Song studies the learning organization cultural aspects and knowledge creation process as they relate to determinations of the perceived organizational performance improvement in the Korean context. The researcher used a DLOQ scale which was based on 21 items scale developed from Yang, Watkins and Marsick (2004). The 633 samples used in five subsidiary companies, which include insurance, electronics, construction, service, and heavy industrial areas of the Korean private conglomerate. The survey instrument was used with the DLOQ; each of the dimensions has three questions to measure each of the seven dimensions of the learning organization environment. The finding found that the relationship between learning organization cultural, knowledge creation, and organizational performance were determined to be positive and significant relationships. With regard to the perceived organizational performance, the researcher initially intended to measure two different levels of performance financial-related and knowledge-related. However, both independent constructs were found to be more related to knowledge-related performance improvement than to perceived level of the organizational financial performance.
Demers (2009) explored the relationship between a firm's implementation of learning organization dimensions or characteristics and organizational performance. Organizational performance measured two profitability ratios (i.e. Return on assets and return on sales). Financial data for these two ratios were collected over an eleven year period, from 1995 to 2005. The researcher used a DLOQ scale which was based on 43 items scale developed from Marsick and Watkins (2003). The sample surveyed 80 manager firms from the public pharmaceutical companies in the United State. Results indicated that the size of the firm, as measured by the number of employees, was not a significant factor for organizational performance. Therefore, the firms were not categorized by size. However, the researcher gave credence to the notion that a firm's adoption and implementation of 'learning organization' characteristics or dimensions is a means of continuous improvement in performance.
Tseng (2010) observed the relationship between learning organization practices, organizational commitment and organizational effectiveness. The study was done in the context of SMEs (incubating start-up small and medium-sized enterprises and awarded outstanding small and medium-sized enterprises) in Taiwan. The researcher used a DLOQ scale which was based on 21 items scale developed from Watkins and Marsick (1999, 2003) to identify the learning organization practices in organizations. A sample of 300 SMEs were investigated. The survey used the DLOQ which was reduced to seven factors to examine the impact of learning organization practices on SMEs' organizational commitment and effectiveness. The scale measuring learning organization practices showed appropriate fit between the proposed measurement model and the data. The results found that learning organization practices have a positive effect on organizational commitment. Learning organization practices have a positive effect on organizational effectiveness and also organizational commitment has a positive relationship with organizational effectiveness. Given these good results, this study found that the scales of learning organization practices, organizational commitment, and organizational effectiveness provide very good supporting evidence of construct validity.
Weldy and Gillis (2010) examined the perceptions of managers, supervisors, and employees from different organizations relevant to the seven dimensions of a learning organization and the two dimensions of knowledge and financial performance. The sample surveyed 143 organizational members from seven local organizations (medium-to-large manufacturing and service firms). In their study, the dimensions of the learning organization used the DLOQ scale based on 43 items developed by Watkins and Marsick (1997). The results indicated significant effects for the level of learning organization dimensions and the two performance dimensions. Moreover, evidences also revealed significant differences across learning dimension levels (empowerment and system connection), and across organizations for six of the learning dimensions including all except continuous learning. The performance dimensions showed managers higher than supervisors and employees on financial performance, and managers higher than employees on knowledge performance.
Akhtar, Arif, Rubi, and Naveed (2011) investigated the impact of organizational learning on organizational performance of higher education institutes in Pakistan. The sample surveyed 150 respondents from faculty and administrative staff. In their study, the dimensions of the organizational learning were used the DLOQ scale which was based on 21 items developed by Yang, Watkins, and Marsick (2004). The results indicated that continuous learning, team learning, embedded system, empowerment, and strategic leadership have no significant impact on organizational performance. There are two dimensions (inquiry and dialogue and system connection), that have a positive and significant impact on organizational performance. Besides, empirical evidences indicated that organizational learning has a significant impact on organizational performance when moderated by organizational culture . Therefore, the need to retain highly motivated staff is more important for higher educational institutes as they are the provider of learning opportunities.
