Learning Theories/Organizational Learning: Interorganizational

Introduction

Interorganizational learning presents an opportunity for an exponential learning process. The advantages of a learning process that takes place within an organization can be immensely multiplied when one considers the opportunities for organizations to learn from other organizations. However, there must be specific steps taken to learning interorganizationally that is different from traditional organizational learning processes.

Interorganizational learning, referred to as collaborative learning in a recent study conducted by Hardy et al (2003), requires a network of social interaction. The authors perpetuate their social constructivist view of knowledge by referring to it “as a property of community practice rather than as a resource that can be generated and possessed by individuals" (p. 326). The authors support their contention by citing Powell et al., 1996:

Knowledge creation occurs in the context of a community, one that is fluid and evolving rather than tightly bound or static…Sources of innovation do not reside exclusively inside firms; instead, they are commonly found in the interstices between firms, universities, research laboratories, suppliers and customers. (Powell et al., 1996, p. 121).

From this standpoint, the authors explicate two venues for collaborative learning: a strategic perspective and a knowledge creation perspective, each having their own benefits and tradeoffs. A strategic perspective is understood as having more structure, established goals, and a partner selection criteria; whereas, a knowledge creation perspective is understood to be less inhibitive – having little or no formality that may inhibit openness and synergy; both of which are necessary for going beyond the boundaries of knowledge transference.

As explained by Holmqvist (2003), a separate stream of organizational learning research focuses on how organizations in cooperation with each other through formal channels, learn. The research refers to it as interorganizational learning and it has conceptualized how members are able to learn by developing sets of rules that are separate from the rules of the persons organization. Therefore this learning group is indeed an unique learning group or interorganizational learning group.

A knowledge creation perspective: learning in multinational corporations

Since World War II the number of multinational corporations has grown dramatically (Macharzina, Oesterle, Brodel, 2003). This fact is indicated by the growth in global trade, which has consistently grown at a faster rate than the overall global economy. Multinational corporations (MNCs) have a number of unique challenges that they face, but the ability to learn and adapt best practices from within the company, yet across cultures, is among the greatest challenges MNCs must overcome if they are to be successful.

Organizational learning and knowledge management can facilitate the internationalization process and improve the competitiveness of a MNC (Macharzina, Oesterle, Brodel, 2003). If, however, a MNC fails to learn effectively or deploy learned knowledge across the organization, much of the efficiencies of size can go unrealized and actually cost the enterprise dearly in duplicative efforts and non-value added learning.

Interorganizational learning is the action of groups working together to discover a strategic and operational path to help all organizations involve improve their processes (Cohen & Sproull 1991; Weick & Westley 1996). Successful implementation of interorganizational learning involves collaboration, trust, and empathy (Uzzi 1996; 1997). Recent events such as natural disasters and terrorist attacks in North America have motivated various organizations in the public and non-public sector to work together to ensure adequate crisis response to American civilians. This is accomplished by having their emergency management components (e.g. Fire Department, Police, Explosive Ordnance, and Medical Services) engage in table topic exercises. As a result, trust increases among the organizations. In addition, the collaboration can create new scenarios which provide new learning abilities for all stakeholders involved.

The challenges of working and conducting business across international boundaries increases the challenges organizations face in cross-cultural interaction. Macharzina, Oesterle, & Brodel in Dierkes, Antal, Child, & Nonaka (2003) suggest “the diversity and complexity of managing a geographically dispersed system of value-added activities is greater than – and hence qualitatively different from that of managing operations with a single national market” (p. 632). Furthermore, while these challenges originate at the foreign local level, their “effects" are systemic, for they involve the characteristics of cross-border processes.

The authors though, further suggest that these increased challenges over time can actually benefit the whole of the organization as the challenges are studied and solutions found in multiple areas. These new solutions can be beneficial in other areas and new strategies formulated can be spread throughout the entire organization. Thus while the challenges may prove much larger than in singular national arenas, certainly an important factor given the increased globaliziation of companies and markets. When organizations apply problem-solving solutions to international challenges, the effectiveness of the group or organization increases its competitive advantage and organizational effectiveness.

