Creativity and Innovation

The growth and survival of the business in the dynamic environment as of today depends upon
the development of new products. Organizations must be always in the lookout for new
opportunities and exploiting them by creating new products and services. Therefore, it is
needless to say that new product development holds the key for the survival of an organization.
New products do not come about on their own. They are the result of the ingenuity of creativity
people in the organization. As such, it is obvious that new product development is the function of
organizational creativity. In other words, it depends upon how creative an organization is in
respect of new ideas. It may be understood any organization can be as creative as its people.
Having understood the importance of creativity in the organizational context, let us understand
the meaning and process of creativity.
Creativity
Creativity, in general, may be defined as an “escape from mental stuckness”. In the
organizational context, it may be viewed as new insights which points to better ways of dealing
with reality. It involves a departure from conventional thinking to non-conventional thinking. It
entails establishment of a relationship between the hitherto unrelated things, ideas or concepts. A
close examination of many products enables us to understand how apparently unrelated things
are related to produce a new product. The ubiquitous wet grinder found in many of the kitchens
may be cited as a best example where a relationship is established between the electric motor and
the conventional stone used in the Indian homes for grinding purposes since times immemorial.
Similar is the case with the electric bulb and the lens that are combined to develop the overhead
projector used in the classrooms. The same logic holds good for many products that we see
around.
Creativity and Innovation
Though, at times creativity and innovation are used interchangeably, it is appropriate to know
that both are different. While creativity is the generation of a new idea, innovation is the
translation of such an idea into a product, service or method of production. In Lawrence B.
Mohr’s Woods, creativity implies “bringing something new into being while innovation implies
bringing something new into use”.
According to Rosabeth Kanter, “Innovation is the generation, acceptance and implementation of
new ideas, processes, products or services”.
Such a distinction is necessary because the skills required to generate new ideas (creativity) are
not the same as those required to make the ideas take the shape of products or services. Since
both creativity and innovation are two different functions, organizations need people good at
both the functions. Further, creativity alone does not contribute for organizational effectiveness
unless the creative ideas can in some way be used or implemented. A new idea, however good it
is, must be capable of implementation and must actually be implemented for the organization to
benefit from it.
The Creativity Process Creative people, in general, are few and far between in any society. Many
products and services that we take for granted these days are the result of their creative thinking.
It was J.P.Guildford, a noted psychologist who coined the phrases ‘divergent’ and ‘convergent’
to describe different thinking styles in the early 1950s. Accordingly, Convergent thinking is the
sort of thinking most of us are trained to do. Divergent thinking is quite different from
convergent thinking. It is intuitive thinking and is quite different from convergent thinking. It is
intuitive thinking useful to deal with problems permitting several possible solutions where novel,
unexpected answers emerge.
Physiologically, our brain has two distinct hemispheres: one on the left side, and the other on the
right side. Psychologists have long back established that these two halves have totally different
jobs. The function of the left side of the brain is linear thought process- the type of thinking
involved when you solve a mathematical problem. The right side of the brain acts or behaves in a
different way. Its functions are connected with imagery, and with intuition or ‘gut-feel’.
There is an obvious parallel between convergence/divergence and the left brain/right brain
model. In other words, convergent thinking takes place in the left brain while, divergent thinking
in the right brain. Having understood the two spheres of the human brain, let us acquaint with the
process of creativity:
Idea generation: The individual selects a problem to work on or more likely become aware that
a problem or need exists. This is the starting point for the new product development indeed. This
refers to the awareness about the ‘gaps’ in the market.
Preparation: The individual becomes obsessed with the idea/ problem, recalling and collecting
information that seems relevant and dreaming up hypothesis without evaluating them. Openness
to experience, tolerance for ambiguity and willingness and courage to redefine the existing
concepts, beliefs are the important psychological attributes required at the stage.
Incubation: After assembling the available information, the individual relaxes and the
