European Journal of Social Sciences – Volume 8, Number 2 (2009)
An Exploratory Research on the Relationship between Organisational Learning Attributes on Non-Profit Organisations Performance in Singapore
Hishamuddin bin Md.Som E-mail: hisyam2@yahoo.com Roland Yeow Theng Nam Faculty of Management and Human Resource Development Universiti Teknologi Malaysia E-mail: roland1507@hotmail.com Abstract Although organisational learning topics were widely researched and discussed on business organisations there were limited empirical study conducted on non-profit organisations (NPOs). As such, the purpose of this paper is to examine the relationship between various organisational learning attributes and organisational performance in the context of NPO specifically in Singapore. Through the self-administered survey carried out on 60 NPOs, the research findings revealed that among the essential organisational learning attributes, organisational learning practices have a strong positive relationship with their organisational performance. Implications of the study are also highlighted and some recommendations suggested such as establishing system and culture of learning and knowledge sharing throughout these NPOs for it to become an effective learning organisation.
Keywords: Individual learning, team learning, organizational learning, learning organization, NPO’s performance
1. Introduction
The concept of organisational learning (OL) has been applauded as a tool to acquire competitiveness in an ever-changing business environment for which new management techniques and developmental strategies are needed in order to remain effective and relevant (DiBella, 1997). Organisations can only remain effective, competitive and successful if they are adaptive toward OL (Senge, 1990; Deevy, 1995). Jones (2000) emphasized the importance of OL for organisational performance, defining it as a process by which managers try to enhance their employees' capabilities and therefore increases organisational performance on a continuous basis. Although the relationship between learning and organisational performance have often been assumed, there are little empirical evidences to support this especially in the context of non-profit organization (NPOs). As noted by Natalie (1999), one of the reason is that the non-profit sector is rarely seen as a rich source of learning and knowledge creation (Natalie, 1999), and faces little or no competition for their services and therefore, not “tested by the marketplace” (Blickendorfer and Janey, 1988). However, Pedler, Burgoyne and Boydell (1991) argued that with the growing demand on services and competitions for the available funding imply that NPOs needs to acquire further organisational capabilities (Hall, 1999; Lowell et al., 2001). In addition, the growing concerns on learning processes and outcomes have been advocated in the non-profit sector by scholars such as 310
European Journal of Social Sciences – Volume 8, Number 2 (2009) Edwards, (1994) and Fowler (1997). NPOs are also expected to justify their contribution and influence toward the society (Hulme and Edwards, 1996). They are required to carry out programmes and services professionally and conform to the performance standard set by government authorities. With such changes and intensifying competitions, OL can be useful for NPOs to develop new capabilities to enhance performance, while remaining effective as well as relevant. Hence, this paper is an attempt to fill a gap in the existing literature, to establish the relationship between OL and performance of NPOs specifically in Singapore.
