Learning Organization And
Organizational Performance Relationship: Empirical Study Of Pharmaceutical
Firms In Jordan
Hussein
M. Harrim, Applied Science Private University
ABSTRACT:
This study examined the relationship
between LO and organizational performance in the pharmaceutical industry in
Keywords: Learning organization,
Knowledge management, Organizational performance, Pharmaceutical firms,
1. Introduction
Jordanian pharmaceutical industry has
been steadily growing and expanding in the international market, and playing an
important role in the Jordanian economy. But, in order to keep growing and
expanding, pharmaceutical firms have only one choice: to reinforce and expand
their capabilities to learn, adapt, innovate and transform themselves,
i.e. to build and maintain LOs.
The significance of this study stems
from several reasons:
¨
First, human resources are considered the most valuable assets for any
organization, particularly Jordanian firms where financial and material
resources, are scarce.
¨
Second, knowledge has become the main source for sustainable competitive
advantage.
¨
Third, the LO has been widely and strongly advocated as a key factor for
organizational performance.
¨
Fourth, research dealing with the relationship between the LO and
performance is scarce (Thomas and Allen, 2006). Empirical work involved with
hypotheses development and testing is very limited (Johnson, 2002; Jashopora, 2003).
¨
Fifth, to the best knowledge of the writer, no empirical research has
been conducted on the LO in the Jordanian setting.
2. Research Problem
The study shall examine the
relationship between the LO and organizational performance in the
pharmaceutical industry in
1.
To what extent pharmaceutical firms in
2.
How well the pharmaceutical firms in
3.
What is the nature of the relationship between LO and organization
performance?
3. Study Hypotheses
Following are the principal hypotheses
of this research:
H1: There is a relationship between the Land organizational performance.
H2: There is a relationship between LO and
financial performance of an organization.
H3: There is a relationship between LO and
customer service.
H4: There is a relationship between LO and
internal processes of an organization.
H5: There is a relationship between LO and
learning/ growth/ innovation of an organization.
4 Research Purposes
1.
Identify the current levels of the dimensions of LO that characterize
pharmaceutical firms in
2.
Assess the organizational performance of the pharmaceutical firms
against core performance measures.
3.
Examine the relationship between LO and performance of the
pharmaceutical firms,
4.
Provide a broad practice framework to help management in pharmaceutical
firms, and others, in practical enactment of the LO.
5. Theoretical/ Conceptual
Framework
This part of the research presents a
review of the literature focusing on the definition of the LO, models of the LO
and organization performance measures.
5.1. Definition Of The LO
Senge, one of the leaders in the field of the LO
defined the LO as one where: “people continually expand their capacity to
create results they truly desire; new and expansive patterns of thinking are
nurtured; collective aspirations are set free; people are continually learning
to learn together” (Stewart, 2001). Since Senge
published his book the Fifth Discipline (1990), the concept LO has been very
popular and attracted many theorists from sociology, anthropology, social
psychology, management, and philosophy, who have attempted to define this
concept.
(Farago and Skyrme 1995) defined LOs as
“those that have in place systems, mechanisms and processes, that are
used to continually enhance their capabilities and those who work with it or
for it, to achieve sustainable objectives for themselves and communities in
which they participate."
(Malhotra
1996) defined the LO as an “organization with an ingrained philosophy for
anticipating, reacting and responding to change, complexity and
uncertainty”. The key ingredient of the LO, Malhotra
commented, is in how organizations process their managerial experiences (Malhotra, 1996). Overmeer (1997)
viewed the LO as “a particular organizational environment facilitating
individual learning, which in turn is harnessed by the organization and
encourages the continuous development of new behaviors and practices (Overmeer, 1997). Drew and Smith 1995 in (Dealtry and Teatre 1998) defined
the LO as “a social system whose members have learned conscious, communal
processes for continually generating, retaining and leveraging individual and
collective learning leading to improved performance of the organizational
system."
Kerka commented on the great number of attempts to
define LO “there is little consensus on the definition of a LO" (Kerka, 1995). Five years later, Garvin observed that
"a clear definition of the LO has proved to be elusive" (Garvin,
2000:9). (Thomas and Allen, 2006) recently commented “literature
indicates a little agreement on what LO or OL means and even less on how to
create a LO”. A number of themes and notions can be drawn from these, and
other, definitions of the LO.
