The paper aims to answer the question: how does organizational learning explain the phenomenon of strategic renewal? It begins with an overview of the organizational learning literature. Organizational learning research has largely remained disconnected from strategy, and attempts to forge a link between strategy and organizational learning have been hindered by one or more of the three shortcomings: a too narrow conceptualization of organizational learning; the failure to address the fundamental tension of strategic renewal- the tension between exploration and exploitation; the lack of empirical research applying organizational learning theory to strategic renewal.
Then, the 4I organizational learning framework- intuiting, interpreting, integrating and institutionalizing- is discussed. It addresses the first two shortcomings, but no empirical examination. This 4I framework recognizes that a firm’s competitive position is dynamic not static, with influences working through feedback loops which create the tension. After that, the research methodology of the case study of CPC is presented. Both the archival data and interview data were collected.
In terms of the former, they analysed each document and summarized the information and summarized it according to both the protocol and the 4I matrix. Data were incorporated into the bins and compared to corresponding archival data to develop interpretation. Finally, they summarize the key finding for the four learning processes as well as feed- forward and feedback. They conclude that it is necessary to first describe organizational learning and then assess whether the organizational learning process is appropriate for the organization, given its context.
The main features of CPC’s strategy formation process
The CPC changed from a Canadian corporate- owned enterprise to retail- franchised postal outlets, it affects the features of the CPC’s strategic renewal. Firstly, the individual envision result in an important strategic step on the path from physical to electronic delivery of mail. Secondly, the new CEO arrived with many new perspective and management concepts from auto industry. This can be one of the main features in CPC’s strategy formation process to success.
Thirdly, the external stakeholders were encouraged to develop new interpretation about CPC through launched Feet-in the- street that an experiential learning program and paradigm, CPC’s innovative prototype of the postal service of the future, through which individuals had the opportunity to try out possibilities unencumbered by existing systems and procedures. Fourthly, the strategic renewal processes le to changes not only in systems and structures but also in strategies. CPC’s strategy shifted from a nationalistic role as the “deliverer of mail services” to being a viable business entity providing customer-focused, fiscally-responsible service. Finally, separating the franchised retail outlets away from existing corporate outlet in order to avoid the tough resource allocation decisions and to integrate after the retail part got smooth running is the obvious step of the new
The advantages and disadvantages of the CPC’s strategy formation process
First of all, the inside workers gained awareness of competitive pressures, client needs; the individual creativity can be increased. Then, the changing interpretation brought about by management turnover provided CPC with a quick infusion of new insights and ways of thinking about the business. A top- down orientation to learning provided an efficient way to change behaviours throughout the organization, as did processes of experiential and experimental learning. In addition, management of relationships changing helped the organization break from tradition, in terms of self-image and modes of operation. After, CPC allowed two factors to operate simultaneously and used the customer as the final judge in order to make CPC’s new strategy more market-oriented and more reliable for a long period of time in its new environment. Finally, the organization of CPC had to evolve very quickly from an unreliable, strike-ridden, inefficient, deficit generating entity to a profitable, competitive, nation-wide delivery service of choice.
The interview revealed that although many individuals had changed their behaviour to comply with edicts from the top, many had not changed their thinking; it may caused by a quick infusion of new insights. Quick strategic renewal processes could also alienate key stakeholder groups in the processes, particularly in the integration process.
The capability of getting deep understanding of the firm’s new context would be declined under a rapid evolution.
The failure to do that organizational learning research ought to forge a stronger link to strategy and explicitly identify the challenge associated with managing the tension between exploration and exploitation may be one of the reasons that some research has adopted an overly- positive stance.
What CPC has done to become a learning organization?
CPC becomes electronic delivery of mail organization and a network management expert. For instance, using electronic switching systems enabled inter-communication. CPC management described the change as a four-phase process. During the self-definition phase the organization had to identity its human, physical, and financial assets and establish its own administrative infrastructure. The second phase was one of becoming self-sufficient. The third is becoming competitive. The fourth phase is preparing for the future. The organizational structure followed its strategy through the integration and institutionalizing processes.
Capabilities, cognition, and inertia: evidence from digital imaging
The goal in this paper is to explore how the combination of capabilities and cognition helps to explain organizational inertia in the face of radical technological change. Through an in-depth case study of the response of the Polaroid Corporation to the ongoing shift from analog to digital imaging, we expand upon this work by examining the relationship between managers’ understanding of the world and the accumulation of organizational capabilities.
The Polaroid story clearly illustrates the importance of managerial cognitive representations in directing search processes in a new learning environment, the evolutionary trajectory of organizational capabilities, and ultimately processes of organizational adaptation. The firm provides particularly compelling example in that, despite early investments and leading- edge technical capability in areas related to digital imaging, the firm has so far not performed well in the digital imaging market. Two search activities related to technology development managerial cognition influences the development of new capability. Understanding processes of organizational change thus requires examining not only the central inertial forces associated with developing new capabilities, but also the impact that cognition has on such processes.
The features of case studies relate to the concept of capabilities of market- driven organizations. According to this emerging literature market orientation represents superior skill in understanding and satisfying customers. Its principal features are following:
* A set of beliefs that puts the customer’s interest first;
* The ability of the organization to generate, disseminates, and uses superior information about customers and competitors;
* The coordinated application of interfunctional resources to the creation of customer value.
Capabilities can be usefully sorted into three categories, depending on the orientation and focus of the defining processes. Firstly, Deploy from inside-out and activated by market requirements, competitive challenges such as cost control and technology development. Secondly outside-in capabilities connect the processes that define the other organizational capabilities to the external environment and creating durable relationships with customers. It contains market sensing and customer linking. Finally, spanning capabilities are needed to integrate the inside- out and outside-in capabilities. Market- driven organizations have superior market sensing, customer linking, and channel bonding capabilities. The processes underlying their superior capabilities are well understood and effectively managed.
In this case, firm’s knowledge of the technologies, manufacturing and distribution through mass market retailers are the main strengths result its dominant position in 1980. however, Three important areas of capability that Polaroid did not invest in: low- cost electronics manufacturing capability, rapid product development capability and new marketing and sales capability result in the weakness.
Polaroid missed the boat on the digital camera evolution. Around the late 90’s when digital cameras were really becoming popular, and companies were making their forays into that area, Polaroid decided to stick with its proprietary technology, instant photography. Eventually, Polaroid did develop digital imaging technology, but introduced it into the market late, which caused more of a loss then a profit for the company. Additionally, Polaroid failed to improve its base technology. The trendy camera used film that was considered expensive by adolescents and the quality of the imaging was inconsistent. The inconsistency of the product caused a decrease in sales .Lastly, Polaroid developed Opal and Onyx, which were printing technologies designed to deliver high-resolution digital images at competitive prices.
Unfortunately, Polaroid developed this technology but did not have enough money to advertise and further develop it. Whether and how quickly organizations respond to technological change has critical implications for their performance and survival. Research has documented consequences for incumbents that failed to respond or responded inappropriately to technological change. The increasing pace of recent technological change has put ever greater pressure on organizations to rapidly adapt, yet this need coincides with a wave of managerial activity focused on process control and improvement. While process management practices are expected to improve an organization’s competitiveness and ability to adapt, researchers have not explored how such institutionally mandated practices influence organizational adaptation to technological change.
Emphasizing cognitive elements in the explanation of the genesis and evolution of capabilities raises both positive and normative issues. A particularly important issue is the question of how beliefs evolve within organization. A second issue that clearly emerges in this research is role of hierarchy in cognition. Finally, this work raises important questions regarding the origins of both capability and cognition.