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Does Organizational Learning Lead to Competitive Advantage? an Evaluation of State Corporations in Kenya

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Does Organizational Learning Lead to Competitive Advantage? an Evaluation of State Corporations in Kenya International Journal of Scientific and Research Publications, Volume 7, Issue 8, August 2017 141 ISSN 2250-3153 Does Organizational Learning Lead to Competitive Advantage? An Evaluation of State Corporations in Kenya Gregory Makabila*, Mike Iravo **, WaitituGichuhi**, AssumptahKagiri * School of Human Resource Development, Jomo Kenyatta University of Agriculture and Technology Abstract-Despite the theoretical underpinning that organizational organizational learning may become the only sustainable source learning is positively associated with competitive advantage, of competitive advantage in the future. Garvin, Edmondson, & empirical support for the relationship between organizational Gino, (2008) concurred by noting that higher rate of learning is learning and competitive advantage is not adequate in strategic positively associated with competitive advantage. In essence, a management literature. The relative absence of such research learning organization purposefully designs and constructs its does not motivate leaders, managers and employees to adopt structure, culture and strategy to enhance and maximize the learning initiatives. This study examined the role of potential for organizational learning to take place (Dodgson, organizational learning in achieving competitive advantage of 1993; Fang et al.,2010). Learning organizations are seen to adapt State Corporations in Kenya with a focus on organization’s to unpredictable environments more quickly than their learning culture, learning processes, systems thinking and their competitors. “how difficult the learning process is, even with role in achieving competitive advantage of state corporations. built-in intent (Kransdorff, 2006)”. Organizational Learning The study assessed the mediating role of rate in the relationship efforts are no longer merely an option but rather a core necessity between the independent variables and competitive advantage. for organizations anywhere in the world, if they have to compete The study employed a descriptive, cross-sectional designs successfully (Singh and Kant, 2008). utilizing both quantitative and qualitative methods to gather data from 198 staff from 35 state corporations comprising of senior Empirical studies have demonstrated the significant role that managers, middle manager and non-management staff. learning plays in fostering performance in various industries and Regression analysis and structural equation modeling were used sectors. For example, the public sector (Ferguson et al., 2013), to make inference on the associations dependent, mediating and non-governmental organizations (Corfield et al., 2013), banking independent variables SPSS Version 22 and AMOS version 21. industry, (Oluikpe, 2012), small- to medium-sized enterprises, Qualitative was analyzed using ATLAS.ti. Results from both (Durst and Edvardsson, 2012), manufacturing organizations simple and multiple linear regression revealed that each of (Birasnav and Rangnekar, 2010), and human service and independent variables was positively and significantly associated professional services firms (Palte et al., 2011); and life insurance with competitive advantage. Rate of learning partially mediated business (Huang et al., 2011). These studies have clearly shown the relationship between learning process and competitive and that learning is an important determinant of organizational systems thinkng and competitive advantage. These results imply success measured by superior performance and competitive that managers need to implement strategies that will increase the advantage. rate of learning with the organization by focusing on concrete learning processes, learning culture and systems thinking Despite the clarity and consensus that organizational learning practices. Both formal and informal learning processes that leads to competitive advantage, adoption of learning practices are maximize utilization-focused knowledge acquisition and sharing still low among organizations, particularly for state corporations. approach are encouraged. To ensure staff or fully engaged in the This low adoption is partly blamed on inadequacies in past learning process, organizations need to invest in building research which have not sufficiently furnish managers with capacity of new and existing employees and partners to concrete prescriptions on how to become a learning organization, encourage reflective practices within the have targeted the partial audience by focusing only chief organization.Longitudinal studies can help strengthen similar executives and excluded departmental managers and non- future studies. managerial staff. for the Kenyan context, state corporations have been left out of most research even though they are tasked to Index Terms- Organizational Learning, Learning Processes, drive economic growth in highly dynamic and unpredictable Culture, Competitive Advantage environments, that requires them to compete. So, this study is aimed to contribute to the literature by examining the I. INTRODUCTION relationship between organization learning and competitive rganizational learning is largely theorized for its role in advantage. It will build of the work of other authors, (Garvin et improving performance and competitiveness of al., 2008; P. Senge, Art, & Roberts, 2001; P. M. Senge, 1990), by O organizations. Senge (1990) argued that the speed of exploring the mechanism through which organizational learning www.ijsrp.org International Journal of Scientific and Research Publications, Volume 7, Issue 8, August 2017 142 ISSN 2250-3153 variables (organizational culture, learning processes and systems capabilities. In conditions of open competition, rival firms will thinking) to influence competitiveness of state corporations. The seek to imitate, acquire or try to substitute for the resources that study will address the following research questions: are a source of advantage. Organizations facing uncertain, changing or ambiguous market conditions similar to those a) Does learning culture effect competitive advantage of state experienced by state corporations need to be able to learn. corporations? Theories posit that organizational learning can help firms amass b) What is the effectiveness of learning processes in fostering and use these kinds of resources and capabilities. For example, competitive advantage of state corporations? Karash (2002) identified the organizational learning concept as a c) What is the effect of systems thinking on competitive resource-oriented approach that is based on the ability of the advantage of state corporations? organization to turn standard resources that are available to all d) Does rate of learning mediate the relationship between into competences that are unique and non-imitable by organizational learning and competitive advantage of state competitors. corporations? 2.1.2. Organizational Learning This study has the following structure: Section 2 presents The concept of OL is a well-researched topic in a range of literature reviewed and research hypotheses. Section 3 contains academic disciplines from economics, management science, research methodology to test hypotheses and sets results of data psychology and sociology to anthropology (Easterby-Smith and analyses. Section 4 brings together the implications, limitations, Lyles, 2011). Senge, (2006) describes organizational learning as and directions for future research. ‘the changing of organizational behavior’ which occurs through a collective learning process. Organizational learning as a unique II. LITERATURE REVIEW resource that is critical in today’s dynamic and discontinuous environment of change and a crucial determinant of competitive 2.1. Theoretical Review advantage (Garvin, Edmondson, & Gino, 2008). Organizational learning emphasizes the development and application of new 2.1.1. Competitive Advantage knowledge that has the potential to change employees’ behavior The rationale for state corporations to seek and gain competitive which is ultimately tipped to strengthen the organization’s advantage is deeply rooted in the dynamic and challenging competitive position. A learning organization uses management environment under which they operated.State corporations are philosophy based on knowledge and understanding, as opposed facing fierce competition from each and facing fierce to fear, for the complexity of the real world. Therefore, competition from vibrant and innovation-minded private and organizational learning has the potential to promote a sense of civil society organizations(Buheji, n.d.). A highly educated and empowerment in the workforce that motivates them for a quality driven public continues to demand more efficient and continuous learning (Bryson et al., 2006). effective goods and servicesfrom all business actors in equal measure. The legal and political environment has become less For learning to be fully entrenched in the organization, it has to favorable to state corporations as they no longer operate as happens at various levels. Argyris and Schön, (1978) notes that monopolies and the compete under relatively the same laws as organizations learn through individuals acting as agents for them the private sector.Furthermore, the perception or corruption has and individuals’ learning activities, which in turn are facilitated worsened among public institutions during the past decade or inhibited by an ecological system of factors. Gareth Morgan, making it more difficult for state corporations to assure the (1986) points out that organizations cannot, themselves, learn; it public
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