From Organizational Learning to Theory U

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1.1 Literature Review
In this chapter I will consider eight authors that provide a definition of the Learning Organization. 
The core of most definitions is that organizational learning is a change within the organization that 
occurs as the organization acquires experience. The question then becomes: changes in what?
Knowledge is the outcome of learning.
The core definition of Argote (2011) is that Organizational Learning  can be analyzed through a 
framework which is formed by a context: as a start of an operation for an organization; the 
organizational context: it affects the experience that the organization acquires and interacts with 
experience to create knowledge; and finally by the knowledge: the results from organizational 
learning, embedded in the context and concerns future experience (Argote, 2011).
Argyris and Schon’s (1974) Organizational Learning theory is based on the understanding of two 
mode of  activities: “Espoused theories” that represent what someone says they would do in a 
certain situation and comprised their beliefs, attitudes, and values and  a “Theories-in-use” that
represent what they actually do. Another important consideration that Argyris (1993) writes is that
while in building learning organization we have to be vigilant about detecting and correcting errors, 
dedicated to producing innovations, and ready to change to meet the demands of the environment, 
which itself is often changing (Argyris, 1993).
David Garvin (1993), professor at the Harvard Business School, writes about three critical question
that are still unresolved and must be considered before a company start creating a learning 
organization; each of these are necessary for an effective enhancement.
The first one regards the meaning: we need a plausible, well-grounded, easy-to-apply definition of a 
learning organization which can be easy to apply. 
Second one is management: we need better operational guidelines for practice, filled with 
operational advice rather than high aspirations. 
Finally, better tools for measurement can assess an organization's rate and level of learning to ensure 
that gains have in fact been made. You can't manage something if you can't measure it (Garvin, 
1993).
“An entity learns if, through its processing of information, the range of its potential behaviors is 
changed” (Huber, 1991, p.89). This author, reflect on four concept-processes:  Knowledge 
acquisition is the process by which knowledge is obtained; Information distribution is the process 
by which information from different sources is shared and leads to new information; Information
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interpretation is the process by which distributed information is given one or more commonly 
understood interpretations; and finally Organizational memory is the means by which knowledge is 
stored for future use (Huber,1991).
Two other important authors define learning organizations as follows: “Organizations are seen as 
learning by encoding inferences from history into routines that guide behavior” (Levitt and 
March,1988, p. 320); the authors believe that  Organizational learning is as routine-based, history-
dependent and target-oriented; Within this perspective on organizational learning learn from direct 
experience, from the experience of others, and  interprets experience developing conceptual 
frameworks or paradigms (Levitt and March,1988).
Other notable stream of literature write: “Organizational learning means the process of improving 
actions through better knowledge and understanding”(Lyles, 1985, p. 803); they will explain us the 
links between changes in behavior and level of cognitive development.
“Characterized knowledge-creating companies as places where inventing new knowledge is not a 
specialized activity; it is a way of behaving, indeed, a way of being, in which everyone is a 
knowledge worker”(Nonaka, 1991, p. 97)
1
. Nonaka suggested that companies use metaphors and 
organizational redundancy to focus thinking, encourage dialogue, and make tacit, instinctively 
understood ideas explicit (Nonaka, 1991). 
And the last author will be Senge (1994), who popularized learning organizations in his book The 
Fifth Discipline, described them as places "where people continually expand their capacity to create 
the results they truly desire, where new and expansive patterns of thinking are nurtured, where 
collective aspiration is set free, and where people are continually learning how to learn
together."'(Senge, 1994, p.1).
To achieve these, Senge suggested the use of five "component technologies": systems thinking, 
personal mastery, mental models, shared vision, and team learning.
1.2 Argote and his Framework
Argote (2011) thinks that the context is the start of operation for an organization. The organizational 
context affects the experience that the organization acquires. The context also interacts with 
experiences in order to create knowledge. The knowledge that results from organizational learning is 
1
Ikujiro Nonaka, “The Knowledge-Creating Company,” Harvard Business Review, November–December 1991, p. 97.