2. Review of the Literature
2.1. Organisational Learning They are various definitions of OL in the literature. Huber (1991) defined OL as processes that enable an organisation to increase its potential through processing of information, when the organisation acquires knowledge useful to them. Patricia (2002) defined OL as the process of cultivation and development of critical knowledge; learning being the process by which employee acquire new skills or knowledge that changes their behaviour in a way that adds value to the organisation. Similarly, Garvin (1993) defined OL as an organisation skilled at creating, acquiring, and transferring knowledge, and at modifying employees’ behaviour to reflect new knowledge and insights. Therefore, based on the purpose and nature of OL, it can be succinctly defined as the effective learning processes which involve systematic acquisition and utilization of knowledge towards organisational change and performance. A review of the existing literature has pointed out different perspectives of OL, particularly on how individual and team learning occur in the organisation. The most common is by Peter Senge (1990) in “The Fifth Discipline: the Art and Practice of the Learning Organisation” which proposed five key activities of OL that is enhancing personal mastery, challenging mental model, developing a shared vision, practicing team learning and engaging in system thinking which is the key element in connecting the other factors for an organisation to be transformed into a learning organisation. Similarly, Argyris and Schon (1978; 1996) focused in establishing OL through individual and team learning within the organisation. Authors such as Pedler, Burgoyne and Boydell (1991) expand this perspective and described a range of practical tools and techniques to stimulate individual and team learning within an organisational setting, pointing out that organisational systems, procedures and structural elements are also essential attributes of OL. The continued influence of systems, structural elements can continue to be effective if they are strategically developed. Relevant literatures within this stream suggested implementing effective knowledge management system through knowledge acquisition, knowledge distribution, and knowledge interpretation and shared organisational memory (Huber, 1991; Dibella 1997). In sum, three key attributes can be identified from the literature which is: (i) enhancement of individual learning, where OL begins from the employee working in the organisation, (ii) engaging team learning, where knowledge is gathered through employee interactions and learning from each other, and (iii) organisational learning practices, where tacit knowledge is procedurally and systematically acquired and transformed into explicit forms and become organisational knowledge which are assessable by employees or approved parties. For the purpose of this study, the three attributes of OL have been identified as contributing factors toward NPOs’ performance. 2.2. Performance Measures of Non-Profit Organisations in Singapore There are some arguments on how an NPO should be evaluated in terms of performance measures. This is due to conflict over perceived stakeholder interests as well as lack of knowledge about the relationship between measures and goals (Hofstede, 1981).The criteria to evaluate NPOs’ performance is more difficult to establish as NPOs tend to have multiple goals stated in broad terms of services to the public or the amelioration of particular social needs (Anthony and Herzlinger 1975). NPOs’ 311
European Journal of Social Sciences – Volume 8, Number 2 (2009) performance is related to human social services and is difficult to measure for the reasons that they are often characterized by vague goals appealing to multiple constituencies that hold several, often competing concepts of what constitutes effective organisational performance (Hatten, 1982; Kanter & Summers, 1987). Unlike business organisations, NPOs are established with specific social missions and objectives to fulfil community or human needs rather than generate profit (Billis and Glennerster, 1998; Courtney, 2002). From the social-mission perspective, NPOs need to focus on performance indicator on how their programmes and services produce benefits to their intended clients (Drucker, 1992). On the same line of thoughts, Durtina (1984) suggested two key performance indicators such as: (i) service and programme effectiveness, which is the degree to which the programme or service is achieving its intended public purpose, and (ii) organisational efficiency or management’s use of resources to achieve programme or service results. A refinement of the aforementioned classification cited by Blickendorfer and Janey (1988) included five key performance indicators that are achieved by the organisation in meeting its mission, effectiveness in strategic, space, and financial planning, ability of the organisation to achieve financial stability, effectiveness allocation and use of capital assets, and finally utilization and development of human resources. Among the mentioned performance indicators, three of these indicators are financially related. This suggests that although NPOs are not financial generating entities, they are accountable to the funds donated by the benefactors. Therefore, a clear measurement and indication of how financial resources are managed become critical and necessary elements for NPOs’ performance evaluation. 