims to identify the key variables that will predict the
dimensions of learning organization based on
transformational leadership and organizational
culture dimensions. It also seeks to investigate the difference in
the development of learning organization between India and
Nepal. To address these issues the article first highlights the
role of leadership and organizational culture and provides an
overview of the relevant literature as the basis for specifying
the hypotheses. Then the method of the study is discussed,
followed by presentation and discussion of the findings. The
final section provides a summary and discusses implications for
future research.
ROLE OF LEADERSHIP IN LEARNING ORGANIZATION
The competitive pressures of the present environment
necessitates the need to focus on risk-taking and creativity,
therefore traditional management styles which insist on
compliance and enforcement of rules are now considered
inappropriate. In such a scenario, developing new competencies
and capabilities has gained importance and this places learning
at the center of organizations. This has led to the development
of new organizational forms known as "Learning Organization"
and these organizations are more adaptive and flexible and tap
the learning of individuals to
improve organizational performance and
enhance organizational learning.
Learning organization hence requires a leader who brings out
the best in the followers, leadership that is more adaptive and
flexible. Senge identified three leadership roles that are
important for building a learning organization. "Leaders as
designers", "leaders as teachers", and the "leaders as stewards".

Similarly, Marquardt (1996) identified six leadership roles in a
learning organization. He considers the role of "instructor",
"coach" and "mentor" as the most important aspect
of leadership in learning organization. In the role of "knowledge
managers", "colearners and model for learning", leaders are
learners themselves. As "architect and designers" and
"coordinator" they are responsible for creating a learning
environment motivating followers to perform at their best.
Johnson (2002) considers visioning, empowerment and leader's
role in learning as crucial skills for leaders of learning
organization.
ROLE OF ORGANIZATIONAL CULTURE IN LEARNING
ORGANIZATION
At present times when the environment is highly competitive,
where markets and products proliferate rapidly, a strong culture,
which does not encourage innovation, proves to be a
disadvantage to a firm. Organizations need to be flexible,
adaptive and innovative to survive in this changing
environment. The focus on flexibility, adaptability and
innovation falls mainly within the domain of organizational
culture, since organizational culture is integral to effective
change initiatives and strategies (Bluedorn and Lundgren,
1993). The need for adaptive, flexible and
innovative organizational culture within organizations in
response to the turbulence and uncertainty in
theorganizational environment has long been suggested. Kotter
and Heskett (1992) identified the adaptive culture as the
'optimal' organizational culture and stated "only cultures that
can help organizations anticipate and adapt to environmental
change will be associated with superior performance over long
periods of time". Bass and Avolio (1993) also highlighted the
importance of adaptive and flexible organizational culture and
distinguish between transformational and
transactional organizational culture.
Transformational culture refers to those organizational
cultures supportive of innovation, transformation and change

and transactional cultures as those that maintain the status quo,
are based on pre-established rules and structures, and inspire
limited levels of commitment and motivation.
Research evidence suggests significant positive correlations
between transformational cultures and
desirableorganizational and individual outcomes (Parry and
Proctor, 2000). An essential factor that adds value in
transformational organizational culture is the degree to which it
supports and promotes innovation and entrepreneurial activity.
Within a rapidly changing and turbulent environment,
innovation plays a crucial part in the long-term survival of an
organization. In contrast, a "pure" transactional culture focuses
on everything in terms of explicit and implicit contractual
relationships' (Bass and Avolio, 1993). They state that, in this
sort of culture, individualism is very strong and therefore a
concern for self-interest, rather than organizational aims,
dominates. Thus, commitment is often short-term, existing to
the extent of rewards provided by the organization (Bass, 1998).
Transactional cultures has been found to correlate significantly
and negatively with organizational and leadershipoutcomes
(Parry and Proctor, 2000).
ROLE OF TRANSFORMATIONAL LEADERSHIP IN
LEARNING ORGANIZATION
Leadership takes on a different role in a learning organization.
To achieve the vision of learning
organizationleadership capabilities must be developed. As
identified by various authors' leaders in learning organization
need to communicate a clear and compelling vision of the future
organization to obtain commitment from
the organizationalmembers, encourage followers to respond to
environmental uncertainty through creativity and
innovativeness, change their mental models and encourage them
to seek learning oriented behaviors and embrace continuous
learning. These roles are suitable to a transformational leader as
they are champions of technological innovation (Howell and
Higgins, 1990), achieve successful transformation of an

