A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A learning organization has five main features; systems thinking, personal mastery, mental models, shared vision and team learning. The Learning organization concept was coined through the work and research of Peter Senge and his colleagues (Senge, 1990). It encourages organizations to shift to a more interconnected way of thinking. Organizations should become more like communities that employees can feel a commitment to. They will work harder for an organization they are committed to.
Organizations do not organically develop into learning organizations; there are factors prompting their change. As organizations grow, they lose their capacity to learn as company structures and individual thinking becomes rigid. When problems arise, the proposed solutions often turn out to be only short term (single loop learning) and re-emerge in the future. To remain competitive, many organizations have restructured, with fewer people in the company. This means those who remain need to work more effectively. To create a competitive advantage, companies need to learn faster than their competitors and to develop a customer responsive culture. Argyris identified that organizations need to maintain knowledge about new products and processes, understand what is happening in the outside environment and produce creative solutions using the knowledge and skills of all within the organization. This requires co-operation between individuals and groups, free and reliable communication, and a culture of trust.
There is a multitude of definitions of a learning organization as well as their typologies. According to Peter Senge, a learning organization exhibits five main characteristics: systems thinking, personal mastery, mental models, a shared vision, and team learning.
Systems thinking. The idea of the learning organization developed from a body of work called systems thinking. This is a conceptual framework that allows people to study businesses as bounded objects. Learning organizations use this method of thinking when assessing their company and have information systems that measure the performance of the organization as a whole and of its various components. Systems thinking states that all the characteristics must be apparent at once in an organization for it to be a learning organization. If some of these characteristics are missing then the organization will fall short of its goal. However O’Keeffe believes that the characteristics of a learning organization are factors that are gradually acquired, rather than developed simultaneously.
Personal mastery. The commitment by an individual to the process of learning is known as personal mastery. There is a competitive advantage for an organization whose workforce can learn more quickly than the workforce of other organizations. Individual learning is acquired through staff training and development, however learning cannot be forced upon an individual who is not receptive to learning. Research shows that most learning in the workplace is incidental, rather than the product of formal training, therefore it is important to develop a culture where personal mastery is practiced in daily life. A learning organization has been described as the sum of individual learning, but there must be mechanisms for individual learning to be transferred into organizational learning.
Mental models. The assumptions held by individuals and organizations are called mental models. To become a learning organization, these models must be challenged. Individuals tend to espouse theories, which are what they intend to follow, and theories-in-use, which are what they actually do. Similarly, organizations tend to have ‘memories’ which preserve certain behaviours, norms and values. In creating a learning environment it is important to replace confrontational attitudes with an open culture that promotes inquiry and trust. To achieve this, the learning organization needs mechanisms for locating and assessing organizational theories of action. Unwanted values need to be discarded in a process called ‘unlearning’. Wang and Ahmed refer to this as ‘triple loop learning.’
Shared vision. The development of a shared vision is important in motivating the staff to learn, as it creates a common identity that provides focus and energy for learning. The most successful visions build on the individual visions of the employees at all levels of the organization, thus the creation of a shared vision can be hindered by traditional structures where the company vision is imposed from above. Therefore, learning organizations tend to have flat, decentralized organizational structures. The shared vision is often to succeed against a competitor, however Senge states that these are transitory goals and suggests that there should also be long term goals that are intrinsic within the company.
Team learning. The accumulation of individual learning constitutes Team learning. The benefit of team or shared learning is that staff grow more quickly and the problem solving capacity of the organization is improved through better access to knowledge and expertise. Learning organizations have structures that facilitate team learning with features such as boundary crossing and openness. Team learning requires individuals to engage in dialogue and discussion; therefore team members must develop open communication, shared meaning, and shared understanding. Learning organizations typically have excellent knowledge management structures, allowing creation, acquisition, dissemination, and implementation of this knowledge in the organization.
The main benefits are;
- Maintaining levels of innovation and remaining competitive
- Being better placed to respond to external pressures
- Having the knowledge to better link resources to customer needs
- Improving quality of outputs at all levels
- Improving Corporate image by becoming more people oriented
- Increasing the pace of change within the organization
Even within or without learning organization, problems can stall the process of learning or cause it to regress. Most of them arise from an organization not fully embracing all the necessary facets. Once these problems can be identified, work can begin on improving them.
