This paper examines organizational learning in large to medium-sized commercial organizations.

It begins by highlighting the tendency, in accounts of organizational learning, to either ignore emotions or to see them as learning barriers. There seem to be two contributing factors here. Firstly, organizations tend to be depicted as unitary entities—that is, it is assumed that organizational members, individually and collectively, share a common economic interest. As a result, learning by individual employees does and should contribute to organizational learning. Secondly, accounts of learning refer almost exclusively to learning of a technical nature—that is, to learning which draws on professional areas such as engineering, law and finance, and which applies these to achieve productivity and profit.

In this paper, I supplement the unitary/technical/economic view of organizational learning with a more human and emotion-rich view. The vehicle for doing so is the notion of ‘interest’.

Psychoanalytic theory is used to support the idea that groups within organizations form around an ‘ontological’ interest relating to the protection and preservation of the group and its members, maintenance of people’s self-esteem and the minimization of feelings associated with exposure to ontological insecurity—for example, deep-seated anxiety, shame, or feelings of powerlessness. Learning associated with the ontological interest helps groups defend against exposure and associated anxiety, by applying knowledge from the past. At the same time, it can hinder risk-taking long after real threat has gone.

The paper argues that a great deal of learning occurs in relation to the ontological interest, particularly when it comes into conflict with the technical-economic interest of commercial organizations. In contrast with the ‘in-the-head’, unitary/technical/economic focus of much of the organizational learning literature, learning in relation to the ontological interest is very different—a turbulent, ‘in-the-gut’ (Long & Newton, 1997) mix of politics and emotions, highly subjective, and imbued with primitive fears and feelings.

To illustrate these ideas, I will refer to case study material from the customer service center of a large financial company.

1 INTRODUCTION

This paper examines organizational learning in large to medium-sized commercial organizations.

It begins by highlighting the tendency, in accounts of organizational learning, to either ignore emotions or to see them as learning barriers. There seem to be two contributing factors here. Firstly, organizations tend to be depicted as unitary entities—that is, it is assumed that organizational members, individually and collectively, share a common economic interest. As a result, learning by individual employees does and should contribute to organizational learning. Secondly, accounts of learning refer almost exclusively to learning of a technical nature—that is, to learning which draws on professional areas such as engineering, law and finance, and which applies these to achieve productivity and profit.

In this paper, I supplement the unitary/technical/economic view of organizational learning with a more human and emotion-rich view. The vehicle for doing so is the notion of ‘interest’.

Psychoanalytic theory is used to support the idea that groups within organizations form around an ‘ontological’ interest relating to the protection and preservation of the group and its members, maintenance of people’s self-esteem and the minimization of feelings associated with exposure to ontological insecurity—for example, deep-seated anxiety, shame, or feelings of powerlessness. Learning associated with the ontological interest helps groups defend against exposure and associated anxiety, by applying knowledge from the past. At the same time, it can hinder risk-taking long after real threat has gone.

The paper argues that a great deal of learning occurs in relation to the ontological interest, particularly when it comes into conflict with the technical-economic interest of commercial organizations. In contrast with the ‘in-the-head’, unitary/technical/economic focus of much of the organizational learning literature, learning in relation to the ontological interest is very different—a turbulent, ‘in-the-gut’ (Long & Newton, 1997) mix of politics and emotions, highly subjective, and imbued with primitive fears and feelings.

To illustrate these ideas, I will refer to case study material from the customer service center of a large financial company.

2 MAINSTREAM PERSPECTIVES ON ORGANIZATIONAL LEARNING

A working definition of ‘organizational learning’

Most people who have written about organizational learning extrapolate from a behavioral/cognitive view of individual learning. This begins with the assumption that individual learning is a cognitive process which results in behavioral change. ‘Organizational’ learning must therefore involve changed ‘organizational’ cognition resulting in new organizational behavior. One could cite many examples of definitions which reflect these assumptions. For example:

‘A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights.’ (Garvin, 1993, p. 80)

This seems a reasonable starting point—we can tell if learning has occurred because people in an organization think differently or have different knowledge, and this shows up behaviorally. However, whether or not such a change constitutes ‘organizational’ learning is another matter.

In this paper, I make no assumption that organizations do, in fact, learn in a way that parallels individual learning. Indeed, the issues raised in the paper are intended to cast light on what it means to say that an organization has ‘learnt’, and I will return to the question of whether organizations can learn at the end of the paper. Meanwhile, I will simply use the term ‘organizational learning’ as a shorthand for: ‘learning in organizations, and (if such a phenomenon exists at all) learning by organizations or subsets of organizations (such as sites, divisions, departments, groups and teams)’

Overview of organizational learning scholarship

Within the fields of organizational theory and management practice, increasing attention has been paid to organizational learning in recent years. For example, if one checks the business and management journal database ABI/Inform, only 39 papers listed between 1985 and 1989 refer to ‘organizational learning’. A decade later, during 1995-1999, there were more than 700 papers.

