Organizational Learning and CoPs in SMEs

Abstract

This post reviews Oh and Lee's (2020) study of organizational learning in six SMEs participating in a government learning organization program. It examines how communities of practice took root, how power shaped learning, and how firms shared external learning resources. It also considers the study's theoretical contributions, recommendations, and limitations.

Background and purpose of the study

Research on workplace learning has focused mainly on large enterprises. In SMEs, owner-managers exert considerable influence over the organization, and internal educational resources are limited.

The study by Coetzer and Perry (2008) emphasized creating an organizational learning environment that offers opportunities to participate in learning in the informal, nonstandardized workplaces of small firms. It also emphasized providing learning resources linked to firms’ internal and external environments. The study by Higgins et al. (2013) incorporated the political and power relations that emerge from social relationships between owner-managers and employees into its account of workplace learning in SMEs.

Drawing on the social, psychological, and political characteristics of learning, this study examined how communities of practice in SMEs interact with organizational practices and organize learning activities.

Theoretical framework

The framework developed by Crossan et al. (1999; 2011) described learning across an organization through the 4I processes of intuiting, interpreting, integrating, and institutionalizing. Intuiting involves intuitively recognizing patterns or new possibilities in personal experience and occurs at the individual level. Interpreting involves articulating ideas or intuitive insights to oneself and others through language or action. Through integrating, members refine these ideas into shared concepts and develop actionable practices by building mutual understanding and coordinating their actions. Interpreting and integrating occur at the group level. Institutionalizing formalizes new practices or systems as norms (or products) at the organizational level.

The sequential processes of intuiting, interpreting, and integrating support “exploration,” which replaces existing practices with new ones, while institutionalizing occurs through “exploitation,” which reinforces practices retained within the organization or adapts them for reuse in a given situation.

The framework developed by Jones and Macpherson (2006) added intertwining to the existing 4I processes. Intertwining refers to interorganizational learning in which consumers, supply chains, and firms interact to build knowledge networks and acquire and share knowledge (Holmqvist, 2003).

The study by Lawrence et al. (2005) treated power and political processes as part of organizational learning and added sociopolitical processes to the model developed by Crossan et al. (1999). Episodic power comprises influence and force, while systemic power comprises domination and discipline.

Type of power	Action	Description
Episodic power	Influence	Political actions based on individuals’ respective interests, involving learning situations in which people support or constrain one another through persuasion, negotiation, and recommendations
Episodic power	Force	A direction of action that controls second-best options or other alternatives to integrate opinions across groups and enable the integrated opinion to be applied at the organizational level
Systemic power	Discipline	Political and power-related actions that facilitate individuals’ recognition and understanding of new things through conscious and unconscious processes of intuiting, including systems and opportunities for practice that support various related experiences
Systemic power	Domination	Political actions that restrict the range of organizational members’ behavior so that it operates systematically and consistently, providing a political foundation for institutionalization

Force creates power circuits that control how learning outcomes spread throughout the organization (Clegg, 1989). Power circuits take three forms. In an “agency circuit,” approval comes from an actor with decision-making authority. A “social integration circuit” involves reaching agreement at obligatory passage points, such as deliberative bodies or committees. A “system integration circuit” involves operating systems that empower or disempower members at obligatory passage points.

This study proposed a theoretical framework that extended the 5I model by adding the resource dependence model (Pfeffer & Salancik, 1978) and institutional isomorphism (DiMaggio & Powell, 1983).

Learning feeds forward from the individual to the interorganizational level (upper arrows) and returns through institutionalizing (lower arrows), each transition coupled with a different form of power

Research methods

The learning organizations examined in this study were small learning groups, including learning meetings and learning teams, run under the Human Resources Development Service of Korea’s SME learning organization program. The researchers used the term interchangeably with formalized communities of practice within firms (Chang, Kim, and Yoon, 2009).

The SME learning organization program selects SMEs eligible for priority support under Article 12 of the Enforcement Decree of the Employment Insurance Act. It aims to establish learning organizations and encourage a learning culture. Meetings are held at least 2 times per month over an operating period of at least 8 months and no more than 3 years (Human Resources Development Service of Korea, 2020).

The researchers initially selected 8 SMEs for the study. They excluded 1 firm because the interviewee changed jobs, making further data collection impossible. They excluded 1 additional firm with 5–12 employees because they judged it unsuitable for explaining organizational learning processes. The final analysis drew on interview data from 6 firms.

