Strategic Management, Learning and Innovation
Convergence of Strategic Management, Organizational Learning and Innovation:
The Case of Lithuanian Organizations
Zenona Atkociuniene and Ingrida Girniene
Faculty of Communication, Vilnius University, Sauletekio 9, Vilnius, Lithuania
Keywords: Knowledge, Knowledge Management, Strategic Management, Innovations, Organizational Learning.
Abstract: The emphasis on knowledge and importance of knowledge has become one of the main factors
distinguishing an intellectual organization of the 21
st
century from others: seeking to improve their
operational efficiency, new millennium enterprises unceasingly learn to cherish their most important
elements: information, knowledge and experience. Keen market competition just proves that material
resources have long ago ceased to be a source of advantage against competitors, and competing by products,
services and prices produces only a short-term effect. Having figured out the nature of a competitive
advantage, organizations turned back to their most valuable assets – human resources which form the basis
for the creation and development of generic and strategic competences. The competitive advantage of an
organization primarily arises not from its created products or services, but from its ability to turn
technological and industrial skills into competences which support organizational strategy and allow
adapting to the changing environment as well as discovering new business opportunities. The purpose of the
paper is to use the case study of Lithuanian organizations to illustrate the correlation between knowledge
management, organizational learning and innovations. Research methodology: theoretical research by
employing the systemic analysis, induction, deduction methods, the questionnaire survey.
1 THE ROLE OF KNOWLEDGE
MANAGEMENT IN THE
MANAGEMENT OF AN
ORGANIZATION: PROBLEM
AREAS
Effective knowledge management in any
organization has become an important instrument
which enables not only to control current
complicated situations, but also to take advantage of
future possibilities. Knowledge is a valuable and
irreplaceable asset of the organization, which is
unique in its inexhaustible and immeasurable
character. However, the results produced by
knowledge are measurable and tangible: improved
products, services, processes, new markets,
innovative solutions, better customer service,
established competitive advantage, saved expenses,
changes in organizational culture (Marr et al., 2003);
(Moustaghfir, 2008) – these are some examples of
how the implementation of knowledge management
substantially changes the organization.
D. J. Teece (1998) claims that the competitive
advantage of an organization in modern economy is
gained not through the position occupied in the
market, but through the knowledge assets
accumulated by the organization and difficult to
repeat as well as the ability to apply and use it.
Hence the necessity for knowledge management
practices: processes enabling accumulation,
formation, systematization and efficient use of the
knowledge assets and a constant increase in its
value. D. J. Teece (1998) defines knowledge
management as the entirety of procedures and
techniques targeted at a maximum use of available
knowledge assets. According to K. M. Wiig (1997),
knowledge management has two key objectives: to
make the organization act intelligently and to realize
the best value of its knowledge.
While analyzing knowledge management and its
impact on the strategic competences of an
organization, it is important to identify and
substantiate problem areas which largely influence
efficiency of the organization’s operations. Although
covering many diverse activities and research fields,
243
Atkociuniene Z. and Girniene I..
Strategic Management, Learning and Innovation - Convergence of Strategic Management, Organizational Learning and Innovation: The Case of
Lithuanian Organizations.
DOI: 10.5220/0004108602430246
In Proceedings of the International Conference on Knowledge Management and Information Sharing (KMIS-2012), pages 243-246
ISBN: 978-989-8565-31-0
Copyright
c
2012 SCITEPRESS (Science and Technology Publications, Lda.)
knowledge management is mainly related to
strategic management, organizational learning and
innovation management in the analyzed context.
Although diverse tendencies have been observed
in the evolution of strategic management ideas, the
two essential links connect the ideas of basically all
strategic management theoreticians (Thompson,
Richardson, 1996); (Zack, 1999); (Bollinger and
Smith, 2001); (Tidd, 2006); (Sajid, 2010); (Skyrme,
2011). Firstly, all authors try to emphasize the
importance of organizational competences and their
improvement: whatever the profile of the
organization’s activity and its unique characteristics,
its competitive advantage lies in the organization, in
the form of resources and competences; therefore,
the organization should act strategically with regard
to its available unique, valuable and irreplaceable
resources and competences, rather than to the
products or services derived from these
competences, because particularly these resources
are the driver of the present-day economy. Secondly,
they all underscore the role of effective leadership in
strategic development. Both approaches are closely
related to the discipline of knowledge management:
the first approach points to the meaning of
competences (i.e. the outcome of adequate
application of knowledge management in the
operations of an organization); the second approach
points to one of the major conditions for the
implementation of knowledge management in an
organization, the absence whereof makes efficient
competence development impossible.
Knowledge is related to learning and
development. According to J. Loermans (2002), the
creation of knowledge is the final result of the
learning process and vice versa – learning starts
when the creation of knowledge, its sharing and use
begin. Not only individuals, but also social systems,
i.e. organizations, can learn (Fiol and Lyles, 1985);
(Senge, 1990); (Dodgson, 1991); (Sandler, 1993);
(Argyris and Schon, 1996); (Loermans, 2002);
(Sanchez, 2005); (Ryder, 2012). If an organization is
capable of effectively and efficiently managing
available knowledge, it will be able to manage new
knowledge created in the process of organizational
learning. In other words, knowledge management is
based on the results of organizational learning; it
controls them and ensures an adequate environment
seeking to retain and properly maintain the processes
of knowledge assets creation and management.
