What is Organizational Learning Theory? Best Ways to Apply it in 2024

There is no greater proponent of talent development and employee growth than organizational learning. As a concept of creating, retaining, and transferring knowledge, it is a “must-study” for all leaders in 2024.

While the concept isn’t necessarily a new one, it still remains relevant in the world of performance management to this date. We do recommend you give the book On Organizational Learning (1978) by Chris Argyis and Donald Schön a look as it still is one of the most comprehensive resources on the topic. 

That being said, we wanted to put together a post that gives you a shorter summary and introduces you to the basics of organizational learning.

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What is Organizational Learning?

Organizational learning is a dynamic process that involves creating, retaining, and transferring knowledge within an organization. The main concept revolves around an organization’s ability to use the collective insights and experiences of its members to develop and adapt to new circumstances. 

At its very core, organizational learning is about how organizations learn and adapt to the continuously changing environment in which they operate.

The process of organizational learning typically occurs in two ways: through individuals and the organization as a whole. Individual learning happens when employees gain new skills or knowledge, which they then apply to their work. 

However, for this learning to benefit the entire organization, it must be captured and disseminated so that it becomes part of the organization’s collective knowledge base.

Organizational learning is often driven by the need to solve problems or to improve performance. When employees encounter new challenges, they seek out solutions, which often leads to new learning. 

This learning is then institutionalized through changes in processes, practices, and policies, ensuring that the organization as a whole benefits from the experiences of individuals.

What is Organizational Learning Theory?

Organizational learning theory is a concept that explains how organizations learn and adapt. It draws from various disciplines, including psychology, sociology, and business management. 

The theory was largely developed in the latter half of the 20th century, with significant contributions from scholars like Chris Argyris, Donald Schön, and Peter Senge.

Chris Argyris and Donald Schön, in their 1978 book “Organizational Learning: A Theory of Action Perspective,” introduced key concepts like single-loop and double-loop learning. Single-loop learning involves making changes to improve performance without altering the underlying beliefs and policies. In contrast, double-loop learning involves reevaluating and modifying the core assumptions and norms that guide behavior in the organization.

Peter Senge, in his 1990 book “The Fifth Discipline,” expanded on these ideas and popularized the concept of the “learning organization.” This concept emphasizes the importance of systems thinking, personal mastery, mental models, shared vision, and team learning in creating an organization that continuously evolves and improves.

Argyris, Chris, and Schön, Donald. On Organizational Learning. 1st ed., Addison-Wesley, 1978.

Senge, Peter M. The Fifth Discipline: The Art and Practice of the Learning Organization. Currency Doubleday, 1990.

Principles of Organizational Learning Theory

The principles of organizational learning theory provide a framework for understanding how learning occurs in organizations. These core  principles include:

1. Single-Loop & Double-Loop Learning: As previously mentioned, single-loop learning focuses on solving problems within the current set of norms and policies, while double-loop learning challenges and changes these underlying norms and assumptions. We will be diving further into these through the article.

2. The Learning Organization: This principle focuses on creating an environment where continuous learning is encouraged and supported. It involves five disciplines:
   1. Systems thinking: Understanding the organization as a whole.
   2. Personal mastery: Individual commitment to learning.
   3. Mental models: Examining and improving internal images of our surroundings.
   4. Shared vision: Building a common sense of purpose.
   5. Team learning: Learning collectively and leveraging group intelligence.

3. Knowledge Management and Information Sharing: Effective organizational learning relies on proper knowledge management, which involves capturing, distributing, and effectively using knowledge. 

4. Role of Leadership: Leaders play a crucial role in fostering a culture of learning. They must encourage experimentation, tolerate mistakes, and ensure that lessons learned are shared and implemented.

Why is Organizational Learning Theory Important?

There multiple reasons to put a heavy emphasis on organizational learning. Organizations in 2024 can’t afford to remain stagnangt and not learn from their mistakes and past experiences. Some of the key reasons why organizational learning theory is important includes but aren’t limited to:

Innovation and Competitive Advantage: Organizations that learn and adapt quickly are more likely to innovate and maintain a competitive edge. By continuously updating their knowledge and practices, they can stay ahead of industry trends and technological advancements.

Employee Development and Retention: A culture of learning contributes to employee growth and satisfaction. When employees feel that they are learning and developing new skills, the organizations they are a part of are bound te experience high retention rates.

Adaptability: In today’s ever-changing business landscape, the ability to adapt is key to survival and success. Organizational learning enables companies to respond to changes in the market, technology, and customer preferences effectively.

How to apply organizational learning in practice?

In order to provide you with some practical applications of organizational learning theory, we put together a list of example scenarios where organizational learning can be applied in various organizations in diffrentt fields:

Retail Industry: A retail chain uses organizational learning to optimize its supply chain management. By analyzing sales data and external feedback, the company identifies inefficiencies in its logistics and inventory processes and implements a more streamlined system, reducing costs and improving customer satisfaction.

Educational Institutions: A university applies organizational learning principles to enhance its curriculum design. Feedback from students and alumni, coupled with the latest educational research, drives continuous updates to course content, teaching methods, and technology use, ensuring relevance and efficacy in learning.

Non-Profit Organizations: A non-profit dedicated to environmental conservation employs organizational learning to improve its advocacy strategies. By systematically reviewing the outcomes of past campaigns and incorporating new scientific findings, the organization refines its approach to effectively influence policy and public opinion.

Hospitality Sector: A hotel chain implements organizational learning to enhance guest experiences. By gathering and analyzing data on guest preferences and feedback, the hotel modifies its services and amenities, leading to improved customer and employee loyalty and higher ratings.

Financial Services: A bank integrates organizational learning in its risk management practices. Continuous analysis of market trends and customer behavior helps the bank anticipate and mitigate financial risks more effectively, ensuring long-term stability and customer trust.

Types of Organizational Learning

Argyris and Schön explain the different types of learning that take place in an organizational context through Single Loop, Double Loop, and Deutero learning. Below you will find the definition of Single Loop learning as well as the definitions of Double Loop and Duetero Learning. You will also find examples to each of those learning types.

1. Single Loop Learning

Single Loop Learning is the most basic form of learning in an organizational context. It is characterized by a straightforward process where errors are detected and corrected without necessarily examining or altering the underlying policies and objectives.

Example of Single Loop Learning

Consider a customer service department that receives complaints about slow response times. If the department simply decides to hire more staff to reduce the wait time, it’s employing Single Loop Learning. The solution is direct and doesn’t challenge the existing norms or procedures beyond addressing the immediate problem.

2. Double Loop Learning

Double Loop Learning, a more complex form, involves not only detecting and correcting errors but also reflecting on and reevaluating the underlying norms, policies, and objectives that lead to the errors.

Example of Double Loop Learning

Building on the previous example, if the customer service department decides to reevaluate its entire approach to customer service – questioning whether their current processes, attitudes, or understanding of customer needs are effective – they are engaging in Double Loop Learning. This might lead to a comprehensive restructuring of how customer service is delivered, which could include new training programs, a different approach to customer interaction, or a redefinition of service goals.

3. Deutero Learning

Deutero Learning, or learning about learning, is the most advanced of the three. It involves understanding how one learns and improving this process. It’s about reflecting on and adjusting not just goals and strategies (as in Double Loop Learning) but the very process of learning itself.

Example of Deutero Learning

In a workplace scenario, a project team might engage in Deutero Learning by regularly reviewing not only their project outcomes but also their approach to problem-solving and decision-making. They might analyze their successes and failures in learning from past projects and adapt their learning processes accordingly. This could involve changing how they gather feedback, how they communicate internally, or how they adapt to unforeseen challenges.