Awasthy and Gupta (2011) studied the learning orientation in manufacturing and service firms in India. Their study adopted the smaller forms of DLOQ with 21 items developed by Yang (2003) to determine the theoretical relationships of the learning culture and performance variables (financial and knowledge performance). Convenience sampling was collected from 235 executives working in domestic private, MNCs and public sector organization operating in India-NCR. The results indicated that overall structural level dimensions (embedded system, system connection, strategic leadership, and empowerment) have a significant and greater impact on financial and knowledge performance outcomes in both the manufacturing and service sectors. But the people level dimensions (continuous learning, inquiry and dialogue, and team learning) were more likely to influence learning orientation in the service sectors as compared to the manufacturing sectors. In addition, empirical evidences indicated that the manufacturing sector emphasizes greater on the significant role of systems, effective information collection, storage mechanisms, leadership, continuous learning, shared vision, and team dynamics. On the other hand, service sector supports the importance of individual and group issues.
Table 2.2
Summary of Literature on Learning Organization and Organizational Performance
Author/Year
Respondents
Independent Variables
Dependent Variables
Mediator/Moderator
Findings
McHargue (1999)
264 CEOs from nonprofit organizations in the United State.
-Continuous learning
-Inquiry and dialogue
-Team learning
-System to capture learning
-Empowerment
-Connect to the environment
-Leadership for learning
-Financial performance
-Knowledge performance
-Mission performance
-
-CL -> FP, KP, MP (+/S)
-ID -> FP, KP, MP (+/S)
-TL -> FP, KP, MP(+/S)
-System to capture learning -> FP, KP, MP (+/S)
-EM -> FP, KP, MP (+/S)
-Connect to the environment -> FP, KP, MP (+/S)
-Leadership for learning-> FP, KP, MP (+/S)
Ellinger, Ellinger,Yang, and Howton (2002)
208 logistics managers in US.
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Financial performance
-
- LO -> FP (+/S)
Yang (2003) and Yang, Watkins, and Marsick (2004)
836 multiple organizations: service, manufacturing and public organizations in US.
-Continuous learning
-Inquiry and dialogue
-Team learning
-Empowerment
-Financial performance
-Knowledge performance
-Embedded system
-System connection
-Strategic leadership
-CL, ID, TL, EM (indirect) -> FP, KP (+/S)
-ES (indirect)-> FP, KP (+/S)
-SC -> KP (+/S), SC (indirect) -> FP (+/S)
-SL ->FP (+/S), SL (indirect) -> KP (+/S)
Note. (+)=Positive; S=Significant; CL=Continuous Learning; ID=Inquiry and Dialogue; TL=Team Learning; ES=Embedded System; EM=Empowerment; SC=System Connection; SL=Strategic Leadership; FP=Fiinancial Performance; KP=Knowledge performance; MP=Mission performance.
Table 2.2 (Continued)
Summary of Literature on Learning Organization and Organizational Performance
Author/Year
Respondents
Independent Variables
Dependent Variables
Mediator/Moderator
Findings
Davis (2005)
2,000 firms in US.
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
- LO -> OP (+/S)
Kumer and Idris (2006)
238 from private colleges in Malaysia
DLOQ
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Knowledge performance
-
- LO -> KP (+/S)
Chajnacki (2007)
259 from large, publicly-owned companies in US.
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
- LO -> OP (+/S)
Note. (+)=Positive; S=Significant; DLOQ=The Dimension of Learning Organization Questionnaire; LO=Learning Organization; OP=Organizational Performance; KP=Knowledge performance.
Table 2.2 (Continued)
Summary of Literature on Learning Organization and Organizational Performance
Author/Year
Respondents
Independent Variables
Dependent Variables
Mediator/Moderator
Findings
Herrera (2007)
275 small, medium, and large levels in the record company
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
- LO -> OP (+/S)
Wang and Yang (2007)
919 employees in nine companies in China
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Financial performance
-Job satisfaction
- LO -> FP (+/S)
-Job satisfaction -> FP (+/NS)
Lien, Hung, Yang, and Li (2008)
679 HR directors from
five medium-to-large private corporations
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
-LO -> OP (+/S)
Note. (+)=Positive; S=Significant; NS= No Significant; DLOQ=The Dimension of Learning Organization Questionnaire; LO=Learning Organization; FP=Financial performance; OP=Organizational Performance.
Table 2.2 (Continued)
Summary of Literature on Learning Organization and Organizational Performance
Author/Year
Respondents
Independent Variables
Dependent Variables
Mediator/Moderator
Findings
Song (2008)
633 from five companies in Korea.
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance improvement
-Knowledge creation
- LO -> OP (+/S)
- LO -> Knowledge creation (+/S)
-Knowledge creation -> OP (+/S)
Demers (2009)
80 manager firms from the public pharmaceutical companies in US.
