Organizational behaviour: concepts and applications

Business

Organizational Behavior Theory and the Modern Learning Organization

Companies are in many ways like people. They grow. They learn. They undertake new tasks and responsibilities. For years, psychologists have studied how individual human beings make decisions; how men and women process information, pool their ideas, and arrive at workable solutions to problems. Behavioral psychologists analyze and quantify the full range of cognitive processes. But as many in the business world now realize, many of these same cognitive paradigms apply as well to their own organizations. A corporation ultimately arrives at its decisions in much the same way as an individual, or collection of individuals. The organization of the company is broadly similar to the organization of any group. The successful business is not static in its organization; rather it is a learning organization. McMillan provides an excellent working definition of just this sort of modern learning organization:

learning organization is continually developing its abilities in order to flourish and survive. Learning organizations are about creative as well as adaptive learning; they have an evolving shared vision; they use systems thinking; and they spend time challenging their mental models. These are organizations which facilitate the learning of all their members, who constantly reframe their view of the world and continuously adapt and transform themselves. (McMillan, 2004, p. 52)

Change is the new constant. Old ideas and methods must give way to new challenges if today's businesses are to survive in a global environment. Globalism demands an ability to adapt to rapidly changing circumstances; a talent for understanding different cultures; for working in different legal and regulatory environments. A company must be able to employ the latest technology and the most qualified personnel. A modern learning organization is shaped by its organizational behavioral paradigm.

The significance of change, and the concomitant importance of adapting to that change, makes the behavioral structure of a successful modern business much like the behavioral mindset of a successful entrepreneur (Harrison & Leitch, 2005) - the main difference being that the first is an organization, while the second is an individual. Strychacz notes the similarities between the attributes of a mover-and-shaker "type" in the contemporary corporate world, and a prosperous and successful entrepreneur. The corporate executive is a,

Powerful, autonomous thinker, tough-minded entrepreneur of ideas, therapeutically releasing the blocked energies of society... Marketplace Man outside the marketplace. He embodies the forcefulness associated originally with the masterful entrepreneur... In the terms of professionalism... The expert investing symbolic capital... is the consummately powerful professional. (Strychacz, 2002, p. 158)

Learning about the marketplace is much like learning about anything else. Crossan and Dutta believe that entrepreneurship involves processes of both personal and organizational learning. (Dutta & Crossan, 2005) Expanding on that theme, Lumpkin identifies three forms of learning that link entrepreneurship and organizational success - behavioral learning, cognitive learning, and action learning. (Lumpkin, 2005)

Each of these processes is, according to Lumpkin, "emergent and iterative, usually changing over time and often involving multiple layers of analysis." (Lumpkin, 2005) Chen further refines these definitions of organizational learning behavior to include the following characteristics:

1) Organizational learning has two dimensions, cognitive (acquiring new knowledge) and behavioral (adjusting to change);

2) The ultimate purpose is for an organization to successfully adapt to environmental changes, continue to exist, and develop;

3) Learning is continuous (Chen, 2005)

That entrepreneurial learning and behavioral qualities are also characteristics of organizations can be easily inferred. Learning is as much a process of socialization as it is one of individual development. Culture, too, is part of the entrepreneurial paradigm:

Dimensions of culture potentially play an important role in shaping an individual's schema and sensemaking... Furthermore, because culture is a shared attribute, individuals with common cultural backgrounds will tend to have more similar views of their environments than individuals with different cultural backgrounds. Because shared perceptions can be formed through both strong and weak ties, family relations, ethnic mix, urbanization, region, and industry could all be the sources of cultural differences. (Chrisman, Chua & Steier, 2002)

In the case of a corporation, or other business, learning to understand the company, its strategies and goals, can be seen as another example of learning about one's society and culture.

Entrepreneurship is, in fact, considered a special subset of cognitive psychology - a fairly well established area of research. (Mitchell et al., 2004) Within this particular, narrower field, investigators are concerned with the specific questions of precisely how entrepreneurs think, and in what way their thinking differs from that of the ordinary businessperson. (Mitchell et al., 2004) An analysis of entrepreneurial thinking makes use of the cognitive perspective, which situates individuals and their thinking processes at the center of a nexus of economic creation, that the firm might thereby be viewed as an artifact that involves creative cognition.... Mental simulations and counterfactual thinking, as cognitive heuristics, guide reasoning and the opportunity identification process.

(Mitchell et al., 2004)

Specifically, entrepreneurs possess unique cognitive skills that enable them to size up opportunities, and to look at situations from a special economic perspective i.e. To see in which way money can best be made. Cope continues the breakdown of these entrepreneurial characteristics and cognitive faculties in accordance with behavioral learning theory. Cope re-states the important point that the entrepreneurial personality brings to the organization the pioneering spirit - the willingness to undertake a brand new, and potentially risky, venture (Cope, 2005). Furthermore, Cope highlights Gartner's argument in regard to the entrepreneurial personality, and the continuing participation in a company's growth and development (Cope, 2005) i.e. its continued existence as a modern learning organization. Cope cites Gartner's statement that, "the individual who creates the organization as the entrepreneur takes on other roles at each stage -- innovator, manager, small business owner, division vice president, etc." (Cope, 2005)

The behavioral mindset that underlies the entrepreneurial personality is, therefore, a significant contributor to a company's success even long after its initial establishment, or branching out into a new area or venture.