2.3. Financial Performance Indicators of NPOs The concept of financial measures for NPOs was recommended by Herzlinger and Nitterhouse (1995), which includes the use of financial ratios on sales revenue and assets management. NPOs with high asset turnover are considered as generating more programmes or services than those with low asset turnover. It is also noted by Herzlinger and Nitterhouse (1995) that NPOs with low turnover are more likely to invest their assets to earn income than to provide services. The liquidity ratio measures the relationship “between assets and liabilities and also helps to determine the consistency of goals and resources. NPO with “a high liquidity usually has overly modest social goals, whereby an NPO with low liquidity may be excessively ambitious” (p.55). Similarly, the use of financial measures in determining NPOs’ performance was also suggested in recent years. Ritchie and Kolodinsky (2003) recommended two other financial ratios, which include fundraising efficiency and fiscal performance as viable financial performance indicators of NPOs. The use of financial ratios in determining NPOs’ performance has not been commonly employed in the NPOs of Singapore. However, a recent focus on financial transparency has accompanied changes such as newly established regulations on yearly publication of financial reports over the internet and stronger empowerment to the Registrar of Charities intend to strengthen and to better govern the running of NPOs in Singapore. To date, NPOs in Singapore are assessed based on four main financial performance indicators. They include collection of funds and donations, funds use on direct charitable programmes and services, operating and administration expenses and annual reserve. As many NPOs operate based on public and/or the government funds, their ability to collect sufficient funds indicates the sustainability of their programmes and services. Besides the capabilities and strategies of funds raising, donations and grants are given based on their organisational needs as well as their reputation. The ability to obtain a large amount of donation is also an indicator of the public trust and confidence on the particular NPO. Moreover, all NPOs in Singapore are subjected to the 30/70 rule in which only 30 percent of collected funds should be used on operating and administration costs, while 70 percent to be used on direct programmes and services that contribute to the improvement of client’s lives. NPOs that incur high operating and administration expenses would be seen as inefficient and are required to pursue effective cost control. Finally, their annual reserve indicates their ability to fulfil their commitment towards their targeted programmes, services and internal operations. This includes organisational sustainability in times of unstable financial condition 312
European Journal of Social Sciences – Volume 8, Number 2 (2009) such as economic crisis which could potentially lead to a decline in donations. In short, positive annual reserve of an NPO indicates its financial soundness and ability to pursue future development. As noted by Brewer (1983), the quantitative or financial measures of NPOs can be absolute or relative – a standard or a comparison with other agencies. In a similar vein, these measurements are to compare the financial resources of one NPO against the other with a similar setting, programmes or services. However, this form of “measure can be rather narrow” (Barrett, 2001: p. 38) and does not reflect the true performance of a NPO in fulfilling their intended mission. Salamon (1996) mentioned likewise where NPOs exist to fulfil social needs rather than profit generation, thus it should not be the only measurement of effectiveness or performance for the non-profit sector. Moreover, the lack of profit motive makes measurement of NPOs’ performance extremely difficult and incomplete (Anthony 1988, Change and Tuckman, 1993), hence non-financial measures are also required for a more complete assessment of NPOs’ performance evaluation. 2.4. Non-Financial Performance Indicators of NPOs Programme and service outcomes as well as outputs measures have been widely used to comprehend the limitations of financial performance measures. In this context, programme or service outcomes are defined as “those benefits or changes for individuals or communities after participating in the programmes or services of NPOs” (UWA, 1995). It is therefore, an assessment of the results of a programme or service activity compared to its intended purpose (GPRA, 1993). In order to evaluate non-financial programme and service performance of NPOs, both of these measurements must be included. Outcomes are the intended effects of programmes or services of NPOs (Jansen, 2004); they are the expected results on how the programme and service benefits the clients. As mentioned by Kettner and Martin (1996), outcome is the impact or accomplishments measured by the quality of life changes in clients. On the other hand, outputs are the direct products of the programmes or service activities and are measured in units. For example, the number of meals served to aged persons or the number of alcoholics attending rehabilitation programmes (Natalie, 1995). The combination of outcome and output measurement gives a more complete indication of the effectiveness of NPOs’ programmes and