The social view of the LO dominates
the popular writing; the focus is not on outcomes; rather it focuses on
interaction and process (Smith and Tosey, 1999):
¨
Learning is required at the individual, team and organizational levels.
¨
Learning must be continuous.
¨
Learning should be goal-oriented, usd to reach
desired goals-individual, team and organizational.
¨
Individual performance must be linked with organizational performance.
¨
LO must foster inquiry and dialogue, making it safe for people to share
knowledge openly and take risks.
¨
Embrace “ereative tension’ as a
source of energy and renewal.
¨
LOs are continuously aware of and interact with their environment (Kerka, 1995).
¨
Learning combines both adaptive learning (coping) and generative
learning (creating), it is not enough for an organization to adapt to change,
but it is necessary, as well, to learn to create its future (Peters, 1996, Malhotra, 1996).
¨
What distinguishes LOs from other
organizations is their ability to continually expand their respective
capacities to create their future or learn and transform themselves (Watkins
and Marsick, 1992).
5.2. Why Is the LO Important
In his book the Fifth Discipline, ( Senge 1990) argued that the old methods, efforts and
procedures of quality management, learning from mistakes, process reengineering
are insufficient to enable organizations to survive in the future - an
organization needs to become learning ( Rosenfeld and Wilson, 1999: 536).
The concept of the LO popularized by Senge has received much attention recently
because it is thought to embrace many of the vital qualities for today’s
organizations, i.e., teamwork, participation, flexibility and responsiveness. (Bierly et al., 2000) observed that "the theme
underpinning literature is that there is unprecedented need for LO capable to
create, integrate and apply knowledge, such capability is critical to firms
developing competitive advantage." Likewise,(Robbins
and Coulter, 2005: 41) argued that "the capability of an organization to
learn and apply what it learns can be the only source for sustainable
competitive advantage." Similarly, (Kiernan 1999) suggested that
“the ability for continual learning has become inevitable necessity for a
company to attain competitive advantage.” (Farago
and Skyrme 1995) stressed that "with the pace of
change ever quickening, the need to develop mechanisms for continuous learning
and innovation is greater than before." In general, says (Ghosh, 2004), “there appears a general consensus in
literature that organizational learning can help achieve sustainable
competitive advantage”. Recently, (Thomas and Allen, 2006), stressed that
“ability to learn has become a critical factor in the firms’
capability to respond and deal successfully with market opportunities in
knowledge-based economy…. under the rapid change and change in the nature
of work, organizations have become to consider learning as an important and
critical factor, more than ever before”.
5.3. Building The LO
One of the first and most popularized
models dealing with building a LO is Senge’s
model. (Senge 1990) identified five core disciplines
needed to build a LO. These disciplines are: systems thinking, personal
mastery, mental models, building shared vision, and team learning.
Senge saw "systems thinking" at the heart
of his model, the whole as primary, interdependence and interaction of the
parts, parts not to be taken as primary, and stressed cyclical causation,
long-term perspective, and feedback of the features of open systems
perspective. Persanal mastery means that
organizations must encourage their employees to continuously learn and develop
their skills and capabilities. Each individual must have a clear vision and
long range goals, recognize clearly the gap between the vision and current
situation, and be willing and determined to change the
present situation.
Team learning is seen to be crucial
"because teams, not individuals, are the fundamental teaching unit in
modern organizations (Senge, 1990: l0). Stress is
made on dialogue, team work, sharing information, constructive discussion,
openness, collaboration, and free thinking as crucial in team learning
A mental model is one’s way of
looking at the world, it determines how we think and act. We need to examine
objectively our assumptions and beliefs, see things as they are, never make
generalizations, say what we think, take criticism without being on the
defensive, recognize mistakes and correct them, and never avoid risks.
Shared vision is a critical factor in
organization success, and shared vision must be created through interaction
with individuals in the organization not imposed by top management. A shared
vision provides encouragement and support for members to learn and innovate.
Commenting on this model, (Gorelick, 2005) observed
“I believe that Senge’s five disciplines
are integral components in a LO, providing tools and methods that are
applicable and useful in the process of OL”.
Several models of a LO were developed extending and or drawing on Senge’s model to a greater or lesser degree. Following is a brief discussion of some of these models.
Watkins
and Marsick in (Cullen, 1999) identified seven
principal dimensions for building a LO:
¨
Creating opportunities for continuous learning.
