Organizational Learning and Innovation Affect on Performance
1. Introduction
Organizations are in a continuous process of searching for strategies that would provide them with a competitive advantage. Efficiency in stable environments is achieved through standardized routines, division of labor and management control (Grant, 2005). However, recent changes in the business environment have compelled firms to search for new strategies for competitive edge as the conventional strategies have become obsolete (Chirico & Salvato, 2008). Economic globalization, which refers to integration of operations and markets in a borderless economic space (Johnson & Turner, 2003), and advances in information and communication technology (Hanna, 2010); are among the central environmental forces faced by contemporary organizations (Griffin & Moorhead, 2007; Roy, 2005).
In order to cope with the current external opportunities and threats, it is argued that organizations have to learn, that is, acquire new knowledge and skills that will improve their existing and future performance (Child, Faulkner, & Tallman, 2005; DiBella, 1998; Ortenblad, 2001). In fact, it is proposed that the only competitive advantage future companies will have is the ability of their managers to learn faster than competitors (Geus, 1988). Many other researchers suggest that the effective strategy for sustaining and improving a firm’s competitive edge and performance is organizational learning (e.g. Mavondo, Chimhanzi, & Stewart, 2005; Senge, 1990; Sinkula, Baker, & Noordewier, 1997).
Scholars also attest that new knowledge and skills obtained through learning enhance firm’s innovative capabilities thus improving the level of firms’ competitiveness and performance (Baker & Sinkula, 1999; Huber, 1991; Keiser & Koch, 2008; Nonaka, 1994). Research shows that innovation is linked to the concepts of generation, acceptance, and implementation of new ideas, processes, products and services (Damanpour, 1991; Drucker, 2002), and is determined
Organizations are in a continuous process of searching for strategies that would provide them with a competitive advantage. Efficiency in stable environments is achieved through standardized routines, division of labor and management control (Grant, 2005). However, recent changes in the business environment have compelled firms to search for new strategies for competitive edge as the conventional strategies have become obsolete (Chirico & Salvato, 2008). Economic globalization, which refers to integration of operations and markets in a borderless economic space (Johnson & Turner, 2003), and advances in information and communication technology (Hanna, 2010); are among the central environmental forces faced by contemporary organizations (Griffin & Moorhead, 2007; Roy, 2005).
In order to cope with the current external opportunities and threats, it is argued that organizations have to learn, that is, acquire new knowledge and skills that will improve their existing and future performance (Child, Faulkner, & Tallman, 2005; DiBella, 1998; Ortenblad, 2001). In fact, it is proposed that the only competitive advantage future companies will have is the ability of their managers to learn faster than competitors (Geus, 1988). Many other researchers suggest that the effective strategy for sustaining and improving a firm’s competitive edge and performance is organizational learning (e.g. Mavondo, Chimhanzi, & Stewart, 2005; Senge, 1990; Sinkula, Baker, & Noordewier, 1997).
Scholars also attest that new knowledge and skills obtained through learning enhance firm’s innovative capabilities thus improving the level of firms’ competitiveness and performance (Baker & Sinkula, 1999; Huber, 1991; Keiser & Koch, 2008; Nonaka, 1994). Research shows that innovation is linked to the concepts of generation, acceptance, and implementation of new ideas, processes, products and services (Damanpour, 1991; Drucker, 2002), and is determined