services. In Singapore, NPOs are required to present relevant supporting documents indicating programme or service outcomes and outputs to potential benefactors. This is to ensure that the implementation of programmes and services would eventually meet the purpose and the objectives of NPOs. Most importantly, the resources incurred would eventually contribute to the well being of the intended clients. The preceding literatures suggested the importance of non-financial performance indicators in determining NPOs’ performance. The non-financial performance indicators that have been identified are as follows: (i) clients’ satisfaction on programmes and services, (ii) programmes and services efficiency, (iii) increase in clients, (iv) programmes and services quality, (v) programme and service effectiveness. The first indicator highlights the level of clients’ satisfaction while participating in programmes and services of NPOs. Such information are often collected through programme and service evaluation and consolidated for quality enhancement purposes, which includes planning, organising and execution of programmes and services. Efficiency is determined by the amount of time needed for programmes or services to be delivered to the intended clients. The third indicator focuses on the number of clients participated in the programmes and services of NPOs. An increase in the number of client indicates the relevance and effectiveness of programmes or services. Conversely, a decline of client reflects the end of a programme or a service life cycle. The forth indicator determines the quality of a programme or services. This is to augment the first non-financial indicator by providing another dimension on quality, in terms of the number of complaints handled, and service effort in meeting the client and social demand. Lastly, NPOs should also be evaluated on their overall effectiveness of programmes as well service delivery and implementation. This includes determining the extent of positive changes and benefits the programmes and services have on the clients. NPOs therefore need to further enhance the effects of their programme and service to meet the social and 313
European Journal of Social Sciences – Volume 8, Number 2 (2009) community needs. In sum, the aforementioned non-financial performance indicators are client and mission centred which have been agreed upon as the primary purpose of what an NPO is set to achieve, and distinguish them from business organisations. In sum, the aforementioned non-financial performance indicators are client and mission centred which had been agreed upon as the primary purpose of what an NPO was set to achieve, and distinguish them from business organisations. The identified non-financial performance indicators also correspond to the various performance criteria of several scholars such as Pappas (1996), Yoder and Ferris (1997) and Nathan (1998). 2.5. Individual Learning Individual learning as a strategic component of organizational success has been widely discussed in the management literature. From the human resource development perspective, employees’ skills and learning abilities contribute to the competitiveness of an organization (McDougall and Beattie, 1998; Beeby and Booth, 2000). Some of these included cognitive capacity (Neisser, 1967), where learning has to do with individual ability to reflect from experiences; learning styles (Allinson and Hayes, 1996) where individuals pursue their preferred learning approaches; interpretive ability (Crossan et al., 1993, 1999) where analytical and critical thinking approach is used towards learning; and individual schema (Neisser, 1967). Other scholars suggested that individual learner has a different learning preference and that the learning behaviours subsequently become institutionalized in organisational routines (Murray and Moses, 2005). The concept of individual learning within the organisational context was dominated by the three-learning loop theory (Argyris and Schon, 1978, 1993). The theory begins from the concept of “single-loop learning” where learning is based on the assumptions or decisions against organizational norms. If the outcome or result of a specific action meets the existing norms, it will serve as a feedback to confirm that the action taken is correct and acceptable by the organization. In this case, individual members learnt through observation and feedback and by management affirmation which become the “theory-in-use” of the organisation. The same approach for similar situation will be carried out if previous experiences tell them that their approach is acceptable in the organisational setting, culture or work practices. Second is the ‘double-loop learning’ when organisation members question long-held assumptions about its mission, customers, capabilities, products, service or corporate strategies. Double-loop learning occurs when organizational members examine the long-held assumptions about its customers, products, services or corporate strategies. It involves questioning and changing governing conditions or values. What makes double-loop learning different from single-loop learning is the people’s ability to question the outcome of the events or problems. Organisation members who engage in double-loop learning do not compromise on the initial outcome but constantly seek to understand the problem better and as a result generate new and better solutions. The