KCT Reference

Asian Research Consortium
Asian Journal of Research in Social Sciences and Humanities

Vol. 6, No. 6, June 2016, pp. 1687-1700.
Asian Journal
of Research in
Social Sciences
and
Humanities
ISSN 2249-7315
A Journal Indexed in Indian Citation Index
www.aijsh.com
DOI NUMBER: 10.5958/2249-7315.2016.00318.X
Assessing the Impact of Learning Organization on

Innovation Performance in Renewable Energy Sector
Dr. Kirupa Priyadarsini M*; Dr. M. V. Subha**
Downloaded From IP - 14.139.186.178 on dated 15-Jun-2016
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Members Copy, Not for Commercial Sale
*Associate Professor,
KCT Business School,
Coimbatore, India.
**Associate Professor,
Department of Management Studies,
Anna University, Regional Campus,
Coimbatore, India.
Abstract
The present study aims to explore and assess the impact of learning organization on innovation
performance in renewable energy industries. To assess the learning, the dimension of learning
organization questionnaire (Watkins and Marsick (1997)) was adopted. This paper examines the
Dimensions of Learning Organization (DLOQ) which has continuous learning, Dialogue & Inquiry,
Team Learning, Embedded System, System Connections, Provide Leadership and also assess the
Innovation performance. The data was collected from two hundred and thirty employees of
renewable energy sector. Structural Equation Modeling was used to mode the impact of
Organizational learning on process innovation performance and product innovation performance.
The results of the study indicate that process innovations are high with companies that Promote
inquiry dialogue, Create systems to capture and shared knowledge and that Provide strategic
leadership for learning.
Keywords: Learning organization, process innovation, product innovation, strategic leadership.
Introduction
A learning organization is an organization skilled at creating, acquiring, and transferring
knowledge, and at modifying its behavior to reflect new knowledge and insights.Learning is very
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Priyadarsini & Subha (2016). Asian Journal of Research in Social Sciences and Humanities,
Vol. 6, No.6, pp. 1687-1700.
important both for individuals and organizations. The importance of learning depends on a simple
reality. Learning is defined as a process in which individuals acquire new knowledge and intuitions
that result in a change of the behaviours and actions. Learning can take place in individuals, teams,
the organization and even the communities with which the organization interact. Sandra Kerka has
suggested in her book the Learning Organization: Myths and Realities that any learning
organization possesses the following characteristics: use learning to teach their goals, embrace
creative tension as a source of energy and renewal, provide continuous learning opportunities, link
individual performance with overall organizations performance, foster inquiry and dialogue,
making it safe for people to should openly and take risks. In a learning organization, workers
encouraged to take risks, which results in more opportunities for the organization. The knowledge
is getting more global every day and that dynamic structure of knowledge is forcing people to be
open to change and development. The exact and simple way of acquiring knowledge is learning.
The aim of this study is to explore and assess the impact of learning organization on innovation
performance in renewable energy industries. To assess the learning, the dimension of learning
organization questionnaire (Watkins and Marsick (1997)) was adopted. This paper examines the
Dimensions of Learning Organization (DLOQ) which has continuous learning, Dialogue & Inquiry,
Team Learning, Embedded System, System Connections, Provide Leadership and also assess the
Innovation performance.
The Indian energy sector is on an expansion phase providing huge opportunities for innovative HR
and hiring practices in this sector. This had led the companies in the energy sector to develop talent,
enhance growth and stimulate innovation in their organizations. Organizations should focus on
motivating their employees and retaining talent in order to meet the shortage of talent in this sector.
This calls for sustaining the competitiveness and ensuring momentum in their long-term growth, by
bringing in green and inclusive innovations that leads to growth in all spheres like economic, social
and environmental sustainability. Hence the current study aims to assess the impact of learning
organization on Innovation Performance in the Renewable energy sector in India.