subconscious mind becomes active. In this not much understood but crucial step, the individual
often appears to be idle or day dreaming, but the subconscious is in fact trying to arrange the
facts into a pattern. Psychological freedom and safety are important at this stage.
Illumination: This is something which we experience quite often. Often, when least expected –
while eating, falling asleep or walking- the new integrative idea will flash into the individual’s
mind. Such insights must be recorded quickly, because the conscious mind may forget them in
the course of other activities.
Verification and Application: The individual sets out to prove by logic or experiment that the
idea can solve the problem and can be implemented. Tenacity may be required at this point. It is
at this state the individual switches over to the logical, analytical or convergent thinking. The
practical implications are examined what is known as feasibility assessment- both technical and
economic for commercialization of the idea/concept. This is also known as assessing the
scalability.
Organizational Creativity and Innovation
Just as individuals differ in their ability to translate their creative talents into results,
organizations also differ in their ability to translate the talents of their members into new
products, processes or services. To make the organization creative, managers need to know the
steps involved in the creativity process presented above and take appropriate initiatives to
encourage the process.
Climate for Organisational Creativity
Creativity is best nurtured in a permissive climate which encourages the exploration of new ideas
and new ways of doing things. The following aspects, if practiced, would contribute to fostering
creativity in organization.
Accept change: Organisation members must believe that change will benefit them and the
organization. Some resistance to change is found in many organizations for fear of losing
position, learning new skills, etc. Such a resistance to change has to be overcome by clarifying
the need and urgency for change. The adage that routine drives out the non-routine has to be
revisited and must be seen the other way.
Encourage new ideas: Managers in the organizations, from top to the down must make it clear
in word and deed that they welcome new approaches. To encourage creativity, managers must
listen to their subordinates ideas and suggestions/ways of doing things. They must have an open
mind. Permit more interaction: A permissive, creative climate can be fostered if individuals have
the opportunity to interact with other members of the group and other groups in the organization.
Such interaction encourages the exchange of useful information, the free flow of ideas, and fresh
perspectives on problems.
Tolerate failure: In spite of the best efforts and intentions, failure is not uncommon. Tolerance
for failure needs to be imbibed. Failure has to be understood as a learning experience.
Freedom to achieve: For the mind to explore new ideas there has to be abundant freedom of
thought and action. Organisation members must be properly guided towards achievement. A
supportive climate will help gain control over the time and money invested in creative behavior.
Offer recognition: Creative individuals are motivated to work hard on tasks that interest them.
They must be rewarded for the tasks well done. By offering recognition in such tangible forms as
salary increase, recognition, the message gets conveyed that creative behavior is valued and
rewarded.
Factors which hamper Innovation
Rosabeth Kanter has developed a list of ten types of attitudes that stifle creative and innovative
attempts or disposition of the people in the organization. Such attitudes will have a dampening
effect on organizational creativity and innovation. An understanding of the following points may
help you avoid getting into the trap.
- Viewing any new idea from below with suspicion- because it is new, and because it is from
below.
- Insisting that people who need our approval to act first go through several other levels of
management to get their signatures.
-Asking departments or individuals to challenge and criticize each other’s proposals.
- Expressing criticism freely and withholding praise where it is due. (Keeping the people on their
toes). Creating a fear psychosis among people that they can be fired at any time.
 - Treating identification of problems as signs of failure in order to discourage people from letting
you know when something in their area is not working.
- Controlling everything carefully. Make sure people count anything that can be counted
frequently.
- Making decisions to reorganize or changing the policies in secret, and springing them on people
unexpectedly.
- Making sure that requests for information are fully justified, and making doubly sure that it is
not given out to managers freely.
- Assigning to lower-level managers, in the name of delegation and participation, responsibility
for figuring out how to cutback, layoff, move people around, or otherwise implementing the
threats you have thrown around.
- And above all, never forget that you the higher - ups, already know everything important about
this business.
Difference between creativity and innovation:

