Building a learning organization the case of logigear vietnam

BUILDING A LEARNING ORGANIZATION – THE CASE OF LOGIGEAR VIETNAM Abstract This research is to find the factors that contruct a “learning organization” for LogiGear Vietnam, an informati

VƯƠNG BẢO LONG

BUILDING A LEARNING ORGANIZATION – THE CASE OF LOGIGEAR VIETNAM

LUẬN VĂN THẠC SĨ KINH TẾ

TP HỒ CHÍ MINH – NĂM 2017

-

VƯƠNG BẢO LONG

BUILDING A LEARNING ORGANIZATION

- THE CASE OF LOGIGEAR VIETNAM

Chuyên ngành: Quản trị kinh doanh (eMBA)

LUẬN VĂN THẠC SĨ KINH TẾ

Người hướng dẫn khoa học: TS Lý Thị Minh Châu

TP HỒ CHÍ MINH – NĂM 2017

STATEMENT OF AUTHENTICATION

I hereby declare that the work presented in this thesis is, to the best of my knowledge and belief, original The ideas and quotes taken from external sources are duly acknowledged in the text The material, either in full or in part, has not been previously submitted to any other institution

Ho Chi Minh City, March 31, 2017

(signed)

Vuong Bao Long

Table of Contents

Secondary Cover Page

Statement of Authentication

Table of Content

Table of Figures

List of Tables

Abstract 1

Chapter I - INTRODUCTION 2

1.1 Rationale 2

1.2 Problem Statement 6

1.3 Research Questions 10

1.4 Research Objectives 10

1.5 About LogiGear 11

Chapter II - LITERATURE REVIEW 14

2.1 What is “Learning”? 14

2.2 What is a “Learning Organization”? 17

2.3 Knowledge and Knowledge Management 23

2.4 Innovation and Innovation Competence 25

Chapter III - RESEARCH METHODOLOGY 30

3.1 Data Collection 32

3.2 Participants in Interviews - Key Stakeholder Groups 32

3.3 Data Analysis 38

3.4 Research Model 41

Chapter IV - FINDINGS & DISCUSSIONS 42

4.1 Personal Mastery 43

4.2 Mental Models 46

4.3 Shared Vision 47

4.4 Team Learning 49

4.5 Systems Thinking 52

4.6 Technology 56

4.7 Summary of Findings & Discussions 60

4.8 Framework Suggestion 63

Chapter V - CONCLUDING REMARKS 74 References

Appendices

Table of Figures

Figure 1.1- Scope of Research 6

Figure21.2- Transforming to a Learning Organization 10

Figure31.3- TestArchitect, the automation test tool of LogiGear 12

Figure42.1- Single-Loop Learning and Double-Loop Learning 15

Figure52.2- Triple-loop learning by Asian Development Bank 15

Figure62.3- Kolb's Experiential Learning Style 16

Figure72.4- Three-leg Model for Learning Organization 19

Figure82.5- Overall model of a learning organization 20

Figure92.6- A Framework for Understanding Tacit Knowing 24

Figure103.1- Description of data collection and data analysis 40

Figure103.2- Research Model: Elements That Construct Learning Organization 41

Figure114.1- Sarder’s Principle: Two Percent of Revenue to Learning and Development 55 Figure124.2- Framework for Building “Learning Organization” for LogiGear VN 64

Figure134.3- Org Chart of the "Learning Organization" Task Force 72

Figure144.4- The Action Plan to Build A “Learning Organization” 73

List of Tables Table11.1- Diagnosis Report of LogiGear’s Learning Culture 9

Table21.2- Ranges of Services by LogiGear VN 12

Table33.1- Five Disciplines by Peter Senge 31

Table43.2- Data Collection - Interview Coding & Demographics 35

Table53.3- Data Collection - Focus Group Coding & Demographics 37

Table64.1- Factors that construct Learning Organization in LogiGear 61

Table74.2- Qualtrics for Learning Organization 71

BUILDING A LEARNING ORGANIZATION

– THE CASE OF LOGIGEAR VIETNAM

Abstract

This research is to find the factors that contruct a “learning organization” for LogiGear Vietnam, an information technology company In the backdrop of the Five-Discipline Model of “Learning Organization” by Perter Senge, the author employed a qualitative method to collect and analyze data from in-depth interviews and focus group with all three levels of staff in the company, being software engineers, middle layer managers, and top executives The result revealed that Senge’s five disciplines (Personal Mastery, Mental Minsets, Shared Vision, Team Learning, Systems Thinking) do exist in LogiGear VN together with the 6 th discipline, “Technology”, found as an emergent finding The research is specific, designed and carried out in order to explore and suggest a model to build a

“Learning Organization”, the case of LogiGear Vietnam

Keywords: learning, knowledge, learning organization, innovation, information

technology, LogiGear Vietnam

“The ability to learn faster than your competitors may be

the only sustainable competitive advantage.”

an “aha!” moment, but it’s “a result from hard and focused work” (Drucker, 2015) Nowadays, “innovation discipline is still in its infancy, but competencies that increase chances of innovation can now be learned.” (Bezerra, 2005)

