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A Study on the Relationships among the Organizational Learning Capacity, Organizational Learning Culture, and Organizational Innovation Performance
Li-Jia Chiua and Neng-Tang Norman Huangb a Department of Technology Application and Human Resource Development, National Taiwan Normal University, Taiwan a 162, HePing East Road, Section 1, Taipei, Taiwan b Department of Technology Application and Human Resource Development, National Taiwan Normal University, Taiwan b 162, HePing East Road, Section 1, Taipei, Taiwan a chiu.judy1188@gmail.com b nthuang@ntnu.edu.tw ABSTRACT With the development of globalization and information technology, as well as the rapid changes in the external environment, effective use of organizational learning capability to achieve organizational innovation performance is an important source of competitive advantage. However, past studies showed that Organizational learning capability (OL Capability) and organizational performance are related. In other words, the role of organizational learning capability (OL Capability) is important to improve firms performance. The purpose of this paper is to analyze the relationship between organizational learning capacity (OL Capacity) and organizational innovation performance, by taking organizational learning culture (OL Culture) into consideration. The study attempts to investigate the following question: Is organizational learning culture positively associated with organizational innovation performance? Is organizational learning culture positively associated with organizational learning capacity? And finally, explore the relationships among the organizational learning capacity, organizational learning culture, and organizational innovation performance? The sample is 150 managers and staffs from an information technology company with a firm size of 3000-employees. The questionnaire is consisted of three sections, the first is Learning Organization Questionnaire (DLOQ), the second is organizational learning capacity measurement scale, and the third is organizational innovation performance measurement scale. Structural equation modeling is used to test this theoretical model. The investigation is done in hope to provide an alternative solution and may serve as a reference for the company managers. Keyword: Organizational learning culture organizational learning capacity organizational innovation performance 1. INTRODUCTION Innovation is conceived as an individual and collective learning process that aims to find new ways of solving problems. Innovation through creativity is an important factor for the success and competitive advantage of organizations (Woodman et al.1993; Hsiao & Chang, 2011). Senge (1990) observed that learning and innovation are crucial for firms in sustaining competitive advantage. Argyris and Schon (1978) also posited that learning and competence provide the foundation for organizations to improve their

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core competencies and further sustain competitive advantage (Hung et al., 2010). The concept of organizational learning culture (OLC) is presented and defined as a set of norms and values about the functioning of an organization. They should support systematic, in-depth approaches aimed at achieving higher-level organizational learning. (Skerlavaj et al., 2010). Moreover, a true innovative firm must be embedded of a strong culture that stimulates the engagement in innovative behavior. Specifically, some cultural factors such as decentralization in decision making, error tolerance or social relations have been shown to affect knowledge and innovation outcomes through organizational learning (Chang and Harrington, 2003; Lemon & Sahota, 2004; Alegrea & Chiva, 2008). The capacity to learn has been considered a key index of an organizations effectiveness and potential to innovate (Je rez-Gomez et al., 2005; Alegrea & Chivab. 2008). While an organizational learning capability may be manifested as a broad, encompassing competency that produces actionable knowledge of various sorts, the specific learning capability of interest here is learning capability with regard to a firms innovative outputs. (DiBella & Nevis, 1998; Ingelgard et al., 2002). Product innovation is a process that includes the technical design, R&D, manufacturing, management and commercial activities involved in the marketing of a new (or improved) product (Alegrea & Chivab, 2008). Innovation efficacy reflects the degree of success of an innovation. On the other hand, innovation efficiency reflects the effort made to achieve that degree of success (Alegrea & Chivab, 2008). The aim of this paper is to analyze the relationship between organizational learning capacity (OLC) and organizational innovation performance, by taking into consideration o organizational learning culture (OLC). Structural equations modeling used to test the research hypotheses. 2. THEORETICAL BACKGROUND AND HYPOTHESES 2.1 Organizational learning culture (OLC) The concept of organizational learning culture is derived from organizational learning and learning organization concept, and refers to when an organization recognized learning as absolutely critical for its business success (Wang, Yang, & McLean, 2007). Previous studies also provide growing evidence of a relationship between organizational learning culture and economic performance (Marsick & Watkins, 2003; Malik et al., 2011). Usman et al. (2011) the learning culture facilitates the employees performance, that is increases their efficiency and effectiveness with innovation, creativity, and behavior modification. Teece et al.s (1997) suggest that organizational learning culture has a positive effect on performance. Many studies suggest that organizational learning culture can improve individual, team, and organizational learning and thus enhance organizational performance (Egan et al., 2004; Ellinger et al., 2002; Yang,Watkins, & Marsick, 2004). Therefore, the researchers hypothesize: Hypothesis 1 organizational learning culture is positively associated with organizational innovation performance. 2.2 Organizational learning capability The combinations of knowledge innovation, diffusion, and application are critical concepts in knowledge economy (Raval, 2000; Chang et al.,2011). Chang et al., (2011) Most studies indicated that organizational learning injects new ideas into the organization. Argyris and Schon (1978) suggested that organizational learning would enhance the innovative capacity of an organization. In other words, organizational learning can play an important factor in organizational innovation.