BASIS FOR
CREATIVITY INNOVATION
COMPARISON

Meaning Creativity is an act of creating new Innovation is the introduction of

ideas, imaginations and possibilities. something new and effective into the
market.

Process Imaginative Productive

Quantifiable No Yes

Related to Thinking something new Introducing something new

Money Consumption No Yes

Risk No Yes

Definition of Creativity

Creativity is the characteristic of a person to generate new ideas, alternatives, solutions, and
possibilities in a unique and different way.

Creativity is the ability to conceive something unpredictable, original and unique. It must be
expressive, exciting and imaginative. It is the mirror of how beautifully a person can think in any
given circumstance.
It is not genetic but can be developed if someone keeps on learning and comprehending things
with a rare and exclusive perception. Creativity is a brainstorming and mind-blogging activity in
which a person has to think beyond his imagination for bringing something worthwhile. It is an
activity of unveiling something which was previously hidden.
Definition of Innovation
Innovation is an act of application of new ideas to which creates some value for the business
organization, government, and society as well. Better and smarter way of doing anything is
innovation. It could be the introduction of:

 New technology.
 New product line or segment.
 A new method of production.
 An improvement in the existing product.

Innovation is closely tied to creativity i.e. putting creative ideas into action is an innovation,
whose consequences should be positive. It is the process of doing something better for the first
time, which was not previously done by any entity. It can also be termed as a change which can
bring a new edge to the performance and productivity of the company. It is of two types i.e.
evolutionary and revolutionary.
Key Differences between Creativity and Innovation
The following are the major differences between Creativity and Innovation:
1. The quality of thinking new ideas and putting them into reality is creativity. The act of
executing the creative ideas into practice is innovation.
2. Creativity is an imaginative process as opposed to innovation is a productive process.
3. Creativity can never be measured, but Innovation can be measured.
4. Creativity is related to the generation of ideas which are new and unique. Conversely,
Innovation is related to introduce something better into the market.
5. Creativity does not require money. On the other hand, innovation requires money.
6. There is no risk involved in creativity, whereas the risk is always attached to innovation.

Example

The invention of the motorcycle was the biggest innovation over scooters. In early centuries,
people used to travel with scooters, for which they have to make lots of efforts to start it like they
need to strike the kick and knee down from either side if it doesn’t start. So, years and years
passed away, and nobody even thought for the invention of bikes. The invention of the
motorcycle make them realize that they can also ride bikes without making any extra efforts,
they just have to click the switch and its starts automatically.

In this example, the thought of creation of a new traveling motorcycle is creativity, but the actual
invention of it is innovation.
 Negotiation

Negotiation is a method by which people settle differences. It is a process by which compromise