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
- LO -> OP (+/S)
Tseng (2010)
300 SMEs in Taiwan
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational effectiveness
Organizational commitment
- LO -> Organizational effectiveness (+/S)
- LO -> Organizational commitment (+/S)
-Organizational commitment -> Organizational effectiveness (+/S)
Note. (+)=Positive; S=Significant; DLOQ=The Dimension of Learning Organization Questionnaire; LO=Learning Organization; OP=Organizational Performance.
Table 2.2 (Continued)
Summary of Literature on Learning Organization and Organizational Performance
Author/Year
Respondents
Independent Variables
Dependent Variables
Mediator/Moderator
Findings
Weldy and Gillis (2010)
143 organizational members from seven local organizations (medium-to-large manufacturing and service firms).
DLOQ:
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Organizational performance
-
- LO -> OP (+/S)
Akhtar, Arif, Rubi, and Naveed (2011)
150 respondents from faculty and administrative staff of higher education institutes in Pakistan.
-Organizational learning
-Continuous learning
-Inquiry and dialogue
-Team learning
-Embedded system
-Empowerment
-System connection
-Leadership
-Organizational performance
Organizational culture
-CL -> OP (+/NS)
-ID -> OP (+/S)
-TL -> OP (-/NS)
-ES -> OP (-/NS)
-EM ->OP (+/NS)
-SC ->OP (+/S)
-Leadership->OP (-/NS)
-OL ->organizational culture->OP (+/S)
Awasthy and Gupta (2011)
235 executives working in domestic private, MNCs and public sector organization in India.
People Level
-Continuous learning
-Inquiry and dialogue
-Team learning
Structural Level
-Embedded system
-Empowerment
-System connection
-Strategic leadership
-Financial performance
-Knowledge performance
-
- People Level and Structural Level-> FP (+/S)
- People Level and Structural Level-> -> KP (+/S)
Note. (+)=Positive; (-)=Negative; S=Significant; NS= No Significant; DLOQ=The Dimension of Learning Organization Questionnaire; LO=Learning Organization; CL=Continuous Learning; ID=Inquiry and Dialogue; TL=Team Learning; ES=Embedded System; EM=Empowerment; SC=System Connection; SL=Strategic Leadership; OL=Organizational Learning: FP=Fiinancial Performance; KP=Knowledge performance; OP=Organizational Performance.
Based on Table 2.2, most of studies have tested the relationship between the dimension of learning organization questionnaire (DLOQ) and organizational performance (Davis, 2005; Kumer & Idris, 2006; Chajnacki, 2007; Herrera, 2007; Lien, Hung, Yang, & Li, 2008; Song, 2008; Demers, 2009; Tseng, 2010; Weldy & Gillis, 2010), financial performance (Ellinger et al., 2002; Wang & Yang, 2007), knowledge performance (Kumer & Idris, 2006). There are two studies that have tested the relationship within each dimension of the learning organization questionnaire (DLOQ) and organizational performance (McHargue, 1999; Akhtar et al., 2011). Their findings found inconsistent results in the relationship between the different dimensions of the learning organization and performance. The linkage between continuous learning, empowerment and organizational performance were positive insignificant relationships, while team learning, embedded system, and leadership were negative insignificant relationships (Akhtar et al., 2011). On the other hand, a study by McHargue (1999) found that continuous learning, team learning, system to capture learning, empowerment, and leadership were positive significant relationship with performance. Therefore, the present study needs to investigate the results between the different dimensions of the learning organization and organizational performance.
2.10 Empirical Studies concerning Learning Organization, Organizational Innovativeness and Organizational Performance
This section realizes to the learning organization, organizational innovativeness and organizational performance literature by reporting empirical studies from many researchers from many enterprises such as Small Enterprises (Eshlaghy & Maatofi, 2011), Small and Medium Enterprises (Calantone, Cavusgil, & Zhao, 2002; Hult, Hurley, & Knight, 2004; Keskin, 2006; Lin, 2006; Lin, Peng, & Kao, 2008; Ussahawanitchakit, 2008; Dhamadasa, 2009; Rhee, Park, & Lee, 2010; Salim & Sulaiman, 2011; Suliyanto & Rahab, 2012, and Small-Medium-Large Enterprises (Eris & Ozmen, 2012; Lee & Tsai, 2005; Jimenez-Jimenez, Valle, & Hernandez-Espallardo,2008).