¨
Encouraging and supporting dialogue and inquiry.
¨
Encouraging and supporting teamwork and collaboration.
¨
Establish systems for acquiring and sharing learning.
¨
Employees’ empowerment and collective vision.
¨
Linking the organization with its external environment.
¨
Develop leaders to be examples/ models and support learning at the
individual, team and organizational levels.
(Daft
2004: 30) suggested that a LO involves five main elements:
¨
Horizontal organizational structure.
¨
Information sharing.
¨
Adaptive culture.
¨
Collaborative strategy.
¨
Employee empowerment.
Finally,
(Robbins and Coulter 2005: 248) stressed that the characteristics of a LO
revolve around the following dimensions:
¨
Organizational design: boundaryless, teams,
empowerment.
¨
Information sharing: accurate, open, timely.
¨
Leadership: shared vision, collaboration.
¨
Organization culture- strong mutual relationship, sense of community,
caring, trust.
It can be concluded from the previous
discussion that the various models of the Lo extend and or draw on Senge’s model, to a greater or lesser degree.
Building a Lo is a challenging, slow, continuous multi-faceted process that
requires continual changes in the whole organizational internal environment,
including culture, structure, job design, processes, technology, human, etc.
5.4. Organizational Performance
Literature on organizational
performance clearly shows that there is no single universal measure that can be
used to assess overall organizational performance. Traditional financial measures
are not accepted as the sole indicators for organizational performance.
Moreover, we can hardly find an organization that is very successful or failure
in every aspect.
Many performance measures and models
have been developed and advocated by various writers, such as: profitability,
productivity, efficiency, effectiveness, adaptability, growth, innovation, etc.
Robbins (1998: 483) suggested four
performance indicators to assess organizational effectiveness: profit
maximization, organizational ability to acquire inputs and transform them
successfully into outputs, maintaining stability and balance, and identifying
and satisfying customers’ needs. (Kottler,
2000: 40-42) identified four key dimemsions to
achieve competitive performance: stakeholders, internal process, resources and
organizational management.
Among the performance measures that
received much attention is effectiveness. (Daft 2004:66) pointed that
"organizational
effectiveness included: goal approach, resource-based approach and internal
process approach." (Robbins and Coulter 2005:466) suggested that
"organizational effectiveness included four approaches/models: goal/output
achievement, systems resources, internal processes, and multiple constituencies models."
One of the approaches/models of
assessing organizational performance that became popular and widely applied is
the "balanced scorecard". The balanced scorecard is a performance
measurement tool that focuses on four areas: financial performance, customer
service, internal processes and people/ innovation/growth. These four measures
are interdependent indicators/measures. Daft commented on this model "This
model has attracted much attention and became the main management system in
many giant firms and managers can use it for setting goals, resource
allocation, budget planning and rewards" (Daft, 2004:293).
6. Research
6.1. Population And Sample
This research was administered with a
purposive sample of (400) participants, representing 14% of total employees
working at (5) pharmaceutical firms, and (350) questionnaires were analyzed.. The pharmaceutical industry was selected because it has
been playing a steadily increasing role in the Jordanian economy, witnessing
rapid disturbing changes, and continual product development and fierce
competition. All this makes the pharmaceutical industry attractive and suitable
for studying the LO and its relationship with organizational performance.
6.2. Instrument:
A questionnaire was developed for the purpose of collecting field data, and consisted of two parts. The first part drew on and extended basically Senge's model (1990), and Watkins and Marsick's model (1992) dealing with the LO and included (45) statements representing the 6 core dimensions of a LO, as follows:
1. Systems thinking:: Statements 1-7
2. Shared vision:: Statements 8-13
3. Teamwork and collaboration: Statements 14-21
4. Leadership and empowerment: Statements 22-27
5. Organizational Culture: Statements 28-36
6. Learning environment and knowledge transfer: Statements 37-45
The second part of the questionnaire focused on organizational performance, and included (18) statements covering four performance measures, based on balanced scorecard, as follows:
1. Financial performance : Statements 1-4
2. Internal processes : Statements 5-9
3. Customer service : Statements 10-13
4. Learning / growth / innovation : Statements 14-18
Cronbach Alpha coefficients were calculated for all dimensions of the LO, and the results were: systems thinking (0.740), shared vision (0.792), teamwork and collaboration (0.669), leadership and empowerment (0.726), organizational culture (0.675), learning environment (0.724). Also, Cronbach Alpha coefficients for all performance measures were found as follows: financial performance (0.708), internal processes (0.779), customer service (0.715), learning/ growth/ innovation (0.64) (table -1).