organization by aligning
the organizationalvision, organizational design and management
practices (Appelbaum et. al., 1998), change long held
assumptions, values and beliefs and encourage employees to
learn new behaviors (LeBrasseur et. al., 2002).
Transformational leader are change agents, who take the
responsibility for revitalizing an organization. They define the
need for change, create new visions, mobilize commitment to
those visions and ultimately transform an organization.
The present day environmental pressure necessitates the
transformation to a learning organization. Changing from a
traditional organization to a learning organization aims to
transform traditional organization into a more responsive and
effective organization that is able to withstand and survive the
environmental pressure and hence improve its performance in
the face of the turbulent environment. Environmental
uncertainties are stressful to followers, as they do not
understand the direction of change, the potential impact of the
change, and the success of a particular response. Under such
conditions, the idealized vision articulated by the leader
provides a challenge and motivating force for change to the
followers as it represents a perspective shared by all the
followers and promises to meet their hopes and aspirations
(Conger and Kanungo, 1987; Waldman et. al., 2001). This age
of rapid change, calls for a new kind of leadership to enable
organizations to transform and cope with the changes (Tichy
and Ulrich, 1984). This new brand of leaders must have the
ability to help the organization develop a vision of what it can
be, to mobilize the organization to accept and work towards
achieving the new vision, and to institutionalize the changes
that must last over time. These new leaders are called
transformational leaders and learning organizations require
the leadership of the transformational leader who enables the
members to make sense of the environmental uncertainty by
continuous learning through the mechanism
of organizational learning. A transformational leader with a

shared vision and effective communication can enable members
to understand the goals and aspirations of the learning
organization, the importance of organizational learning in the
transformation process and thus change their mental models and
encourage them to seek learning-oriented behaviors and
embrace continuous learning.
On the basis of the above discussions the following hypothesis
has been specified as the basis for focusing the empirical
investigation:
Hypothesis 1: Transformational leadership has a significant and
positive influence in building a learning organization.
ROLE OF ADAPTIVE AND
GENERATIVE ORGANIZATIONAL CULTURE AND
LEARNING ORGANIZATION
To make the transition to a learning organization, organizations
require a culture that supports and facilitates this
transformation. Schien, (1996) considers three cultures to be
present in every organization: the operator culture, the
engineering culture and the executive culture. If an organization
attempts to reinvent itself and learn in a generative way then
there has to be proper alignment among these
three cultures otherwise the learning initiatives will be short
lived. Through "dialogue" organizations can achieve mutual
understanding among the three culturesand promote the value of
trust, openness and communication to enhance learning. Paton
and McCalman (2000) also consider open dialogue,
experimentation and risk-taking as prerequisites to a
learning culture.
The challenge for organizations in this present environment is
to create contexts in which members continually learn and
experiment, are innovative and strive for the creation of new
ideas and new products, as it is not sufficient for organizations
to respond, adapt and cope with the pressures of change
(Barrett, 1995). The lifeblood of a learning organization is a
free and open system for communicating information and
knowledge as it encourages knowledge creation and enhances

learning (Hill, 1996). Experiments are catalyst for creating new
knowledge and learning andorganizational members should be
encouraged to conduct experiments no matter what the outcome.
McGiIl et. al. (1992) considers experimentation and risk taking
as important values that promote a learning culture.
The prior literature provides the basis for expecting a
relationship between organizational culture and learning
organization and the following hypothesis has been specified as
the basis for focusing the empirical investigation.
Hypothesis 2: A generative and adaptive culture will have a
significant and positive relationship with the dimensions of a
learning organization.
This study also seeks to investigate the difference in the
development of learning organization between India and Nepal
and the following hypothesis has been specified as the basis for
focusing the empirical investigation.
Hypothesis 3: There will be no significant difference among the
various dimensions of learning organization between India and
Nepal.
The theoretical model depicting the framework for the study and
the relationship among the hypothesis is shown in Figure 1 .
METHOD
Sample and Procedures
This is a comparative study designed to compare selected
organizations in the pharmaceutical sector between Nepal and
India. This industry was chosen for the study because
improving organizational performance through learning has
been a critical factor for company survival due to the industry's
rapid technological advances and highly competitive markets.
Four organizations each, from the pharmaceutical industry, were
selected in both Nepal and India. Both countries are developing
economies. In the past decade, India has advanced at an
alarming rate and struggled to build and maintain sustainable
competitive advantage in the present global scenario. Nepal is
undergoing political and economic transformation and is
opening up its economy to Foreign Direct Investment and Multi-