Review of Literature
Argyris (1964) discussed the idea of learning in individuals and organizations. His innovative
thinking around notions such as the learning society, double-loop learning, and reflection-in-action
has become part of the language of education (Smith, 2001). In the early 1990s, Senge began to
explore the art and practice of the learning organization and popularized organizational learning
with his book, The Fifth Discipline, that describes five characteristics of learning organizations:
systems thinking, personal mastery, mental models, building shared vision, and team learning
(Senge,1990a).
Franois Therin (2010) explored the influence of processes of learning in organization on
innovation performance in high-tech small firms. An original construct, based on 6 dimensions, is
derived to evaluate the degree of learning in firms. Specifically, influence on product and process
innovations and financial performance tested. The study concluded that learning organization
processes enhanced innovative performance.
John Hagedoorn, MyriamCloodt (2002) studied innovative performance of a large international
sample of nearly 1200 companies in four high-tech industries, using a variety of indicators
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Vol. 6, No.6, pp. 1687-1700.
established that a composite construct based on these four indicators clearly catches a latent
variable innovative performance. However, their findings also suggest that the statistical overlap
between these indicators is that strong that future research might also consider using any of these
indicators to measure the innovative performance of companies in high-tech industries.
Chien-Chi Tseng( 2010) explored the effects of learning organization practices on organizational
commitment and effectiveness in small and medium-sized enterprises (SMEs). The results
suggested that learning organization practices can be viewed as an important antecedent factor for
organizational commitment, as well as an antecedent factor for organizational effectiveness.
Strengthening learning organization practices is a wise way to create organizational effectiveness;
strong learning organization practices were good to develop the organizational commitment; and
the well developed organizational commitment were an advantage to foster organizational
effectiveness.
Maria et al (2011) in their work studied the influences of transformational leadership on
organizational performance through the dynamic capabilities of organizational learning and
innovation on a sample of 168 Spanish firms. The results reveal that (1) transformational leadership
influences organizational performance positively through organizational learning and innovation;
(2) organizational learning influences organizational performance positively, both directly and
indirectly through organizational innovation; (3) organizational innovation influences
organizational performance positively
A study by A. Noruzy (2012) tried to determine relations between transformational leadership,
organizational learning, knowledge management, organizational innovation, and organizational
performance among Iranian manufacturing companies through structural equation modeling and
concluded that transformational leadership directly influenced organizational learning and
knowledge management. Organizational learning directly and positively influenced knowledge
management of manufacturing firms. Transformational leadership positively influenced
organizational innovation and organizational performance of manufacturing firms. Organizational
learning and knowledge management directly influenced organizational innovation; whereas
organizational learning and organizational innovation directly influenced organizational
performance among manufacturing firms.
The study by Norashikin Hussein et al (2014) proposes that learning organization culture have
direct effects on organizational performance and organizational innovativeness, potentially leading
to long-term organizational success
zlemYaarUurlu (2016) examined the effect of organizational learning capability on product
innovation performance in the manufacturing sector to examine the relationship between the
dimensions of organizational learning capability and the dimensions of product innovation
performance. The findings of the study indicate a positive relationship between organizational
learning capability and product innovation performance.
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Vol. 6, No.6, pp. 1687-1700.
Objectives of the Study