The Fourth Industrial Revolution (4IR) - of which the emerging technology breakthroughs in fields such as AI, IoT, robotics, 3D printing, and nano technology prevail - urges companies to learn faster, produce faster and deliver faster using new technologies that are merging the physical, digital and biological worlds (Schwab, 2016) LogiGear VN is not an exception and cannot be staying out of the circle of influence, when it is an IT/software company with goal to be leading in its industry, software testing and development In order to pursue the vision and achieve its strategic goal to become a transformational organization, LogiGear VN needs to be innovative first hand and deep down it must become a “learning organization”

In a seminar on innovation leadership in Ho Chi Minh City in 2013, Prof Tony Wagner of Harvard Business School articulated that if labor was a commodity in the industrial age and knowledge was a valuable asset, it is now innovation that creates quantum added value that ensures competitive advantage for sustainable growth and development He said, the imperative was true not only at corporate level like the cases of IBM, Intel, Apple, Google, etc., but also at state level such as Israel, Sweden, Switzerland, Norway, USA, Japan, etc

Not long ago, World Bank and Ministry of Planning & Investment of Vietnam have stressed that “boosting the learning and innovation in order to maintain a high and sustainable growth needs a radical reform program.” (WB & MPI, 2016)

For a country to thrive, enhancing productivity using innovation competence is the ultimate solution (Porter, 1990) For firms, innovation competence increases their

competitive advantage (Tidd & Bessant, 2015)

Nguyen Van Dung and colleagues (2016) emphasize the importance of innovation

in a knowledge economy They examine the role of different components of knowledge economy in economic growth and other factors such as innovation, education, etc that simultaneously affect economic growth of 37 countries in Asia during 1990 – 2014 The research confirms that “there exists a positive association between economic growth and four components of the knowledge economy framework”, which are innovation, education, ICT infrastructure, and natural resources intensity

Nadeshwar and Jayasimha (2010, p 182) wrote “while all people have the capacity

to learn, the structures in which they have to function are often not conducive to reflection and engagement Furthermore, people may lack the tools and guiding ideas to make sense of the situations they face” As to Senge, for a learning organization, ‘adaptive learning’ must be joined by ‘generative learning’ and double-loop learning that enhances our capacity to create.” (Senge, 1990, p 13-14)

Indeed, to compete and win in the context of increasing globalization, integration, and rapidly evolving technologies, individuals and organizations have no way other than building their ability to learn – the cornerstone for continuous improvement,

fastest and adapt well to changing environments perform the best over time.” (Hess, 2014)

Bersin (2012) quoted in his article “5 Keys to Building a Learning Organization”

that the worldwide corporate training industry valued at 135 billion US dollars, but

“companies now realize that they simply cannot find the skills they need in the workforce and have to reinvest heavily in corporate training… Should companies

go back to the 1980s and build a corporate university again? The answer is

no Today the world of corporate training has been revolutionized.” (Bersin, 2012)

He suggested 5 keys to build a learning organization, which are: (1) corporate learning is "informal" and HR doesn't own it, (2) Promote and reward expertise, (3) Unleash the power of experts, (4) Demonstrate the value of formal training, and (5)

interestingly was his recent assertion on Forbes.com March 09, 2017 of AI1 and cognitive computing that change the way corporate people learn: “Thirty-eight percent of companies in our new research (10,400 respondents from 140 countries) believe that robotics and automation will be "fully implemented" in their company within five years” (Bersin, 2017) Although there would be a long way for robotics

to fully replace men in learning, the possibility it comes true is not petite

Innovative organization should start from being a learning organization This means

a simultaneous visionary transformation and involves all levels of resources (individual, team, and organization itself) along the process of the organization’s development (Senge, 1990)

1 AI – Artificial Intelligence

As an information technology company, LogiGear’s workforce comprises of 99% knowledge workers who are software engineers, a kind of “knowledge workers” whose main capital is knowledge and whose job is to "think for a living" (Davenport, 2005) Crabtree et al (1997) reveals that knowledge workers spend 38% of their time searching for information Loo (2017) suggests a definition of creative knowledge work from four specific roles: copywriting, creative directing, software programming, and systems programme managing in advertising and IT software He finds out “Creative knowledge workers use a combination of creative applications to perform their functions/roles in the knowledge economy including anticipatory imagination, problem solving, problem seeking, and generating ideas and aesthetic sensibilities” (Loo, 2017, p 138) LogiGear VN values continual learning and endlessly encourages employees to learn for good, individually and collectively

Down to earth, in the kick-off meeting in early January 2017, the CEO of LogiGear

VN restated and committed to make LogiGear VN “a transformation through innovation” Knowing that in order to reach the fame of innovation, which is believed the concrete foundation for shifting it to new heights, LogiGear VN has to first of all be a learning organization

A great advantage for LogiGear VN is that their top executive leaders strongly support learning They are typical examples of people who regard on-going learning and researching as a lifetime aspiration They are frequent speakers in seminars, conferences, forums of information technology around the world They are authors/editors who have books published internationally, some of which are best-selling books in their field

LogiGear VN sets to gain an organizational transformation in 2018 A transformation that best satisfies its customers, creates an innovative/self-driven workforce, and accommodates for a sustainable business development In order to ensure the success of such a transformational shift, the company acknowledges it

has a multiple agenda to proceed This research focuses on the block of “learning organization” (Fig 1.1)

Figure 1.1- Scope of Research

Source: Adapted from Tidd and Bessant (2015), Rothwell (1992), Senge (1990, 2006), Schumpeter (1934, 1939, 1942)