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embedded in the context and affects future experience. Thus, the cycle is dynamic and occurs over 
time.
The context includes characteristics of the organization and the environment in which the 
organization is embedded. The organizational context includes the organization’s structure, culture, 
technology, identity, memory, goals, incentives and strategy. The context also includes relationships 
with other organizations through alliances, joint ventures, memberships in associations. The 
environmental context includes competitors, clients, institutions, regulators and so on. It can vary 
along many dimensions, such as volatility, uncertainty, interconnectedness and munificence.
Experience is what transpires in the organization as it performs its task. Experience can be measured 
in terms of the cumulative number of task performances and interact with the context through 
learning processes, and translates experience into knowledge.
2
The framework for analyzing organizational learning is shown in Figure 1. 
Figure 1: Organizational Learning Cycle
Source: Argote, Organizational Learning: from expertise to knowledge, 2011
The third  research theme focus on learning processes and outcomes of knowledge creation, 
retention and transfer.
2
L. Argote, Organizational Learning: From Expertise to Knowledge, 2011 
Context 
Knowledge Experience
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Knowledge creation occurs when a unit generates knowledge that is new to it. Emotional 
ambivalence or negative and positive emotions has been shown to enhance knowledge creation; 
rewards can also increase knowledge creation.
Knowledge retention. Argote and Ingram (2000) conceive the of organizational memory as being 
embedded in organizational members, tools and tasks and the sub-networks formed by crossing
members, tools and tasks. Research on three knowledge repositories or reservoirs is particularly 
active: members, routines or the task-task network and transactive memory systems or the member-
task network.
If knowledge is embedded in organizational members, then their turnover should have a deleterious 
effect on organizations. 
The other knowledge reservoir is receiving considerable attention is transactive memory
3
. In 
organizations with well-developed transactive memory systems (Wegner, 1986; cit. in Argote, 
2000), members possess meta-knowledge of “who knows what”. This meta-knowledge provides 
individuals access to more knowledge than they individually possess and improves task assignment 
because members are matched with the tasks they do best as well as enhances problem solving and 
coordination because members know whom to go to for advice. Research has shown that units with 
well-developed transactive memory systems perform better than units lacking such memory systems 
(Moreland and Argote, 2000).
Recent research is aimed at understanding the conditions under which transactive memory systems 
are most valuable (Ren, Carley and Argote, 2006) and improve organizational performance is 
needed. 
Knowledge transfer. It happens when the organizations learn indirectly from the experience of other 
units as well as directly from their own experience (Huber, 1991; Levitt & March, 1988).
Learning indirectly from the experience of others, is knowledge transfer (Argote & Ingram, 2000). 
Empirical work provided evidence of learning from one’s own as well as from other’s experience 
(Darr, Argote & Epple 1995; Epple, Argote & Devadas, 1991; Zander & Kogut, 1995; Baum & 
Ingram, 1998; Bresman, in press).
A current theme in research on knowledge transfer is identifying factors that facilitate or inhibit 
knowledge transfer and explain the variance observed in the extent of transfer. These factors 
3
A transactive memory system refers to a shared system that individuals in groups and  organizations develop to 
collectively encode, store, and retrieve information or knowledge in  different domains (Wegner, 1987).
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include: characteristics of the knowledge such as its causal ambiguity
4
(Szulanski, 1996; cit. in 
Argote, 2000); characteristics of the units involved in the transfer such as their absorptive capacity 
(Cohen & Levinthal, 1990; cit. in Argote, 2000), expertise (Cross & Sproull, 2004), similarity (Darr 
& Kurtzberg, 2000; cit. in Argote, 2000), or location (Gittleman, 2007; Jaffee, Trajtenberg & 
Henderson, 1993; cit. in Argote, 2000), and characteristics of the relationships among the units such 
as the quality of their relationship (Szulanksi, 1996; Zollo & Reuer, in press; cit. in Argote, 2000). 