The prime aim of this study is to explore the level of learning organization and innovation
performance in energy sector through dimensions of learning organization. The study also tries to
assess the impact of dimensions of learning organization and their effect on Innovation capabilities
of a firm.
Methodology
This study aims at assessing the extent to which the renewable energy industries promote learning
in organization and its effect on innovation performance. Companies in renewable energy business
considered for the study. Employees in the middle management level and above cadres considered
for the study.
Operational Definitions of Learning Organization Dimensions

Create continuous
learning opportunities
Promote inquiry and
dialogue
Encourage
collaboration and team
learning
Create systems to
capture and should
learning
Empower people
toward a collective
vision
Connect the
organization to its
environment
Provide strategic
leadership for learning
In organization, Opportunities for ongoing education and growth

provided; learning is designed into work so that people can learn on the
job.
In the organization, people gain productive reasoning skills to express
their views and the capacity to listen and inquire into the views of others.
In the organization, Work is designed to use teams to access different
modes of thinking; collaboration is valued by the culture and rewarded;
teams expected to learn by working together.
In the organization, necessary systems to shared learning created,
maintained, and integrated with work; employees have access to these
high- and low-technology systems like suggestion systems, electronic
bulletin boards.
In the organization, people involved in setting and implementing a
shared vision; responsibility is distributed so that people motivated to
learn what they held accountable to do.
The organization is linked to its communities; people understand the
overall environment and use information to adjust work practices; people
helped to see the effect of their work on the entire organization.
In organization Leadership uses learning strategically for business
results; leaders model, champion, and support learning.
The data was collected from two hundred and thirty employees of renewable energy sector. The
primary data was collected by using questionnaires. To improve the reliability and validity,
multiple-item measures used for all of the variables. Responses recorded along a four-point Likert
scale ranging from 1 (strongly disagree) to 4 (strongly agree) for all the items in the questionnaire.
Watkins & Marsicks DLOQ (Dimension of learning organization questionnaire) was used to
measure the learning organization practices for the companies in energy sector.
For assessing the Innovation performance, four dimensions are used. The dimensions sourced from
the author Mariesse and Mohnen (2010), include process innovation, product innovation, cooperation activities, and activities that hamper innovation.
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Vol. 6, No.6, pp. 1687-1700.
Operational Definition of Innovation Performance Dimensions

Process Innovation
Product Innovation
Activities that leads to
Co-operation of
Stakeholders
Activities that hamper
innovation
The new or significantly improved production process, distribution

method, or support activity for goods and services. The process
innovation could either be new to the market or new to the firm.
The new good or service or a significantly improve goods or service with
respect to its capabilities. The Product innovation could either be new to
the market or new to the firm.
The co-operation of the employees, teams and department within the
organization, other enterprises or institutions, government bodies that has
resulted in improved performance.
Factors like lack of qualified personnel, lack of information on markets
and lack of market factors like excessive perceived economic risk
hamper the innovation activities or influencing a decision not to innovate
in the organization.
Research Hypothesis & Model Construction

The model of an effective learning organization is considered as one that has the capability to
integrate people and organization structures in order to facilitate continuous learning and encourage
organization changes (Yang et al; 2004). In organizations, people help each other to learn, support
each other in learning and create continuous learning opportunities which have a positive influence
on innovation performance. These initiatives tend to increase their interest to collaborate with other
institutions for innovation activities. Based on the objectives of the study, the following hypothesis
have been formulated:
H1: Creating continuous learning opportunities have a positive impact to increase the organization
co-operation activities for innovation.
By promoting inquiry and dialogue, employees gain skills to express their views and increase their
capacity to listen to others and inquire into the views of coworkers. This influences the extent to
which an employee is involved in cooperating with their stakeholders for innovation
H2: Inquiry & Dialogue has a positive impact which tends to increase their co-operation with
stakeholders
Encouraging collaboration and team learning indicates that the organization expects the employees
to work in teams. The teams or groups expected to learn and work together. By encouraging
collaboration and team learning the company tends to increase the employees interest to work with
other institutions thereby positively influencing the engagement in co-operation activities.
H3: Encourage collaboration and team learning has positive impact which tends to increase the
organization co-operation activities.
In an organization, systems support and enhance the performance. Specific processes designed,
implemented and integrated with work to help employees share their learning and capture what is
learned at the workplace. If the system is created with a focus to capture and disseminate learning,
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Vol. 6, No.6, pp. 1687-1700.
then the employees look forward for opportunities to associate with outside stakeholders and these
systems have a positive influence on co-operation activities.
H4: Create systems to capture and shared learning has a positive impact on co-operation activities.
To empower people toward a collective vision, people in organization involved in setting, owning,
and implementing a joint vision. People given choices in their work assignments; the organization
supports employees to take decisions; this motivates the people to learn. Empowering people
towards a collective vision has an influence on their interest to cooperate with other institutions.
H5: Empowering people towards a collective vision has positive impact on cooperating with other
institutions which tends to increase the innovation.
Organization is linked to its communities; people understand the overall environment and use
information to adjust work practices; it encourages people to think from a global perspective;
people work together with outside communities to meet mutual needs. Connecting the organization
to its environment has positive impact on the extent to which an organization cooperates with other
institutions.
H6: Connecting the organization to its environment has positive impact on cooperating with other
institutions which tend to increase the innovation.
In an organization, leadership is important to help employee to create a collective vision toward
which the entire organization can work. Leaders mentor and coach, share up to date information
with employees about competitors, industry trends and organizational directions. Strategic
leadership positively affects the extent to which employees engage in cooperating activities.
H7: Provide strategic leadership has positive impact on co-operation activities.
The entire organization seeks cooperation with various business stakeholders who support and
improve innovation. Due to the help of these business stakeholders firms able to innovate new
distribution methods, new logistics method, and new processes. Similarly if innovation activities
include acquisition of machineries, software, industrial design etc. this in turn leads to product
innovation along with process innovations.
H8: Co-operation with external business stake holders has a positive impact on process innovation.
The factors like lack of qualified personnel; lack of information on markets; lack of difficulty in
finding co-operation with partners; which affects the innovation activities or decision making on
innovate products. Such activities hamper the product innovation as well as process innovation.
H9: Factors that hamper innovations have a negative impact on process innovation.
A framework that was similar to the above was developed and the effect of hampering activities on
Process innovation was also tested.
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Vol. 6, No.6, pp. 1687-1700.
H10: Co-operation with external business stake holders has a positive impact on product
innovation.
The factors like lack of qualified personnel; lack of information on markets; lack of difficulty in
finding co-operation with partners; which affects the innovation activities or decision making on
innovate products. Such activities hamper the product innovation as well as process innovation.
Fig: 1 Conceptual Framework for Impact of Learning Organization on

