Organizational learning: a review of some literatures

Organization Studies, Summer, 1993 by Mark Dodgson

Such features of the context of adaptation lead to a tendency to substitute exploitation of known alternatiges for the exploration of unknown ones.' (March 1991: 85)

Another problem involved in learning is 'unlearning', or forgetting past behaviour which is redundant or unsuccessful. This is very important for firms (Clark et al. 1987), and is a crucial feature of Hedberg's (1981) analysis:

'Knowledge grows, and simultaneously it becomes obsolete as reality changes. Understanding involves both learning new knowledge and discarding obsolete and misleading knowledge. The discarding activity -- unlearning -- is as important a part of understanding as is adding new knowledge. In fact, it seems as if slow unlearning is a crucial weakness of many organizations.' (1981: 3)

A wide range of sources of firm learning have been suggested. R&D is a key source, and, additionally, from a development economics perspective, Hobday (1990) describes: learning via joint ventures; by installing capital goods, training, hiring key individuals, reverse engineering, designing, imitating inward investors; and through assembly and mass manufacturing, exporting and investment abroad. The implications of these analyses is that learning occurs in a number of functions within the firm: research, development, design, engineering, manufacturing, and marketing, and externally, and they suggest how important it can be to elicit and utilize information from all these sources. The sources of learning may vary over time with industry, technology and product life cycles, according to the aims of the firm (Mody 1990). Thus with the initial stages of industrial growth, and technology and product development and diffusion, learning may focus on overcoming uncertainties. In later stages, the focus of learning may be attempts to achieve benefits of scale. Beyond this, efforts may focus on regeneration or de-maturity.

Particularly important for innovation in firms is learning from customers and users (von Hippel 1988; Stinchcombe 1990; Rosenberg 1982). This 'external' learning provides an important learning process. Bandura (1977) emphasizes the way people learn by watching before they perform, the way they can profit from the successes and mistakes of others as well as from their own experiences. 'The capacity to learn by observation enables people to acquire large, integrated patterns of behaviour without having to form them gradually by tedious trial and error.' (1977: 12)

The innovation literature describes this when it distinguishes between 'leader' and 'follower' strategies (Freeman 1982), with some firms bearing high risks and costs in the expectation of super profits and others content to entertain less risky and profitable strategies. Recently, some of the research in this tradition which examines collaboration between firms, in its various forms -- joint ventures; strategic alliances; R&D contracts -- sees it as an opportunity to learn from partners (Ciborra 1991; Dodgson 1993b). Whipp et al. (1990) describe an example of the way managers and engineers in competing firms with shared values and aims learn directly from one another. There would, however, be considerable value in wider research to examine the ways in which vicarious learning manifests itself in organizational change. Such research would have significance for better understanding of organizational behaviour in a variety of relationships -- customer/supplier and competitive -- and may have some import for mergers and acquisitions.