Table 1: Cronbach
Alpha Coefficients For Research Variables
|
Independent Variables |
Cronbach
Alpha
|
Dependent Variables |
Cronbach Alpha |
|
Systems thinking |
0.740 |
Financial
performance |
0.708 |
|
Shared vision |
0.792 |
Customer service |
0.715 |
|
Teamwork and
collaboration |
0.669 |
Internal process |
0.779 |
|
Leadership and
empowerment |
0.726 |
Learning/
growth/innovation |
0.684 |
|
Organizational
culture |
0.675 |
overall |
0.8793 |
|
Learning
Environment |
0.724 |
|
|
|
Overall |
0.915 |
|
|
6.3. Model
The Model suggesed in this paper (Figure-1)
represented a synthesis/ integration of the core themes and dimensions of the
LO and core measures of organization performance based on literature review.
Figure 1: Research Model
6.4.
Data Analysis
Table 2: Means And
Standard Deviations Of Participants’ Responses To Variables Of LO
No. |
Statement |
X¯ |
S |
|
|
Systems Thinking
|
4.17 |
1.00 |
|
1 |
The company focuses on trends, change
forces…. |
4.246 |
1.016 |
|
2 |
The company regularly examines its market
position. |
4.514 |
0.944 |
|
3 |
Employee recognizes that the company is a
part of larger system ….. |
3.785 |
1.22 |
|
4 |
Employees are aware that company’s
performance is largely determined by the nature of relationships and
interactions among individuals and units. |
4.269 |
1.044 |
|
5 |
The individual is concerned with the effect
of his/ her actions on others. |
4.168 |
1.014 |
|
6 |
The company regularly compares its
performance (benchmark) with other high performers….. |
4.340 |
0.925 |
|
7 |
The company reviews and learns from its
successes and failures …. |
4.348 |
0.875 |
|
8 |
The company continuously contacts various
stakeholders…… |
3.817 |
0.955 |
|
|
Shared/ Common Vision
|
3.872 |
0.812 |
|
9 |
Employees share clear vision, mission and
goals. |
4.088 |
1.082 |
|
10 |
Company’s mission and vision have wide acceptance. |
3.831 |
0.953 |
|
11 |
Individuals participate in developing
company’s shared vision and goals. |
2.120 |
0.325 |
|
12 |
Employees recognize the gap between
company’s shared vision and current situation. |
3.974 |
1.133 |
|
13 |
Employees are motivated and determined to
achieve the common vision and goals. |
4.505 |
0.771 |
|
14 |
Company’s mission defines the core
values that employees must comply with. |
4.614 |
0.625 |
|
|
Teamwork and Collaboration |
3.782 |
0.941 |
|
15 |
Product development programs/ projects are
assigned to teams. |
2.028 |
0.328 |
|
16 |
Teams are widely used across different
units and levels. |
3.762 |
1.355 |
|
17 |
Current practices encourage employees to solve
problems before discussing them with their managers. |
3.165 |
1.414 |
|
18 |
Team members consider themselves
collectively and jointly responsible for results. |
4.323 |
1.303 |
|
19 |
Interaction and intense communication and collaboration
prevail among members. |
4.051 |
1.437 |
|
20 |
Individuals feel safe when expressing their
opinions and/ or criticizing others’ opinions. |
4.315 |
0.884 |
|
21 |
Every individual is committed to constructive
dialogue to promote common understanding, not to win. |
4.578 |
0.694 |
|
22 |
Mutual trust prevails among individuals. |
3.910 |
1.162 |
|
|
Leadership and Employee Empowerment |
4.001 |
1.251 |
|
23 |
Top management supports change and welcome
new ideas. |
4.371 |
0.961 |
|
24 |
Managers and employees share common vision
and goals. |
4.272 |
1.075 |
|
25 |
Managers accept criticism without much
defensive reaction/ behavior. |
3.685 |
1.295 |
|
26 |
Managers usually provide feedback which
helps to identify problems and opportunities. |
3.165 |
1.414 |
|
27 |
A manager encourages employees to
participate in decision making and problem solving. |
4.282 |
1.283 |
|
28 |
A manager allows employees great independence
and autonomy in doing their works. |
4.046 |
