Learning Organization: Why is it important to Organizations?

Learning is at the heart of a company’s ability

to adapt to rapidly changing environment.

John Browne (CEO, British Petroleum Company)

Introduction of Learning Organization

Learning, today, has become the essential part of our life. People who fail to learn new things, skills or acquire new knowledge have limited probability to success. The same applies to the organizations also. Organizations that fail to learn new skills and acquire new knowledge are being out of sight from this cutthroat, highly competitive business world. They are bound to improve themselves continuously or else bound to fail. In today’s dynamic environment, no organization can boast for being the best among the others until and unless they are continuously involving themselves in learning processes and preparing themselves to cope with the changes.


At this point, it will be fair enough to mention about learning organization–a practice in which people at all level in an organization are continuously learning new skills and knowledge to enhance their capabilities in order to achieve the desired results. Peter Senge was first to introduce the concept of learning organization (Senge, 1994). He once stated in an interview, that a learning organization is a group of people working together to collectively enhance their capabilities to create results they really care about1 and popularized the concept of learning organization in his book “The Fifth Discipline”. Organizations, in present context, face huge and uncertain threat from factors of external environment. As a result, they have started to feel the need of creating the learning organization to facilitate the learning of their employees. However, it is vital to know about the importance and need of learning organization.

Importance of Learning Organization

With the perennial rise in competition and the constant changes that occur, organizations have started to realize the need for continuous transformation to cope with an adversity that may arise2. In this matter, learning organization can help organization to acquire new skills and knowledge required to cope with the change.

Also, the ability to learn faster than your competitors is the only lasting competitive advantage for an organization3. What is being practiced today, the set of rules that govern the organizations, the technologies that are being used and the human resources will also be obsolete in due course of time2. Organizations must, therefore, focus on building learning environment so that employees can learn new ideas, skills and knowledge every day and come up with creative ideas to lead the organizations towards greater successes. Organizations can facilitate learning environment in many ways such as: building libraries, motivating employees to be engaged in learning activities, involving employees in brainstorming activities, encouraging employees to share new ideas, skills and knowledge they have learned or acquired, and so on.

Learning alone is not enough to achieve success. Employees must be able to share what they have learned with each other. They must not be afraid to put forward their ideas, knowledge and most of all they should not be afraid to fail. Amy C. Edmonson puts this particular concept forward in her article “The Competitive Imperative of Learning”4. She has described this concept as psychological safety–a state of mind when people are not afraid to try new things not because they would not fail but because they are encouraged to fail as many times as they want to obtain one important skill which the organizations can develop into their core competency in near future.


Learning organization is also important to encourage employees to make them participate in decision-making process. When employees get involve in decision-making process and when they feel their voices are not left unheard, they tend to be motivated to do tasks more efficiently. Also, their level of dedication and loyalty towards the organizations will increase.

Learning organization can also help in enhancing the performance of the employees. Performance is increasingly determined by factors that cannot be overseen: intelligent experimentation, ingenuity, interpersonal skills, and resilience in the face of adversity, for instance4. Learning organization helps to identify opportunity where employees can learn new skills and enhance performance.

It also serves to reduce the cost that organizations face while carrying out the daily business activities because in learning organization voices of all the employees are heard. When employees feel that their ideas and voices are welcomed they are motivated to offer ways to reduce costs incurred in the organizations. This is one of the most important factors as to why organizations should change themselves into learning organization. Reducing cost and increasing profits is the ultimate goal of the organization, which is supported by learning organization.

When learning organizations are created employees will have knowledge about how to link resources better to customer needs. This is because there is more open communication system in organizations and employees are motivated to collect data from customers about their needs and want, analyze the ongoing trends and are update themselves about the recent happenings in the markets.

Communication is very vital in an organization to maintain the free flow of important information across the organization. Learning organization breaks the traditional approach of holding information by top-level management and ensures the flow of information to every department and employees according to the need. Easy availability of information help employees to perform their task effectively and in return leads to increased organizational effectiveness.

Last but not the least learning organization is needed because the times demand a practice of life-long learning5.


  1. Fulmer, Robert M., Keys, J. Bernard. (1998). A Conversation with Peter Senge: new developments in organizational learning. Organizational Dynamics, 33-42.
  2. Shakya S. Learning Organization. KDBC Convergence. November 2011. pp. 2.
  3. Aggestam, L.2006.Learning Organization or knowledge Management: which came first, the chicken or the egg? Vol.35, No. 3A.
  4. Edmonson, Amy C. The Competitive Imperative of Learning. Harvard Business Review. July-August 2008. pp. 65.
  5. Hübner, S. Building a Learning Organization. January 2002. pp. 16.