Knowledge management is a systemic and
organized effort to use knowledge in an organization
for the purpose of improving its functioning. Since
the ability of organizations to adapt to ever changing
external conditions is limited, knowledge
management, focused on constant renewal of
intangible assets, forms a basis for effective and
efficient management of innovations (Bruton et al.,
2007). Increasingly complicated tasks require
innovative and creative decisions from an
organization, which mainly depends on a favorable
organizational culture and harmonious distribution
of resources. Effective innovation management
directs the process of knowledge development
towards realization of creative ideas and commercial
use of results. Knowledge is the basis of all
innovations, whereas innovations are the driver of
organizational development and the source of a
competitive advantage.
The presented problem areas of knowledge
management lead to the statement that this area of
management is multidisciplinary and integral.
Knowledge, being the basis of all operations of an
organization, is improved and developed through
organizational learning, turns into skills which later
develop into abilities and competences necessary for
the achievement of the strategic goals of an
organization.
2 THE CASE OF LITHUANIAN
ORGANIZATIONS
Theoretical insights of the paper suppose a problem
question of the empirical research: Is the formulation
and implementation of strategic goals in Lithuanian
organization related to organizational learning and
application of new knowledge (innovative activities)
while seeking a competitive advantage?
The successful micro, small, medium and large
Lithuanian organizations (total: 42) working in
information technology field were surveyed. 36% of
surveyed organizations are small and 43% are
medium Lithuanian limited liability companies and
this group will be used to summarize the results.
86% of surveyed organizations have formulated
a strategy, vision and mission. 81% of respondents
underlined that organizational strategy is concerned
with information and knowledge management. 76%
of respondents stressed that employees’ knowledge
is managed as one of the main resource in
organizations. Managers underline that employees
are the most important asset in the strategic
documents. Employees are identified as a key
organization resource in surveyed Lithuanian
organizations. Also the importance of new products
and services development is emphasized (Figure 1).
KMIS2012-InternationalConferenceonKnowledgeManagementandInformationSharing
244
Figure 1: The most important aspects underlined in the
strategic documents.
Information technology, existing products and
services development, customer attraction and
retention and information management are less
mentioned in organization's strategic documents.
These results show that organizations are trying to
create innovations using knowledge as one of the
most important strategic resources.
37% surveyed Lithuanian organizations use
acquisition and adaptation of new knowledge, 31% -
new products/services development and
improvement 17% the best price offer, 14%
information technology renewal and improvement,
1% other while seeking competitive advantage in the
market.
79% of respondents agree that teamwork is
encouraged in surveyed Lithuanian organizations.
Errors and failures are tolerated in 71% of surveyed
organizations. 98% of respondents are constantly
improving their competence and trying to gain new
knowledge. New continuous training courses for
staff are organized at least once every six months.
Organizational learning can be related with the
organizational culture type. Organizational culture
type was determined according to one of the most
popular organizational culture typologies proposed
by K. S. Cameron and R. E. Quinn (1999). Scientists
have identified four types of organizational culture:
hierarchy (control culture), market (compete
culture), clan (collaborate culture) and adhocracy
(create culture). One organization may belong to
different types of the organizational culture.
37% of respondents agree that the clan
organizational culture dominates in the surveyed
Lithuanian organizations. Organizations, belonging
to this type of culture, are friendly workplaces where
people are sharing everything together. Leaders are
seen as teachers or even as parents, who care for
employees, show the right direction help (Cameron,
Quinn, 1999). This type of the organizational culture
could stimulate team working, the process of sharing
good or bad practices, tolerating failures and errors,
sharing, developing and expanding knowledge.
The most important factors which lead to the
organizational success among respondents were
organizations’ employees, products and services
(Figure 2).
0% 5% 10% 15% 20% 25% 30% 35%
Other
Clients
Technology
Infor mati on
Employees
Products / Services
Figure 2: Factors of organizational success.
Organizational learning is one of conditions,
which leads to successful work and innovation in
organizations. 64% of surveyed Lithuanian
organizations are flexible and dynamic. 83% of
respondents are encouraged to propose new ideas.
Almost all studied Lithuanian organizations are
innovative. They are improving or developing new
products and services for the past three years (Figure
3).
24%
33%
18%
23%
2%
Process innovations
Organizational innovations
Marketing innovations
Product innovations
Innovations are not created
Figure 3: Innovation activities of organizations over the
past 3 years.
The majority of created innovations are
organizational in surveyed organizations. The most
popular type of innovation is the implementation of
new management methods. Also, organizations
support the process of modernization, the use of new
production methods and innovation projects, the
StrategicManagement,LearningandInnovation-ConvergenceofStrategicManagement,OrganizationalLearningand
Innovation:TheCaseofLithuanianOrganizations
245
development of new and the improvement of
existing products and services.
3 CONCLUSIONS
The correlation between strategic management,
organizational learning and innovations is very
important in every competitive organization. The
case study has confirmed the significant role of
knowledge management in the organizational
strategy that was presented in earlier mentioned
theoretical paradigms. Employees and their
knowledge are highlighted in the strategic
documents of Lithuanian organizations. Surveyed
organizations gain a benefit and are very successful
in the market because of integrating employees’
knowledge into organizational processes and it leads
to innovations. The clan culture dominates in
organizations and it could be referred as
advantageous to share, develop and expand
knowledge. In conclusion, surveyed Lithuanian
organizations try to relate the formulation of
strategic objectives and their implementation to
organizational learning and innovative activities
while seeking competitive advantage.
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