The present business scenario possesses both opportunities and challenges for the contemporary business organizations. Market exposure is more for the contemporary organizations. However, due to rapid influx of competitors in the market, more organizations are facing threat of survival. They are implementing newer strategies to develop or improve their internal environment in order to cope up with rapidly changing global business scenario (Craig & Campbell, 2012). One of the strategies implemented by various business organizations is learning organization. This theory is being penned by Peter Senge to develop a learning atmosphere for the employees. Learning organization provide the business organizations in having access to different innovative ideas from all the stakeholders. This theory states an environment of learning which will be aligned with the organizational objectives and goals.
Toyota is one of the most prominent automobile major in the world. They have also implemented the theory of learning organization in order to get adjusted with the change in taste and preference pattern of the customers. This will not only helps in increasing the job satisfaction and productivity of the employees but also provide competitive advantages in the market by catching the expectation and requirement of the customers ahead of its competitors (Wong & Laschinger, 2013). This essay will discuss about the concept of learning organization along with its implications on the productivity and growth of Toyota.
Toyota is one most sustainable organization around the world when it comes to learning organization (Eccles, Perkins & Serafeim, 2012). It is being seen that the learning environment is being applicable from the top to the bottom of the organization. They have implanted the theory of learning organization in their organizational culture. All the stakeholders in their internal environment are covered under this concept. They have implemented several aspects of learning organization in order to provide optimal environment for their employees. The first aspect implemented by them is psychological safety. According to this concept, Toyota maintains an internal environment where employees will convey their opinion without any fear of being noticed. Disagreeing with their superiors will also be accepted in a positive manner. According to Toyota, this free environment is required for the employees to learn new things from their superiors and vice versa (Mone & London, 2014). Differences in the opinions are also being appreciated by them. It is being believed that appreciation of differences will lead to generation of more diversified ideas from the employees.
Learning organization of Toyota is also applicable for their managers also. It is being seen by them that, more working hours for the managers with having stress and work pressure reduce the productivity of them (Caldwell, 2012). They lack analytical ability due to excessive pressure. Thus, learning organization is being implemented for them also. Learning organization provides required time for an immediate pause for the managers, which will help them to get rid of stress and pressure. Training given to the employees is also included on the learning organization. Employees are given training according to the organizational values, goals and objectives. It enables the employees to learn the organizational process and work accordingly.
Another aspect of learning organization is communication. The knowledge or idea originated among any individual employees or in the group should be properly communicated among all the stakeholders of the organization. It should have the two way approach, upside down and downside up. Higher managers should learn and gather information from the lower level employees and vice versa (Caldwell, 2012). Effective communication of the new ideas will help to generate different opinions and sharing among all the stakeholders.
Toyota is operating in a fiercely competitive market and hence, it is important for them to implement a continuous process of innovation in order to survive in the market (Townsend & Calantone, 2014). According to them, innovation will come from the side of the employees and satisfaction of jobs will help the employees to be motivated and enable in generation of new and innovative idea. Learning organization also refers to the learning and gathers information about the latest and updated trend in the market. Expectation and requirement of the customers should be taken in to consideration to meet the market demand. Organizations should learn from the customers about the areas to be improved or modified by them. Thus, Toyota maintains an effective communication channel to promote communication between the organization and the customer (Shockley-Zalabak, 2014).
Another aspect learning organization which distinguishes Toyota from other organizations is promoting informal way of learning (Cunningham & Hillier, 2013). According to them, formal training process yields less desired output than that of informal training such as, providing tools to support performance and on demand coaching process. Employees feel more comfortable in an informal learning process. Thus, chance of generation of new ideas and counter ideas are more in the informal learning process. Toyota also aligned their diversity policy with their concept of learning organization. Toyota operates in different countries and has operational facilities in numerous regions. Thus, their workforce constitutes of diversified employees. Learning organization has much to do with the diversified workforce (Downey et al., 2015). Employees from different social backgrounds and cultures have different solutions and approach against a single issue. This enables them to gather different ideas from the employees and learn from them.