Although work on knowledge transfer in the 1990’s emphasized cognitive and social factors, recent 
work also emphasizes motivational factors (Quigley, Tesluk, Locke & Bartol, 2007) as predictors of 
knowledge transfer.
Knowledge transfer typically occurs across a boundary. The boundary could be between 
occupational groups (Bechky, 2003), between organizational units (Darr, Argote & Epple, 1995) or 
between geographic areas (Tallman & Phene, 2007). Understanding the translations that happen at 
the boundary is an important area of current research (Carlisle & Rebentisch, 2003; Carlisle, 2004; 
Tallman & Phene, 2007). How boundaries affect transfer is an interesting question that has led to 
seemingly anomalous findings. For example, on the one hand, knowledge transfer is more likely if 
two units share a superordinate identity and thus are internal to the same boundary (Kane et al., 
2005). On the other hand, individuals may value external over internal knowledge (Menon & 
Pfeffer, 2003). Reconciling this apparent anomaly is an interesting topic for future search.
1.3 Argyris: Theory in Use and Espoused Theory
“Learning is an idea in good currency”(Argyris,1993, p.1)
The quality of learning within a company  produces an “intellectual capital”, crucial in building 
organization that is vigilant about detecting and correcting errors, dedicated to producing 
innovations, and ready to change to meet the demands of the environment, which itself is often 
changing (Argyris, 1993).
The author explain that there  are at least two ways to correct errors in all organizations. One is to 
change the behaviour (for example, reduce backbiting and bad-mouthing among individuals), 
learning that corrects errors by changing routine behavior . This kind of correction needs only 
single-loop learning. The second way to correct errors is to modify the underlying programme, or 
master programme, that leads individuals to bad-mouth others even when they say they do not 
4
Definition of causal ambiguity will be in the fifth chapter.
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intend to do so. This is double-loop learning, learning that corrects errors by investigate the 
underlying values and policies of the organization. If actions are changed without changing the 
master programmes individuals use to produce the actions, then the correction will either fail or will 
not persist (Argyris, 1993).
An error is any mismatch between our intentions and what actually happens. If a department does 
not meet its budget, it is a mismatch. If the organization is unable to implement its strategy, that is 
also a mismatch. Behind this view of learning is a view of human nature and organizations. Human 
beings design their intentions and their actions. 
Organizations design their strategies, and they design the implementation of strategy. If this view is 
correct, then it is also correct that individuals and organizations cannot knowingly design and 
produce errors. If I say that I am going to upset you and I succeed, then that is a match. If the 
organization designs a flawed implementation process, carries it out, and it fails, that is a match, too.
In these two examples, the intended or unintended consequences occurred as a result of the design 
that was implemented. Thus we may say that the error occurred by design
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(Argyris, 1993).
One cause of designed error is the fact that we are skillful at what we do. Actions that are skillful, 
work. They are produced automatically, and we pay little or no attention while producing them. 
Indeed, to pay conscious attention to them could be distracting and lead to a loss of skill.
Argyris’s and Schon’s (1974) explain that organizational learning theory is based on the 
understanding of two (often conflicting) modes of operation:
“Espoused theories” represent what someone says they would do in a certain situation and 
comprised their beliefs, attitudes, and values. 
“Theories-in-use” represent what they actually do. These Theories is the design we found 
throughout the world. It has four governing values: Achieve your intended purpose; Maximize 
winning and minimize losing: Suppress negative feelings; Behave according to what you consider 
rational.
The most prevalent action strategies that arise from these Theories are the following: Advocate your 
position;  Evaluate the thoughts and actions of others (and your own thoughts and actions); Attribute 
causes for whatever you are trying to understand.