learning process involves questioning one’s own assumptions and behaviours in doing the job or making a decision, hence, double-loop learning takes single-loop learning a step further by engaging people in an active learning process. In the context of NPOs, it is important for them to review and to a certain extent challenge their existing missions and purposes for which new programmes and services could be a development for new community and social needs. The third learning approach is ‘deutero-learning’ when people learn about previous context of learning. They reflect on and inquire into previous episodes of learning including the failure to learn. Most often than not, people in the organisation question essential principles on which the organisation is based, and challenging its mission, vision, market position and culture. Yochanan and Paul (1998) commented that many organisations are seen not to progress beyond single-loop learning as leaders in the organisation are often unwilling to ask such basic question. In the case of deuteron learning, both organisation leaders and subordinates invent new strategies for learning, implement these strategies, and evaluate and generalize what they have implemented. In order for an organisation to obtain deuteron learning, it is required that the management creates a learning culture that motivates and encourages learning. The difference between double-loop learning and deutero-learning is that the latter is influenced by management philosophies 314
European Journal of Social Sciences – Volume 8, Number 2 (2009) and organisational practices which have been considered as external influences toward individual practices. Furthermore, as learning often occurs through work contexts rather than formal classroom learning, informal learning becomes a crucial strategy for effective workplace learning and knowledge sharing. Informal learning occurs through communication, dialogue and sharing with other organisation members (Srikantia and Pasmare, 1996). Such learning behaviours are often problem driven and situational. Nevertheless, it encourages creative and critical thinking and engages teamwork, which has been widely agreed as important phenomena of a learning organisation. In term of adult learning principle, effective learning occurs when people are able to associate learning with actual working conditions or when knowledge learnt is able to help them in direct problem solving and decision making. From the review of individual learning practices, we propose that: H1 - Individual learning has a positive effect on NPOs’ performance. 2.6. Team Learning Team learning occurs when knowledge is collectively acquired through a social process (Bawden and Zuber-Skerritt, 2002). Daft and Weick (1984) defined team learning as a group of skilled-individual, learning through each other’s experiences and knowledge. Its main function is to create a process of knowledge distribution, and generation of shared understanding to facilitate the interpretation of knowledge acquired (Crossan et al. 1995). According to Osland and Yaprak (1995), when new knowledge reaches other organisation members, it means changing individual knowledge into organisational knowledge. Through the process, the learning and knowledge acquired become the commodity and “shared memory” of all people involved and owned by the organisation. This theory is applicable in the non-profit sector, as this sector depends highly on volunteers to offer services to their client and some of them also hold important position in planning, training and strategising their NPOs’ services. One example of missing essential talents and experienced volunteers would be the change of board members or resignation of key employees. Knowledge acquired over the years in planning and delivering programmes and services would have been undetected when these people decided to terminate their involvement with the NPO. Hence, people need to be actively engaged together into learning new knowledge in order to be transferred for later use or eventually become strategic assets of the organisation. The acquired knowledge can be used in making effective decisions and policies which are important for organisational effectiveness and stability (Beyer, 1981; March & Olsen, 1989). To promote team learning, leaders must engage organisation members on active enquiry, discuss errors and problems, and participate in experimentation and team reflection. Above all, organisational teams would need to have strong sense of team trust in order to pursue effective learning and knowledge sharing (Leitch et al, 1998; Elliott et al., 2000). Moreover, research has also shown that team learning is negatively related to formalization and hierarchies (Easterby-Smith, 1997; Goh, 1998) and positively related to the minimization of boundaries between functions, informal networking and dialogue (Nevis et al., 1995; Schein, 1993). In the search of an organisational structure to facilitate team learning, Daniel (2002) concluded that the matrix structure is the most appropriate structural design for the fact that it enables and demands learning from all respective team members. Similarly, other scholars have mentioned that in order to facilitate team learning, barriers to cross-functional team learning must be removed. (Darian and Coopersmith, 2001; Mezias et al., 2001). An empirical research done on Australian hospitals by Chan et al., (2003) demonstrated positive prediction of team learning toward team performance. This study revealed that the presence of internal team learning (or learning within a team) and external team learning (or cross-functional team learning), which is the use of matrix team structure, enhanced team performance. The results of the study provided some empirical confirmation of the long-standing hypothesis that team learning has positive influence on team performance (Banker et al., 1996). Therefore we propose that the following hypothesis: H2 - Team learning has a positive effect on NPOs’ performance
