School of Business Although interest in organizational learning has grown dramatically in recent years, a general theory of organizational learning has remained elusive. We identify renewal of the overall enterprise as the underlying phenomenon of interest and organizational learning as a principal means to this end. With this perspective we develop a framework for the process of organizational learning, presenting organizational learning as four processes-intuiting, interpreting, integrating, and institutionalizing-linking the individual, group, and organizational levels.

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Organizational learning (OL) is receiving increasing attention from researchers and practitioners alike. In fact, some have suggested that the only sustainable competitive advantage is a firm's ability to learn faster than its competitors. In spite of OL's promise, the field has been slow to evolve. The primary impediments to the development of OL theory are that inconsistent terminology is used for comparable concepts and that different definitions are used to describe the phenomenon. Furthermore, many theorists have neglected to make explicit their underlying assumptions about the phenomenon. Employing an inductive approach, this review surfaces the implicit and explicit assumptions of OL researchers, identifying three key dimensions that differentiate perspectives: (1) unit of analysis—individual, group, organizational, and inter organizational; (2) cognitive/behavioral emphasis; and (3) the learning‐performance relationship.

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Some of the common organizational requirements prescribed for generic business strategies of cost leadership and differentiation are empirically examined in a study consisting of 69 business units. The results suggest the fit between business unit strategy and the internal organization of multi‐business companies does have an effect upon business unit performance.