Before conducting interviews at the firms, the researchers gathered preliminary data through individual interviews with 2 program officers at the Human Resources Development Service of Korea and 1 person at the Korea Federation of SMEs. They sent the firms a semistructured questionnaire 1 week in advance to collect initial written responses. Onsite, in-depth interviews followed, lasting 60–90 minutes. The team analyzed the data using multiple-case analysis (Merriam, 1998).

Category	Firm A	Firm B	Firm C	Firm D	Firm E	Firm F
Industry	Automotive	Publishing	Public relations	Metals	Information and communications	Textiles
Size	120 employees	50 employees	70 employees	50 employees	120 employees	40 employees
Year established	Early 2000s	Early 2000s	Early 2000s	Late 1980s	Early 1990s	Early 2000s
Program participation period	2016–2018, continued operation	2016–2018	2016–2018	2017–2019	2016–2018, independent operation	2017–2019, independent operation
Other characteristics	Joint venture with a foreign firm, subsidiary	Recently spun off	Top 10% in its industry	Top 10% in its industry	Top 10% in its industry	Joint venture with a foreign firm

Findings

In all 6 participating firms, owner-managers showed interest in employee education and had a decisive influence on the decision to join the learning organization program. Chief executives articulated organizational values, such as the view that “Failure is also learning” (Firms A and D) and the importance of encouraging one another to learn (Firm F).

Most firms chose strategic tasks or the development of work manuals as learning topics. In years 2 and 3 of the program, most shifted to bottom-up topic selection or combined bottom-up and top-down approaches.

Category	Topic selection approach	Departmental organization
Firm A	Year 1, top-down (strategic tasks, manual development) → Years 2·3, bottom-up	Year 1, interdepartmental → Years 2·3, interdepartmental/interorganizational
Firm B	Year 1, top-down (strategic tasks) → Years 2·3, bottom-up	Years 1·2, interdepartmental → Year 3, intradepartmental
Firm C	Year 1, top-down (strategic tasks) → Years 2·3, mixed (problem-solving)	Years 1·2·3, interdepartmental
Firm D	Year 1, top-down (welfare, safety, innovation) → Years 2·3, bottom-up	Years 1·2, intradepartmental → Year 3, interdepartmental
Firm E	Year 1, mixed (problem-solving, manual development, communication) → Years 2·3, bottom-up	Year 1, intradepartmental/interdepartmental → Years 2·3, intradepartmental
Firm F	Years 1·2·3, bottom-up	Years 1·2·3, interdepartmental

The researchers attributed these changes to trial and error during the initial period of top-down operation.

Participants encountered attempts to exert influence through open communication, including brainstorming sessions, and topic selection. In most firms, middle managers (learning team leaders) or mentors reconciled differing opinions and guided members toward work-related learning topics.

Firm A awarded credits in its internal credit bank system for participation in the learning organization, using discipline and domination to encourage participation. In Firms B and C, members proposed learning topics that linked their personal interests in new technologies to new business areas. They persuaded middle managers to support these topics.

Bottom-up influence appeared in only some firms. Most used learning organizations to train new employees, produce training manuals, and structure the knowledge required for work (Firms A, C, D, and E).

As learning organizations developed, they functioned as power circuits that brought opinions together and spread learning outcomes through learning activities at the group and organizational levels. Firm A included employees from partner firms in its learning organization to share its quality improvement cases with them. It also ran separate learning clubs for its own employees and formalized calls for learning topics and procedures for operating and evaluating learning teams.

In Firm D, conflict between established and new employees surfaced within the learning organization. Experienced workers wanted to address recurring quality errors and improve existing work practices while resisting knowledge sharing. New employees wanted experienced workers to share their knowledge.

The firm’s chief executive had delegated authority to select learning topics to employees to overcome a business crisis. Employees chose topics through discussions and shared work and knowledge as they collaborated to solve problems. The researchers interpreted the “experience of working together” at the “obligatory passage point” of the learning organization as an opportunity to resolve conflict. This process also resulted in a new patent.

In some firms, linking rewards for learning organization activities to personnel evaluations led to disputes over the fairness of those evaluations. Additional work sometimes fell disproportionately on particular employees. Conflicts also arose over departmental interests and responsibilities.

