Confronting the Black Swan: A Case Study of Corporate Learning

Abstract

Objectives of the Study The objective of this mixed methods case study is two-fold. First, it explores corporate learning using the theory of organizational knowledge creation and one US based corporation to determine the theory's relevance to American firms. Second, it seeks to understand how social practices and leadership behaviors affect employee knowledge or "true beliefs" and thus the implications to the firm's knowledge creation and ultimately, its competitive advantage. Ikujiro Nonaka's theory of organizational knowledge creation is used as the framework to examine the extent to which internal factors affect knowledge creation at the organizational and employee levels. The research addresses two questions regarding Nonaka's theory: 1) it assesses the theory in a US corporation with a relatively homogenous population to determine the validity of the theory that was developed outside the US and 2) it examines to what extent internal factors such as social practices and leadership behaviors affect the organizational knowledge creation process. In addition, consequences from events external to the firm are assessed to determine their impact on knowledge creation and corporate learning. Summary The study used knowledge creation theory to understand how internal behaviors and external events affected corporate learning and competitive advantage. Given that knowledge is only useful in its context, the introduction described the origins of the firm and impact of the Internet. The literature review provided the historical context for organizational culture in US firms, the growth of learning organizations and it summarized organizational knowledge creation theory. Social practices and leadership behaviors were explored in relation to a variety of topics. The research used quantitative and qualitative data that included survey data and qualitative data collected from semi-structured interviews, direct observation, internal documents, and secondary sources. The variety of sources aided the attempt to identify robust answers to the broad research questions raised in the study. Conclusions The interviews and direct observations at the firm reveal that organizational knowledge creation is not evident in this US corporation, primarily due to the narrow way in which knowledge is perceived and leadership behaviors that fail to consistently empower subordinates in the hierarchical management model. The cultural beliefs that preclude knowledge creation were also observed to thwart corporate learning. Several social practices and leadership behaviors appear to influence employee beliefs and thus corporate learning including communication transparency, decision-making and accountability, and strategic responses to external "random" events in digital communication. Shortcomings in these areas appear to have related and unintended consequences of diminished trust, lack of confidence, and risk aversion that can jeopardize the firm's competitive advantage.