1.2 Problem Statement

Since 2015, triggered by market demands (agile deliverables, more cost effective, better quality), technologies (shorter product life-cycles, new framework and methodologies, etc), and internal dynamics such as optimizing workforce, business re-model, corporate portfolio shift (Worley & Cummings, 2009), LogiGear VN has been facing the demand for a transformational change Although LogiGear VN sets and carries out its mission “to provide leading-edge software testing technologies and expertise to customers” (LogiGearVN, 2016), it could hardly compete with other rivals in the industry The number of sales closed has dropped significantly in recent years; customers have been lately leaving for other providers who could offer more advanced technological solutions (faster speed, higher performance, lower price) The new capabilities of workforce are not improved up to the speed of new changes in technology and customers’ demands Since its commencement in 2005, there were innovative improvements in methodologies, frameworks, processes, and

Learning Organization Innovation Transformation

Knowledge Management

- Sustainable business growth

some initiatives, but all were carried out in such a small scale that was not sufficient enough to generate radical transformation in LogiGear VN The company filed and got registered patent for TestArchitect®, an automation testing tool; and the

cases

Technology rapid change requires every tech company to fast adapt with it and to

be ahead of trends Taking “cloud” trend for example, LogiGear VN has been modelling its business, which is able to switch from the PC, local-based software testing to cloud-based software testing and cloud-service-delivery In order to accommodate for this transformation, the engineers’ job role and skill sets are required to be changed They are more deeply and globally connected to the “cloud” world and interacting together in real time If they work on projects that employ AWS or IBM cloud server/service, they should be first of all qualified by Amazon and IBM for a various range of professional certificates

re-Figure 2 1.2- Technology Changes Job Role/Skill

Source: LogiGear VN’s training materials

2 ABT – Action-based Testing

Recent diagnoses on Dec 31, 2016 and June 30, 2016 using Harvard’s tool - los.hbs.edu show that there is a serious problem in exercising “learning culture” of the company The survey tool is a questionnaire by Harvard Business School, including 10 criteria designated into 3 groups In particular, the surveyed result shows 7/10 elements of “learning organization” fall below average score and tend to significantly decline:

Psychological Safety: They remain unchanged 62.9 and 62.9 in the latest two surveys, and lower than median score, 76

Appreciation of differences: remain unchanged 57.1 and 57.1, and lower than median score, 64

Openness to New Ideas: although increased double in the recent survey from 32.1 (Jun 30, 2016) to 64.3 (Dec 31, 2016), but it is very much lower than median score,

90 There is improvement but still a long way to go to innovation

Time for Reflection: 65.7 and 42.9 respectively It is not very much far below the median, 50, but there was a significant drop that the management should closely look into

Analysis: 60.0 and 54.3, pretty low compared to 71 median There is almost no debate, argument, feedback, active and multi-aspect communication Learning organizations really fear of “no conflict” and disagreement They fear of no feedback and idea

Education and Training: not very much lower than median, 80; but dropped from 78.6 to 71.4 This is alarming

Leadership that reinforces learning: 40.0 and 47.5, significantly low compared to 74

as median This is a serious issue that needs to be urgently addressed, whether it is the mindset or competence, at the manager or leader level

Postively, there are three elements that stand higher than average level:

Experimentation: Increased from 57.9 to 82.1, an extreme jump over the median, 71

Information Collection: Increased from 60.5 to 81.0, a significant jump over the median, 80

Information Transfer: Increased from 57.1 to 75.0, a little higher than median, 71 The 7 declining elements seriously impact to the value of “learning organization” It releases a strong warning siren that the board of directors of LogiGear VN needs to immediately take action to address the nearly happening catastrophe before being late

Table 1 1.1- Diagnosis Report of LogiGear’s Learning Culture

Source: Garvin et al (2008)

Furthermore, software technology is changing fast and LogiGear VN should not be left behind It needs to be technologically staying abreast of trends The other challenge is to find more innovative ways to create “blue oceans” (Kim & Mauborgne, 2005) in order to lead and win Acknowledging the reality and

perceiving that innovation is the key for building competitive advantage which guarantees a flourishing existence and sustainable business development, the company set high priority to transform itself to learning organization

Figure 2 1.2- Transforming to a Learning Organization

1.5 About LogiGear

Establishment

top thought leaders in the software testing industry Since then it has completed software testing and development projects for prominent companies across a broad range of industries and technologies The headquarter continues to be in Silicon Valley, California with a majority of the software testing and software development staff based in Ho Chi Minh City and Da Nang, Vietnam, established 2004 as

“LogiGear VN” The total headcounts of LogiGear VN is 500 as at the end of 2016 LogiGear Corp continues to grow as companies realize the benefits of outsourcing their software testing and development It is honored by Inc 500|5000 as one the fastest growing private companies in the USA in 2009, 2012, 2013, 2014

Vision and Mission

LogiGear VN aims at becoming the world leading software testing and

development service provider The company “provides leading-edge software

testing technologies and expertise, along with software development services that enable our customers to accelerate business growth while having confidence in the software they deliver.” (LogiGear VN’s website www.logigear.com)

Products and Services

Products

LogiGear VN’s product is the test automation tool named TestArchitect® It is an ideal test automation solution for high-volume test automation production It lets you quickly develop a large volume of easy to maintain automated tests—using the tool’s built-in actions that eliminate coding

Figure 3 1.3- TestArchitect, the automation test tool of LogiGear

Source: LogiGear’s website ( www.logigear.com )

