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A Study on the Relationships among the Organizational Learning

Capacity, Organizational Learning Culture, and Organizational

Innovation Performance

Li-Jia Chiuaand Neng-Tang Norman Huangb

aDepartment of Technology Application and Human Resource Development, National

Taiwan Normal University, Taiwana162, HePing East Road, Section 1, Taipei, Taiwan

bDepartment of Technology Application and Human Resource Development, National

Taiwan Normal University, Taiwanb162, HePing East Road, Section 1, Taipei, Taiwan

[email protected]@ntnu.edu.tw

ABSTRACT

With the development of globalization and information technology, as well asthe rapid changes in the external environment, effective use of organizational learning

capability to achieve organizational innovation performance is an important source of

competitive advantage. However, past studies showed that Organizational learning

capability (OL Capability) and organizational performance are related. In other words,

the role of organizational learning capability (OL Capability) is important to improve

firmsperformance.The purpose of this paper is to analyze the relationship between organizational

learning capacity (OL Capacity) and organizational innovation performance, by taking

organizational learning culture (OL Culture) into consideration. The study attempts to

investigate the following question: Is organizational learning culture positively

associated with organizational innovation performance? Is organizational learningculture positively associated with organizational learning capacity? And finally,

explore the relationships among the organizational learning capacity, organizational

learning culture, and organizational innovation performance?

The sample is 150 managers and staffs from an information technology company

with a firm size of 3000-employees. The questionnaire is consisted of three sections,

the first is Learning Organization Questionnaire (DLOQ), the second is organizational

learning capacity measurement scale, and the third is organizational innovation

performance measurement scale. Structural equation modeling is used to test this

theoretical model.

The investigation is done in hope to provide an alternative solution and mayserve as a reference for the company managers.

Keyword: Organizational learning culture organizational learning capacity

organizational innovation performance

1. INTRODUCTIONInnovation is conceived as an individual and collective learning process that aims

to find new ways of solving problems. Innovation through creativity is an important

factor for the success and competitive advantage of organizations (Woodman et al.1993;

Hsiao & Chang, 2011). Senge (1990) observed that learning and innovation are crucial

for firms in sustaining competitive advantage. Argyris and Schon (1978) also positedthat learning and competence provide the foundation for organizations to improve their

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core competencies and further sustain competitive advantage (Hung et al., 2010).

The concept of organizational learning culture (OLC) is presented 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. (Skerlavaj et al., 2010). Moreover, a true innovative firm must be embedded

of a strong culture that stimulates the engagement in innovative behavior. Specifically,some cultural factors such as decentralization in decision making, error tolerance or

social relations have been shown to affect knowledge and innovation outcomes through

organizational learning (Chang and Harrington, 2003; Lemon & Sahota, 2004; Alegrea

& Chiva, 2008).

The capacity to learn has been considered a key index of an organizationseffectiveness and potential to innovate (Jerez-Go mez et al., 2005; Alegrea & Chivab.

2008). While an organizational learning capability may be manifested as a broad,

encompassing competency that produces actionable knowledge of various sorts, the

specific learning capability of interest here is learning capability with regard to a firmsinnovative outputs. (DiBella & Nevis, 1998; Ingelgard et al., 2002).

Product innovation is a process that includes the technical design, R&D,manufacturing, management and commercial activities involved in the marketing of a

new (or improved) product (Alegrea & Chivab, 2008). Innovation efficacy reflects the

degree of success of an innovation. On the other hand, innovation efficiency reflects

the effort made to achieve that degree of success (Alegrea & Chivab, 2008).

The aim of this paper is to analyze the relationship between organizational

learning capacity (OLC) and organizational innovation performance, by taking into

consideration o organizational learning culture (OLC). Structural equations modeling

used to test the research hypotheses.

2.

THEORETICAL BACKGROUND AND HYPOTHESES2.1 Organizational learni ng culture (OLC)The concept of organizational learning culture is derived from organizational learning

and learning organization concept, and refers to when an organization recognized

learning as absolutely critical for its business success (Wang, Yang, & McLean, 2007).

Previous studies also provide growing evidence of a relationship between

organizational learning culture and economic performance (Marsick & Watkins, 2003;

Malik et al., 2011).Usman et al. (2011) the learning culture facilitates the employeesperformance, that is increases their efficiency and effectiveness with innovation,

creativity, and behavior modification.

Teece et al.s (1997) suggest that organizational learning culture has a positive

effect on performance. Many studies suggest that organizational learning culture canimprove individual, team, and organizational learning and thus enhance organizational

performance (Egan et al., 2004; Ellinger et al., 2002; Yang,Watkins, & Marsick, 2004).

Therefore, the researchers hypothesize:

Hypothesis 1 organizational learning culture is positively associated with

organizational innovation performance.

