Learning organisations are a relatively new concept within the strategic management approach and org...

1. What is a learning organization?
Learning organisations are a relatively new concept within the strategic management approach and
organisational structures as a whole. However, they have been favoured over the traditional top
down method by many theorists and some companies. This has coincided with the development of
globalisation and the need for integration between sectors and organisations based around the
world with different cultures and needs. It has been suggested that this integration and flatter
structure cuts costs and increases productivity and efficiency by reducing time needed for
communication and decision making while increasing individual responsibility over tasks. Gibb, A
(1997) suggested that costs were reduced due to fewer 'discontinuities', or frictions, between the
different sections and the company as a whole. Communication and frictions are seen to be reduced
in a learning organisation as apposed to a top-down structure because everyone's opinion is taken
into account and everyone is working together, whereas in a top-down organisation the 'orders' or
'decisions' are coming from the top and people are told what to do creating inefficiency due to poor
communication and understanding. In terms of strategy, this means that everyone gets to place their
opinion and knowledge within the strategy resulting in an organisation where employees and
managers alike are happy with the strategy and the strategy is constantly 'learning' from the work
environment. Farrell, A (2000) found that a learning organisation has a stronger significant positive
effect on business performance than a market orientation that a top-down organisation would be
focused on. He suggests that by focusing on development within the organisation and continuous
internal improvement, rather than focusing on what is happening within the market, that the
company was more successful. Top-down companies are very market orientated and focus on
motivation by financial targets. Farrell suggests that learning organisations are more successful
than these companies because they are focusing on development within. Wang, C et al (2003)
suggests that a learning organisation structure allows radical innovation and creativity through the
sharing and merging of ideas through a flat structure. Everyone is asked what they would like the
strategy to be which results in not only innovation and creativity, but also one common focus and
goal. This means that the workforce is highly motivated and the company is all aiming collectively in
one direction, making it highly efficient. Stalk, Evans and Shuhman (1992) also talk about efficiency
within a learning organisation as opposed to the disorganisation and wastage within a traditional
top-down orientated organisation. They comment on the Japanese and their identification of
significant delays due to the processes within an organisation being integrated by the top down
method. They move this on further by saying that this results in major disruption, inefficiency and
wastage of product, process and thoughts. They suggested that in order to resolve this, an
organisation should adopt a learning organisation strategy and structure so that the company is
working collectively in order to resolve these inefficiency's and problems.
Above I have suggested the downfalls of a top-down approach to strategic management and how
using and adopting a learning organisation's strategy and structure can resolve these issues.
However, there are cases where a top down approach to strategic management would be more
appropriate than that of a learning organisation. Firstly Gaoler, G (1992) conducted research into
Shell and how they manage their organisational structure as a learning environment. He suggests
that if an organisation have not already aligned and implemented a learning environment structure
and organisation, that it may be very difficult to change and adapt towards one. He further
commented that this is because a company would need to develop the organisational conversation
and communication needed to achieve a learning organisation, which can be very difficult for a
business, which has long, stood as a traditional top-down organisation. Changing from a top-down
business to a learning organisation would be very difficult to implement, not only for the reasons
above, but also because this would involve implementing a new strategy completely including work

