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strategy and business
 / Summer 2003 / Issue 31(originally published by Booz & Company)


Recent Studies

In addition, market research suggests most consumers haven’t paid much attention to the dolphin-safe label because they’re motivated by price rather than conscience when buying tuna.

In the area of corporate governance, the professors say the media wield the power to pressure governments to better enforce existing laws or develop new laws that strongly affect corporate strategy. This is because politicians have been held in the thrall of the media much longer than corporate executives.

Then there are the media’s more overt attacks on companies’ reputations. Whether in the form of journalists writing about companies or activists projecting their agendas using paid advertisements in newspapers, on the Web, or on television, negative media attention can be harsh on corporate reputations internally as well as in society at large. In 1992, for example, the shareholder activist Robert Monks funded an advertisement in the Wall Street Journal. The caption “The non-performing assets of Sears” was accompanied by a picture of the company’s board of directors. Some good did come of this: The Sears board accepted many of Mr. Monks’s suggested changes in policy, and the board was forced to “increase shareholder value, an objective they should have pursued to begin with,” the authors write. But the Sears directors paid a heavy price for such public criticism. Their reputations were sullied; whether they had acted in shareholders’ best interest was not the issue.

The better news about the media’s increased influence on business agendas is that publications are producing more quantitative rankings of companies, such as Fortune magazine’s “100 Most Admired Companies,” that include nonfinancial performance measures. These rankings are valuable marketing assets companies can utilize, and they don’t have to bear the cost of collecting and certifying the information themselves.

Is Organizational Learning Good?

Chris Grey ([email protected]), “Against Learning,” University of Cambridge Judge Institute of Management Working Paper Number 4/2001.

Learning, whether at school or within organizations, is generally regarded as a liberating force that empowers the individual. So it is hard to imagine anyone, especially a professional educator, being against it. Yet Chris Grey, a faculty member at Cambridge University’s Judge Institute of Management in the U.K., cautions that organizational learning can also be an instrument of control.

In the business world, the notion of the learning organization came to prominence in the 1990s, when Peter Senge and the late Donald Schön of the Massachusetts Institute of Technology and Chris Argyris of Harvard were influential in convincing companies that organizational learning — learning undertaken by individuals that benefits the wider organization — is critical to business success.

Much of the literature on organizational learning, Professor Grey notes, simply assumes that, “like vitamins and giving up smoking, learning is a good thing.” In making the contradictory case, Professor Grey suggests there is an important distinction between learning that broadens the thinking of individuals and learning for a specific organizational purpose, which may have the opposite effect.

His argument focuses on two concerns. First, organizational learning is often presented as a shift away from hierarchical management. As such, it claims to give individual workers greater freedom to be creative and to innovate. Yet a common guiding principle of organizational learning is ensuring that senior managers have access to new corporate knowledge through the codification of workers’ tacit knowledge. In this respect, the researcher argues, the learning organization can be seen as belonging to the tradition of Taylorism, which sought to wrest power from the hands of skilled workers.

Professor Grey’s other contention is that organizational learning has an implicit agenda. Here he draws parallels with a 1977 study of schoolboys destined for jobs as manual workers. The research found that the boys’ learning opportunities were organized to significantly reduce the variety of life choices available to them. In other words, their learning was designed to train them only for manual work rather than to empower them to make alternative choices.

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