Another indicator of interest is that a considerable number of prominent commercial organizations have made public commitments to the vision of becoming a ‘learning organization’—including in the UK, Shell, Mercedes Benz, Rover, and Fiat; in the US, Johnsonville Foods, Chaparral Steel, Motorola, Shell, and Hanover Insurance; and in Australia, ICI, Carlton & United Breweries, Lend Lease, and Westpac Banking Corporation.

Dominant assumptions

Thus, a lot has been written about organizational learning, and at least at the level of company rhetoric, there is strong interest in the area. But in endorsing the notion of organizational learning, what do these writers and companies mean?

While acknowledging the diverse academic disciplines and cultural biases which have shaped organizational learning scholarship, it is still possible to make some generalizations. Most writers make two assumptions which, taken together, push the focus well away from the kind of psychoanalytically-informed views of organizational life which we are considering in this conference. I would like to run through these assumptions briefly.

The unitary assumption. Firstly, the organizational learning literature generally assumes a unitary convergence between the interests of managers and employees (Danau & Sommerlad, 1995), with the result that the learning goals and aspirations of individuals and groups directly align with those of the organization. This assumption casts the organization as something like a beehive, where all employees happily surrender their ‘honey’ (that is, their knowledge and learning) to further the technical and economic interests of the organization.

The technical assumption. Secondly, there is a technical assumption about organizational learning—namely, that learning in commercial organizations relates, or at least should relate, to a shared technical interest. By ‘technical’, I mean the application of knowledge from professions such as engineering, law, accounting and marketing to provide and improve products and services and ultimately, to improve business productivity and profit. Thus, a sample of 70 recent dissertations dealing with organizational learning includes accounts of learning about software enhancement, auto-body design, bank lending rules, capital budgeting, and the manufacture of semiconductors—all technical areas. None of the sample address learning about non-technical areas, such as organizational politics, people’s differences, strategies for collaborative work, or areas of threat and vulnerability.

Emotions and organizational learning: The mainstream view

The unitary and technical assumptions are associated with strong tendencies in accounts of organizational learning (and, I suspect, in accounts of other related areas such as organizational knowledge) to leave out the emotional dimension.

If emotions are included at all, they tend to be seen as barriers to learning. Thus, one of the first to popularize the notion of organizational learning, Chris Argyris (1994) acknowledges that feelings of vulnerability, risk, and embarrassment play an important part in learning, but in his accounts, such emotions are ‘anti-learning’ (p. 79) and ‘a recipe for ineffective learning’ (p. 80).

Another prominent contributor to the organizational learning literature, Peter Senge (1990) puts great emphasis on the mechanistic, cognitive aspects of learning. This is very much learning in the head, through changing one’s mental models. Emotions don’t get much mention, but when they do, they tend to be presented as a form of disability or as interfering with achieving one’s personal vision.

The idea that feelings of uncertainty or anxiety constitute a learning disability can be found throughout the literature, in discussions of ‘learning obstacles’ (McGill & Slocum, 1994); ‘learned helplessness’, (Marsick & Watkins, 1994); ‘knowledge-inhibiting activities’ (Leonard-Barton, 1995) and ‘learning disorders’ (Snyder and Cummings, 1998) . While the perspectives of these authors vary, there is a common tendency to depict learning which serves the organization as ‘good’, and other learning as defective.

3 ORGANIZATIONAL LEARNING AND INTERESTS

The technical and economic interests

To look at these issues in another way, I’d like to introduce the notion of ‘interest’, not in the sense of individual preference (eg an interest in history) but as used by Habermas (1987) to describe group and society-level, fundamental drives towards knowledge.

As I’ve shown, the mainstream literature of organizational learning rests on an assumption that knowledge and learning are motivated by a technical and economic interest. Actually, in most discussions, these two are inseparable—in serving the technical interest, learning also serves the economic interest in productivity and profit. People’s capacity to think and learn, the technical interest and the economic interest merge.

There is no doubt that a great deal of learning in organizations does serve the technical and economic interest. However, to consider the emotional underbelly of organizational learning, it is necessary to look deeper.

Interests at the political level

Habermas’ work is helpful. It suggests a second, ‘political’ level of interest which motivates learning. Under this heading, I put Habermas’ accounts of learning about one’s own situation, the situation of others, and people’s differences (what he refers to as the ‘practical’ interest) and learning relating to the search for freedom and autonomy (he calls this the ‘emancipatory’ interest). This level of learning is political in two senses, a pluralist one (groups learn how to exercise power in order to compete successfully for resources) and a more radical one (groups learn about the ways in which the economic and bureaucratic ‘system’ hinders freedom and autonomy). I suggest that a great deal of so-called ‘organizational learning’ is actually learning by groups which form around a political interest.

However, in this paper I’d like to suggest a third, still deeper level of interest, which I’ll call ‘ontological’. It is here that we tap most directly into the emotional dimensions of organizational learning. In the remainder of this paper, I want to focus on the ontological interest and its place in organizational learning.

