Learning organization, knowledge management, employee outcomes and performance of large manufacturing firms in Kenya
Abstract
The concept of learning organization has generated a lot of debate among scholars in recent years.
Learning organizations have developed as a result of pressures facing modern organizations to
adapt and remain competitive in modern business environment. However, few empirical studies
have examined the relationship between learning organization and organizational performance.
This study sought to contribute to this growing body of knowledge by determining the influence
of learning organization on performance of large manufacturing firms in Kenya. Specific
objectives focused on examining the mediation of employee outcomes in the relationship between
learning organization and firm performance, assessing the moderating effect of knowledge
management and establishing the joint effect of the three variables on performance. The study
was guided by the positivist approach. Review of literature and identification of knowledge gaps
formed the basis of the conceptual model and hypotheses. The study was anchored on four
theories: resource based view, knowledge based view, dynamic capabilities theory and human
capital theory. The descriptive survey design was used. Data was collected from a cross section of
study units. The target population consisted of 108 large manufacturing firms. A structured
questionnaire, based on a five-point likert type scale, was used to collect primary data. The key
respondents included the human resource manager, finance manager and production manager.
Results of tests for normality confirmed that data employed in analysis was normally distributed.
The reliability test showed that all the study variables were reliable thus suitable for further
analysis. Descriptive statistics and regression analyses were used to analyze data. Results of the
study indicated that learning organization has a positive influence on firm performance. The
relationship between learning organization and both financial and non-financial performance was
positive and significant. Findings of the study did not provide sufficient evidence to support the
mediation of employee outcomes in the relationship between learning organization and firm
performance. Similarly, the study also established that knowledge management does not
moderate the relationship between learning organization and firm performance. However, based
on the structure of the research model which included learning organization, employee outcomes
and knowledge management, the results seemed reasonable. The combined effect of learning
organization, employee outcomes and knowledge management on financial performance was not
statistically significant. Results of the study revealed that the joint effect of learning organization,
employee outcomes and knowledge management on non-financial performance was greater than
the individual effect of the predictor variables. The results of further analysis revealed that
learning organization mediates the relationship between knowledge management and nonfinancial
performance. The study also confirmed the mediation of learning organization in the
relationship between employee outcomes and non-financial performance. The results present
diverse implications for policy, practice and research. The study confirmed that learning
organization has a significant influence on employee outcomes such as organizational
commitment and job satisfaction. Human resource development practitioners can use the findings
of this study to support the case for implementation of learning organization initiatives. This will
lead to high levels of organizational commitment and job satisfaction which translate to increased
productivity. Policy makers will use the findings of this study to evaluate how well the
manufacturing sector can be leveraged through learning organization practices in order to
contribute to increased economic growth. The study provided support for the basic proposition of
resource based view that superior performance can be achieved from a combination of firm
specific resources. The study confirmed that human resource practices combined into an overall
system can be valuable and difficult to imitate thus leading to superior performance. Future
studies could use longitudinal study to provide a better understanding of the influence of learning
organization on firm performance. Organizational factors such as strategy, structure, innovation
technology and leadership could be considered as possible influencers in the relationship.
Publisher
University of Nairobi