In terms of cognitive learning ability, the same entrepreneurial skills are necessary to the continuing organizational development of the business. Men and women with cognitive skills are able to use their pre-existing stock of knowledge to discover and enhance business opportunities. (Politis, 2005) These pre-existing sources of information relate not only to company-, and opportunity-specific, knowledge, but also to general knowledge. (Politis, 2005) Again, this would appear to associate "being informed" - whether about culture, law, technology, etc. - with being better able to build up an organization. The businessperson who is capable of communicating his or her wider knowledge of procedures, markets, and so forth, to the other members of his or her organization will be able best to aid that organization.

Previous experience could however lead to a greater likelihood of a customized set of benefits, such as relevant business skills, well-developed networks, and a business reputation, that can be leveraged into subsequent ventures. The ability to better cope with liabilities of newness could in this respect involve several aspects related to the various ways entrepreneurs reduce the traditional obstacles and uncertainties related to setting up a new venture. (Politis, 2005)

Clearly, the cognitive learning processes of an organization contribute to the success or failure of attempts to navigate successfully through new opportunities and to continue to benefit from existing markets and situations.

No less important in the scheme of company growth and development is the organizational place occupied by action learning. Honig notes that action is a by-product of exploitation, resource acquisition and coordination. (Honig, 2001) Action is a natural result of the cognitive process,

Informed action is a function of the existence of knowledge about the relationship between specific actions and outcomes. It assumes actors are rational and make decisions based on their prior knowledge or expectations regarding relationships. Thus, informed action assumes that the process between discovery, knowledge, and action is unobstructed, continuous, and dynamic. (Honig, 2001)

Shepherd and Krueger specifically studied entrepreneurial teams within companies and concluded that the actions taken by these teams were as significant to business success as the more traditionally individual decisions of lone entrepreneurs. (Shepherd & Krueger, 2002) Speaking of what they term "collective efficiency," Shepherd and Krueger point out that,

If fellow team members are needed to support an intention... perceptions of collective efficacy are likely to also be important. Collective efficacy refers to a team's belief in their conjoint capabilities to organize and execute the courses of action required to produce given levels of attainments.... A collective belief that the team can be effective.... collective efficacy is conceptually distinct from the aggregation of the self-efficacy of each member of the team since it is a team level attribute. (Shepherd & Krueger, 2002)

The sum total of the actions of all the members of the group are what makes the organization run smoothly and achieve its goals. Though the individual men and women in the group may possess different abilities, and may stronger or weaker drives to reach group goals, the group itself still remains of paramount importance in achieving the objects of the business.

In this context, the learning curves followed by the collective of entrepreneurs place that collective of entrepreneurs within the still larger setting of the global marketplace. Taylor and Asheim refer to an economic geography that is more than merely a map of where economic activities take place (Taylor & Asheim, 2001, p. 315). A modern learning organization integrates itself on virtually every conceivable level. Much as its individual members make use consciously and unconsciously of a variety of learning techniques in order to work together as a unit, so too do all of their learning paradigms combine to make them a single, effective player on a larger global stage.

Taylor and Asheim encourage firms to immerse themselves in the concept of economic geography, to complete, as it were, the learning curve, by employing their cognitive abilities vis-a-vis the global marketplace, and so use that marketplace as a source for policies and ideas:

This input into policy will grow only when economic geographers more appropriately theorize the firm and build the key issues of "place," "space," and "spatialities" into their theorizing. This rationale lies behind the set of papers on the firm that we have brought together in this special issue of Economic Geography. (Taylor & Asheim, 2001, p. 315)

In other words, the final dimension of "the group" must be understood as the outer framework within which the company operates. A company may indeed have certain goals in regard to the "outer" world it seeks to exploit, but in order to exploit that outer world successfully it must also recognize itself as part of that world. The grouping of individual entrepreneurs who have now become an organization, must in turn, become a group within a group, this outer, and all-encompassing group being the global marketplace.

Thus, the global marketplace becomes the endpoint, as well as the starting point, of organizational learning theory. The successful modern business must learn to operate on a global stage. Technology, transportation, and simple day-to-day financial realities have made it impossible to ignore the resources and opportunities of a wider world. Competition comes from everywhere, as do the possibilities for financial success. In order to make good use of all of these opportunities, and to avoid the pitfalls of worldwide competition, companies must act like entrepreneurs - they must become agglomerations of individuals. Each of these individual began as a kind of entrepreneur, each possessing her or his own goals, talents, knowledge, and so forth. The entrepreneur makes use of a wide range of organizational skills; skills that enable her or him to size up opportunities, to understand how to deal with them, and how to continue the process of growth and expansion once these opportunities have begun to pay off. Behavioral, cognitive, and action-based learning theories each contribute in their own particular ways to these entrepreneurial processes. A successful enterprise - being a collection of individuals - achieves its greatest success and adaptability by becoming a collection of entrepreneurs; one that fuses together so completely that t effectively becomes a single, giant "super-entrepreneur." Once this level of collectivity is reached, it remains only to use the same organizational theories and apply them to the ultimate "collective" - the global marketplace of which the company, no matter how largely, remains but a part. Success is based on continued learning and working together.