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European Journal of Social Sciences – Volume 8, Number 2 (2009) 2.7. Organisational Learning Practices As much as individual and team learning are critical attributes of OL, they need to be incorporated into an effective knowledge sharing system within an organisation. OL is essential to institutionalise individual and team’s intellectual capital and needs to be embedded into organisation core competencies and organisational memories as a form of knowledge system, work procedures, routines, and organisational culture (Kim, 1993; Gephart and Marsick, 1996). These will then reinforce continuous learning for organisational success. From the perspective of linking individual and team learning onto the organisational level, Huber (1991), Watkins and Marsick (1997) proposed several OL practices which includes effective knowledge acquisition processes, whereby knowledge are systematically acquired from both individuals and teams. The acquired knowledge must be distributed throughout the organisation, especially to organisation member who needed them for decision-making. The distribution channels must be simple and effective in nature. In addition, the organisation members must be engaged in active knowledge interpretation, that incorporate encoding individual and team knowledge into explicit form such as work manuals, standard operating procedures, or decision support systems or expert system (Zollo et al., 2002). In this context, organisations with strong IT infrastructure are able to transform the knowledge for strategic use. As such, organisations that engage in these OL practices will have some common knowledge sharing structure and system that allow acquisition and storage of explicit knowledge, and above all, utilizing these knowledge to achieve better organisational performance. There should also be a proper system to sustain and secure knowledge acquired as they become essential asset to the organisation. Based on the above review, we propose the following hypothesis: H3 - Organisational learning practices have a positive effect on NPOs’ performance. Based on the above discussions, the link between the above variables with NPOs’ performance is illustrated in Figure 1.
Figure 1: The Research Framework
Individual level
Team or Group level
Organizational performance
Organizational level
3. Research Methodology
This study employed mail survey using structured questionnaires based on the Dimensions of Learning Organisation Questionnaires (DLOQ) developed by Watkins and Marsick (1997). The original DLOQ questionnaire consisted of 55-items deemed as important elements in individual, team, organisational learning and organisational performance. As the DLOQ was not originally designed for the non-profit sector, it was modified accordingly. For example, questionnaire items that focus on identifying the return of investment, market share, and cost per business transaction were reviewed and rephrased. The instrument finally consisted of 67 items with additional items added to test the research hypotheses. Respondents were solicited on a four-point scale, from “strongly disagree” (coded 1) to “strongly agree” (coded 4). Respondents which comprises of NPOs were chosen from the sampling frame obtained from online databases of National Volunteers and Philanthropy Centre (NVPC) and National Council of 316
European Journal of Social Sciences – Volume 8, Number 2 (2009) Social Services (NCSS). They were chosen based on three criteria. First, their mission and purpose must be human social service oriented as they form the largest sector of NPOs in Singapore. They also incur the most financial needs as compared to other non-profit sectors, such as the arts, youths, educations, and sports (NVPC, 2005). Second, they must have been operating for at least five years as they are assumed to have established organisational cultures, systems, corporate practices and financial resources. Third, they must have non-financial performance indicators or key performance indicators (KPI) relevant to this study. A total of 70 NPOs were found to have met these criteria. Respondents were represented by executive directors (EDs) as they were the key decision-makers in corporate operations, policies setting and programmes execution and evaluation. Most importantly, these respondents have access to corporate financial information and service standards that are vital for this study. With the help of a comprehensive database provided by NCSS and NVPC, all names of executive directors and NPOs’ addresses can be retrieved accordingly. Out of 70 questionnaires distributed, 60 (85%) were returned and analysed. The high response rate was due to the pre-survey notice and since this study was related to enhancing NPOs’ performance, respondents were keen to be involved.