or agreement is reached while avoiding argument and dispute.
In any disagreement, individuals understandably aim to achieve the best possible outcome for
their position (or perhaps an organisation they represent). However, the principles of fairness,
seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.
In order to achieve a desirable outcome, it may be useful to follow a structured approach to
negotiation. For example, in a work situation a meeting may need to be arranged in which all
parties involved can come together.
The process of negotiation
The process of negotiation includes the following stages:
1. Preparation
2. Discussion
3. Clarification of goals
4. Negotiate towards a Win-Win outcome
5. Agreement
6. Implementation of a course of action
1. Preparation
Before any negotiation takes place, a decision needs to be taken as to when and where a meeting
will take place to discuss the problem and who will attend. Setting a limited time-scale can also
be helpful to prevent the disagreement continuing.
This stage involves ensuring all the pertinent facts of the situation are known in order to clarify
your own position. In the work example above, this would include knowing the ‘rules’ of your
organisation, to whom help is given, when help is not felt appropriate and the grounds for such
refusals. Your organisation may well have policies to which you can refer in preparation for the
negotiation.
Undertaking preparation before discussing the disagreement will help to avoid further conflict
and unnecessarily wasting time during the meeting.
2. Discussion
During this stage, individuals or members of each side put forward the case as they see it, i.e.
their understanding of the situation.
Key skills during this stage include questioning, listening and clarifying.
Sometimes it is helpful to take notes during the discussion stage to record all points put forward
in case there is need for further clarification. It is extremely important to listen, as when
disagreement takes place it is easy to make the mistake of saying too much and listening too
little. Each side should have an equal opportunity to present their case.
3. Clarifying Goals
From the discussion, the goals, interests and viewpoints of both sides of the disagreement need to
be clarified.
It is helpful to list these factors in order of priority. Through this clarification it is often possible
to identify or establish some common ground. Clarification is an essential part of the negotiation
process, without it misunderstandings are likely to occur which may cause problems and barriers
to reaching a beneficial outcome.
4. Negotiate Towards a Win-Win Outcome
This stage focuses on what is termed a 'win-win' outcome where both sides feel they have gained
something positive through the process of negotiation and both sides feel their point of view has
been taken into consideration.
A win-win outcome is usually the best result. Although this may not always be possible, through
negotiation, it should be the ultimate goal.
Suggestions of alternative strategies and compromises need to be considered at this point.
Compromises are often positive alternatives which can often achieve greater benefit for all
concerned compared to holding to the original positions.
5. Agreement
Agreement can be achieved once understanding of both sides’ viewpoints and interests have
been considered.
It is essential to for everybody involved to keep an open mind in order to achieve an acceptable
solution. Any agreement needs to be made perfectly clear so that both sides know what has been
decided.
6. Implementing a Course of Action
From the agreement, a course of action has to be implemented to carry through the decision.
Failure to Agree
If the process of negotiation breaks down and agreement cannot be reached, then re-scheduling a
further meeting is called for. This avoids all parties becoming embroiled in heated discussion or
argument, which not only wastes time but can also damage future relationships.
At the subsequent meeting, the stages of negotiation should be repeated. Any new ideas or
interests should be taken into account and the situation looked at afresh. At this stage it may also
be helpful to look at other alternative solutions and/or bring in another person to mediate.
Informal Negotiation
There are times when there is a need to negotiate more informally. At such times, when a
difference of opinion arises, it might not be possible or appropriate to go through the stages set
out above in a formal manner.
Nevertheless, remembering the key points in the stages of formal negotiation may be very
helpful in a variety of informal situations.
In any negotiation, the following three elements are important and likely to affect the ultimate
outcome of the negotiation:
1. Attitudes
All negotiation is strongly influenced by underlying attitudes to the process itself, for example
attitudes to the issues and personalities involved in the particular case or attitudes linked to
personal needs for recognition.
Always be aware that:
 Negotiation is not an arena for the realisation of individual achievements.
 There can be resentment of the need to negotiate by those in authority.
 Certain features of negotiation may influence a person’s behaviour, for example some
people may become defensive.
2. Knowledge
The more knowledge you possess of the issues in question, the greater your participation in
the process of negotiation. In other words, good preparation is essential.
Do your homework and gather as much information about the issues as you can.
Furthermore, the way issues are negotiated must be understood as negotiating will require
different methods in different situations.
3. Interpersonal Skills
Good interpersonal skills are essential for effective negotiations, both in formal situations and in
less formal or one-to-one negotiations.
These skills include:
 Effective verbal communication
 Listening
 Reducing misunderstandings
 Rapport Building.
 Problem Solving
 Decision Making
 Assertiveness
 Dealing with Difficult Situations
Types
Negotiation theorists generally distinguish between two types of negotiation. The difference in
the usage of the two types depends on the mindset of the negotiator but also on the situation:
one-off encounters where lasting relationships do not obtain are more likely to produce
distributive negotiations whereas lasting relationships are more likely to require integrative
negotiating. Different theorists use different labels for the two general types and distinguish them
in different ways.
 Distributive negotiation
Distributive negotiation is also sometimes called positional or hard-bargaining negotiation and
attempts to distribute a "fixed pie" of benefits. Distributive negotiation operates under zero-sum
conditions and implies that any gain one party makes is at the expense of the other and vice
versa. For this reason, distributive negotiation is also sometimes called win-lose because of the
assumption that one person's gain is another person's loss. Distributive negotiation examples
include haggling prices on an open market, including the negotiation of the price of a car or a
home.
In a distributive negotiation, each side often adopts an extreme or fixed position, knowing it will
not be accepted—and then seeks to cede as little as possible before reaching a deal. Distributive
bargainers conceive of negotiation as a process of distributing a fixed amount of value. A
distributive negotiation often involves people who have never had a previous interactive
relationship, nor are they likely to do so again in the near future, although all negotiations usually