Process Innovation Performance
Create continuous
Learning
opportunities
HI(+
)
Promote inquiry and

dialogue
H2(+)
Encourage
collaboration and
team learning
Hamper
activities
H3(+)
H9(-)
Create systems to
capture and sh
learning
H4(+)
Co operation
activities
H5(+)
Empower people
toward a
Collective vision
Connect the
organization to its
environment
Provide strategic
H7(+)
H6(+)
1693
H8(+)
Process &
Product
Innovation
Vol. 6, No.6, pp. 1687-1700.
Results and Discussions

The demographic profile of the respondents showed that 80.4% of the respondents are male and
19.6% are female. Based on the organizations hierarchy 19.6 % are at the entry level, 38.7% are
from the junior executives level, 10.7% are Senior Executives, 19.6 % are Team leads or Project
heads and 11.3 % are Deputy Managers.
Reliability and validity tests are conducted for all the constructs in the conceptual model. The
reliability of the ten constructs used in the study was carried out using VPLS software. The
reliability of the constructs refers to the accuracy with which the constructs repeatedly measure the
same phenomenon within permissible variation. The reliability of each construct in question is
examined using Cronbacb's alpha (Cronbach, 1951). An alpha score larger than 0.7 is generally
acceptable as sufficient accuracy for a construct (Nunnally, 1978). The composite reliability for
internal consistency of the constructs was tested and was above 0.7.
Table 1Reliability and Validity of Constructs for Process Innovation

Construct
Create continuous learning opportunity
Promote Inquiry & dialogue
Encourage collaboration and team learning
Create systems to capture and sh knowledge
Empower people to collective vision
Connect the organization to its environment
Provide strategic leadership for learning
Co-operation activity
Process innovation
Product Innovation
Hamper activities
Composite Reliability
0.74
0.70
0.70
0.76
0.70
0.71
0.71
0.75
0.85
0.71
0.70
AVE
0.59
0.55
0.54
0.59
0.58
0.59
0.56
0.60
0.74
0.56
0.53
The convergent validity of each construct is checked by examining the Average Variance Extracted'
(AVE) values. Constructs which have AVE values greater than 0.5 said to have convergent validity
or unidimensionality. In some cases, values up to 0.4 also are considered if they are central to the
model (Chin, 1995 and 1998; Chin and Newsted, 1999; and Chin et al, 2003). Discriminant validity
of constructs is ascertained by comparing the AVE scores of the two constructs with the square of
the correlation between the two constructs. If both the AVE values are larger than the square of the
correlation, the constructs can be considered to show Discriminant validity (Fornell and Larcker,
1981).
The correlation values are generated using the SPSS software for the constructs in the model. From
the results of the correlation analysis shown in Table 3, it can be seen that all the correlation values
are greater than 0.6. All the correlation values are also found to be significant at 0.05 levels. The
highest correlation is for Process innovation and Continuous Learning.
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Vol. 6, No.6, pp. 1687-1700.
Table 2 Correlation of the Model Constructs

CL
CL
1
DI
TL
EMS
EMP
DI
.505** 1
TL
.423** .369** 1
EMS
.530** .477** .299** 1
EMP
.510** .465** .364** .462** 1
SYSC
PL
PCI
PPI
CO HP
SYSC .546** .545** .385** .485** .532** 1