A single, plain text, action-based test replaces multiple lines of code, which speeds testing and makes it possible to update 10’s or 100’s of tests by replacing just a few actions It is easily integrated to popular management tools, like JIRA, Zephyr, Microsoft TFS and HP Quality Center extend end-to-end test management on desktop, web/cloud, and mobile devices

Services

LogiGear VN provides both automated and manual software testing services using its talents, expertise and tools to deliver clientss applications and products with the faster time-to-market, measurable improvements in quality and cost reduction The services range from on-demand manual testing resources by individual testers

or dedicated teams, to fully-managed testing services where the company takes full responsibility for testing projects The automation experts can work with client’s preferred automated software testing tool, or LogiGear VN’s tool TestArchitect, to conduct automated testing on a large-scale

Table 2 1.2- Ranges of Services by LogiGear VN

Source: LogiGear VN’s website

Markets & Clients

North America (US, Canada) is the principal market of LogiGear, where 90% of the clients based Other clients are in Europe, Japan, and Australia Since commencement, LogiGear VN has been completed more than 3,000 projects with millions of test cases and solutions for a rich variety range of industries: aerospace, automobile, oil & gas, banking, insurance, education, healthcare, games, mobile application, etc

LogiGear VN sets goal to transform itself through “learning organization”

The recent market demands, technologies, and internal dynamics urge LogiGear VN

to be more adaptive to changes, more innovative in developing its products and services so as to compete and advance in the software testing industry More seriously, the number of sales has dropped and customers have been leaving impacting much to their existence in Vietnam They need to gain new competivive advantage in terms of cost effectiveness, market lead-time, quality, and sustainable scalability of human resources

Having perceived the urgency of the matter, the CEO and the board of management

of company have been designing and executing a scheme for transformation that takes the work of building a “learning organization” for LogiGear VN as a key cornerstone in the recent years

Chapter II - LITERATURE REVIEW

Sarder (2016) says successful organizations such as Google, GE, Columbia University share many characteristics in common, one of which is a vital characteristic: “They are learning organizations, able to remain competitive and continue growing in a rapidly changing global environment They value, promote, and support learning at all levels and have learning plans and systems the enable them to translate that learning into action.” (Sarder, 2016, p 31)

2.1 What is “Learning”?

By the online Oxford Dictionaries, learning is “the acquisition of knowledge or skills through study, experience, or being taught”

Learning, education and training are popularly used as equivalent substitutes to each

by many organizations However, there are important distinctions between the terms Education and training are processes that may lead to learning Learning is the outcome or result of a learning process

Argyris and Schön (1978, p 2) suggested “learning involves the detection and correction of error Where something goes wrong, it is suggested, an initial port of call for many people is to look for another strategy that will address and work within the governing variables In other words, given or chosen goals, values, plans

and rules are operationalized rather than questioned.” This is called single-loop

learning (Argyris and Schön, 1974) And, an alternative response is to question to

governing variables themselves, to subject them to critical scrutiny, is called double-loop learning Such learning may lead to an alteration in the governing variables and, thus, a shift in the way in which strategies and consequences are

framed In other words, double-loop learning occurs when error is detected and

corrected in ways that involve the modification of an organization’s underlying norms, policies and objectives

Figure 4 2.1- Single-Loop Learning and Double-Loop Learning

Source: Argyris and Schön (1974, 1978), Argyris (1977)

The focus of much of Chris Argyris’ research has been to explore how organizations can increase their capacity for double-loop learning He argues that double-loop learning is necessary if practitioners and organizations are to make informed decisions in rapidly changing and often uncertain contexts (Argyris &

Schön, 1974; Argyris 1982, 1990)

The Asian Development Bank even suggests the triple-loop learning, which is reflected in the question “How do we decide what is right?” and modeled below:

Figure 5 2.2- Triple-loop learning by Asian Development Bank

Source: ADB (2009) adapted from Argyris & Schön (1974, 1978)

Strategy

Governing Variable

Consequen -ces

Single Loop Learning

Double Loop Learning

Triple Loop Learning

(Are we doing things right?)

(Are we doing the right things?)

(How do we decide what is right?)

Triple-Loop Learning

Kolb and Fry (1974) views learning as an integrated process with each stage being mutually supportive of and feeding into the next It is possible to enter the cycle at any stage and follow it through its logical sequence However, effective learning only occurs when a learner is able to execute all four stages of the model Therefore, no one stage of the cycle is an effective as a learning procedure on its own

At individual level, as to Kolb, learning occurs by passing through a series of stages

in a ‘learning cycle’, including four stages:

Figure 6 2.3- Kolb's Experiential Learning Style

Source: McLeod, S A (2010, revised 2013)

At team level, “team learning” is a skill developed for group problem solving and learning (Senge, 1990) Is about enhancing a team’s capacity to think and act in a collective and collaborative manner, with full inclusiveness

At organizational level, Garvin (1993: 78 - 92) defined “A learning organization is

an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.”