Calantone, Cavusgil, and Zhao (2002) investigated a casual relationship between learning orientation, firm innovation capability, and firm performance. The sample surveyed 187 vice presidents from manufacturing and service SME firms in the United States. The sample was split into two groups based on the mean of organization age. Organizations above the mean were defined as old, and those below the mean were defined as young. The findings found that there is no significant difference between the young and old organizations. The moderating effect of organization age on the relationship between learning orientation and firm innovativeness is supported by the study. The researchers suggested that the effect of learning orientation on firm innovativeness is affected by the length of time the organization has been in business. Older firms are more likely to employ knowledge learned and turn it into innovative activities. Younger firms need to establish an efficient mechanism for rapidly internalizing knowledge. The empirical tests have not revealed a moderating effect of organization age on the relationship between learning and performance. However, learning orientation facilitates the generation of resources and skills essential for firm performance and learning orientation and is central not only for innovation but also for the organization's other activities.
Hult, Hurley, and Knight. (2004) studied the relationship between market orientation, entrepreneurial orientation, and learning orientation as a key antecedents to innovativeness as well as direct relationships between innovativeness and business performance. The 181 marketing managers of the industrial - based SME firm in the United States were investigated. Three variables of performance were tested, namely growth in sales, profitability, and market share. The results found that innovativeness is positively significant related to business performance. Market orientation, learning orientation, and entrepreneurial orientation are positively significant related to innovativeness. On the other hand, the direct effect of learning orientation on performance is insignificant; suggesting that learning orientation must be mediated by some other construct, such as innovativeness, in order to have an effect on business performance. The researchers stated that learning orientation occurs primarily at the cultural level of the firm when members of an organization acquire knowledge via the learning process, that organization acquires the ability to be innovative.
Lee and Tsai (2005) evaluated the interrelationships between market orientation, learning orientation, business operation mode, innovativeness and business performance. There were 100 samples used in the study for the manufacturing and service small-medium-large firms in Taiwan. The results found that the factors of business operation mode have a dominant impact on a firm's innovativeness. The moderating effects of business operation mode of the relationship between market orientation, learning orientation, and innovativeness. Furthermore, market orientation, business operation mode, and learning orientation of a firm significantly affects innovativeness, and innovativeness significantly impacts on business performance. The indirect effect of market orientation, learning orientation, business operation mode via innovativeness have significant impact on business performance. The direct effect of market orientation and learning orientation also have significant impact on business performance. The researchers stated that market orientation, learning orientation, and innovativeness have been recognized as major factors of business performance both direct and indirect effects. Therefoure, a firm should not only emphasize on the improvement of market orientation, learning orientation and performance but also the development of its innovativeness including technical innovation, innovation management, and innovative ideas.
Keskin (2006) examined the relationship between market orientation, learning orientation, innovativeness, and firm performance in SMEs. The sample surveyed 157 managers from SMEs operating in Turkey. The result found that market orientation has no significant impact on firm innovativeness and firm performance. Firm innovativeness has a positive significant impact on firm performance in SMEs. Learning orientation has a positive significant influence on firm innovativeness, and also learning orientation mediates the relationship between market orientation and firm innovativeness. Market orientation has a positive significant impact on learning orientation in SMEs. Empirical evidence of this study asserts that learning orientation is an antecedent of firm innovativeness and firm performance. Aggregating and disseminating employees' and managements' learning throughout the organization with social and environmental factors, in essence, facilitates the development of a learning organization, which has the ability to improve and use technology effectively; create a more labor efficient organization structure; generate new markets; and become more competitive. Managers should leverage employee learning to a higher-level and advance knowledge management for organizational learning in SMEs.
Lin (2006) studied the relationship among organizational learning culture, absorptive capacity, structural organicity, organizational innovativeness, and organizational effectiveness. Data were collected from 246 SME business organizations in Taiwan. The learning culture was measured by a shorter version of the DLOQ. The results found that organizational learning culture has a positive significant effect on absorptive capacity and structural organicity. Structural organicity has a positive significant effect on organizational innovativeness, while organizational innovativeness has a positive significant effect on organizational effectiveness. In addition, absorptive capacity has a positive significant effect on organizational innovativeness and organizational effectiveness. Empirical evidences showed that organizational learning culture plays a crucial role to enhance organizational innovativeness, which is critical to organizational effectiveness. This study did not test the direct path between organizational learning culture and organizational effectiveness. The researcher stated that organizations rely on learning activities for knowledge and information. Learning culture is affected organizational processes such as their ability to innovate, which subsequently have an effect on performance outcomes.
