Organizational learning in financial decision processes of small, independent colleges.

Theorists hypothesize that organizations learn in a manner similar to individuals, possessing and building upon a shared body of knowledge as a result of prior experience. According to theory, when a problem comes to the attention of the organization, the process of solving the problem uses past learning and creates new learning that alters the shared body of knowledge. This study explored how learning from past decision processes is used and how decision processes provide organizational learning for the future in colleges. Interviews were conducted with a decision making group of senior administrators at seven small, private colleges about a decision process which had been identified as having significant financial implications. The interviewer explored the decision process as well as the organizational structure and context in which the decision process occurred. Because organizational learning theory is relatively new, there is still disagreement as to its definition and characteristics; but some of the organizational learning variables from the literature were explored, and a hypothesized model of organizational learning within decision processes was tested. The colleges in the study were categorized according to McGill and Slocum's typology of learning organizations: knowing, understanding, thinking, and learning. Only one of the seven was a fully functioning learning organization, although two others had made changes that could result in their becoming learning organizations. The principal finding is that, for colleges examining financial issues, the past is often an inhibitor of organizational learning rather than a facilitator, reinforcing inflexible decision processes, limiting the ways in which a problem can be framed, constraining actions to conform to past successes and failures, and pre-determining outcomes. Organizational learning appears to be inhibited by an unexamined mission, rigid specialization, lack of flexibility, and accepting assumptions without examination. Organizational learning is enhanced by committee models of decision making, spanning internal and external boundaries, questioning assumptions, ongoing analysis of new and old information, and a willingness to change. The president of a small, private college is a significant variable in the organizational learning process. Change or action are not essential for organizational learning to occur.PhDEducationEducational administrationHigher educationManagementSocial SciencesUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/130240/2/9721982.pd