2.2 Organizational learn ing capabil ity

The combinations of knowledge innovation, diffusion, and application are

critical concepts in knowledge economy (Raval, 2000; Chang et al.,2011). Chang et

al., (2011) Most studies indicated that organizational learning injects new ideas into

the organization. Argyris and Schon (1978) suggested that organizational learning

would enhance the innovative capacity of an organization. In other words,organizational learning can play an important factor in organizational innovation.


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Organizational learning is associated it with organizational innovation (Hsiao et al.,

2009; Weerawardena et al., 2006).

According to Bierly and Chakrabarti (1996), firms should achieve an adequate

balance between internal and external learning that best fits their resource

configuration and strategic objectives. Internal learning occurs when members of the

organization generate and distribute new knowledge inside the firm; it dependsmainly on organizational culture factors such as participative decision making or

management style (Hurley & Hult, 1998; Lemon & Sahota, 2004).

Following a comprehensive literature review, Chiva et al. (2007) identified five

essential facilitating factors of organizational learning: experimentation, risk taking,

interaction with the external environment, dialogue and participative decision making.

(Alegrea & Chivab, 2008). Therefore, the researchers hypothesize:

Hypothesis 2 organizational learning culture is positively associated with

organizational learning capacity.

2.3 Organizational innovation perf ormance

It often describes in terms of changes, example, a firm offers the world

(product/service innovation), and the ways it creates and delivers those offerings(process innovation) (Francis and Bessant, 2005). However, the process to carry out

organization reform and create new value is called organizational innovation (Glynn,

1996;Chen et al., 2011).

According to Thomke (2001), experimentation is a basic learning mechanism

for a company to innovate: the development of a new product requires a number of

experiments to test market and technology issues. New ideas and proposals represent

the starting point of innovation (Koc and Ceylan, 2006). Risk taking is necessary for

the generation of new ideas and should therefore be tolerated in order to promote

innovation (Amabile et al., 1996).

The past Researchers showed that Organizational learning capability (OLC) and

organizational innovation (OI) are related (Fang et al., 2011). In other words, the role

of Organizational learning capability (OLC) is an important to enables product

development successful and improves firms performance(Hult et al., 2004; Fang etal., 2011). Therefore, the researchers hypothesize:

Hypothesis 3 organizational learning capacity is positively associated with

organizational innovation performance.

The researchers propose a conceptual model, shown in Fig.1 that includes our

research hypotheses. This model links organizational learning capacity, organizational

learning culture and organizational innovation performance.

Fig.1 conceptual model


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3. METHODOLOGY3.1 Data coll ection

Data is collecting from Information Technology R & D managers and staff. The

study will be scheduled to obtain 150 valid questionnaires. In this study, company

scope about three thousand employees. Company headquarters is located in Taipei,

Taiwan. Structural equation modeling was used to test this theoretical model.3.2 Procedures

Based on literature review and previous research, three hypotheses were

formulated and examined. The questionnaire consists of two parts. The first fastconsisted of 7-point Likert scales demographic information, but the second will more

specific. This section, consisting of 41 items, is 16 items for organizational learningculture, 14 items for organizational learning capacity, and 11 items for organizational

innovation performance. All are compos of 7-point Likert scales.

3.3 M easurements

3.3.1 Organizational learn ing cultu re measurement scale

This study assessed organizational learning culture using the Dimensions of

Learning Organization Questionnaire (DLOQ) designed by Watkins and Marsick(1993, 2003). Same as Hung et al.s (2010), study organizational learning culture wasassessed on 7 point scaled Likert-type items. Respondents are asked to determine the

degree to which each of the questions reflects their organizations situations inlearning culture (1 = strongly disagree to 7 = strongly agree).

3.3.2. Organizational learn ing capacity measurement scale

Researchers will use the OLC measurement instrument developed by Chiva et al.

(2007). Alegrea and Chivab, (2008) According to the conceptualization of this scale,

OLC consists of the skills and characteristics that enable an organization to learn. Five

dimensions constitute the essential factors that represent the OLC latent concept

(Sharma, 1996; Uriel; Alegrea and Chivab, 2008). These dimensions are

experimentation, risk taking, interaction with the external environment, dialogue and

participative decision making. The OLC measurement scale was applied using a

7-point Likert scale, where 1 represented total disagreement and 7, total agreement.

3.2.3. Organizational i nnovation performance measurement scale

Alegre et al. (2006) recently proposed and tested a measurement scale for product

innovation performance in the context of biotechnology firms. Product innovation

performance was conceptualized as a construct with two different dimensions

consistent with previous literature: innovation efficacy and innovation efficiency

(Alegrea and Chivab, 2008). Researchers will use the same measurement scale.

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