A great notion is that learning may not necessarily involve certain formal education

or training activity, but can often result from the process of undertaking work itself The learning organization therefore does not necessarily require an enhanced investment in education and training (although organizations can rarely resist this

call), but certainly requires efforts to ensure that learning is captured as a value added resource in the organization To do this, it is important to review the ways in which individuals and organizations learn

2.2 What is a “Learning Organization”?

There are numerous definitions on Learning Organization from different authors Most of the authors identify the common characteristics of learning organization as the organization has the capacity to learn, adapt and change Yang et al (2004) shared there have been four key approaches for the concept of learning organization, including systems thinking, learning perspective, strategic perspective and integrative perspective O’Sullivan (1999) confirmed learning organization model was originated from systems thinking approach in the U.S and most popular

is a concept which was invented through the work and research of Peter Senge and his colleagues since the early nineties of the 20th century

Hussein et al (2016, p 512) reported “Continuous learning was found to be the highest correlated with organizational performance while collaboration and team learning was found to be highly associated with organizational innovativeness.” Derrick-Mills et al (2014) asserted that an organizational culture that values learning can be a key facilitator of data use for continuous quality improvement

Phongsichomphu et al (2013) indicates the factors that impact learning organization include leadership, organizational culture, technology utilization, knowledge management; and those factors affect each other

Bersin & Associates (2010) revealed that the most influential driver of business power is the learning culture of an organization

Garvin et al (2008) suggested three building blocks of a learning organization that are “supportive learning environment, concrete learning processes and practices,

and leadership that reinforces learning” They also suggested a tool to assess the

evaluating LogiGear VN’s learning status quo The three building blocks are:

A supportive learning environment: An environment that supports learning has four distinguishing characteristics It’s the environment that creates a sense of psychological safety, appreciation of differences, openness to new ideas, and time for reflection Supportive learning environments allow time for a pause in the action and encourage thoughtful review of the organization’s processes

Concrete learning processes and practices: A learning organization is not cultivated effortlessly It arises from a series of concrete steps and widely distributed activities, not unlike the workings of business processes such as logistics, billing, order fulfillment, and product development Learning processes involve the generation, collection, interpretation, and dissemination of information They include experimentation to develop and test new products and services; intelligence gathering to keep track of competitive, customer, and technological trends; disciplined analysis and interpretation to identify and solve problems; and education and training to develop both new and established employees

Leadership that reinforces learning: Organizational learning is strongly influenced

by the behavior of leaders When leaders actively question and listen to employees—and thereby prompt dialogue and debate—people in the institution feel encouraged to learn If leaders signal the importance of spending time on problem identification, knowledge transfer, and reflective post-audits, these activities are likely to flourish When people in power demonstrate through their own behavior a willingness to entertain alternative points of view, employees feel emboldened to offer new ideas and options

Kim (2002) adapted from Senge (1990) suggested the model of three-leg tool for building a learning organization He divided the learning competence into five

levels which are novice, advanced beginner, competent, proficient, expert, and it stands on the three legs: aspiration, generative conversation, and understanding complexity These the legs are actually based on the five disciplines suggested by Senge

Figure 7 2.4- Three-leg Model for Learning Organization

Source: (Kim, 2002)

Flood (1999) revisited Senge’s fifth discipline, the systemic thinking, which requires organizations to have an ability to “learn the unknowable” He pointed out crucial developments in systemic thinking in the context of the learning organization, including creativity and organizational transformation

Mayo and Lank (1994) concluded that a learning organization integrates full brainpower, knowledge and experience available into it for a continual evolvement for the benefit of its stakeholders Their approach is more pragmatic since they examine practices and synchronize them to an overall model of the learning organization which is based on the European Quality Model, where Enablers and Environment means the “setting” which ensure for the success (of building a

learning organization), whereas Learning and Values stand for the “outcomes” from

a learning organization

Figure 8 2.5- Overall model of a learning organization

Source: Mayo and Lank (1994)

McGill et al (1992, p 7) defined the learning organization as “a company that can respond to new information by altering the very 'programming' by which information are processed and evaluated.”

Senge regards learning organizations as the “organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together” (Senge,

1990, p 3) He indicated five key elements that a Learning Organization should have are shared vision, mental models, personal mastery, systems thinking and

that are quick learners and fast adjusted themselves will stand out and lead And, organizations have to be able to discover how connect people’s commitment and capacity to learn at every level in the organization (Senge, 1990) In other words, in order to adapt to changes and trends, organizations should be competent in learning, fast learning

Creating Values

A supportive culture &

learning climate

Senge’s 5-discipline theory (1990) includes:

Personal mastery is “a discipline of continually clarifying and deepening our

personal vision, of focusing our energies, of developing patience, and of seeing reality objectively.”

Mental models “are deeply ingrained assuptions, generalizations, and even pictures

of images that influence how we understand the world and how we take action.” One important value Senge describes is the openness And a dominant feature of openness is to stop “power games” and be truthful about what said and done

Shared vision is “a practice of unearthing shared pictures of the future that foster

genuine commitment and enrollment rather than compliance.” Only when the vision

is authentic and shared, employees will participate in improvement processes to get the company closer to accomplishing its vision

Team learning “starts with dialogue, the capacity of members of team to suspend

assumptions and enter into genuine thinking together.” Team learning includes the effective teamwork that leads to results which individuals could not have achieved

if doing on their own, and members of a team learn more and faster than they would have without the team However, to get success, team members have to be willing

to shift their mental models and be open to learn from their colleagues

Systems thinking is “the fifth discipline that integrates the other four.” It is the

ability to see the whole, perceive long-term patterns, understand interdependencies, and better recognize that consequences of our actions

It would be a big shortcoming if we disregard the “learning disabilities” outlined by Senge He postulates several perceived deleterious habits or mindsets, which he refers to as "learning disabilities”, comprised in the following notes (Senge, 1990):

