Organisational learning strategies for developing strategic capability within Australian Franchised Business Units

[Abstract]Within the Australian marketplace there is often considerable similarity between competing products and services. The need for all firms to develop a competitive advantage in this market is pressing. Franchises are a growing competitive business sector in Australia, with an annual growth rate in excess of 12%. Franchised business units are no different from other firms in that they need to develop a competitive advantage. Within this current fast changing business environment there has not been any research published on how owners and operators within franchised business units in Australia use organisational learning strategies to develop their strategic capability with a view to gaining a competitive advantage. Many firms have adopted traditional training approaches in organisational learning to develop their firm’s strategic capability believing this strategy to be in line with best practice. This narrow training view of organisational learning involves key employees within a firm identifying skill gaps between where the firm needs to be and the current competencies of their staff. The gap is then bridged by traditional training methods that extend staff competencies to meet the firm’s requirements. These traditional training approaches separate learning from the work context and have been identified by many researchers over the years as an inefficient practice. This study was undertaken using a case study approach based on semi-structured interviews to gain an understanding on how franchised business units in Australia used a range of organisational learning strategies to develop their strategic capability. People were interviewed from various organisational levels at five major franchises. The study found that strategic capability is enhanced by developing a learning environment that integrated both operational and strategic learning strategies. Based on the research findings, a franchised business unit’s strategic capability will, in many cases, determine the difference between the franchise’s performance in the marketplace and that of its competitors, hence, developing organisational learning strategies to gain and apply these capabilities are of a critical importance in a franchised business unit gaining a competitive advantage. The study found a number of key ingredients in organisational learning strategy that built a firm’s capability. These key ingredients include adopting a work-based learning strategy which incorporates learning activities such as listening and observing others in the workplace; regular internal training; access to external courses; controlled on-the-job training and supporting individuals and groups within their normal work; developing and implementing accredited in-house learning which would include opportunities for staff to develop both operational and strategic levels of learning; formal and informal mentoring for developing the skills of individuals and groups; participation in higher education; and the use of internal state and national franchise conferences as a tool in developing staff and to provide a work environment where empowerment of staff at all levels is encouraged, accepted and supported by the required learning strategies to make it successful. For franchised businesses within Australia aspiring to gain or build on competitive advantage, it is envisaged that the findings of this research will foster the implementation of a combination of organisational learning strategies that encompass both operational and strategic learning, and include learning for both the individual and collective groups