To explain better the difference between these theories, Argyris (1993) tell us: 
5
C. Argyris, Education for Leading-Learning, Organizational Dynamics, Winter 1993, pp 5-17.
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“When someone is asked how he would behave under certain circumstances, the answer he usually 
gives is his espoused theory of action for that situation. This is the theory of action to which he gives 
allegiance, and which, upon request, he communicates to others. However the theory that actually 
governs his actions is his theory-in-use, which may or may not be compatible with his espoused 
theory; furthermore, the individual may or may not be aware of incompatibility of the two theories.”
(Argyris and Schön 1974: 6-7)
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.
The challenge is to help individuals transform their espoused theories into theories-in-use by 
learning a “new” set of skills and a “new” set of governing values. Effectively, these two modes of 
operation “told” individuals how to design their actions and implement their designs. All insights, 
understandings, attitudes had to “pass through” the theory-in use in order to become actionable. This 
is why it is possible to educate individuals to lead-learn by helping them to develop new master 
programs for action (Argyris, 1993).
1.4 Garvin: Five Activities to define Learning Organizations
David Garvin (1993), professor at the Harvard Business School, writes about three critical issues
that are still unresolved and must be addressed before a company start to creating a learning 
organization; each of these are essential for an effective implementation. 
First is the question of meaning: we need a plausible, well-grounded, easy-to-apply definition of a 
learning organization; it must be actionable and easy to apply. 
Second is management: we need clearer operational guidelines for practice, filled with operational
advice rather than high aspirations (Garvin, 1993).
Finally, better tools for measurement can assess an organization's rate and level of learning to ensure 
that gains have in fact been made. Since you can't manage something if you can't measure it, a 
complete learning audit is a must. That includes measuring cognitive and behavioral changes as well 
as tangible improvements in results.
Once these "three Ms" are addressed, managers will have a solid foundation for promoting learning 
organizations. Without this groundwork, progress is unlikely to be successful.
In order for learning to become a meaningful corporate goal, it must first be understood (Garvin, 
1993).
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Argyris C., Donald Schon, Theory in Practice, Jossey-Bass, 1974
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Using these "three Ms" as a framework, Garvin defines learning organizations as skilled at five main 
activities: systematic problem solving, experimentation with new approaches, learning from past 
experience, learning from the best practices of others, and transferring knowledge quickly and 
efficiently throughout the organization.
Each step is accompanied by a distinctive mind-set, tool kit, and pattern of behavior. Many 
companies practice these activities at some level. But few are consistently successful because they 
rely largely on happenstance and isolated examples. By creating systems and processes that support 
these activities and integrate them into the fabric of daily operations, companies can manage their 
learning more effectively (Garvin, 1993).
The five main activities are:
1. Systematic problem solving. This first activity remains on the philosophy and methods of the 
quality movement. Its underlying ideas, now widely accepted, include: 
 Relying on the scientific method, rather than guesswork, for diagnosing problems.
 Insisting on data, rather than assumptions, as background for decision making.
 Using simple statistical tools (histograms, Pareto charts, correlations, cause-and-effect 
diagrams) to organize data and draw inferences.
2. Experimentation. This activity involves the systematic searching for and testing of new 
knowledge. Using the scientific method is essential, and there are obvious parallels to systematic 
problem solving. But unlike problem solving, experimentation is usually motivated by opportunity 
and expanding horizons, not by current difficulties. It takes two main forms: ongoing programs and 
one-of a-kind demonstration projects.
3. Learning from past experience. Companies must review their successes and failures, assess 
them systematically, and record the lessons in a form that employers find open and accessible.
“Unfortunately, too many managers today are indifferent, even hostile, to the past, and by failing to 
reflect on it, they let valuable knowledge escape. A study of more than 150 new products concluded 
that the knowledge gained from failures are often instrumental in achieving subsequent successes. In 
the simplest terms, failure is the ultimate teacher” Garvin (1993) said.
4. Learning from others. Of course, not all learning comes from reflection and self-analysis. 
Sometimes the most powerful insights come from looking outside one’s immediate environment to 
gain a new perspective. Enlightened managers know that even companies in completely different 
businesses can be fertile sources of ideas and catalysts for creative thinking.