4. Analysis
A majority (81%) of the respondents have been with their NPOs for more than 5 years which implied that they have sufficient understanding on NPOs’ operations and practices thus able to provide relevant information regarding the current research. Figure 2 indicates that the NPOs in this study are mostly funded by government funds (38.9%). They are thus more likely to be subjected to autocratic directives, high level of financial accountability and transparency. Only 27.8% are funded by public donations which called for more innovative funds raising strategies and efforts.
Figure 2: Types of Funding Collection
Govt.Funds 38.9%
Corporate donations 11.1%
Community chest 1.9%
Others 11.1%
Public donations 27.8%
Charity Events 3.7%
Social Enterp.& busine 5.6%
4.1. Scale Reliabilities The reliability of the questionnaire was tested using Cronbach’s alpha (α) measurements. The reliability coefficients α of each variable were as follows: individual level (0.947); Team learning (0.919) and Organisational learning practices (0.941). All these dimensions were above 0.70 which is in agreement with the suggestions made by Nunnally (1978). 317
European Journal of Social Sciences – Volume 8, Number 2 (2009) 4.2. Regression Analysis These study hypotheses were tested using stepwise regression analysis. Several assumption testing were also performed in this analysis. An examination of the Mahalanobis distance values indicates that there were no multivariate outliers (i.e. greater than critical χ2 values of 5.99 at a α value of 0.05) among the independent variables. From the scatter plot of residuals against predicted values, it was discovered that there was no clear relationship between the residuals and predicted value, consistent with the assumption of linearity. The normal plot of regression standardised residuals for the dependent variable also indicates a relatively normal distribution. Having confirmed that no assumptions have been violated, the interpretation of this analysis is sound. The result of the stepwise regression analysis is shown in Table 1 (a) and (b).
Table 1 (a): Stepwise Regression Results for OL attributes with Organisational Performance
b Model Summary
Change Statistics Model 1 R R Square .885a .783 Adjusted R Square .778 Std. Error of the Estimate 6.35813 R Square Change .783
b ANOVA
F Change 187.087
df1 1
df2 52
Sig. F Change .000
a. Predictors: (Constant), OORG b. Dependent Variable: OPERF Model 1 Sum of Squares 7563.132 2102.144 9665.276
df 1 52 53
Regression Residual Total
Mean Square 7563.132 40.426
F 187.087
Sig. .000a
a. Predictors: (Constant), OORG b. Dependent Variable: OPERF
Table 1 (b):
Stepwise Regression Results for OL attributes with Organisational Perform
a Coefficients
Unstandardized Coefficients Model 1 (Constant) OORG B 7.074 .862 Std. Error 4.763 .063
Standardized Coefficients Beta .885 t 1.485 13.678 Sig. .144 .000 Zero-order .885
Correlations Partial .885 Part .885
Collinearity Statistics Tolerance 1.000 VIF 1.000
a. Dependent Variable: OPERF
b Excluded Variables
Collinearity Statistics Model 1 Beta In .089a -.035a t .632 -.243 Sig. .530 .809 Partial Correlation .088 -.034 Tolerance .216 .205 VIF 4.633 4.868 Minimum Tolerance .216 .205
OINDIVDU OTEAM
a. Predictors in the Model: (Constant), OORG b. Dependent Variable: OPERF
The result indicate that there is only one element, namely organisational learning practices (β = 0.885, p<0.05) which is positively associated with organisational performance as indicated by the Fvalue. VIF=1.00 < 5 hence multicollinearity was resolved. In other words it’s explaining 88.5% of the variation in organisational performance. In other word, this element is directly involved in the 318
European Journal of Social Sciences – Volume 8, Number 2 (2009) improvements of the organisational performance. Thus hypotheses H3 was supported. The other two elements namely, individual learning (β = 0.089, p>0.05) and team learning (β =0.035, p > 0.05) are not significantly associated with organisational performance. Thus hypotheses H1 and H2 were rejected at the significance level of > 0.05
5. Discussion, Conclusions and Future Research
