Impact of transformational leadership on organizational learning Essay

Organizational Learning (OL) Literature reveals that OL improves the development by introducing new expertise, output or commercialism. Nonaka & Takuchi (1995) argued that learning is vital for product innovation which means that it is not limited to only acquisition and retention of knowledge but it is used to get the required outcomes. Knowledge oriented view of the organizations argue that knowledge and learning capacity influence the organizational performance and also direct the firm to achieve sustainable and continuous competitive advantage (Zhang, 2008). In last thirty years extensive research have been conducted on the OL and it has contributed a lot in the organizational development and change management, but still there is a little agreement on what is meant by the term OL and its nature. (Crossan, Lane & White, R.E, 1999; Huber, 1999 and Kim, 1993). The reason for this problem is that the OL has been studied by many disciplines and perspectives (Lopez, et al, 2006). According to (Argyris, 1995),† Learning occurs whenever errors are detected and corrected or when a match between intentions and consequences is produced for the first time.† (p.20). According to Huber (1991), when knowledge is acquired, information is spread, correctly analyzed, and recalled, organization learning eventually takes place. He further assumed that learning occurs in the organization if any of its unit acquires information useful to the organization. This is also supported by DeNisi & Griffin (2008) that â€Å"OL is the process by which the organization â€Å"learns† from past mistakes and adapts to its environment.† From these definitions, it is concluded that OL is a process whereby organization gets knowledge and removes the problem and adapts ... ...pply knowledge, then OL will be damaged, so organizations should have such compensation systems that motivate the employee to get, share, and apply knowledge in the organization (Wong, 2005). The findings of the study conducted by Dechawatanapaisal (2005) demonstrated that the pay for performance and recognition are the contributing factors in the organizational learning. Especially recognition that is easy to implement and does not require large investment, can increase the employee morale that support their learning. Khandekar & Sharma (2006) pointed out that improved reward system plays an important role in strengthening the learning capabilities of the organization which leads us to propose that the selective compensation and reward system that create a powerful motive for the employees to get, apply and share knowledge has a positive impact on OL.