I am my position

The enemy is out there

The Illusion of Taking Charge

The Fixation on Events

The Parable of the Boiling frog

The Delusion of Learning from Experience

The Myth of the Management Team

And, we should keep in mind 11 laws of the Fifth Discipline, which are quite philosophical (Senge, 1990):

Today's problems come from yesterday's “solutions”

The harder you push, the harder the system pushes back

Behavior grows better before it grows worse

The easy way out usually leads back in

The cure can be worse than the disease

Faster is slower

Cause and effect are not closely related in time and space

Small changes can produce big results but the areas of highest leverage are often the least obvious

You can have your cake and eat it too - but not all at once

Dividing an elephant in half does not produce two small elephants

There is no blame

It is necessary to distinguish “Learning Organization” with “Organizational Learning” and “Learning Culture.”

Organizational Learning (OL), as to Cambridge Dictionary, is “a process in

which managers and employees within a company or organization learn to deal with

regard Organizational Learning as a process of creating, retaining, and transferring knowledge within an organization

“Organizational learning means the process of improving actions through better knowledge and understanding.” (Fiol & Lyles, 1985, p 803)

“Organizations are seen as learning by encoding inferences from history into routines that guide behavior.” (Levitt & March, 1988, p 319)

“Organizational learning is a process of detecting and correcting error The

individuals’ learning activities, in turn, are facilitated or inhibited by an ecological system of factors that may be called an organizational learning system.” (Argyris,

1977, p 117)

“Organizational learning occurs through shared insights, knowledge, and mental models… [and] builds on past knowledge and experience—that is, on memory.” (Stata R., 1989, p 65)

Learning Culture, by Oracle Inc (2013, p 1), “is a set of organizational values,

conventions, processes, and practices that encourage individuals—and the organization as a whole—to increase knowledge, competence, and performance” That culture consists of a community of employees who are instilled with a growth mindset And, they are not only passionate in learning but also willing to contribute

to their organization, and share their knowledge with others (Grossman, 2015)

2.3 Knowledge and Knowledge Management

Knowledge is an indicator of organizational learning Organizational learning

happens when there is a change in the knowledge of an organization Researchers measure organizational knowledge in various ways For example, some researchers assess knowledge as changes in an organization's practices or routines that increase efficiency Other researchers base it on the number of patents an organization has

Knowledge management is the process of collecting, developing, and spreading

knowledge assets to enable organizational learning

Darroch (2005) through his study on the correlation between knowledge management, innovation and business results revealed that knowledge management positively impact innovation and business outcomes

Two distinct forms of knowledge, explicit and tacit, are significant in this respect Explicit knowledge is codified, systematic, formal, and easy to communicate Tacit knowledge is personal, context-specific, subjective knowledge

Explicit knowledge is knowledge that is easy to transfer Unlike tacit knowledge,

explicit knowledge is declarative or factual It is transferred through written, verbal,

or codified media

Tacit knowledge is knowledge that is difficult to transfer As described by Polanyi

(1966), tacit knowledge is the knowledge of procedures It is a personal type of

knowledge that cannot be shared simply through written or verbal communication

It is learned mostly through experience over time This is a transfer of tacit knowledge since this knowledge is too complex to be codified and passed along through a document This knowledge can only be transferred to new employees through practice and experience

It was the rigorous logic and fundamental assumptions that make Polanyi's work a unique contribution to the theory of knowledge literature (Gerald, 2001) He provides a comprehensive framework for a more dynamic view of the tacit and explicit knowledge relationship in relation to human condition

Figure 9 2.6- A Framework for Understanding Tacit Knowing

Source: Gerald (2001)

Churgh (2015) agrees with Polanyi when confirming, "Tacit knowledge can be defined as skills, ideas and experiences that people have in their minds and are, therefore, difficult to access because it is often not codified and may not necessarily

be easily expressed Whereas, Nonaka and Takeuchi (1995) propose that tacit knowledge can be converted to explicit knowledge

Regardless of who were saying what, the so called “tacit knowledge” exists in organizations and everybody needs to have a personal learning ability to learn it and master it (personal mastery) Because, in the corporate world, that is what the competitors can’t copy from the others unless they “steal” the talents, the ones who own it

2.4 Innovation and Innovation Competence

Innovation can be defined as all the scientific, technological, organizational, financial, and commercial activities necessary to create, implement, and market new

or improved products or processes (OECD, 2010)

Innovation Competency, referring to Harvard’s Competency Dictionary, is the ability to “generating innovative solutions in work situations; trying different and novel ways to deal with work problems and opportunities.” Key actions of innovation are:

Challenges paradigms

Identifies implicit assumptions in the way problems or situations are defined or presented; sees alternative ways to view or define problems; is not constrained by the thoughts or approaches of others

Leverages diverse resources

It draws upon multiple and diverse sources (individuals, disciplines, bodies of knowledge) for ideas and inspiration

Thinks expansively

Combines ideas in unique ways or makes connections between disparate ideas; explores different lines of thought; views situations from multiple perspectives; brainstorms multiple approaches/solutions

Evaluates multiple solutions

Examines numerous potential solutions and evaluates each before accepting any

Ensures relevance

Targets important areas for innovation and develops solutions that address meaningful work issues

(Source: Harvard University Competency Dictionary, “Innovation”, p 18)

Doan Thi Hong Van and Bui Nguyen Le Uyen (2016) give an urgent call

“Vietnamese busineses must improve their innovation capacity continuously”, and indicate that TQM, internal human resourses, absorptive capacity, collaboration networks, and government support positively impact to Vietnamese business innovation capacity Of which, “developing human resources is elementary measure

to promote innovation capacity”, while absorptive capacity is also considered an important solution and “top managers must understand the urgency of innovation and how to manage innovative operations effectively.” People and leadership are among the most important factors in building innovation competence of a company

Nguyen Dinh Tho (2016) reveals that innovativeness capability (and three out of four components of marketing capability) impacts to firm performance

Tidd and Bessant (2015) affirm that “innovation directly correlates with entrepreneurship.”