The increasing concerns on accountability, outcomes assessment, and performance evaluation attest to the importance of the work of NPOs and their effectiveness have been widely recommended in the non-profit sector of Singapore. NPOs are required to present substantial organisational capabilities in order to compete among other similar and diversified services as to remain relevant. As such, NPOs are required to carry out some form of transformation to improve their organisational performance in order to meet the public expectations. In particular, organisational learning has been identified as the key component for organisations seeking transformation and enhancement of organisational performance (Senge, 1990; Dixon, 1993; Watkins and Marsick, 1997). “Learning must be greater than or equal to the rate of change, if not, the organisation will be falling behind and slowly dying” (Revans, 1982 p. 45). Constant learning and knowledge enhancement are heralded as strategic assets and sources of competitive advantage of organisations (Stata, 1989; Nonaka and Takeuchi, 1995). De Geus (1997) asserts that being good at learning is one factor that extraordinarily successful organisations have in common. As many scholars have recommended the application of organisational learning for superior performance in the business sectors, however, there is little empirical finding on how organisational learning could influence NPOs’ performance. As such, the current research has established the relationship between attributes of organisational learning practices and NPOs’ performance, particularly the NPOs human social service in Singapore. The research findings indicate that organisational learning practices have positive effects on the attainment of NPOs’ performance in terms of its programme/service efficiency and effectiveness, with more clients attending to the NPOs programmes or services each year, generating clients’ satisfaction, and most importantly, the programmes and services have improved the client’s quality of lives. The findings imply that strengthening of organisational learning practices would generate better programmes and services that fulfil the needs of clients. These outcomes are in-congruence with the findings of other researchers where organisational learning as essential developmental processes for a learning organisation to occur (Senge, 1990, Huber, 1991 and Gavin, 1993). As learning is a social contract that binds organisations with individuals together in a common endeavour, it requires a sense of mutual voluntary agreement between parties (Lawson, 1998). Therefore, in order to facilitate effective implementation of organisational learning, organisational members needs to be trained on critical thinking, effective communication, and team building to augment trust among one another. It has also been advocated in many literatures that a supportive learning culture is beneficially towards overall organisational development, transformation and effectiveness (Barbara, 1996). The strategy for effective implementation of organisational learning lies on developing learning capabilities of the individuals, strengthening teamwork and an effective knowledge sharing system. Hence, it is recommended that all NPOs develop a learning culture which empowers individual learning and knowledge sharing as they have direct benefits toward the implementation of organisational learning and missions’ attainment. As the applications of organisational learning are also a form of organisational change effort, people who are involved in the change process should be communicated and educated of its benefits. In the academic literature, communication and conversation are often seen as tools for announcing and explaining change, preparing people for the positive and negative effect of change (Jick, 1993), increasing each others' understanding towards changes and commitment to change (Beckard and Pritchard, 1992; Morgan, 1998), and reducing confusion about and resistance to change (Kotter and Schlesinger, 1987). 319
European Journal of Social Sciences – Volume 8, Number 2 (2009) Apart from communication, organisational culture and leadership approaches are also essential elements for organisational change and performance. Thus it is recommended to include the relevant organisational elements of organisational culture, design and structure, effective communication and leadership styles as future research related to NPOs. The research outcomes have provided empirical evidences to which organisational learning affect NPOs’ performance. It is hoped that this study have provided a platform for future research on how NPOs can become a learning organisation via the implementation of organisational learning practices. This study has focused on organisational learning and its effects from the NPOs’ perspectives, rather than the perspectives of their clients and community that they are serving. Hence it is recommended that future research includes clients’ feedback on NPOs’ performance as an additional dimension in this study. As this research focused only on human social service sector of a developed country, further research can be done on developing countries where communities development rely heavily on the support of non-profit agencies. This could perhaps potentially highlight the practical contribution of NPOs in the context of developing countries.
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