Learning organization and performance of large Manufacturing Firms

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 pressure facing modern organizations to adapt and remain competitive in modern business environment. However, few empirical studies have examined the relationship between learning organization and firm performance.A number of discussions presented in literature focus on why learning matters, yet few empirical studies address the processes required to build learning organizations and their potential impact on firm 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. To assess this relationship, the authors obtained managerial responses to the Yang, Watkins and Marsick’s Dimensions of the Learning Organization Questionnaire (DLOQ) as well as financial and non-financial measures of performance.Results of the study reveal that learning organization has a significant influence on firm performance measured in both financial and non-financial terms. The findings are consistent with the basic proposition of Resource Based View (RBV) which suggests that firms perform well when they implement strategies that exploit their internal resources and capabilities. The findings also provide support to previous empirical studies.