PL
.472** .386** .312** .433** .448** .422** 1
PCI
PPI
.636** .413** .354** .490** .447** .510** .412** 1

.396** .341** .343** .306** .363** .370** .359** .332** 1
CO
.194** .156*
.138*
HP
-.015
-.031
.015
.181** .110
.099
-.104
.180** .173** .289** .169* 1

.048
.013
.086
.138* .041 1
*(CI create continuous learning opportunity; DI promote inquiry & Dialogue; TL encourage collaboration and team
EMS Create systems capture and sh learning; EMP- Empower people toward a collective vision; SYSC- Connect the
organization to its environment; PL - Provide strategic leadership for learning; PCI process innovation; PPI product
innovation; CO- co-operation activities; HI-hampering activities)
The result of VPLS structural equation model is given below in Fig. 2 & 3. Tests of significance for
all paths are conducted using bootstrap re-sampling procedure. The test of each link is mapped to
each path in the model. The estimated path coefficient along with their t-statistic is shown in the
model. The causal effect of learning organization on Innovation performance is tested using Visual
PLS path modeling software. A rigorous test of the significance of various proposed relations can
be tested using the bootstrap function in Visual PLS. PLS path modeling is a nonparametric
method, and as such cannot be used for performing a t-test. But it is possible to use re-sampling
methods (bootstrap and jack knife) to obtain the significance of the various paths in the model.
Bootstrap is more reliable in estimating the significance of paths (Chin, 1995). So, this research has
considered and used bootstrap for the purpose of determining causal relations proposed in the
model.
The results are examined for significance. At 5% level of significance the cutoff t-statistic is 1.96.In
general; it is assumed that if the t-statistic is more than two, the path is significant.
1695
Vol. 6, No.6, pp. 1687-1700.
Fig. 2 Model of Learning Organization Impact on Process Innovation

Create continuous
Learning opportunities
Promote inquiry and

dialogue
Encourage
collaboration and
team learning
Create systems to
capture and shared
learning
Empower people
toward a
Collective vision
Connect the
organization to its
environment
0.006
(0.143)
0.184
(2.901)
Hamper
activities
0.108
(1.654)
0.278
(3.077)
0.013
(0.318)
-0.095
(-1.889)
Co operation
activities
0.412
(6.340)
Rsq = 0.306
Process
Innovation
Rsq = 0.190
0.031
(0.705)
0.152
(2.01)
Provide strategic
The results therefore indicate that promoting inquiry and dialogue had a positive impact on the
firms capacity to cooperate for activities that lead to process innovation with a t value of 2.901 and
a significance of 0.184. Creating systems to capture and shared learning was also found to have a
positive impact on Cooperation activities with a t value of 3.077 and a path coefficient of 0.278 yet
another aspect of learning organization that had an impact was providing strategic leadership. The
better the strategic leadership better will be the companys activities to cooperate for process
innovation.
Another hypothesis that was proved is whether the cooperation activities lead to process
innovation. The t statistic of 6.34 and a path coefficient of 0.412 indicate that the higher an
1696
Vol. 6, No.6, pp. 1687-1700.
organization tries to cooperate with its stakeholders greater will be its ability to come out with
process innovations.
Table 3 Bootstrap for Process Innovation

Hypothesis
H1
H2
H3
H4
H5
H6
H7
H8
H9

Cooperation activity
Co-operation
activity
Process Innovation
Hamper activity
Process Innovation
Standardized
path coefficient
0.00
t-statistics
0.18
0.10
2.90
1.65
0.27
3.07
0.01
0.31
0.03
0.7.
0.15
2.20
0.41
-0.09
6.34
-1.88
0.14
Fig. 3 Model of Learning Organization Impact on Product Innovation

Performance
Create continuous
Learning opportunities
Promote inquiry and

dialogue
Encourage
collaboration and
team learning
Create systems to
capture and sh
learning
Empower people
toward a
Collective vision
Connect the
organization to its
environment
Provide strategic
leadership for
learning
0.006
(0.159)
0.181
(2.692)
Hamper
activities
0.111
(1.699)
0.279
(3.430)
-0.014
(-0.280)
-0.155
(-2.591)
Co operation
activities
Rsq = 0.308
0.032
(0.655)
0.152
(2.013)
0.321
(4.996)
1697
Product
Innovation
Rsq = 0.129
Vol. 6, No.6, pp. 1687-1700.
Table 4 Structural Bootstrap for Product Innovation

