Learning is the way we create new knowledge and improve ourselves. Brown and Duguid describe organizational learning is the bridge between working and innovating. Organizational Learning is a process to enable organizations to better use the knowledge of their members to make business decisions. In a conventional organization, decisions are often based on management perspective without taking into account the other members of the organization. A business using Organizational Learning recognizes the value added by including all of its members in the decision making process.
A Learning Organization recognizes that a business consists of people and it takes a commitment from all in the organization to best obtain the organization’s goals. Through Organizational Learning an organization gains knowledge and develops skills to empower its members to work as a cohesive team.
The following table saws some of the key differences between a Conventional Organization and a Learning Organization. Conventional Organization | Learning Organization | Locked into management’s views of methods and goals. | Flexible and open to new ideas. | Makes decisions based on what currently best fits the organizational structure. | 1. Willing to disregard the status quo in favor of innovation. 2. Management encourages all members to continuously rethink what they do, how they do it, and how they might do it better | Adapts and/or reacts to change. | Anticipates the future and strives to create services and products before others are able to perceive the needs. |

Organizational learning is important to organizational change and development with the changing environment, technologies and other things. As well as it helps to solve organizational problems.

Organizational learning focused originally on the practice of five core disciplines, or capacities as follow:
Personal mastery
Managers must go beyond knowing what is important to achieve, they must have the ability to clarify and relay their massage to others within the organization.
Mental models
Managers must be able to explain the reasoning behind decisions made, while being open to suggestions from others and being able to handle criticism without being defensive or judgmental.
Shared vision
Managers who share their vision with others in the organization are more likely to get feedback on the vision. A shared vision is more likely to receive commitment from the people needed to implement the goals set by management. If people feel they have been involved in the process they are more likely to be committed to the entire process.
Team learning
Managers should be able to align and develop the capacity of the team members in order to obtain the team’s desired results. Team learning builds shared vision and personal mastery because a talented team will consist of talented individuals.
Systems thinking
Managers need to look at issues as they interrelate with other processes within the organization.
Important perspectives of organizational learning * The system approach (Argyris and Schon) * Situated learning and communities of practice (Lave and Wennger)
Two of the most noteworthy contributors to the field of organizational learning theory have been Chris Argrys and Donald Schon. According to Argrys & Schon is a product of organizational inquiry. This means that whenever expected outcome differs from actual outcome, an individual (or group) will engage in inquiry to understand and, if necessary, solve this inconsistency. In the process of organizational inquiry, the individual will interact with other members of the organization and learning will take place. Learning is therefore a direct product of this interaction. This interaction often goes well beyond defined organizational rules and procedures. Their approach to organizational learning theory is based on the understanding of two (often conflicting) modes of operation.
Espoused theory
This refers to the formalized part of the organization. Every firm will tend to have various instructions regarding the way employees should conduct themselves in order to carry out their jobs (e.g. problem solving). These instructions are often specific and narrow in focus, confining the individual to a set path. An example of espoused theory might be if the computer does not work, try rebooting it and then contact the IT department.
Theory-in-use
This is the actual way things are done. Individuals will rarely follow espoused theory and will rely on interaction and brainstorming to solve a problem. Theory in use refers to the loose, flowing, and social way that employees solve problems and learn. An example of this might be the way someone actually solves a problem with their computer by troubleshooting solutions, researching on forums, asking co-workers for opinions
Organizational Learning Theory
Argrys and Schon (1996) identify three levels of learning which may be present in the organization
1. Single loop learning

It consists of one feedback loop when strategy is modified in response to an unexpected result (error correction). As example when sales are down, marketing managers inquire into the cause, and tweak the strategy to try to bring sales back on track.

Figure 1. Single-loop learning

2. Double loop learning

Learning that results in a change in theory-in-use. The values, strategies, and assumptions that govern action are changed to create a more efficient environment. In the above example, managers might rethink the entire marketing or sales process so that there will be no (or fewer) such fluctuations in the future

Figure 2. Double-loop learning.

3. Deutero-learning

Deutero-learning is improving the learning system itself. This is composed of structural and behavioral components which determine how learning takes place. Essentially deutero-learning is therefore learning how to learn.

Figure 3. Deutero-learning
Effective learning must therefore include all three, continuously improving the organization at all levels. However, while any organization will employ single loop learning, double loop and particularly deuteron-learning are a far greater challenge.
Organizational Learning and Communities of Practice
Communities of practice are "groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise by interacting on an ongoing basis. They are focused on a domain of knowledge and over time accumulate expertise in this domain. They develop their shared practice by interacting around problems, solutions, and insights, and building a common store of knowledge. communities of practice are formed by people who engage in a process of collective learning in a shared domain of human endeavour, a tribe learning to survive, a band of artists seeking new forms of expression, a group of engineers working on similar problems, a clique of pupils defining their identity in the school, a network of surgeons exploring novel techniques, a gathering of first-time managers helping each other cope.
The characteristics of such communities of practice vary. Some have names, many do not. Some communities of practice are quite formal in organization, others are very fluid and informal. However, members are brought together by joining in common activities and by 'what they have learned through their mutual engagement in these activities.
The characteristics of communities of practice
The domain - A community of practice is something more than a club of friends or a network of connections between people. It has an identity defined by a shared domain of interest. Membership therefore implies a commitment to the domain, and therefore a shared competence that distinguishes members from other people
The community - In pursuing their interest in their domain, members engage in joint activities and discussions, help each other, and share information. They build relationships that enable them to learn from each other.
The practice - Members of a community of practice are practitioners. They develop a shared repertoire of resources, experiences, stories, tools, and ways of addressing recurring problems in short a shared practice. This takes time and sustained interaction.
Situated learning
Situated learning is a type of learning that involves learning materials within the context of how the information or skills are actually used and applied. It is typically associated with social learning and though it was initially recognized in regard to adult education, some of its practices have been extended to youth education as well. Situated learning does not typically involve a particular pedagogical approach, but instead seeks to understand how learning relates to daily practices and social interactions.
One of the most important concepts within situated learning is the idea of “legitimate peripheral participation,” which is the process by which someone can learn by being within a social environment of practice. For example, someone can simply be around other people who are doing an activity, and the person will begin to learn what they are doing. In actual usage, this is typically not quite as passive and a person is encouraged to become a participant in his or her learning. This creates a community of practice, where everyone in a classroom or similar environment is learning through doing and sharing common experiences and knowledge.