nationals. Therefore, it was thought useful to compare selected
companies in the two countries to see if there exist any
differences in the development of learning organization and to
explore how successful practices of one country could be
utilized in the other countries.
Data was collected through a survey instrument and the sample
consisted of a cross section of people including senior
executives and managerial personnel from all the departments of
the participating organizations. The sampling technique
employed is convenience based non-probability sampling.
According to Churchill (1979), this type of sampling can be
adopted when the emphasis is on exploratory research. The
researcher delivered the questionnaires to the organizations, in
both the countries, personally and the completed questionnaires
were collected from the respondents in the same manner. The
respondents were assured of confidentiality and anonymity.
Measures
Transformational leadership was measured using a 28-item scale
developed by Podsakoff et. al. (1990). This scale
measures leadership orientation based on the dimensions of
articulate vision, role model, foster goal acceptance,
performance expectations, individual support, intellectual
stimulation and transactional leader behavior. All items were
rated on a 4-point scale with 1= "does not apply" and 4=
"applies to a great extent."
Organizational culture was measured using OCTAPACE
developed by Pareek (1973). The OCTAPACE profile is a 40-
item instrument that gives the profile of organization's ethos in
eight values (Openness, Confrontation, Trust, Authenticity,
Proaction, Autonomy, Collaboration, Experimenting). The
instrument contains two parts. In part one, values are stated in
items 1 to 24 (three statements each of the eight values), and the
respondents were required to check (on a 4-point scale ranging
from 1= "not valued in the organization" to 4= "very highly
valued in the organization"). Part two contains sixteen
statements on beliefs, two each for eight values, and the

respondent checks (on a 4-point scale ranging from 1= "few or
no people in this organization share this belief to 4= "this belief
is well shared in this organization ") how much each item is
valued in her/his organization.
Learning Organization was measured using the Learning
Organization Profile developed by Marquadt (1996). The profile
is a 50-item instrument assessing five dimensions; learning
dynamics, organization transformation, people empowerment,
knowledge management, and technology application). All items
were rated on a 4-point scale ranging from 1 does not apply) to
4 (applies to a great extent).
Data Analysis
The hypotheses were tested using t-tests, correlational analysis
and multiple regression analysis. To determine whether
significant differences existed in the development of learning
organization t-test was computed. In order to understand the
relationship between the learning organization and the various
dimensions of transformationalleadership as well
as organizational culture Pearson's Product Moment Correlation
was computed. Regression is the determination of statistical
relationship between two or more variables. Learning
Organization was taken as the dependent or criterion variable
and transformational leadership and organizational culture as
the independent variables or predictor variables. Stepwise
Multiple Regression was used.
RESULTS
Preliminary Analysis
First, a preliminary analysis was done with all of the survey
items to test the scales' psychometric properties. Those items
that demonstrated adequate reliability (Cronbach alphas of
above .60) were retained. Based on this analysis 25 items were
retained in the Learning Organization Profile. All the items
were retained in the transformationalleadership measure and
OCTAPACE as these measures had adequate reliability.
Intercorrelations also showed generally positive relationships.
Results and Findings

T-test of difference was conducted between Nepal and India on
all the dimensions of learning organization. The findings
suggested that organizations in the pharmaceutical sector in
India showed the existence of some subsystems of the learning
organization (learning dynamics, organization transformation,
and technology application) as compared to Nepal.
Transforming to learning organization involves incorporating
the five subsystems of the learning organization: learning
dynamics, organization transformation, people empowerment,
knowledge management and technology application (Marquadt,
1996). Attempting to become a learning organization without all
five of these dimensions will be insufficient. If any of the
subsystem is weak or absent, the effectiveness of the other
subsystems is significantly weakened. India showed significant
differences only in the dimension of learning dynamics,
organization transformation and technology application. Though
organizations in India did understand the importance of
learning, the transformation was incomplete as the other two
subsystems, people empowerment and knowledge management,
was not present. The organizations in the pharmaceutical sector
in Nepal are yet to understand the importance of learning and
make the transition to a learning organization.
Hypothesis 3 was partially supported as no difference was found
in the dimension of people empowerment and knowledge
management between Nepal and India.
The result of correlational analysis shows that in India all the
dimensions of transformational leadership, except for role
model, show a significant and positive correlation with the
dimension of learning organization. The dimension of role
model did not show any significant correlation. In Nepal, too all
the dimensions showed significant and positive correlations
except for the dimension of role model, which did not show any
significant correlation. Hypothesis 1 was accepted. With respect
to organizational culture, in both the countries, all the
dimensions of organizational culturewere significantly and
positively related to learning organization. Except for the