Some organizations find it hard to embrace personal mastery because as a concept it is intangible and the benefits cannot be quantified;, personal mastery can even be seen as a threat to the organisation. This threat can be real, as Senge points out, that “to empower people in an unaligned organisation can be counterproductive”. In other words, if individuals do not engage with a shared vision, personal mastery could be used to advance their own personal visions. In some organisations a lack of a learning culture can be a barrier to learning. An environment must be created where individuals can share learning without it being devalued and ignored, so more people can benefit from their knowledge and the individuals becomes empowered. A learning organization needs to fully accept the removal of traditional hierarchical structures.
Resistance to learning can occur within a learning organization if there is not sufficient buy-in at an individual level. This is often encountered with people who feel threatened by change or believe that they have the most to lose. They are likely to have closed mind sets, and are not willing to engage with mental models. Unless implemented coherently across the organization, learning can be viewed as elitist and restricted to senior levels. In that case, learning will not be viewed as a shared vision. If training and development is compulsory, it can be viewed as a form of control, rather than as personal development. Learning and the pursuit of personal mastery needs to be an individual choice, therefore enforced take-up will not work.
In addition, organizational size may become the barrier to internal knowledge sharing. When the number of employees exceeds 150, internal knowledge sharing dramatically decreases because of higher complexity in the formal organizational structure, weaker inter-employee relationships, lower trust, reduced connective efficacy, and less effective communication. As such, as the size of an organizational unit increases, the effectiveness of internal knowledge flows dramatically diminishes and the degree of intra-organizational knowledge sharing decreases.
Some problems and issues In our discussion of Senge and the learning organization we point to some particular problems associated with his conceptualization. These include a failure to fully appreciate and incorporate the imperatives that animate modern organizations; the relative sophistication of the thinking he requires of managers (and whether many in practice they are up to it); and questions around his treatment of organizational politics. It is certainly difficult to find real-life examples of learning organizations (Kerka 1995). There has also been a lack of critical analysis of the theoretical framework.
Based on their study of attempts to reform the Swiss Postal Service, Matthias Finger and Silvia Bűrgin Brand (1999) provide us with a useful listing of more important shortcomings of the learning organization concept. They conclude that it is not possible to transform a bureaucratic organization by learning initiatives alone. They believe that by referring to the notion of the learning organization it was possible to make change less threatening and more acceptable to participants. ‘However, individual and collective learning which has undoubtedly taken place has not really been connected to organizational change and transformation’. Part of the issue, they suggest, is to do with the concept of the learning organization itself. They argue the following points. The concept of the learning organization:
Focuses mainly on the cultural dimension, and does not adequately take into account the other dimensions of an organization. To transform an organization it is necessary to attend to structures and the organization of work as well as the culture and processes. ‘Focussing exclusively on training activities in order to foster learning… favours this purely cultural bias’ .
Favours individual and collective learning processes at all levels of the organization, but does not connect them properly to the organization’s strategic objectives. Popular models of organizational learning (such as Dixon 1994) assume such a link. It is, therefore, imperative, ‘that the link between individual and collective learning and the organization’s strategic objectives is made’. This shortcoming, Finger and Brand argue, makes a case for some form of measurement of organizational learning – so that it is possible to assess the extent to which such learning contributes or not towards strategic objectives
In the work of Peter Senge 
The Fifth Discipline 
Peter Senge stated in an interview that a learning organization is a group of people working together collectively to enhance their capacities to create results they really care about. Senge popularized the concept of the learning organization through his book The Fifth Discipline. In the book, he proposed the following five disciplines:
- Systems thinking: Organizations are a system of interrelationships. To become more successful we need to analyze these relationships and find the problems in them. This will allow an organization to eliminate the obstacles to learning
- Personal mastery: An individual holds great importance in a learning organization. Personal development holds as much important as commitment and work for the organization. Employees need to grow and work on their own goals.
- Mental Models: This is the company culture and the diverse theories and mindsets that serve as a framework for the functioning of the organization. Learning organizations look for how these affect organizational development.
- Shared Vision: A learning organization's employees all share a common vision. Personal goals must be in sync with the goals and vision of the organization.
- Team Learning: The importance of dialogue and group discussion. For a team to learn, they must be in sync and reach agreement.
Challenges in the transformation to a Learning Organization 
The book The Dance of Change states there are many reasons why an organization may have trouble in transforming itself into a learning organization. The first is that an organization does not have enough time. Employees and management may have other issues that take priority over trying to change the culture of their organization. The team may not be able to commit the time an institution does not have the appropriate help or training. For an organization to be able to change, it needs to know the steps necessary to solve the problems it faces. As a solution, a mentor or coach who is well versed in the learning organization concept may be necessary.
