IT Assignment help on: Individual learning in an organization
Schwandt and Marquardt (2000) pointed out that learning is a critical activity for the modern organization in order for it to cope with the present scenario characterized by:
a) The exponential rate of growth of our Knowledge base (doubles every few years)
b) Competition not being restricted by geographic boundaries with firms becoming global in nature
c) Technological breakthroughs leading to rapid change
d) Increased need to adapt, by re-engineering and restructuring, for survival and growth in a period of rapid change.
Hence it is imperative for the modern organization to become a learning organization in order to ensure its survival and growth in this era characterized by rapid change.
Senge (1990) in his book The Fifth Discipline, tells us that the Learning Organization is one “where people continually expand their capacities to create results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” Further Senge (1992) proposed that all the activities of a Learning Organization are based upon five central principles, which are:
a) Personal Mastery: The creation of an organizational environment where the employees are continually expanding their own capabilities to achieve the results desired by them, and encouraging their fellow employees to do the same.
b) Mental Models: The continual reflection, clarification, and improvement in the internal viewing patterns of the employees which they use to decide upon their personal actions, decisions, beliefs and worldviews.
c) Shared Vision: The creation of a sense of commitment to a common and desirable future and the path leading up to such a future, by individual interactions within the organization.
d) Team Learning: The creation of intelligence and ability, within a team, such that it is capable of achieving results that are beyond the capabilities of the individual team members.
e) Systems Thinking: The evolution of the organizational language and thinking process to identify, visualise, and manipulate the forces that interact to create an inter-related system. This allows the organization to remain in-tune with the larger natural and economic forces and cope with the rapid pace of change.
A key discovery by Senge is the emphasis on the “team” which is the fundamental learning unit within the modern organization and not the individual employee.
Farrell (2000) put forth the view that organizational learning may be the only sustainable competitive advantage available to an organization and contributes in a key manner in the success of the modern organization.
In keeping with earlier research it is clear that an organization from the earlier industrial era is radically different from a modern organization of the information age. This assignment attempts to take one such organization, Wesfarmers Limited, and study the key focus areas that can help transform this organization into a Learning Organization.
Problem Statement
What are the key focus areas that Wesfarmers Limited needs to focus upon in order to transform itself into a Learning Organization?
Introduction to the Chosen Organization
Wesfarmers Limited is an organization of over 200,000 employees, operating in the business groupings of retail, industrial, and insurance, and serving millions of customers across Australia and New Zealand. It was listed on the Australian Securities Exchange in 1984 after 70 years as a West Australian farmers’ co-operative. It is currently one of Australia’s largest companies and the largest employer in the private sector. After its public listing, it has diversified into many areas using an aggressive strategy of acquisition.
Its current business activities include full service supermarket retailer (The Coles Group entities such as Target, Kmart, Pick ‘n Pay Hypermarket, Liquorland, etc.), office supply retailer (Officeworks), hardware store (The Bunnings chain), coal mines (Curragh, Bengalla, and Premier Coal), Insurance (Lumley, Crombie Lockwood, WFI, OAMPS), industrial safety products ( Wesfarmers Industrial and Safety, Blackwoods Paykels), chemicals and fertilisers (QNP, Australian vinyls), energy (Kleenheat Gas), investment banking and private equity (Gresham Partners), timber sawmill operations (Wespine), and property trust (Bunnings Warehouse Property Trust).
Analytical Methodology
As can be concluded from such a diverse portfolio, Wesfarmers is a very complex entity. In order to find out the key focus areas for transformation into a learning organization, we have to first analyze the organization from a holistic perspective in order to find out how it differs from the ideal learning organization. For this purpose we found the analytical frameworks proposed by Hames (1994) and The McKinsey 7-S Framework to be the most useful and well accepted models within published theoretical literature.
Hames (1994) clearly points to the different roles of employees within the earlier industrial organizations and the present day information-based organizations. His proposed framework is as follows:
| Attribute | Industrial Organization | Information-Based Organization |
| Focus | The individual is assigned clear and measurable targets that must be delivered as per the deadline | The team is a basic unit that must tackle the strategic issues as and when they arise |
| Knowledge | The individuals are highly specialized in particular domains and possess a narrow skill base | The team members have multi-disciplinary knowledge and hence possess a wide skill base |
| Accountability | The individual is accountable for his/her results. The targets and deliverables are clear and measureable at the individual level | The unit of learning is the team and hence the entire team is responsible for the targets that are fixed for it. |
| Structure | Clear differentiation and segmentation within a rigid hierarchical structure | Matrix-type arrangement allows for flexibility within roles and a flat structure |
| Problem Solving | The approach used is linear and reactive in nature | The approach used is holistic and pro-active in nature |
| Perspective | The focus remains on local issues | The focus expands to include global issues |
| Attention | There are quantitative differences | There are qualitative differences |
| Information Flow | The information flows in a linear and hierarchical manner | The information flows through networks (human and technological) with little or no barriers at the boundaries |
| Investment | Mostly into improvements of plant and machinery | Most investment goes into development of human capital and internal knowledge base |
| Orientation | Concerned with the present | Thinking of the future |
| Management | They are autocratic in nature and selections to their ranks is through a process of careful review and inspection | They encourage a collaborative and participative environment with empowered employees |
| Initiative | Emerges from Top Management only | Emerges from all levels of the organization |
| Integration | Results are achieved using codified systems in place | Results are achieved by continued commitment to organizational values |
The McKinsey 7-S Framework is another systems oriented view of the differences that prevail between the Traditional Organization and the Learning Organization. Hitt (1995) added an eighth “S” (Synergistic Teams) to this framework to come up with a comprehensive view of the differences between the two types of organizations.