dimension of autonomy, that showed a negative but
insignificant correlation in India whereas in Nepal it showed no
significant correlation. Hypothesis 2 was also accepted.
To gain an insight into the relationships further between the
independent and dependent variables and to identify the
predictive relationships between the two sets of variables, if
any, multiple regression analysis was done. There are two sets
of equation. In the first set independent variables are the
dimensions of transformational leadership. The dependent
variable is the dimension of learning organization. Results
indicate that in India foster acceptance of group goals accounted
for 25.5% of the variance with a ß- coefficient of .505. An
increase of 5.1% was observed when performance expectation
entered in the equation taking the total variance to 30.9% with a
ßcoefficient of .254. None of the other variables entered in the
equation due to low level of tolerance. In Nepal foster
acceptance of goals accounted for 37.5% of the variance with ß
coefficient of .613. An increase of 12% was observed when
individual consideration was entered in the equation taking the
variance to 49.5% with a ß coefficient of .359. The other
variables did not enter into the equation.
For the second set of equation, the independent variable is the
dimension of organizational culture while the dependent
variable is the dimension of learning organization. In India, it
was observed openness accounted for 35.5% of the variance
with a ß coefficient of .596. An increase of 10.6% was observed
when proaction entered in the equation with a ß coefficient of
.344. Finally, authenticity accounted for an increase of 3.7%
taking the total variance to 49.8% with a negative ß coefficient
of .204. None of the other variables entered the equation. In
Nepal, openness accounted for 53.4% of the variance with a ß
coefficient of .731. An increase of 7.5% was observed when
proaction entered in the equation taking the total variance to
60.9% with a ß coefficient of .355. None of the other variables
entered the equation.
DISCUSSION AND CONCLUSIONS

Transforming to learning organization has become
an organizational imperative in the 21s1 century. Prior research
has suggested that transformational leadership and a generative
and adaptive culture are one of the most important factors that
influence the development of learning organization. Based on
prior research two hypotheses were proposed to understand the
relationship between transformational leadership and learning
organization and alsoorganizational culture and learning
organization. A third hypothesis was proposed to investigate
and compare if there existed any difference in the development
of learning organization in Nepal and India.
Findings based on Nepalese and Indian organizations in the
telecommunication sector provide support for the expectation
that transformational leaders have a positive influence in the
development of a learning organization; a generative and
adaptive organizational culture also has a positive influence in
the development of a learning organization. A difference was
found in the development of learning organization in Nepal and
India and it was observed that some of the subsystems were
found to be present in the organizations in India. However,
attempting to become learning organization without
incorporating all five systems is insufficient. The
Pharmaceutical sector in India does understand the importance
of learning but the absence of two subsystems weakened the
efforts. Though the pharmaceutical sector in Nepal is facing
stiff competition, they do not focus on learning to improve
performance. The focus is more on short-term gains rather than
long-term growth and survival.
Findings also suggest that leaders in both the countries under
study do not demonstrate
transformational leadershipcharacteristics. Though there is
support for transformational leaders having a positive impact on
the development of a learning organization, this could not be
seen in both the countries under study. The reason for this could
be the impact national culture has on the leadership style and
influence tactics used by organizational leaders. The sample