Nguyen Quoc Duy (2015) pointed out groups of elements that influence corporate innovation competence, consisting of internal factors such as common business characteristics, corporate strategy, organizational structure, culture and leadership, human resources and functional strategy; external factors include relationship, R&D, technology progress, connection with professional associations, and national policies that support innovation

Phung Xuan Nha and Le Quan (2013) studied innovation of 583 Vietnamese enterprises in four dimensions (perception and culture of innovation, innovation results, forms of innovation, and resource allocation to innovation) and learned that most of the enterprises perceived pretty well about the importance and benefits of innovation, but no many of them actually had a comprehensive program to promote innovation

Smith and Tushman (2005) in their co-research “Managing Strategic Contradictions: A Top Management Model for Managing Innovation Streams” proved that corporate performance depends on top management teams’ commitment and ambidexterity on balancing exploration and exploitation The authors developed

“a model of managing strategic contradictions associated with paradoxical cognition - senior leaders and/or their teams (a) articulating a paradoxical frame, (b) differentiating between the strategy and architecture for the existing product and those for innovation, and (c) integrating between those strategies and architectures.” O'Reilly and Tushman (2004) invented the term “Ambidextrous Organization” for organizations that have ability to exploit the current resources (cash, talent, expertise, customers, and so on so forth) and explore the potentials, innovations and future trends in order to become innovative “They must constantly pursue

incremental innovations, small improvements in their existing products and

operations that let them operate more efficiently and deliver ever greater value to

customers Companies also have to make architectural innovations, applying

technological or process advances to fundamentally change some component or

element of their business… Finally, businesses need to come up with discontinuous

innovations—radical advances like digital photography that profoundly alter the

basis for competition in an industry, often rendering old products or ways of working obsolete.” (O’Reilly & Tushman, 2004, p 74)

Garcia & Calantone (2002) delineated four components of learning orientation: commitment to learning, shared vision, open-mindedness, and intra-organizational knowledge sharing Learning orientation was conceptualized as a second-order construct and it affected firm innovativeness, which in turn affected firm performance

Rothwell (1992) in his “Successful Industrial Innovation: critical factors for the 1990s” described “Not only is technology changing rapidly, but the process of the commercialization of technological change – the industrial innovation process – is changing also.” He traced developments in dominant perceived model of industrial innovation since the simple linear “technology push” and “demand pull” of the 1960s – 1970s, to the “coupling model” in 1970s – 1980s, and the “integrated model” in 1980s – 1990s, and he predicted the 2000s where innovation was becoming faster and involving inter-company networking and employed a new electronic toolkit (expert systems and simulation modeling)

Schumpeter in his Theory of Economic Development (1934), Business Cycles (1939), and Capitalism, Socialism and Democracy (1942) described the importance

of innovation and entrepreneurship to economic development He suggested that anyone who does things for profits must innovate He believed innovation is a critical driver of competitiveness and economic dynamics Sledzik (2013) agreed with Schumpeter on the aspect: “… accented that it is entrepreneurship that

‘replaces today’s Pareto optimum with tomorrow’s different new thing’ Schumpeter's words that entrepreneurship is innovation have never seemed so appropriate as the nowadays”

Synthetizing various views from different authors about learning organization we can see that corporate performance depends on top management teams’ commitment and ambidexterity on balancing exploration and exploitation (Smith and Tushman, 2005) Garcia & Calantone (2002) focused on learning orientation

that affected firm innovativeness Darroch (2005) revealed that knowledge management positively impact innovation According to Senge (1990), people are agents, able to act upon the structures and systems of which they are a part All the disciplines are, in that light, “concerned with a shift of mind from seeing parts to seeing wholes, from seeing people as helpless reactors to seeing them as active participants in shaping their reality, from reacting to the present to creating the future” (Senge 1990, revised ed 2006: 69) Jamali et al (2009), Jashapara (2003), Hejazi and Veisi (2007), Abbasi et al (2015) confirmed that Senge’s Learning Organization 5-discipline model has been the best fit for the business and education organizations

Chapter III - RESEARCH METHODOLOGY

The qualitative research is apt to the types of questions raised to the interviewees about their perception of “learning organization” The selection of research method should reflect the research topic and the general research strategy as the methodology dicides which methods are used and how each method is used (Silverman, 2000) “Theoretical perspective” is taken to mean “the philosophical stance lying behind the methodology” (Crotty, 1998, p 66) The theoretical perspective, according to Crotty (1998), provides a context for the process involved

a basis for its logic and and its criteria The study adopts the interpretive qualitative paradigm of research which “looks for culturally derived and historically situated interpretations of the social life world” (Crotty, 1998, p 67) According to Merriam, the interpretive qualitative paradigm “exemplifies all the characteristics of qualitative research, … that is the researcher is interested in understanding how participants make meaning of a situation or phenomenon, and this meaning is mediated through the researcher as instrument” (Merriam, 2002, p 6)