Jimenez-Jimenez, Valle, and Hernandez-Espallardo (2008) studied the relationships between organizational learning, market orientation, innovation, and performance. Data was collected from 744 CEOs in the manufacturing and service of small-medium-large firms in Spain. The findings found that innovation has a positive and significant impact on performance. Both market orientation and organizational learning have a positive and significant impact on innovation. In addition, market orientation has a negative and no significant impact on performance, while organizational learning has a positive and significant impact on performance. This study also found that there is not a significant difference between the manufacturing and service firms. Researchers stated that organizational learning happens when it is supported by managers and by an appropriate learning infrastructure and culture which enhances creativity, openness to new ideas, experimentation, and constant improvement of individual knowledge, risk-taking behavior or system thinking.
Lin, Peng, and Kao (2008) researched the innovativeness effect of entrepreneurial orientation, market orientation and learning orientation on business performance. The sample surveyed 333 managers from SMEs in Taiwan. The results found that entrepreneurial orientation has a positive significant impact on market orientation and learning orientation, while market orientation positively correlated with learning orientation. Learning orientation has a positive significant impact on innovativeness. Innovativeness has a positive significant impact on business performance. In addition, learning orientation as a mediator between market orietntation and innovativeness has a positive and significant relationships. However, the indirect effect between entrepreneurial orientation and innovativeness via learning orientation have no significant impact. The researchers claimed that to achieve greater competitive advantage and better business performance, firms have to develop learning capabilities and employee alignment with corporate missions. Further, innovativeness may not only occur in the technology-intensive industries but also in labor-intensive industries.
Ussahawanitchakit (2008) studied the impacts of organizational learning on innovation orientation and firm efficiency of accounting firms in Thailand. Four dimensions of organizational learning are chosen as independent variables, including commitment to learning, shared vision, open-mindedness, and intra-organizational knowledge sharing. The sample of 115 top business executives, including managing directors and/or presidents of businesses of accounting firms were investigated. The results found that shared vision, open-mindedness, and intra-organizational knowledge sharing has significant positive and direct effects of accounting firms' innovation orientation, while the commitment to learning has no significant impact on innovation orientation. Likewise, innovation orientation has an important relationship with firm efficiency. Surprisingly, Commitment to learning, shared vision, and open-mindedness have no significant relationship with firm efficiency, and only intra-organizational knowledge sharing has a positive and significant impact on firm efficiency. The researchers stated that accounting firms are likely to acquire these strategies of organizational learning through a mediator of innovation orientation to improve firm efficiency, serve superior customer value, promote better competitive advantages, encourage greater competitiveness, and achieve outstanding performance.
Dhamadasa (2009) analyzed the relationship between organizational learning, innovation and performance. A sample of 222 manufacturing companies comprising of family and non-family SMEs in Australia were used. The three factors of organizational learning were commitment to learning, shared vision, and networking. The findings found that commitment to learning and shared vision have insignificant impact on innovation, while networking has a positive and significant impact on innovation. Commitment to learning and networking have no significant impact on performance, while shared vision has a positive and significant impact on performance. In addition, this study has tested the mediator between the independent variable and dependent variable. The indirect effect between commitment to learning and performance via innovation has a positive and significant and the indirect effect between shared vision and performance via innovation has a positive and significant impact. The indirect effect between networking and performance mediated by innovation has a positive and significant impact. This finding highlighted that when a family SME creates an innovation-oriented culture, that culture facilitates better performance from learning. Moreover, the effects of networks were found to be stronger in family SMEs for innovation than in non-family SMEs.
Rhee, Park, and Lee (2010) investigated the relationships between drivers of innovativeness and performance and the mediation of learning orientation for SMEs in Korea. The sample of 333 CEOs or senior managers of SMEs in South Korea were used. Empirical results found that market orientation has a significant effect on learning orientation. Entrepreneurial orientation also positively influenced learning orientation. Both market orientation and entrepreneurial orientation are critical factors in encouraging learning orientation. Learning orientation has a positive significant effect on innovativness, and innovativeness has a positive significant effect on performance. In addition, innovativeness has a positively influenced by market orientation via learning orientation, while the partial mediation of learning orientation has a positive and significant in the relationship between entrepreneurial orientation and innovativeness. The researchers indicated that learning orientation can play an intervening variable in the effects of the both factors (market orientation and entrepreneurial orientation) on innovativeness.
