Managing an organizational learning system by aligning stocks and flows of knowledge: An empirical examination of intellectual capital, knowledge management, and business performance

There exists great interest in organizational learning among academics and practitioners. However, the organizational learning literature remains a mixture of qualitative theories, descriptive case studies, computer simulations and little empirical research. The goal of this paper is to advance the current state of theory development by taking an empirical approach which considers organizational learning as a dynamic system of behaviours across individual, group and organizational levels.;The 4-i framework of organizational learning (Crossan, Lane and White, 1999) offers a lens through which the processes of learning in organizations can be studied. These processes encompass a multi-level conceptualization of learning which is a key dimension within the literature. A distinction currently lacking in the literature is the difference between knowledge in organizations that is static (i.e., remains fixed within one individual or information system) versus knowledge that is dynamic (i.e., moves from one individual or information system to the next). This paper considers knowledge stocks and flows which interact with one another across levels in an overall organizational learning system. The main research issue of this dissertation is to determine---across a sample of organizations---how perceptions of knowledge stocks and flows in an organizational learning system relate to each other, and ultimately how their inter-relationship is associated with business performance.;A survey instrument was used to test these hypotheses based on the Strategic Learning Assessment Map (SLAM) (Crossan and Hulland, 1997; Crossan and Bontis, 1998). The survey was administered to 32 organizations in the mutual fund industry. Approximately 15 individuals representing senior-, middle- and non-management levels responded from each organization resulting in a total sample of 480 respondents. The final PLS (Partial Least Squares) model was highly explanatory and validated the following propositions: (i) there is a positive relationship between knowledge stocks at all levels and business performance; and (ii) the misalignment between knowledge stocks and flows in a learning system is negatively associated with business performance.;In conclusion, investing in knowledge flow behaviours will allow organizations to minimize the misalignment between knowledge stocks and flows which improves the efficiency of the organizational learning system thereby yielding greater business performance.