have a distributive element.
In the distributive approach each negotiator fights for the largest possible piece of the pie, so
parties tend to regard each other more as an adversary than a partner and to take a harder
line. Since Prospect Theory indicates that people value losses more than gains and are more risk-
averse about losses, concession-convergence bargaining is likely to be more acrimonious and
less productive of an agreement.
 Integrative negotiation
Integrative negotiation is also called interest-based, merit-based, or principled negotiation. It is a
set of techniques that attempts to improve the quality and likelihood of negotiated agreement by
taking advantage of the fact that different parties often value various outcomes differently. While
distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided
between the parties, integrative negotiation attempts to create value in the course of the
negotiation ("expand the pie") by either "compensating" loss of one item with gains from another
("trade-offs"), or by constructing or reframing the issues of the conflict in such a way that both
parties benefit ("win-win" negotiation).
However, even integrative negotiation is likely to have some distributive elements, especially
when the different parties both value different items to the same degree or when details are left to
be allocated at the end of the negotiation. While concession is mandatory for negotiations,
research shows that people, who concede more quickly, are less likely to explore all integrative
and mutually beneficial solutions. Therefore, early conceding reduces the chance of an
integrative negotiation.
Integrative negotiation often involves a higher degree of trust and the formation of a relationship.
It can also involve creative problem-solving that aims to achieve mutual gains. It sees a good
agreement as not one with maximum individual gain, but one that provides optimum gain for all
parties. Gains in this scenario are not at the expense of the other, but with it. Each seeks to
accord the other enough benefit that it will hold to the agreement that gives the first party an
agreeable outcome, and vice versa.
Productive negotiation focuses on the underlying interests of the parties rather than their starting
positions, approaches negotiation as a shared problem-solving rather than a personalized battle,
and insists upon adherence to objective, principled criteria as the basis for agreement.
 Organizational Learning
Learning can take place at individual level, team level or at organisational level.
Though we mainly focus and relate learning to an individual, more and more organisations are
adopting the concept of organisational learning in order to survive in the competitive world.
Organisational learning can be described as the ability of an organisation to develop an
understanding and gain insight from experience through experimentation, observation and
analysis and thus make it more efficient and effective in competition to other organisations.
Organisational learning thus studies models and theories about the way an organization learns
and adapts. Effective organisational learning entails modifying the procedure themselves and
may be even the assumptions, values, and objectives on which they were based to not only solve
current problems, but to prevent their recurrence in the future (Coffey et al, 1997).
It not only contributes to resolving organisational issues, but promotes individual development of
knowledge and skills. Organisational learning is also related to organisational change as it can
contribute and is conducive to organisational change.
An organisation in the process of learning may utilise any one of the three learning styles, viz.,
(i) single loop learning
Single loop learning mainly deals with the identification and rectification of errors. This is the
fundamental level of organisational learning where the effectiveness of rules and policies in the
organisation are focused on. One disadvantage of this style is that, the organisations may focus
only on the errors and not on developmental aspects. This style can be most effective when
solving problems with high level of urgency.
(ii) Double loop learning
Double loop learning when compared to single loop learning is in-depth. It is normally used in
an organisation when there is a need to focus on norms, structures and identify the root causes of
an error. The use of this learning style may lead to certain changes that may impact the values,
beliefs and strategies in an organisation.
Double loop learning directly deals with the root cause of the problem thus may require a long
period of time and cannot be utilised for dealing with immediate problems. Double loop learning
is definitely more advantageous to any organisation compared to single loop learning. However,
there is hesitation on part of the organisations to use it because of its complexity, time
consuming process and also because it involves disclosure of errors and questioning of values,
beliefs and strategies in an organisation.
(iii) Deuteron learning
In deuteron learning, not only there is an in-depth analysis of error and questioning of values,
beliefs and strategies as in double loop learning, but it goes one step further and also attempts to
evaluate and analyse the whole process of learning. This style thus enhances the learning practice
in the organisation.
The above are the three learning styles that might be adopted in an organisation. However, it is
not that only a single style is utilized. A successful organisation will apply each of these learning
styles depending on the demands of the situation.
Organisational learning is based on five core areas, namely, system thinking, team learning,
shared vision, mental models and personal mastery. Of these five areas, system thinking is the
most important. These five core areas also distinguish a learning organisation from a
bureaucratic organisation.
1 System Thinking
System thinking is like looking at the organisation as a whole and then focusing on the
relationship between its varied parts. It helps in working along with the system rather than
against it. In order to develop system thinking, the employees in an organisation need to
participate actively in the varied activities taking place in the organisation. System thinking lies
at the heart of organisational learning because all the members of the organisation are able to
develop an understanding of the whole rather than parts of the organisation like structure,
processes and behaviour.
2 Team Learning
Various types of team exist in organisations that are crucial to the overall functioning of the
organisation. Thus it can be said that teams are fundamental units of an organisation and form
basic learning units of an organisation.
Team learning occurs when the team members develop a feeling of cohesiveness and collectively
experience productiveness while working on a particular task. It involves sharing of knowledge
and application of this knowledge in collective thinking environment. For team learning to take
place it is extremely important that the team members are involved in effective team behaviour
and team work. Further, effective interaction between the team members is extremely important
for the team learning to take place and to overcome the barriers that interferes with learning.
3 Shared Vision
Shared vision means that all the employees in an organisation have common objectives and
goals, and they are collectively committed to achieving them. Shared vision is extremely