Even though, implementation of learning organization incurs costs for the organizations but also, it has several benefits which will have favorable impact on the organizations. It can have a fair amount of contribution on the growth of the organizations. Increase in the productivity of the employees and the organization as a whole is the key advantage of learning organization. It enables the employees to learn new ideas and share among the internal environment of the organization. It helps to motivate the employees and increase the level of job satisfaction among them. Thus, more motivated and satisfied employees will have more productivity which eventually increase the gross output of the organizations (Lazaroiu, 2015). Increase in the output of the organization means generating of more output from the same amount of input. Thus, the profitability will increase for the organization and increase in the profitability will contribute in the organizational growth.
Learning organization helps in reducing the attrition rate of the employees due to the reason that it helps to motivate the employees. Lower attrition rate of the employees can be achieved only when the level of satisfaction and morale of the employees will be high. Lower rate of employee turnover reduce the cost incurred by the organization regarding recruiting and selecting new employees (Goswami & Jha, 2012). Moreover, it takes time for the new employees to achieve the productivity level of the ex employees. Thus lower rate of attrition also helps in maintaining the productivity of the employees. Learning organization involves effective communication among all the stakeholders in the organizations. This enables the higher managers to determine the issues of the employees and necessary steps to be taken. Lower managerial levels and the employees also get benefited from effective communication by having the clear idea about the organizational goals and objectives and the management is expecting from them. This enables the organizations to address the grievances of the employees at their primary stage.
Innovation and creative ideas can be generated from the employees if they are given proper chance to convey their opinion to the higher management. Free and flexible working environment is one of the basic criteria of learning organization. Employees will feel more comfortable to communicate their opinions in this environment. It will lead to more generation of the innovative ideas (Aziz & Rizkallah, 2015). More generation of innovative ideas will help to meet the demand of the customers more effectively. It will also help the organizations to stay ahead in the competition and contribute in the achievement of the organizational goals and objectives. Learning organization also involves effective communication with the customers to determine their requirement and expectation. Meeting the market demand will help the organizations to grow further. Effective fulfillment of the demand of the customers will help in generating more revenue from the market. Thus it will meet the ultimate goal of the organizations of generating profits.
Therefore, these are the reasons for the importance of the Learning organization to contribute in the growth of the organizations. Even though the initial cost to implement the theory of learning organization is more but in the long-run, it will enable the organizations to generate more revenue and contribute in the organizational growth. In the present business scenario, contemporary business organizations have to maintain different aspects of business to survive in the market along with keeping in mind about the interest of the stakeholders. Contemporary business organization such as Toyota, maintains their market leadership position due to proper and effective stakeholder management. Learning organization provides the organizations, opportunities to take care of their stakeholders and increase the productivity from them.
Reference
Aziz, H. H. A., & Rizkallah, A. (2015). Effect of organizational factors on employees’ generation of innovative ideas. EuroMed Journal of Business, 10(2), 134.
Caldwell, R. (2012). Leadership and learning: A critical reexamination of Senge’s learning organization. Systemic Practice and Action Research, 25(1), 39-55.
Craig, T., & Campbell, D. (2012). Organisations and the business environment. Routledge.
Cunningham, J., & Hillier, E. (2013). Informal learning in the workplace: key activities and processes. Education+ Training, 55(1), 37-51.
Downey, S. N., Werff, L., Thomas, K. M., & Plaut, V. C. (2015). The role of diversity practices and inclusion in promoting trust and employee engagement. Journal of Applied Social Psychology, 45(1), 35-44.
Eccles, R. G., Perkins, K. M., & Serafeim, G. (2012). How to become a sustainable company. MIT Sloan Management Review, 53(4), 43.
Goswami, B. K., & Jha, S. (2012). Attrition issues and retention challenges of employees. International Journal of Scientific & Engineering Research, 3(4), 1-6.
Lazaroiu, G. (2015). Employee Motivation and Job Performance. Linguistic and Philosophical Investigations, 14, 97.
Mone, E. M., & London, M. (2014). Employee engagement through effective performance management: A practical guide for managers. Routledge.
Shockley-Zalabak, P. (2014). Fundamentals of organizational communication. Pearson.
Townsend, J. D., & Calantone, R. J. (2014). Evolution and transformation of innovation in the global automotive industry. Journal of Product Innovation Management, 31(1), 4-7.
Wong, C. A., & Laschinger, H. K. (2013). Authentic leadership, performance, and job satisfaction: the mediating role of empowerment. Journal of advanced nursing, 69(4), 947-959.
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