Organizational Learning Culture - The Missing Link between Business Process Change and Organizational Performance
International Journal of Production Economics, Vol. 106, No. 2, pp. 346-367, 2007
22 Pages Posted: 9 Dec 2008
Date Written: April 1, 2007
The aim of this paper is to present and test a model of organizational performance improvement based on the impact of organizational learning culture. The concept of organizational learning culture (OLC) is proposed and defined as a set of norms and values about the functioning of an organization. They should support systematic, in-depth approaches aimed at achieving higher-level organizational learning. The elements of an organizational learning process that we use are information acquisition, information interpretation, and behavioral and cognitive changes. Within the competing values framework OLC covers some aspects of all four different types of cultures: group, developmental, hierarchical, and rational. We use data from 203 Slovenian companies employing more than 50 people. The impact of OLC on organizational performance is empirically tested via structural equation modeling (SEM). The results show that OLC has a positive direct impact on all three aspects of non-financial performance included in the model: performance from the employee, customer, and supplier perspectives. The effect of organizational learning culture on financial performance is still positive, but indirect (through non-financial performance from the employee perspective).
Keywords: Organizational learning culture, Competing values framework, Organizational performance, Structural equation modeling
JEL Classification: M1
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