1.389 |
|
|
Organizational Culture
|
3.432 |
0.851 |
|
29 |
The company is concerned with the future
and external world. |
4.317 |
0.869 |
|
30 |
Managers and employees accept and support
change. |
4.562 |
0.694 |
|
31 |
Knowledge is considered the main resource
for both the individual and the company. |
3.897 |
1.143 |
|
32 |
Employee’s mistakes are
constructively discussed to be avoided in the future. |
2.004 |
0.434 |
|
33 |
Mistakes by employees are tolerated. |
2.091 |
0.49 |
|
34 |
Work environment allows employees safe
expression of their opinions. |
4.371 |
0.960 |
|
35 |
Experimentation, inquiry and risk taking
are encouraged. |
2.058 |
0.328 |
|
36 |
Emphasis is placed on mutual trust,
frankness and openness among individuals. |
3.165 |
1.414 |
|
37 |
Every person is treated with care, respect
and dignity. |
4.328 |
1.303 |
|
|
Learning Environment and Knowledge
Transfer |
4.112 |
1.101 |
|
38 |
A new employee is encouraged to question
the current practices in the company. |
4.358 |
0.879 |
|
39 |
Management gives serious consideration to
new ideas submitted by employees. |
4.589 |
0.689 |
|
40 |
An employee believes what he learns will be
applied. |
3.92 |
1.143 |
|
41 |
Creative and innovative ideas which are
implemented are rewarded. |
3.319 |
0.958 |
|
42 |
When hiring, promoting and rewarding
employees, an employee’s willingness to learn and share knowledge is
taken into consideration. |
4.317 |
1.068 |
|
43 |
The company has constant plans to develop
and train employees in all areas and at all levels. |
3.718 |
1.350 |
|
44 |
The company seeks to provide all necessary
actions and measures to extend and spread learning and knowledge sharing throughout the whole org. |
3.116 |
1.407 |
|
45 |
There is a system which allows and
encourages employees to learn successful practices from other companies. |
4.289 |
1.198 |
Table 2 presents the means (X¯) and the standard deviations (s) of the responses of the research sample to the statements of the independent variable (the LO). It clearly appears that respondents felt that their firms have been moving well toward building LO, with an overall mean = 3.892. Most of the variables/ statements have a mean above the mean of the scale (3); only few statements have a mean below (3).
Systems thinking had the highest mean (4.17), and all variables of systems thinking had a mean above (3). Thus, people saw their firms as a system interacting with the external environment, and consisting of interacting and interdependent individuals and units.
Learning environment and knowledge transfer dimension ranked the second, with a mean = 4.11. This meant that people felt strongly that the organizational environment and knowledge transfer support and facilitate building and maintaining a LO. Leadership and empowerment dimension came third, with a mean = 4.00, which meant that study respondents had a strong feeling that leadership and employee empowerment is an important factor in building a LO. Four of the variables had a mean above (4), and two had a mean above (3).
Shared vision came fourth, after leadership and empowerment, with a mean = 3.87, which is still higher than the mean of the scale (3). This meant that respondents had a relatively strong belief that shared vision and goals contribute to building LOs.
Teamwork and collaboration scored a mean = 3.78, which meant that product development projects and programs are individual-based, rather than team-based structure.
Last, organizational culture had the lowest mean (3.43), which is a little above the mean of the scale. This meant that the core organizational values, norms and beliefs play a relatively moderate role in building LOs.
Table 3: Means And
Standard Derivations Of Participants’ Responses To Variables Of
Organizational Performance.
