Learning capability and business performance: a non‐financial and financial assessment

Purpose – There has been little research that includes reliable deductions about the positive influence of learning capability on business performance. For this reason, the main objective of the present study is to empirically explore the link between learning capability in organizations and business performance evaluated in both financial and non‐financial terms.Design/methodology/approach – Using data from 111 Spanish companies, research was conducted through a structural equation modelling. In doing so, a measurement model was conducted for the main constructs – learning capability, financial performance and non‐financial performance‐ and examine the paths between them.Findings – The analysis shows the positive link existing between: learning capability and non‐financial performance; and non‐financial performance and financial performance.Originality/value – This is a detailed empirical examination of learning capability as a source of performance in organizations. It should be of value to all those wh...

[1]  J. Farley,et al.  Determinants of Financial Performance: A Meta-Analysis , 1990 .

[2]  E. Nevis,et al.  Understanding Organizations as Learning Systems , 1995 .

[3]  Morten T. Hansen,et al.  When using knowledge can hurt performance: the value of organizational capabilities in a management consulting company , 2005 .

[4]  Andy Neely,et al.  Performance measurement frameworks: A review , 2007 .

[5]  D. Shepherd,et al.  Knowledge‐based resources, entrepreneurial orientation, and the performance of small and medium‐sized businesses , 2003 .

[6]  R. Grant,et al.  Environments: Organizational Capability as Knowledge Integration , 2022 .

[7]  A. Carmeli,et al.  The relationships between intangible organizational elements and organizational performance , 2004 .

[8]  James K. Harter,et al.  Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis. , 2002, The Journal of applied psychology.

[9]  C. Fornell,et al.  Customer Satisfaction, Market Share, and Profitability: Findings from Sweden , 1994 .

[10]  J. Hulland,et al.  Managing An Organizational Learning System By Aligning Stocks and Flows , 2002 .

[11]  Swee C. Goh,et al.  Improving organizational learning capability: lessons from two case studies , 2003 .

[12]  Mary Crossan,et al.  ORGANIZATIONAL LEARNING: DIMENSIONS FOR A THEORY , 1995 .

[13]  Christoph Zott,et al.  DYNAMIC CAPABILITIES AND THE EMERGENCE OF INTRAINDUSTRY DIFFERENTIAL FIRM PERFORMANCE: INSIGHTS FROM A SIMULATION STUDY , 2003 .

[14]  D. Teece Strategies for Managing Knowledge Assets: the Role of Firm Structure and Industrial Context , 2000 .

[15]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[16]  W. Dill,et al.  ORGANIZATIONAL LEARNING: OBSERVATIONS TOWARD A THEORY, , 1965 .

[17]  Alexander E. Ellinger,et al.  The relationship between the learning organization concept and firms' financial performance: An empirical assessment , 2002 .

[18]  A. Amin,et al.  Architectures of Knowledge: Firms, Capabilities, and Communities , 2004 .

[19]  David L. Deeds,et al.  The impact of stocks and flows of organizational knowledge on firm performance: an empirical investigation of the biotechnology industry , 1999 .

[20]  Melissa M. Appleyard,et al.  HOW DOES KNOWLEDGE FLOW? INTERFIRM PATTERNS IN THE SEMICONDUCTOR INDUSTRY , 1996 .

[21]  R. Calantone,et al.  Learning orientation, firm innovation capability, and firm performance , 2002 .

[22]  I. Nonaka,et al.  The Knowledge Creating Company , 2008 .

[23]  J. March Exploration and exploitation in organizational learning , 1991, STUDI ORGANIZZATIVI.

[24]  Roderick E. White,et al.  An Organizational Learning Framework : From Intuition to Institution Author ( s ) : , 2007 .

[25]  J. Brown,et al.  Bridging epistemologies: The generative dance between organizational knowledge and organizational knowing , 1999, STUDI ORGANIZZATIVI.

[26]  Karl G. Jöreskog,et al.  Lisrel 8: Structural Equation Modeling With the Simplis Command Language , 1993 .

[27]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[28]  Gregory G. Dess,et al.  Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit , 1984 .

[29]  M. Easterby-Smith Disciplines of Organizational Learning: Contributions and Critiques , 1997 .