Hypothesis
H1
H2
H3
H4
H5
H6
H7
H8
H9

Co-operation
activity
Co-operation
activity
Product Innovation
Hamper activity
Product Innovation
Standardized
path
coefficient
0.00
t-statistics
0.18
0.11
2.69
1.69
0.27
3.43
0.01
0.28
0.03
0.65
0.15
2.01
0.32
-0.15
4.99
-2.59
0.15
The results therefore indicate that promoting inquiry and dialogue had a positive impact on the
firms capacity to cooperate for activities that lead to product innovation with a t value of 2.69 and
a significance of 0.184. Creating systems to capture and shared learning was also found to have a
positive impact on Cooperation activities with a t value of 3.43 and a path coefficient of 0.278 yet
another aspect of learning organization that had an impact was providing strategic leadership. The
better the strategic leadership better will be the companys activities to cooperate for product
innovation.
Another hypothesis that was proved is whether the cooperation activities lead to product
innovation. The t statistic of 4.99 and a path coefficient of 0.32 indicate that the higher an
organization tries to cooperate with its stakeholders greater will be its ability to come out with
product innovations.
Conclusion
The present study aimed at exploring the dimensions of learning that influenced the extent to which
firms collaborated with the external stakeholders which resulted in innovation performance
measured through process innovation and product innovation in the renewable energy sector where
learning is primary importance. Employees in the middle management levels were the respondents.
To attain the above objective path analysis using VPLS software was used. Two models were built
and tested one for assessing the product innovation performance and the other for measuring the
process innovation performance. The results of the study indicate that process innovations are high
with companies that Promote inquiry dialogue, Create systems to capture and shared knowledge
and that Provide strategic leadership for learning. The above three dimensions of DLOQ was found
to have a positive impact on the extent to which companies engage in cooperative activities with
their external stakeholders which in turn improved their process innovation performance in firms.
1698
Vol. 6, No.6, pp. 1687-1700.
Similarly, the product innovation in companies also seems to have been impacted by the same three
constructs among the seven dimensions of learning organization. The study categorically proves
that firms in the Renewable Energy sector need to focus on giving more opportunities to share their
opinions and suggestions, increase inquiry and dialogue, create systems and processes where the
learning in the organization shall be captured and shared. This will enable to create the right kind of
strategic leadership that emphasizes learning at workplace in order to have improved processes and
products that leads to a competitive advantage against their competitors in the market.
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Asian Research Consortium

Asian Journal of Research in Social Sciences and Humanities

DOI NUMBER: 10.5958/2249-7315.2016.00318.X

Assessing the Impact of Learning Organization on

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Keywords: Learning organization, process innovation, product innovation, strategic leadership.

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Operational Definitions of Learning Organization Dimensions

In organization, Opportunities for ongoing education and growth

Operational Definition of Innovation Performance Dimensions

The new or significantly improved production process, distribution

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Research Hypothesis & Model Construction

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Fig: 1 Conceptual Framework for Impact of Learning Organization on

Promote inquiry and

Results and Discussions

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Table 1Reliability and Validity of Constructs for Process Innovation

Table 2 Correlation of the Model Constructs

.530** .477** .299** 1

.510** .465** .364** .462** 1

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SYSC .546** .545** .385** .485** .532** 1

.472** .386** .312** .433** .448** .422** 1

.636** .413** .354** .490** .447** .510** .412** 1

.180** .173** .289** .169* 1

Fig. 2 Model of Learning Organization Impact on Process Innovation

Promote inquiry and

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Table 3 Bootstrap for Process Innovation

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Create continuous learning opportunity

Fig. 3 Model of Learning Organization Impact on Product Innovation

Promote inquiry and

Table 4 Structural Bootstrap for Product Innovation

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Create continuous learning opportunity

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Senge, P.M., 1996. The Fifth Discipline. New York, Doubleday.

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.530 .477 .299** 1

.510 .465 .364 .462 1

SYSC .546 .545 .385 .485 .532** 1

.472 .386 .312 .433 .448 .422 1

.636 .413 .354 .490 .447 .510 .412** 1

.180 .173 .289** .169* 1