|
No. |
Statement |
X¯ |
S |
|
|
Financial Performance |
4.241 |
1.042 |
|
1 |
Increase in profits. |
4.0514 |
1.437 |
|
2 |
Increase in earnings. |
4.365 |
0.884 |
|
3 |
Sales growth. |
4.662 |
0.694 |
|
4 |
Growth in market share compared to other
competitive products/ services. |
3.900 |
1.162 |
|
|
Internal Processes |
3.992 |
1.221 |
|
5 |
Efficiency of internal processes. |
4.371 |
0.960 |
|
6 |
Cost reduction. |
4.331 |
1.072 |
|
7 |
Resources acquisition and utilization. |
3.762 |
1.355 |
|
8 |
Employees’ satisfaction. |
3.165 |
1.414 |
|
9 |
Reduction of employees’ turnover. |
4.328 |
1.303 |
|
|
Customer Service
|
4.143 |
1.042 |
|
10 |
Customer satisfaction regarding quality
and price of products provided by the company. |
4.051 |
1.437 |
|
11 |
Customer satisfaction of company’s
fast and smooth response to customer’s requests and inquiries. |
4.357 |
0.879 |
|
12 |
Retaining present customers. |
4.563 |
0.723 |
|
13 |
Attracting new customers. |
3.875 |
1.071 |
|
|
Learning/ growth/ innovation
|
3.652 |
1.053 |
|
14 |
Development and introduction of new
products/ services. |
4.272 |
0.982 |
|
15 |
Improvement of current products and
services. |
4.231 |
1.062 |
|
16 |
Development of new production methods. |
2.112 |
0.462 |
|
17 |
Introducing changes and improvements in
company’s strategies policies, processes, structure and culture. |
3.156 |
1.328 |
|
18 |
Coping and dealing successfully with
various environmental changes. |
4.285 |
1.285 |
Table 3 displays the means and standard deviations of sample responses to the statements of the dependent variable (organizational performance). Overall performance of the studied firms was high, as perceived by the research subjects (X¯= 4.00). The scale that got the highest mean was financial performance with a mean = 4.241.
Customer service scale came second, very close to financial performance, with a mean = 4.143.
Internal processes scale ranked the third, very close to high, with a mean = 3.99.
The lowest performance assessment by respondents was given to learning/growth with a mean = 3.652, but it is still above the mean of the scale (3).
6.5. Hypotheses Testing
Table 4: Pearson Correlations Calculations
|
Independent Variable |
Dependent Variable |
|||
DEPA |
DEPB |
DEPC |
DEPD |
|
|
IND1
Pearson Correlation |
598** |
159** |
173** |
193** |
|
Sig.(2-tailed) |
000 |
003 |
001 |
001 |
|
N |
350 |
350 |
350 |
350 |
|
IND2
Pearson Correlation |
093 |
283** |
330** |
310** |
|
Sig.(2-tailed) |
081 |
000 |
000 |
000 |
|
N |
350 |
350 |
350 |
350 |
|
IND3
Pearson Correlation |
649** |
931** |
907** |
917** |
|
Sig.(2-tailed) |
000 |
000 |
000 |
000 |
|
N |
350 |
350 |
350 |
350 |
|
IND4
Pearson Correlation |
643** |
954** |
926** |
926** |
|
Sig.(2-tailed) |
000 |
000 |
000 |
000 |
|
N |
350 |
350 |
350 |
350 |
|
IND5
Pearson Correlation |
821** |
839** |
842** |
812** |
|
Sig.(2-tailed) |
000 |
000 |
000 |
000 |
|
N |
350 |
350 |
350 |
350 |
|
IND6
Pearson Correlation |
754** |
899** |
881** |
861** |
|
Sig.(2-tailed) |
000 |
000 |
000 |
000 |
|
N |
350 |
350 |
350 |
350 |
** Correlation is Significant at the 0.01 level
(2-tailed).
Table 5: Pearson Correlations Calculations
|
|
|
DEP |
|
|
1 |
959** |
|
Sig.(2-tailed) |
. |
000 |
|
N |
350 |
350 |
|
DEP
Pearson Correlation |
959** |
1 |
|
Sig.(2-tailed) |
000 |
. |
|
N |
350 |
350 |
** Correlation is Significant at the 0.01 level.
Pearson's Correlation was used to test hypotheses of the study, and the results were displayed by Tables 4 and 5.
H1: There is a relationship between the LO and organizational performance.
Based on Pearson's correlation coefficient, there is a significant positive relationship between the LO and organizational performance, (r = 0.959).
H2: There is a relationship between the LO and financial performance scale.
The six core dimensions of the LO, except shared vision, had significant positive relationship with financial performance of the studied pharmaceutical firms.
H3: There is a relationship between the LO and customer service.
Results in table (5) indicated a positive relationship between each of the six dimensions of the LO and customer service. Noticeable correlation coefficients (r= 0.954, 0.931, 0.899, 0.839) were found between four of the dimensions of LO and customer service.
