Learning Organization and Performance of Large Manufacturing Firms

Abstract

The concept of learning organization has generated a lot of debate among scholars inrecent years. Learning organizations have developed as a result of pressure facing modernorganizations to adapt and remain competitive in modern business environment. However,few empirical studies have examined the relationship between learning organization andfirm performance.A number of discussions presented in literature focus on why learningmatters, yet few empirical studies address the processes required to build learningorganizations and their potential impact on firm performance. This study sought tocontribute to this growing body of knowledge by determining the influence of learningorganization on performance of large manufacturing firms in Kenya. To assess thisrelationship, the authors obtained managerial responses to the Yang, Watkins andMarsick’s Dimensions of the Learning Organization Questionnaire (DLOQ) as well asfinancial and non-financial measures of performance.Results of the study reveal thatlearning organization has a significant influence on firm performance measured in bothfinancial and non-financial terms. The findings are consistent with the basic proposition ofResource Based View (RBV) which suggests that firms perform well when they implementstrategies that exploit their internal resources and capabilities. The findings also providesupport to previous empirical studies.