Chris Argyris and Donald Schön (1978) defined organizational learning as: "the detection and correction of error". Fiol and Lyles later define learning as "the process of improving actions through better knowledge and understanding" (1985).
Dodgson describes organizational learning as "the way firms build, supplement, and organize knowledge and routines around their activities and within their cultures and adapt and develop organizational efficiency by improving the use of the broad skills of their workforces" (1993). Huber states that learning occurs in an organization "if through its processing of information, the range of its [organization's] potential behaviors is changed" (1991).
A "learning organization" is a firm that purposefully constructs structures and strategies so as to enhance and maximize Organizational Learning (Dodgson, 1993). The concept of a learning organization has become popular since organizations want to be more adaptable to change.
Learning is a dynamic concept and it emphasizes the continually changing nature of organizations. The focus is gradually shifting from individual learning to organizational learning. Just as learning is essential for the growth of individuals, it is equally important for organizations.
Since individuals form the bulk of the organization, they must establish the necessary forms and processes to enable organizational learning in order to facilitate change.
Organizational learning is more than the sum of the parts of individual learning (Dodgson, 1993; Fiol & Lyles, 1985). An organization does not lose out on its learning abilities when members leave the organization. Organizational learning contributes to organizational memory. Thus, learning systems not only influence immediate members but also future members due to the accumulation of histories, experiences, norms, and stories.
Creating a learning organization is only half the solution to a challenging problem (Prahalad & Hamel, 1994). Equally important is the creation of an unlearning organization which essentially means that the organization must forget some of its past. Thus, learning occurs amidst such conflicting factors (Dodgson, 1993).