Category	Bottom-up learning process	Top-down learning process	Interorganizational learning
Firm A	Knowledge sharing within the organization, improved work efficiency	Development of work manuals, structuring of quality management	Technical partnerships with partner firms, resource sharing with the parent firm, connections with government and external experts
Firm B	Improved departmental efficiency, development of innovative work	Development of work manuals	Adoption of government education systems
Firm C	Expansion of the organization’s business areas	Institutionalization of an education department, strengthening of the owner-manager’s education business	Connections with government and external experts
Firm D	Expansion of the organization’s business areas	Expansion and institutionalization of work based on a new patent	Adoption of government education systems, resource sharing with associations
Firm E	Improved organizational efficiency	Standardization of work processes, owner-manager intervention	Adoption of government education systems, connections with external experts
Firm F	Improved organizational efficiency, creation of a learning culture (democratization of decision-making)	Institutionalization of core values and learning activities, owner-manager intervention, future continuation of the learning organization system	Technical partnerships with partner firms, benchmarking, connections with government and external experts

Firm A established a relationship of “mutual resource dependence” by sharing educational resources (courses) and human resources (experts) with its parent firm and overseas joint venture firms. “Institutional isomorphism” appeared in human resource development activities as participating firms shared approaches to running government education systems for SMEs or applied practices from benchmark cases within their own firms. The researchers described this adoption of government systems as common among SMEs with limited educational resources (Coetzer & Perry, 2008).

Conclusion

Most participating firms joined the learning organization program because of their owner-managers’ interest and commitment, at a time when they perceived internal and external organizational changes as crises. They initially institutionalized the program using a top-down approach. After trial and error in year 1, they adjusted how they ran the program in years 2–3.

Members sometimes saw these activities as additional work and felt burdened by them. All participating firms shared learning resources with external institutions or expert groups, including government agencies, associations, and partner firms.

Learning organizations served as mechanisms of “force,” or power circuits, to bring opinions together and translate them into organizational outputs. This role was clear in firms whose learning organizations spanned departments. It did not occur in Firm B, which ran learning organizations within individual departments.

Learning organizations also socialized members during new employee training and supported the standardization of work processes. The researchers interpreted these activities as the exercise of domination and discipline.

Discussion and recommendations

The case analysis used a framework integrating Jones and Macpherson’s (2006) 5I model of organizational learning in SMEs and the social, psychological, and political learning processes of Lawrence et al. (2005). It also incorporated the institutional perspective of DiMaggio and Powell (1983) and the resource dependence model of Pfeffer and Salancik (1978).

The researchers acknowledged that the study was limited to SMEs participating in a government learning organization program, as communities of practice rarely operated on a voluntary basis in SMEs. The findings have limited applicability to organizational learning processes in SMEs where communities of practice operate autonomously and informally or do not exist. The researchers recommended extending the research to SMEs where communities of practice emerge organically or operate informally.

The framework developed by Crossan et al. (1999) traced how individual, group, and organizational learning connect through intuiting, interpreting, integrating, and institutionalizing. It explained the tension between the spread of new learning and the influence of institutionalized learning. The review by Crossan et al. (2011) examined subsequent research and maintained that a comprehensive theory of organizational learning was still taking shape.

The model developed by March (1991) described how resources are allocated between exploring new possibilities and exploiting existing knowledge and capabilities. The repeated, rapid, and certain rewards from exploitation can weaken the exploration required for long-term adaptation.

The framework developed by Lawrence et al. (2005) incorporated influence, force, discipline, and domination into the 4I model and explained how power shapes both the possibilities and the direction of learning. Institutionalizing learning outcomes involves power processes that bring members’ ideas together and establish them as organizational practices.

The analysis by Contu and Willmott (2003) described how applications of situated learning and communities of practice to management can leave power relations and social context outside their scope. The study by Vince (2001) focused on the interaction of power and emotion and explained how anxiety and defensive relationships affect group learning.

A subsequent study by the same authors, Knowledge acquisition, group reflexivity, and innovative behavior (Oh & Lee, 2024), cited this case study. It suggested that integration driven by tacit knowledge, such as through the establishment of communities of practice, promotes innovative behavior even within a structured learning climate.

References

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English title: Exploring organizational learning process in SMEs: the case study of Communities of Practice. English keywords: small and medium-sized enterprise (SME), organizational learning, community of practice (CoP), learning organization, power circuit.