The approach taken for this study lies in the acceptance of the importance of understanding and an appreciation of the influence of subjective interpretations and perceptions in the constructs of a learning organization This approach focuses on how learning organization is experienced in the everyday world The phenomenological orientation is ‘particularly interested in how a learning organization is constructed by those who participate in it” (Denscombe, 2003, p.99) When the social world is socially constructed, the possibility of seeing things differently increases, thus giving rise to multiple perceptions of reality, supports a predominantly qualitative research orientation, rather than a quantitative one

This is a qualitative research using questionnaires and semi-structured interviews with executives, managers, and employees who closely involve in the process of building LogiGear VN into a learning organization

Obsevations, surveys, in-depth interviews, and focus groups are conducted to collect and analyze information about how LogiGear VN’s staff at all levels perceive the concept of “learning organization”, what and how they practice the

“learning organization” in their own kaleidoscope The researcher also tries to identify critical success factors and facilitating influencers as well as obstacles to the execution, whether foreseen or otherwise, with strategies for resolution In that journey, Senge’s definition of “learning organization” and his five-discipline model shall be employed to compare and contrast to that of LogiGear VN

Table 3 3.1- Five Disciplines by Peter Senge

Personal Mastery

a discipline of continually clarifying and deepening our personal vision,

of focusing our energies, of developing patience, and of seeing reality objectively (Senge, 1990)

Mental Models

are deeply ingrained assumptions, generalizations, or even pictures of images that influence how we understand the world and how we take action (Senge, 1990)

Shared Vision a practice of unearthing shared pictures of the future that foster genuine

commitment and enrollment rather than compliance (Senge, 1990)

Team Learning “starts with dialogue, the capacity of members of a team to suspend

assumptions and enter into genuine thinking together (Senge, 1990)

Systems Thinking The Fifth Discipline that integrates the other four.

The interview questions are piloted and tailored to suit the language and understanding of information technology professionals and IT corporate environment Table of Questions is presented at Appendix 1 & 2

3.1 Data Collection

Primary data are collected through observations, in-depth interviews and focus groups with corporate executives, managers, and non-managers of LogiGear VN The author first send email to probe 50 staff of LogiGear VN who may be willing to participate in the interviews In the email, the objectives of research and anonymity principle (via codifying process) applied to interviewees are clearly explained and communicated As a result, the author received 24 responses with “Yes, I participate in your interview”, who can be divided in three groups: Software Engineers (14), Mid-managers (5), and Top Executives (5)

Secondary data are referred from literatures, company reports, books, magazines and websites

Interviews were recorded to enable transcripts to be made and to facilitate discussions and suggestions

3.2 Participants in Interviews - Key Stakeholder Groups

This research is to identify critical factors that construct LogiGear VN’s “learning organization” from key stakeholders’ viewpoints

The key stakeholder groups were focused on 1) Top executives, 2) Middle layer managers, and 3) Software engineers To obtain a representative sample, a combination of purposive, systematic and snowball sampling techniques were used

to recruit participants Three executives, five mid-managers, and ten software engineers were selected for individual interview A triangulation allows the same phenomenon to be studied from different approaches (Veal, 2005) A focus group

session was conducted with representatives from each of the executives, managers, and software engineers groups

mid-The three stakeholder groups are dealt with in the following sections

3.2.1 Stakeholder 1: Top Executives

This group consists of three executives who are a Chief Technology Officer (CTO),

a R&D director, and an engineering service delivery director They are all senior leaders of the company and have at least more than 15 years being with the company These participants are playing strategic roles and have deep insights of the vision, mission, and business development strategy of the company They are currently providing technical and people leadership to more than 500 software engineers of LogiGear VN

3.2.2 Stakeholder 2: Mid-Managers

This group comprises business managers whose seniority is from 5 – 10 years at the company These participants are in charge of project management, people development, sales and marketing, quality assurance, customer satisfaction These participants are crucial to the research because they are able to provide insights into the performance of their employees, expectation from customers or demand from the market, technical/technology leadership on a daily basis They hold critical roles

in developing human resouces, satisfying customers, and ensuring business efficiency They are the ones who lead, manage, coach, train, mentor, and influence their engineers the most

3.2.3 Stakeholder 3: Soffware Engineers

This group accounts for 90% of the total population of the company (LogiGear VN’s internal report, 2016) They directly provide services (software testing and software development) to customers and generate revenue for the company The

success of the company depends on the performance of this group Acquiring, retaining and developing them is most challenging yet rewarding to LogiGear VN Their degrees of skills set, competence, and performance determine whether or not LogiGear VN would become a leader or a follower in the industry and market

3.2.4 Interview and focus group coding & demographics

The table below shows the characteristics of participants in the collection of primary data Every care has been taken to preserve the identity and anonymity of the participants - and in parallel, pseudo names are used in all references to the focus group and interview participants

The participants are categorised into the three groups identified in section 3.2.1 above Participants are coded as executive (exec), mid-manager (mgr), and software engineer (engr)

This study employs two research instruments, semi-structured interviews and focus group sessions, as primary means of data collection Data was also collected from document analysis of LogiGear VN