[30]  Ron Sanchez,et al.  Knowledge Management and Organizational Competence , 2001 .

[31]  S. Zahra,et al.  Absorptive Capacity: A Review, Reconceptualization, and Extension , 2002 .

[32]  Anthony J. DiBella,et al.  How Organizations Learn: An Integrated Strategy for Building Learning Capability , 1997 .

[33]  T. Baldwin,et al.  Invited reaction: Linking learning with financial performance , 2002 .

[34]  Alexander Styhre,et al.  Dynamic learning capability and actionable knowledge creation: clinical R&D in a pharmaceutical company , 2002 .

[35]  Christine W. Soo,et al.  The Role of Knowledge Quality in Firm Performance , 2004 .

[36]  Maurizio Zollo,et al.  Deliberate Learning and the Evolution of Dynamic Capabilities , 2002 .

[37]  P. Bierly,et al.  Generic knowledge strategies in the U.S. pharmaceutical industry , 1996 .

[38]  E. Ziegel,et al.  The Balanced Scorecard , 1998 .

[39]  G. Huber Organizational Learning: The Contributing Processes and the Literatures , 1991 .

[40]  Karel Cool,et al.  Asset stock accumulation and sustainability of competitive advantage , 1989 .

[41]  Michael H. Zack,et al.  Developing a Knowledge Strategy , 1999 .

[42]  Daniel J. Koys The Effects of Employee Satisfaction, Organizational Citizenship Behavior, and Turnover on Organizational Effectiveness , 2001 .

[43]  Shu-Hui Chuang,et al.  A resource-based perspective on knowledge management capability and competitive advantage: an empirical investigation , 2004 .

[44]  Heeseok Lee,et al.  An empirical investigation of KM styles and their effect on corporate performance , 2003, Inf. Manag..

[45]  P. Senge THE FIFTH DISCIPLINE , 1997 .

[46]  W. Bogner,et al.  Corporate Entrepreneurship, Knowledge, and Competence Development , 1999 .

[47]  James M. Sinkula,et al.  The synergistic effect of market orientation and learning orientation on organizational performance , 1999 .

[48]  Maria L. Kraimer,et al.  A Social Capital Theory of Career Success , 2001 .

[49]  Elayne Coakes,et al.  Managing and leveraging knowledge for organisational advantage , 2004 .

[50]  T. A. Stewart Intellectual Capital: The New Wealth of Organizations , 1997 .

[51]  C. Fornell,et al.  Foundations of the American Customer Satisfaction Index , 2000 .

[52]  Daniel Vekstein,et al.  Managing Knowledge and Corporate Performance: an Empirical Analysis of the World Automobile Industry , 1998 .

[53]  Martin B. Meznar,et al.  The Social Construction of Organizational Learning: Conceptual and Practical Issues in the Field , 1995 .

[54]  R. Sohi,et al.  IT competency and firm performance: is organizational learning a missing link? , 2003 .

[55]  J. Barney Firm Resources and Sustained Competitive Advantage , 1991 .

[56]  P. Bentler,et al.  Comparative fit indexes in structural models. , 1990, Psychological bulletin.

[57]  Carol Gorelick,et al.  For performance through learning, knowledge management is the critical practice , 2005 .

[58]  Pilar Jerez-Gómez,et al.  Organizational learning capability: a proposal of measurement , 2005 .

[59]  John C. Narver,et al.  Market Orientation and the Learning Organization , 1995 .

[60]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[61]  E. Sadler‐Smith,et al.  Learning in organizations: HR implications and considerations , 2001 .

[62]  J. Spender Making knowledge the basis of a dynamic theory of the firm , 1996 .

[63]  Robert M. Morgan,et al.  The Role of Existing Knowledge in New Product Innovativeness and Performance , 2003, Decis. Sci..

[64]  Cindy Claycomb,et al.  Does Knowledge Mediate the Effect of Context on Performance? Some Initial Evidence , 2003, Decis. Sci..

[65]  L. Argote,et al.  KNOWLEDGE TRANSFER: A BASIS FOR COMPETITIVE ADVANTAGE IN FIRMS , 2000 .

[66]  J. Levine,et al.  Knowledge Transfer in Organizations: Learning from the Experience of Others☆ , 2000 .