important in an organisation as it sets a performance standard against which each employee can
compare his/ her contribution to the organisational goal.
Shared vision also develops a feeling of cohesiveness amongst employees and may enhance
organisational citizenship. However, in the process of developing a shared vision, it important to
take in to consideration, the mental models existing in that particular organisation. The
employees should also be encouraged to express their personal vision that can form basis of the
shared vision. Care must also be taken to evaluate the shared vision on regular basis.
4 Mental Models
Mental models determine our perception about the world and they are formed in order to help us
look at the world in a simple manner. In an organisational set up mental models guide the way in
which employees perceive the organisational structures and its processes. It is thus extremely
important for an organisation to focus and be aware about the mental models of its employees, as
mental models may limit the perception of the employees and stop them from being creative and
innovative and may compel them to perceive things from a single perspective. Thus the existing
mental model in the organisation needs to be identified and challenged if necessary. Further, a
shared mental model may also be developed in an organisation.
5 Personal Mastery
Personal mastery occurs when an employee is committed to self and professional development
and involved in enhancement of his/ her learning skills and competencies. An organisation
should encourage development of personal mastery amongst its employees by providing them
with training and development programmes, coaching, mentoring and other facilities. Personal
mastery is relevant at all hierarchal levels in an organisation and every employee should be able
to develop it in order to enhance organisation learning.
Strategies for Organisational Learning
Varied strategies are employed to promote organisational learning. They are as follows:
i) Action learning: It is process carried out by a group of people with different levels of skills
and experience to analyse a real problem and develop an action plan. Learning here takes place
by actually working on the problem or carrying out the problem related work activity. The group
also supervises the implementation of the action plan and may make changes throughout the
implementation process.
This strategy is mainly used to deal with complex problems, to identify root cause of the problem
and derive a suitable solution and to develop new strategic plans and increase developmental
opportunities.
ii) Cross-functional teams: It is composed of people with varied levels of skills and experience
who are brought together to accomplish a task.
Cross functional teams help deal with an impending problem in organisations referred to as
‘functional silos problem’, that occurs when the employees in an organisation focus only on the
matters concerning their department or function and interact minimally with other departments or
units in the organisation. This leads to effective functioning of a single department but not of the
organization as a whole as there is no much communication and coordination between the
difference departments and units of the organisation.
With the help of cross functional teams, employees from different departments or units come
together, interact, discuss and share their point of view with regard to a particular issue or
problem. This not only provides with a number of alternatives for dealing with a single issue but
also enhances organisational learning as the employees with varied skills, knowledge and
expertise are involved in sharing and learning from each other. They may also use action
learning as one of their strategies.
iii) Work-outs: These are meetings of employees representing all levels and functions of the
organisation or unit, except management, to identify ways the organization can work together
more efficiently and effectively. Work outs can be effectively used to facilitate organisational
change and to ensure active participation of all employees in change process, to develop creative
and practical strategies of dealing with varied problems in an organisation. It can also be used to
redesign work practices and processes.
iv) Groupware: It is technology used to facilitate a group’s communication, problem-solving,
and decision-making processes. The group members here may come from different geographical
locations. It is extremely useful as it makes communication effective and fast thus accelerating
the problem solving a and decision making process.
v) Benchmarking: It is a process through which the performance, best practices and
achievements of other organisations are compared with one’s own organisation. It can be mainly
used to identify the areas in an organisation where improvements can be carried out. It also helps
an organisation learn from the performance and achievements of other organisations.
vi) Parallel learning structures: Also known as communities of practice, parallel learning
structures, promotes innovation and change in large bureaucratic organisations while retaining
the advantages of bureaucratic design. These structures are also effective in bringing about
organisational change.
All the above strategies are similar as they promote organisational learning. They differ however
in their processes and practices.
Organizational Learning VS Learning Organization
Both the learning organization and organizational learning are very similar in that they connect
to each other, but differ in that one involves theactual learning in an organization and the other
involves the course of gaining the learning in the organization.
Organizational Learning is defined as “the process of improving actions through better
knowledge and understanding” (Fiol, 1985). In other words, the "learning organization is a firm
that purposefully constructs structures and strategies, to enhance and maximize”
(12manage.com, 2008) the learning in an organization.
The learning organization is classified as “organizational learning [that] is the ‘activity and
the process by which organizations eventually reach th[e] ideal of a learning organization’”
(Smith 2001). It is the process of learning about what organizations do now, what they need to
work on or change in order to be more competitive or create a monopoly, what they are doing
right, who the people are that work there and with their competitors, and what they are like as
individuals.
Both the learning organization and organizational learning are similar in that they both involve
learning. Whether being the process of learning or the actual institutionalizing of learning, it has
become popular in organizations today. The reason is because of the idea that one needs to be
better than one’s competitors. Learning has also become more popular because of the ever
changing environment that we all live in today. Organizations are becoming more and more
competitive with each other and without some strategy of becoming better, organizations fall and
go out of business, or even worse, go bankrupt. The strategy of learning in an organization has
become the answer to businesses all around the world.
The learning organization and organizational learning are slightly different in that the learning
organization is the process to change and organizational learning is having the process and
strategies and implementing change throughout an organization. Simply put, one is the plan, the
other is the action.