Organisational learning in SMEs: a process improvement perspective

Abstract

Purpose -We investigate how Organisational Learning (OL) can occur through Process Improvement (PI) activities and how this can lead to sustained improvement over time in the context of small and medium-sized enterprises (SMEs).Design/methodology/approach -We study PI practices in six engineering-oriented SMEs via interview-based case studies. We draw from a range of literature and use an OL conceptual framework, informed by Crossan et al.'s (1999) 4I framework, as an analytical lens.Findings -The OL perspective provides new insights to conceptualize the nature of PI as a multi-level practice in SMEs. Effective PI practices within SMEs are shown to be consistent with OL concepts, enabling firms to translate individually identified improvement opportunities into organisational-level changes resulting in sustained benefits. A new conceptual model is presented that explains how SMEs can learn though improvement activities. The key role of management support, both operational and strategic, is highlighted. It is necessary for management to provide sufficient PI opportunities to enable and sustain beneficial learning.Research limitations/implication -The study is based on a sample of engineering-oriented SMEs located in the UK. Further case-based, longitudinal and survey-based research with firms of different types will enhance the generalisability of the findings, allowing the confirmation and extension of the new conceptual model. Practical Implication -The findings provide a theoretically underpinned framework for OL in engineering-oriented SMEs deriving from PI activities. The new model highlights the key mechanisms that enable learning from improvement activities. The presented findings highlight the key role of management in introducing additional learning opportunities in the form of new business that requires exploratory learning. Without this, the reduction in improvement opportunities reduces the benefits that can be realised from PI.Originality/value -OL provides a multi-level perspective to understanding how smaller firms are able to undergo systematic improvements and the support required to continually improve.

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