Also, the change may not be relevant to the organization's needs. Time should be spent on the actual issues of the organization and its daily issues. To combat this challenge, a strategy must be built. The organization should determine what its problems are before entering into the transformation. Training should remain linked to business results so that it is easier for employees to connect the training with everyday issues.
Problems Organizational Learning addresses 
Some of the issues that Learning Organizations wanted to address within Institutions is fragmentation, competition and reactiveness. Fragmentation is described as breaking a problem into pieces. For example each organization has an accounting department, finance, operations, IT and marketing. Competition occurs when employees are trying to do better or "beat" others in an assignment instead of collaborating. Reactiveness occurs when an organization changes only in reaction to outside forces. Only doing an assignment because it is assigned and not continually creating. These are deeply rooted in many of today's organizations as a product of capitalism and the drive to generate more profit.
The change becoming a community and a learning organization is called a "Galilean Shift". The organization is compared[by whom?] to the Galileo Galilei heliocentric revolution that changed the view that earth was the center of the universe.
See also 
- Knowledge management
- Knowledge sharing
- Mental models
- Organisational learning
- Organizational structure
- Systems Thinking
- Team learning
- Pedler, M., Burgogyne, J. and Boydell, T. 1997. The Learning Company: A strategy for sustainable development. 2nd Ed. London; McGraw-Hill.
- O’Keeffe, T. 2002. Organizational Learning: a new perspective. Journal of European Industrial Training, 26 (2), pp. 130-141.
- Senge, P.M. 1990. The Fifth Discipline. London: Century Business.
- Chawla and Renesch 1995 p.16
- Hipsher, Brian; Grant Lindstrom, Don Parks (1997). "The Strategic Dilemma". Journal of Business and Society 10 (2): 184.
- Argyris, C. 1999. On Organizational Learning. 2nd Ed. Oxford: Blackwell Publishing.
- Wang, C.L. and Ahmed, P.K. 2003. Organizational learning: a critical review. The learning organization, 10 (1) pp. 8-17.
- McHugh, D., Groves, D. and Alker, A. 1998. Managing learning: what do we learn from a learning organization? The Learning Organization. 5 (5) pp.209-220.
- Easterby-Smith, M. , Crossan, M., and Nicolini, D. 2000. Organizational learning: debates past, present and future. Journal of Management Studies. 37 (6) pp 783-796.
- Serenko, A., Bontis, N. and Hardie, T. 2007. Organizational size and knowledge flow: A proposed theoretical link. Journal of Intellectual Capital, 8 (4), pp. 610-627.
- Fulmer and Keys 1998
- Learning Organizations (2005) p.190
- Senge (1999) p.66
- Chawla and Renesch 1995 p.17
- (2005). Learning Organization. A to Z of Management Concepts & Models., pp. 190–191.
- Argyris, Chris. (1999). On Organizational Learning. Massachusetts: Blackwell Publishers Inc.
- Barker, Randolph T. & Camarata, Martin R. *(1998). The role of Communication in Creating and Maintaining a Learning Organization: Preconditions, Indicators, and Disciplines, The Journal of Business Communication, 35 (4), 443-467.
- Chawla, Sarah & Renesch, John.(1995). Learning Organizations
- Fulmer, Robert M., Keys, J. Bernard. (1998). A Conversation with Peter Senge: New Developments in Organizational Learning Organizational Dynamics, 27 (2), 33-42.
- Papa, M. J., Daniels, T. D., & Spiker, B. K. (2008). Organizational Communication: Perspectives and Trends. Thousand Oaks: Sage Publications.
- Schwandt, David R., Marquardt, Michael J. (2000). Organizational Learning. Boca Raton: St.Lucie Press.
- Senge, Peter M. (1990). The Fifth Discipline: The art and practice of the learning organization, Doubleday, New York.
- Senge, Peter., Kleiner, Art., Ross, Richard., Roth, George., Smith, Bryan. (1999). "The Dance of Change" New York: Currency Doubleday.
- Senge, Peter M., Kleiner, Art., Roberts, Charlotte., Ross Richard B., Smith, Bryan J. (1994). The Fifth Discipline Fieldbook New York: Currency Doubleday.