H4: There is relationship between the LO and internal processes.
Correlation coefficients showed a strong positive relationship between four of the dimensions of the LO and internal processes of pharmaceutical firms, where ( r = 0.90) and above. Highest correlation coefficient was found between teamwork/collaboration and internal processes (r = 0.954), followed by the relationship between leadership and empowerment and internal processes (r = 0.931).
H5: There is a relationship between the LO and growth /innovation.
A positive relationship was found between each of the six dimensions of the LO and growth/innovation. Four dimensions of the LO had significant strong positive relationship with organizational growth / innovation. Only (systems thinking and shared vision) had rather weak positive relationship (r = 0.173 and 0.330 respectively).
6.6. Discussion:
Research findings discussed above, indicated significant positive relationship between the LO and organizational performance at Jordanian pharmaceutical industry. Most of the variables of the six dimensions of LO had a moderate-strong positive relationship with all indicators of the four scales of performance. These findings match those of (Kumar and Khairuddin, 2006), and (Power and Waddell, 2004).
The six dimensions of the LO, except shared vision, had moderate-strong relationship with financial performance scale. These findings agree with previous researches carried out by ( (Power and Waddell, 2004). Organizational culture dimension had the highest correlation coefficient (r = 0.821), followed by learning environment, with r = 0.754.
As for the relationship between dimensions of the LO and customer service, it was found that four scales of the LO had strong positive relationship with customer service indicators, and the other two scales (systems thinking and shared vision) had weak positive relationship. These findings do not differ from the findings reported by (Bushe et al., 1996), (Cacioppe, 1998), (Power and Waddell, 2004), and (Yagil, 2002) which stressed particularly the effect of empowerment on customer satisfaction.
The relationship between dimensions of the LO and internal processes did not differ much from the relationship with customer service. Only systems thinking and shared vision had weak positive relationship, whereas the remaining four dimensions had significant positive relationship. These findings were consistent with those reported by (Suzik, 1998) and (Bush et al., 1996), and (Kumar and Khairuddin, 2006).
Research findings showed a positive relationship between each of the six dimensions of the LO and learning/growth/innovation scale. In fact, four of the dimensions of the LO had strong positive relationship with learning/growth/ innovation, and the other (2) dimensions-systems thinking and shared vision – had weak positive relationship with learning /growth/innovation. Similar findings were reported by (Shariffudin and Fytton, 2004; Lopez, Peon and Ordas, 2004; De Long and Fahey, 2000; and Hernandez, 2003); which stressed the effect of organizational culture on organizational performance.
7. Conclusions And Recommendations
Following are the main conclusions and results of the study:
¨
Pharmaceutical firms in
¨ Pharmaceutical firms have developed moderate-high levels of most variables of the six dimensions of the LO. Only few variables were far below the mean of the scale (3), which included the following:
Teamwork and collaboration:
"Product development programs are assigned to teams"
Shared Vision:
"Individuals participating in developing company's shared vision and goals”
Organization Culture:
Mistakes are constructively discussed with employees
Mistakes are tolerated
Experimentation inquiry and risk taking are encouraged
Assessment of overall performance of the pharmaceutical firms, as perceived by research sample, was relatively high;, only learning/ growth/ innovation dimension got an assessment below high level. Performance measures which were assessed a little below high level were:
¨ Resources acquisition and utilization
¨ Employees’ satisfaction
¨ Attracting new customers
¨ Introducing new policies, strategies, etc
Only one performance indicator was below the mean of the scale (3); that was “development of new production methods”.
Research findings indicated rather strong positive relationship between LO and organization performance at Jordanian pharmaceutical firms.
8. Recommendations
Managers and employees need to strongly recognize that knowledge has become a vital source for sustainable competitive advantage. Management should exert continuous efforts to maintain and nourish continuous LO in order to attain steadily higher performance levels. Special emphasis must be placed on: tolerating mistakes and constructive discussion thereof, encouraging trial and experimentation and innovation, expanding use of team- based structures (cross-functional and cross hierarchical ), management must accept criticism, encouraging and nurturing mutual trust, openness, establish constant contacts with various stakeholders, and extend learning and knowledge sharing throughout the whole company.
9. Limitations And Further Research
This study had several limitations. First, the research was carried out in
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About the Author
Hussein M. Harrim (Ph. D), Associate Professor, Applied Science Private University