Organizational learning as a determining factor in business performance

Purpose - With the decline of some well-established firms, the diminishing competitive power of many companies in an increasingly globalized market and the need for organizational renewal and transformation, interest in organizational learning has grown. Senior managers in many organizations are convinced of the importance of improving learning in their organizations. Therefore, it is necessary not only to clarify the concept of organizational learning, but also to establish the relationship between it and business performance. This paper aims to explore this relationship. Design/methodology/approach - The degree to which organizational learning influences business performance is investigated for 195 Spanish firms with more than 200 employees using the statistical technique of structural equation modeling. Findings - The results provide support for the view that organizational learning contributes positively both to innovation and competitiveness and to economic/financial results. Furthermore, the results show a positive relationship between innovation and competitiveness and economic/financial results. Originality/value - Clarifies the concept of organizational learning and establishes the relationship between it and business performance.