2. ethic, processes, communication, structure, culture and practice within the company. Kerka, S
(1995) suggests that there are barriers to becoming an effective learning organisation. These
barriers include a lack of effective leaders, inability to change existing mental models, tunnel vision,
individualism and a culture of disrespect and fear. She takes this further by suggesting that a
learning organisation is a 'journey not a destination' and a 'philosophy not a program'. This enforces
Gaoler's argument that it would be very difficult to change to a learning organisation from a top-
down organisation because there are many barriers to entry to consider which need addressing
carefully if a learning organisation was to be implemented. She also suggests that a learning
organisation is not an end result but a constant developing model, with possibly no end or
completion stage. Coopey, J (1995) also comments on another possible problem with the learning
organisation. He suggests that it only leads to 'modest' empowerment of employees compared to
how these employees would have been empowered within a top-down organisation. Furthermore,
although they may be consulted more in regards to strategy in a learning organisation, management
still may not consider their ideas. He develops further on this point by suggesting that a learning
organisation can lead to power imbalance by managers using it to their advantage or employees
using newly found power in negative ways, whereas in a top-down organisation the power is clearly
defined and distributed. Finger, M and Brand, S (1999) also point out some short falls of the learning
organisation. They suggest that a learning organisation focuses solely on training activities to foster
learning, which they then suggest is favouring mainly a cultural basis. They suggest that to truly
become a learning organisation structure and the organisation of work would also need to be
addressed, something which is clearly defined and implemented within a top-down organisation.
They also suggest that although a learning organisation favours individual and collective learning
processes it does not connect them properly to the organisations strategic objectives resulting in the
potential for disorganisation. A top-down approach shows a clear direction for all employees to one
strategy, although this is decided at the top level and the employees have no input. They suggest
that there needs to be a link between individual and collective learning and the organisations
strategic objectives. They build on this further by suggesting that some form of measurement needs
to be implemented to assess the extent to which learning contributes towards strategic objectives.
This is very different to the top-down strategic management approach where you can see the clear
link between structure and processes and how this will lead to strategic objectives. They make a
further point that a learning organisation as an entity is still too vague in terms of structure,
processes, strategy and power. They suggest that it is very hard to 'pin down' exactly what a
learning organisation is as it is still a relatively new concept when dealing with strategic
management. They reinforce this by suggesting that it is difficult to find 'real life' examples of
learning organisation theory being implemented within organisations.
Learning organisations are a relatively new concept in
terms of strategic management and organisational
structure in general. They have proven to be beneficial
by reducing costs and being more efficient than the top-
down approach. Learning organisations have also been
proven to result in a stronger business performance than
a top-down organisation. This is thought to be linked to
the fact that learning organisations use radical
innovation and creativity to focus on quality and
excellence in terms of targets and outcome rather than
the top-down method where quantitative targets in terms of budgets and profit are used. Top-down
methods focus on quantity rather than quality. Learning organisations also reduce disruption, waste
and inefficiency by using a flatter and more integrated structure together with communication and

3. the sharing of thoughts and processes. However, learning organisations also have their downfalls. It
has been suggested that if the organisation is not already a learning organisation, that it may be
difficult and almost impossible to become one with many barriers to overcome in the process. This,
therefore, suggests that unless an organisation starts out as a learning organisation, that it may not
be able to become one. Learning organisations have also been found to have power imbalances that
have been reinforced by the flat structure and the empowerment of employees. This suggests that a
learning organisation could result in a problematic organisation after a period of time because
disagreement, communication breakdown and demotivated employees could result in organisation
failure. One of the biggest problems with the learning organisation is that it is hard to 'pin down'
exactly what one is. Papers and Journals have found it hard to define exactly what a learning
organisation is because learning organisations are too vague. They also focus too much on the
cultural dimension and favour individual and collective learning processes without considering other
aspects of organisational structure and processes equally. With a learning organisation there is no
clear definition of power, processes and control that a top-down organisation uses.
I think that the learning organisation is better
than the top-down approach to strategic
management. With the development of
globalisation and constantly changing markets,
the learning organisation embraces this by
creating an organisation that constantly adapts
and learns from its environment to align the
organisation to whatever direction or change
needs to be implemented for success. With a
strong focus on quality rather than quantity and
reducing costs while improving efficiency, the learning organisation is the best organisation for the
business environment that we deal with today. It empowers employees, while using radical
innovation and creativity, to use every single ounce of knowledge within that organisation and utilise
it to improve constantly. This approach to strategic management is set up to fight failure and chase
success compared to a top-down approach to strategic management. However, there are things that
need to be considered when using this approach. The learning organisation holds the potential to
become 'messy' in structure and processes with a potential end result of failure if the organisation
slips down this route. Therefore, precautions need to be put in place such as an outline of aims,
objectives and general outlines of final decision-making and who is responsible for this. A clear
outline of organisational structure may reinforce this. This will reduce the 'haziness' of exactly what
the learning organisation is. Precautions also need to be put into place to stop a power imbalance
forming within a learning organisation.