From this paper it is clear that the paradigm shift in theory of management that resulted in the introduction of the Learning Organization is the shift of focus from mere “learning” to the “process of learning”. We now have a structured understanding not only of what we learn and how it can be applied but also how it is learned and communicated. As the rest of this paper endeavors to show, organizations also exhibit specific patterns of cognition, communication and evolution – with profound consequences for their economic output and vitality.
This discussion highlights that it is perhaps best to start with an example. That the Japanese automakers have posed a serious threat to their American counterparts is common knowledge. Japanese cars have demonstrated greater efficiency and has generally been welcomed by the American Public. Not surprisingly, Japanese cars have been scrupulously examined by American engineers to decipher the secret of their performance. In one such test, it was found that a particular engine model was assembled with a set of three different bolts in America while the Japanese used only a single bolt standard. Each type of standard required a different type of wrench, complicating the inventory and incrementing the cost. It was found that this was because the American model was designed by three different teams of engineers while the Japanese model was entirely designed by one designer. Interestingly, this seemingly trivial action could have gone completely undetected though each of the three American teams were satisfied with their individual performance. It was not merely the lack of communication that resulted in the above complication. The fundamental breakdown of the American system of production was the lack of an integrated approach to design, production and testing.