companies for the study were from Nepal and India where
cultural values are relatively high in power distance. Pasa
(2000) found in his study that leaders in cultures, which are
high on collectivism and power distance value dimension, use
the more directive forms of influencing tactics. The frequently
perceived influence behaviors in suchcultures are "granted
power/authority", "taking over responsibility", "rationalizing
and involving" and "pressure". The leaders use these influence
behaviors to obtain obethence and compliance of followers.
This is seen in the sample companies in both the countries
where the leaders expected followers to comply rather than act
on their own. This differs from the transformational leaders who
create followers who are capable of handling challenges on their
own. Since many aspects of leadership behavior can be learned
the findings suggest that to facilitate die transition
organizations should encourage managers to develop and
display transformational leadership behaviors through training
and mentoring processes.
Findings suggest that organizational culture in both the
countries is not conducive to learning. In both the countries,
openness and proaction contributed positively to predict
learning organization. However, these are not the only cultural
values that support and facilitate learning. Hence,
the organizational culture cannot be considered as conducive to
learning in both the countries. Though mere is support in the
literature that organizational culture has an important role to
play in the development of a learning organization,
the organizational culture of the sample companies in both the
countries did not support learning. While this study did not
examine the dual link betweenleadership and culture, there is
support in the literature for this dual link. Leaders shape
the culture of an organization and the organizational
culture also influences the leadership style of individuals and
teams (Ogbonna and Harris, 2000). Bass and Avolio (1993)
suggest that transformational leaders help to develop a
transfonnationalculture and transformational cultures are

necessary to create a flexible and adaptive culture, conducive to
ongoing change and which promotes organizational learning. In
both the countries under study, it is seen that the leaders do not
demonstrate transfonnational leadership characteristics. As a
result, they do not favor a generative and adaptiveculture, which
is supportive of learning among organizational members.
The current findings also have several limitations. Firstly, the
sample size could be expanded, as data collected from a larger
number of companies will permit more powerful hypothesis test.
This study was based on self-report data and so the findings
may be biased by common method variance and spurious
cause/effect inferences. Common method variance is a potential
problem whenever data are collected from a single source.
Having a single respondent for each variable does not allow to
test with-in group agreement. This could be an important issue
because the extant literature has indicated that different
followers/employees may have different perceptions about their
superior'sleadership style and organizational culture (Klein and
House, 1995).
The generalizations occurring from this study are more
conducive and limited to a particular group of employees who
have been included in the study. In other words, the limitation
comes from the sampling technique used, which is non-
probability based convenience sampling. The major inherent
drawback of this technique is that it does not provide the
researcher with any kind of sound foundation for making
general inferences about the population from which this sample
is drawn.
This study has highlighted the importance
of leadership and organizational culture. Besides these two
factors, there are a number of other factors that influence the
development of learning organization. A study of other factors
would provide a fruitful insight into the development of
learning organization. It would also be useful to study the
interaction effect of
transformational leadership and organizational culture and its

impact on learning organization, which was not dealt with in
this study
ARTICLE #3
Romanian managers and employees regarding this subject.
Moreover, we also tried
to see how are managers motivating and rewarding their
employee's initiative and
creative ideas and how do employees feel about the changes that
take place inside
the organization.
1. The main roles played in a change process
Change is the most frequent phenomenon of today's reality and
can be
found everywhere, so a good knowledge of how this process can
be managed is
very important, no matter if we refer to organizations or to
people. The pace of
change is accelerating continuously, and there is no perspective
for it to slow down
very soon.
Managers can no longer focus on business as they usually did
because the
pressure of the environment force organizations to adjust in
order to survive and
prosper, and the main challenge is to manage change efficiently
(Westover, 2010).
Even if change can be found everywhere, managers still have a
delay on
responding properly and this behavior generate low results for
their organizations
(Barbu, Năstase, 2010).
A vision for change is essential in order to deal with the
environment's
complexity, but not all changes should be reactive and done
only when the current

situation of the organization is as bad as that changes become
inevitable. Leaders
are the ones that should play the main role inside the
organization not only because
of their long term vision and disposition for change, but also
because they can
reduce the resistance to change by involving as many people as
possible in this
process.
A strategic leader has a global vision of the organization as a
whole, long
term thinking despite the numberless uncertainties of the
environment and
encourages people to come with new ideas in order to make
change possible inside
the organization (Năstase, 2010).
Every change takes time, effort and needs the support of the
whole
organization. The role that employees have in a process of
change is crucial, and
one of the main things that should be done in order to avoid
crisis and resistance i
to make sure that every member of the organization is involved
in the process
(Stanleigh, 2008; Smith, 2010).
John Kotter emphasized the importance of a good vision, a
sense for
urgency and a strong team as the key factors of success in a
change process,
arguing that most of the transformation efforts fail because
managers are not aware
that a change process goes through a series of phases that
require a considerable
length of time (Kotter, 1995).
In the classical organizations, the supposition that managers
have much