| Dimension | Traditional Organization | Learning Organization |
| Shared Values | The values that are preached to the employees and prized by the management are efficiency and effectiveness | The prized organizational values are excellence and continual renewal of the organization |
| Management Style | The management acts as a control valve, reserving the decision making authority for itself | The management acts as a coach, facilitating interaction, collaboration and shared decision making process |
| Strategy/ Action Plan | The strategy is formulated and disseminated in a top-down manner with the creation of a road-map | The strategy formulation process involves consultation with all the stakeholders and the creation of a learning map |
| Structure | The organization is structured in a rigid, hierarchical manner | The organization is structured in flat manner with the possibility of dynamic collaborative networks springing up spontaneously |
| Staff Characteristics | The employees are selected as per their expertise in their particular fields and the level of expertise leads to position within the hierarchy | The employees are encouraged to learn as much as they can and mistakes are tolerated |
| Distinctive Staff Skills | Adaptive learning is the norm | The environment promotes generative learning |
| Measurement Systems | Performance is measured in financial terms | The performance is measured in both financial and non-financial terms |
| Teams | The teams are fixed as per the working groups within the boundaries of a department, usually structured as per particular verticals | The teams are collaborative and cross-disciplined in nature with a wide knowledge base |
Organizational Analysis
Analyzing Wesfarmers Ltd as per these frameworks, here is what we found:
- Using the framework proposed by Hames (1994)
| Attribute | How does it apply to Wesfarmer | Correspondence to which type of organization (Traditional or Learning) |
| Focus | Targets are assigned to each employee | Traditional |
| Knowledge | Specialized experts are hired at all levels | Traditional |
| Accountability | Individuals are accountable for their targets | Traditional |
| Structure | Hierarchical structure is in place | Traditional |
| Problem Solving | Problems are considered from multiple perspectives to think of holistic solutions | Learning |
| Perspective | There is a global perspective in the mind of the organization | Learning |
| Attention | There are qualitative differences | Learning |
| Information Flow | Information passes through the hierarchy | Traditional |
| Investment | Greater percentage of the investment is made into plant and machinery | Traditional |
| Orientation | The management is a forward thinking one, and believes in thinking of the future | Learning |
| Management | The management style is collaborative with inputs taken from all levels | Learning |
| Initiative | Initiative comes from all levels | Learning |
| Integration | The results come from the systems that the company has in place. | Traditional |
- Using the McKinsey 7-S Framework:
| Dimension | How does it apply to Wesfarmer | Correspondence to which type of organization (Traditional or Learning) |
| Shared Values | The organization believes in excellence | Learning |
| Management Style | The final decision lays in the hands of the management | Traditional |
| Strategy/ Action Plan | The corporate strategy is formulated at the level of the top management with inputs taken from everyone | Traditional |
| Structure | Hierarchical structure of organization | Traditional |
| Staff Characteristics | The staff consists of experienced people with large degree of expertise in their fields | Traditional |
| Distinctive Staff Skills | The learning takes place in a generative manner | Learning |
| Measurement Systems | The target measurement systems are mostly financial in nature | Traditional |
| Teams | Teams are cross functional and multi-disciplinary in nature | Learning |
Results
From our analysis we conclude that Wesfarmer is still largely a traditional company though it is trying to change over into a learning organization. While it resembles a learning organization in terms of its vision, problem-solving ability, and team selection, its focus upon financial measures, hiring of domain experts, hierarchical structure, and large percentage of investments in plant and machinery put it in the category of a traditional organization.
From the above it is clear that Wesfarmer requires a transparent internal environment, where information flows freely and is easily accessible to all the employees. Moreover the hierarchical structure of decision-making needs to be re-structured to allow for more collaborative process where the employees feel empowered that their decisions are being implemented at the corporate level. Wesfarmer also needs to recognize performance along non-financial terms in order to truly measure its operational excellence and its impact on society. It should also consider hiring multi-disciplinary teams to manage its projects instead of domain experts, in order to evaluate the incremental value generation that can be achieved with the former. Finally Wesfarmer needs to evaluate whether it is better to stay within the traditional business groupings and have large percentage of investment in plant and machinery or better to move into modern information-based business groupings (such as insurance, consulting, etc.) where the investment focus is upon the people, less upfront investment is required, and returns are higher in terms of ROI and payback period.
Recommendations
Marsick and Watkins (1996) identified seven action points that the modern organization needs to undertake in order to transform its environment into a learning environment. These are:
a) Actively encouraging and promoting internal dialogue and inquiry
b) Encouraging employees to collaborate with each other and promote team learning
c) Actively creating continuous learning opportunities for their employees
d) The establishment of systems that capture and disseminate team and individual learning
e) Building a connection between the organization and the environment within which it operates
f) Empowering the employees towards a shared vision
g) Bringing in leaders who set up personal examples to encourage learning at the employee, workgroup and organizational levels.
Wesfarmers Limited can adopt these action points for starters to initiate its transformation into a learning organization.
Conclusion
In conclusion we feel that the organization of Wesfarmers Limited is still pursuing traditional industrial age policies in its business operations. In order to transform itself into a more profitable learning organization it needs to reduce the organizational hierarchy, increase the percentage of investment devoted to build-up of human capital, rework its hiring policy to take in multi-disciplinary employees, encourage decision making to take place at all levels of the organization, and allow for ease of flow and access of information by all the employees of the organization.
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