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Organizational learning is associated it with organizational innovation (Hsiao et al., 2009; Weerawardena et al., 2006). According to Bierly and Chakrabarti (1996), firms should achieve an adequate balance between internal and external learning that best fits their resource configuration and strategic objectives. Internal learning occurs when members of the organization generate and distribute new knowledge inside the firm; it depends mainly on organizational culture factors such as participative decision making or management style (Hurley & Hult, 1998; Lemon & Sahota, 2004). Following a comprehensive literature review, Chiva et al. (2007) identified five essential facilitating factors of organizational learning: experimentation, risk taking, interaction with the external environment, dialogue and participative decision making. (Alegrea & Chivab, 2008). Therefore, the researchers hypothesize: Hypothesis 2 organizational learning culture is positively associated with organizational learning capacity. 2.3 Organizational innovation performance It often describes in terms of changes, example, a firm offers the world (product/service innovation), and the ways it creates and delivers those offerings (process innovation) (Francis and Bessant, 2005). However, the process to carry out organization reform and create new value is called organizational innovation (Glynn, 1996; Chen et al., 2011). According to Thomke (2001), experimentation is a basic learning mechanism for a company to innovate: the development of a new product requires a number of experiments to test market and technology issues. New ideas and proposals represent the starting point of innovation (Koc and Ceylan, 2006). Risk taking is necessary for the generation of new ideas and should therefore be tolerated in order to promote innovation (Amabile et al., 1996). The past Researchers showed that Organizational learning capability (OLC) and organizational innovation (OI) are related (Fang et al., 2011). In other words, the role of Organizational learning capability (OLC) is an important to enables product development successful and improves firms performance (Hult et al., 2004; Fang et al., 2011). Therefore, the researchers hypothesize: Hypothesis 3 organizational learning capacity is positively associated with organizational innovation performance. The researchers propose a conceptual model, shown in Fig.1 that includes our research hypotheses. This model links organizational learning capacity, organizational learning culture and organizational innovation performance.

Fig.1 conceptual model

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3. METHODOLOGY 3.1 Data collection Data is collecting from Information Technology R & D managers and staff. The study will be scheduled to obtain 150 valid questionnaires. In this study, company scope about three thousand employees. Company headquarters is located in Taipei, Taiwan. Structural equation modeling was used to test this theoretical model. 3.2 Procedures Based on literature review and previous research, three hypotheses were formulated and examined. The questionnaire consists of two parts. The rst fast consisted of 7-point Likert scales demographic information, but the second will more specic. This section, consisting of 41 items, is 16 items for organizational learning culture, 14 items for organizational learning capacity, and 11 items for organizational innovation performance. All are compos of 7-point Likert scales. 3.3 Measurements 3.3.1 Organizational learning culture measurement scale This study assessed organizational learning culture using the Dimensions of Learning Organization Questionnaire (DLOQ) designed by Watkins and Marsick (1993, 2003). Same as Hung et al.s (2010), study organizational learning culture was assessed on 7 point scaled Likert-type items. Respondents are asked to determine the degree to which each of the questions reflects their organizations situations in learning culture (1 = strongly disagree to 7 = strongly agree). 3.3.2. Organizational learning capacity measurement scale Researchers will use the OLC measurement instrument developed by Chiva et al. (2007). Alegrea and Chivab, (2008) According to the conceptualization of this scale, OLC consists of the skills and characteristics that enable an organization to learn. Five dimensions constitute the essential factors that represent the OLC latent concept (Sharma, 1996; Uriel; Alegrea and Chivab, 2008). These dimensions are experimentation, risk taking, interaction with the external environment, dialogue and participative decision making. The OLC measurement scale was applied using a 7-point Likert scale, where 1 represented total disagreement and 7, total agreement. 3.2.3. Organizational innovation performance measurement scale Alegre et al. (2006) recently proposed and tested a measurement scale for product innovation performance in the context of biotechnology firms. Product innovation performance was conceptualized as a construct with two different dimensions consistent with previous literature: innovation efficacy and innovation efficiency (Alegrea and Chivab, 2008). Researchers will use the same measurement scale. REFERENCES Alegre, J. Lapiedra, R. Chiva, R. 2006. A measurement scale for product innovation performance. European Journal of Innovation Management, 9 (4), 333-346. Alegrea, J. Chivab, R. 2008. Assessing the impact of organizational learning capability on product innovation performance: An empirical test. Technovation 28, 315-326. Amabile, T. Conti, R. Coon, H. Lazenby, J. Herron, M. 1996. Assessing the work environment for creativity. Academy of Management Journal, 39 (5), 1154-1184. Argyris, C. & Schon, D. 1978. Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley. Bierly, P. Chakrabarti, A. 1996. Generic knowledge strategies in the US pharmaceutical industry. Strategic Management Journal, 17, 123-135.

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