more knowledge compared to their subordinates make them feel
entitled to make
decisions without consulting or involving employees (Bibu et
al., 2011). This
perception is also valid when we refer to change, so instead of
being a force that
drives it, employees are rather a force of resistance to change.
an emotional reaction or a behavioral one that has to do with the
feeling of
losing control and uncertainty (Foster, 2010). Employees are the
most powerful
source of resistance because they don't feel involved and
consulted when a change
occurs, so they try to reject the change as much as possible.
In most cases, the main perception is that resistance is
something
destructive for the organization, affecting the success of any
change effort and
making the change process even harder than it already is
(Sweers, Desouza, 2010;
Smollan, 2011; Agboola, Salawu, 2011).
Even if in some situations resistance can have positive effects
upon a
process of change, if that change is not appropriate for the
organization, there is
still need to reduce this phenomenon in order to achieve the
goals in a more
efficient way (Predişcan, Braduşanu, Roiban, 2013).
The roles played in a process of change are different, and
managers,
leaders and employees should all be involved in the process of
identifying the need
for change as being opportune in order to increase support for
change and obtain
the desired results after the process is finished.
2. The role of Romanian employees in a process of change

There are many differences between organizations and the role
that
employees may have regarding change depends first of all of the
view that
managers have related to this subject and second of the existing
management style
inside that particular organization.
In order to see what is the contribution of the Romanian
employees in a
process of change we have tried first to establish appropriate
research
methodologies, then we have identified the sample and in the
end after gathering
and analyzing the data, we have made the interpretation.
2.1 Research methodology
The objective of this article is to show the results of the
analysis regarding .
he role that employees have in the process of change
identification and
implementation, therefore, we considered appropriate to use a
quantitative research
method for gathering the information, more specifically a
questionnaire-based
survey, as well as a qualitative method by using a semi
structured interview.
The process of data gathering was performed in June - July
2013,
exclusively online on various Romanian organizations from
different industries
such as services, trading, manufacturing and public services,
and it was addressed
to both managers and employees, in order to see which are the
main views
regarding the topic.
In order to see which are the main initiators of change and what
are the

reasons for them to implement change, we have formulated two
different
hypotheses as follows:
H1: Most changes come from managers and owners; The two
hypotheses mentioned above are based on the premise that
employees’ involvement in a process of change is minor, due to
the fact that
managers are not aware of the advantages that can be provided
by new creative
ideas and solutions of change generated by their staff.
2.2 Data analysis and interpretation
The information collected from the questionnaires, and the
interviews was
processed using SPSS 17.
Of the 257 questionnaires distributed, 218 were validated and
the
respondents were mainly managers from different levels (72%
from a total of 218).
The percentage of the employees that were included in the study
was 28%.
For a better understanding of how the employees are involved in
a process
of change, we will present the results for each hypothesis.
H1: Most changes come from managers and owners
For the validation of this hypothesis, we have tried to identify
how
frequent the proposals of improvement coming from employees,
managers and
owners are leading to changes inside the organization. The
results were: in 37.60%
of cases rarely the employees proposals lead to change, in
46.80% of cases the
proposals coming from owners are often a source of change
while 55% of the
respondents consider that change ideas coming from managers
are always

materialized. Thereby the hypothesis is valid.
The main reason why managers are the initiators of change
comes from
their responsibility inside the organization which is to make
sure that goals are
reached efficiently according to the strategy, yet this is not a
reason strong enough. or them to be the only ones identifying
the need for change.
Owners have the power to participate and decide on the changes
that will
be made, as a result of their investment to the organization
capital so the fact that
their opinion regarding change is important, shouldn't be a
surprise.
The minimum involvement of the employees for most of the
Romanian
organizations can be explained by the fact that in our country,
the power is still
very centralized, especially in small and medium sized
companies, and the process
of delegation is not fully and accurately implemented. Most
managers don't seem
to understand the importance of encouraging employee
participation not only for
their ideas of change that can be very effective but also for the
fact that any change
needs the support of as many people as possible in order to
reduce the inevitable
resistance that comes with it.
QUESTION #4 How can you bridge the gap between the four
different generations in the labor market? What strategies can
you implement to ensure solidarity and productivity?
QUESTION #5

Describe your dream organization and its organizational
structure.

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