A strategy perspective - learning in strategic alliances

Many organizations have come to rely on alliances with key players in the marketplace as strategic ventures for maintaining a competitive advantage. These key relationships can help foster organizational learning, thus giving an edge over the competition. This serves as a primary motivation for alliance formation. In addition to the motivation of furthering org learning, there are other benefits of alliance formation, such as the potential for significant partnership agreements (Lei, Slocum, and Pitts 1997).

Short-term and long-term strategic planning can flourish when collaborative partnerships with suppliers, customers, and even competitors are considered. Daft (2005) characterizes effective learning organizations as those who have permeable boundaries – companies that will often link themselves with other businesses providing each organization with a larger access to information about current needs and directional trends in the industry. Daft continues to state, “Some learning organizations… also openly share information with competitors or allow competitors to visit and observe their ‘best practices.’ These companies believe the best way to keep their organizations competitive is through a mutual sharing of ideas” (p. 613).

An often successful strategy for organizational learning in a cooperative effort between companies is in the sharing of a mutually beneficial marketing strategy. For example, Advanced Circuit Technologies in Nashua, New Hampshire, formed a coalition of 10 electronic firms to jointly market non-competing products - each member company still conducts its own business, but, as a coalition, they now can adopt a strategy of bidding on projects larger beyond what they could deliver as an individual company as they partner with other firms for services they can’t do themselves (Daft 2005).

Strategic alliances and joint ventures are hybrid arrangements that combine strategic objectives and cultures of partnered organizations (Child, 2003). Such alliances may incorporate the blending of management systems, sales and marketing strategies, or other potentially synergistic aspects of the partnered entities’ businesses. Organizations can benefit from strategic alliances and joint ventures by incorporating best practices from partnered organizations and employing what they have learned through their organizations as a whole. In the best alliances, mutual learning is achieved through knowledge transfer, and through the “dynamic synergy that may be stimulated” by experts coming from different backgrounds (Child, 2003).

One problem with such alliances, however, is the fact that there are substantial barriers to knowledge sharing that arise for any number of reasons. For example, the underlying relationship between the partners may be inherently competitive (e.g. General Motors and Toyota partnering on New United Motor Manufacturing, Inc –aka NUMMI) or one organization has the capacity to absorb large volumes of information and the other partner lacks that capacity (e.g. a large pharmaceutical company partnering with a small biotech company).

For the most part, however, such alliances are beneficial for all parties involved, especially if there is a substantial transfer of knowledge, transformation of that knowledge into usable information within the broader organization, and synthesis of new knowledge that is the direct result of the knowledge sharing that comes about as a result of the alliance.

As organizations continue to expand into new markets internationally, interorganizational learning will provide cost-effective measures that will assist companies as they expand into new global markets. Merriam and Caffarella (1999), citing Ulrich (1998) state, "Globalization requires companies 'to move people, ideas, products, and information around the world to meet local needs'" (p. 13). Meeting these local needs means understanding local logistics, culture, and languages. The authors, continuing to cite Ulrich, state that organizations '"must add new and important ingredients to the mix when making strategy: volatile political situations, contentious global trade issues, fluctuating exchange rates, and unfamiliar cultures'" (p. 14). If individual companies embark upon this enormous learning curve without attempting to learn from other organizations, even competitors, progress may be minimal and likely slow its advance. "'In short, globalization requires that organizations increase their ability to learn and collaborate and to manage diversity, complexity, and abiguity'" (p. 14).

Case studies & workplace examples

One of the silos of organizations that find it difficult to learn interorganizationally is unfortunately the church. There are moments and places where this kind of organizational learning can happen. One of the case studies for interorganizational learning is occurring in Springfield, Missouri. Two churches, Calvary Temple and Parkcrest Assembly, are combining efforts to create a learning organization. Rather than continuing separate organizations they are uniting their resources of land, congregations, and finances. They have created a step process plan considering all angles and problems that might arise. The greatest organizational learning tool they have is trust and united vision. This is how they are learning interorganizationally. They have a common goal, common direction, created together not independent of one another. They are building on what unites them, not concentrating on what might divide them.

← Organizational Learning: Processes · Organizational Learning: Practice →