"The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn." Alvin Toffler
To establish the importance of intimate relationship between leadership practices and knowledge management in the learning organisation, a learning organisation concept should be first identified and discussed, with the emphases on the specific features of contemporary organisation and the essential role of leaders when developing their organisations.
Furthermore, the processes of organisational learning and new knowledge creation should be described, elaborating further on the kinds of processes that leaders and managers should be involved in and responsible for. (Viitala, 2004)
Moreover, the specific managerial tasks in achieving competitive advantage should be presented, accentuating the critical importance of developing organisational competencies and intellectual capital.
Lastly, discussions should be taking place with regard to concepts such as organisational memory and knowledge management, as well as the role of information technology within these frameworks. (Viitala, 2004)
During the last decade, discussion on the determinants of successful organisations has concentrated on their ability to renew, learn and innovate. (Viitala, 2004) The notion of the "learning organization" has become one of the new buzzwords in the management, psychological and human resource development literature. (Garavan, 1997)
The concept of the learning organisation itself has gone through many combinations and permutations in terms of theoretical development and attempts at practical application. (Stewart, 2001) The fervent interest in the learning organisation and the underlying cause for recent emphasis on organisational learning (Blair, 1993) and knowledge management (Choo, 2001) stems from what Senge calls the age of globalisation, where one source of competitive advantage is the ability and rate at which an organisation can learn and react more quickly than its competitors. (Stewart, 2001)
The approach taken by organisational learning theorists is that those organisations that learn can manage the change process more effectively than can those who do not (Stewart, 1999) The basic rationale for such organizations is that in situations of rapid change only those that are flexible, adaptive and productive will excel. (Smith, 2001) Therefore, in order to keep a leading edge over its counterparts, the learning organisation has to keep abreast with the happenings in its internal and external environment. (Blair, 1993)
Classically, work has been thought of as being conservative and difficult to transform. (Blair, 1993) Learning was something divorced from work and innovation was seen as the necessary but disruptive way to change. (Blair, 1993) The industrial age contributed to management beliefs that do not perceive learning as productive, so that activities such as reading journals or sharing work-based stories in the cafeteria were not considered "real" work. (Prewitt, 2003) Furthermore, generic strategies that were used for the development of a competitive advantage were cost leadership (doing things cheaper), market differentiation (doing things better) and niche orientation, concentrating on tangible assets, such as property, production facilities, raw materials and physical technologies. (Dimitriades, 2005)
Subsequently, the globalization of business activity, the intensely competitive nature of global business and the greater demands being placed on businesses by customers (Pemberton, & Stonehouse, 2000) gradually led to an erosion of traditional sources of competitive advantage, demanding the adoption of complementary and/or supplementary strategic approaches. Change is now measured in terms of months not years as it was in the past (Blair, 1993) and tangible...