The ‘ontological’ interest

Ontology relates to the essential nature of the things that we know—that is, to existence or state of being, basic reality, first principles (Schwandt, 1997). One could talk about an organization’s ontological interest, meaning its interest in staying viable. However, I want to concentrate on individual and group ontology, and the part it plays in knowledge acquisition and learning.

In an early use of the term, Laing (1969) discusses people’s ‘ontological security’. An ontologically secure person has an integral sense of selfhood and personal identity, of the permanency of things, and of the reliability of natural processes:

The individual, then, may experience his own being as real, alive, whole; as differentiated from the rest of the world in ordinary circumstances so clearly that his identity and autonomy are never in question; as a continuum in time; as having an inner consistency, substantiality, genuineness, and worth; as spatially co-extensive with the body; and, usually, as having begun in or around birth and liable to extinction with death. He thus has a firm core of ontological security. (Laing, 1969, p. 41-2)

Laing goes on to describe the painful fears and anxieties that accompany ontological insecurity—for example, the fear of being engulfed and overwhelmed, of loss of identity and autonomy, of obliteration, of emptiness, of depersonalization—and of the various manoeuvres which people engage to minimize these feelings.

As Laing’s account suggests, there are degrees of such insecurity, just as there are of other psychological attributes. One is never fully ‘secure’ or ‘insecure’, and, as suggested by the work of psychoanalytic investigators such as Money-Kyrle (1978), Klein (1981) and Fiarbairn (see Sutherland, 1989), to some extent and under some circumstances we all can experience some degree of ontological insecurity.

In much of the psychoanalytic literature, the focus is on the functioning of the individual psyche, and in this context, one could use the term ‘ontological interest’ to describe the individual’s drive to preserve or enhance ontological security. However, there is also an ‘ontological interest’ which resides at group level. This assertion draws on the idea, proposed by Freud (1921) and well-accepted in the psychoanalytic literature, that identification plays an important role in collective group activity. According to Long (2000), the ‘primary glue’ of a group is the identificatory process in which group members internalize and then draw on representations of fellow team members as they engage in common tasks. Moreover, there is a tendency for organizational actors to internalize the sense of identity provided by the organization, which itself serves an ‘ontological function’ (Schwartz, 1990, p. 32).

As a result of these patterns of identification with other individuals and with the organization, the group needs to be seen as more than just the sum of its individual members—there is a shared sense of ‘identity’ (Kets de Vries, 1995, p. 232) and ‘group mind’ (Neri, 1998) associated with mutual identifications, which encompass concern for individual, group and organizational ontology. At individual and group level, the ontological interest is concerned with the protection and preservation of the group and its members, maintenance of people’s self-esteem and the minimization of feelings associated with exposure to ontological insecurity—for example, deep-seated anxiety, shame, or feelings of powerlessness (Hirschhorn, 1988; Schwartz, 1990).

In the context of work, the ontological interest is evident in the concept of ‘social defense against anxiety’, which was first proposed by Jaques (1955). For Jacques, social defenses serve to defend against ‘psychotic anxiety’ and are ‘one of the primary cohesive elements binding individuals into institutionalized human association’ (1955, p. 479). These ideas were later developed by Menzies Lyth (described in Menzies Lyth, 1988, but conducted during the late 1950s and early 1960s). Drawing in part on Klein’s work, Menzies Lyth described the (ontological-level) terrors which can be aroused during nursing, and the tendency to deflect these via social defenses.

Another area of psychoanalytic investigation which suggests a group ontological interest is Bion’s foundational work on shared group assumptions (Bion, 1961), which has provided the basis for a great deal of subsequent theorizing about group dynamics (see, for example, Pines, 1985; Hirschhorn, 1988; Lawrence et al, 1996; Miller, 1998).Through observation, Bion proposed that workgroups function on two levels concurrently. On one level, there is a specific, agreed task which group members work together to achieve (in commercial organizations, corresponding with tasks which serve the organization’s technical and economic interests). On a second, deeper level, the group is held together by basic, unconscious shared assumptions—a form of ‘group mentality’ which encompasses ‘the anonymous contributions [of group members], and through which the impulses and desires implicit in these contributions are gratified’ (1961, p. 50).

Regardless of how one accounts for basis assumptions in group behavior, they suggest that groups of people working together are engaged not only in pursuing the technical and political interests, but at a much more primitive ontological level where behavioral patterns relate to such survival basics as fighting and defending, to feeding and coupling. At base, these behaviors relate to ‘warding off or managing the fear of fragmentation and terror of annihilation’ (Lipgar, 1998, p. 27).

The ontological interest is often evident in situations involving organizational change. For example, fighting for the survival of a particular company may provoke deep fears, stresses and foreboding as people ‘collude or collide in defining the situation’ (Fineman & Sturdy, 1999, p. 659). Being invited or forced to exit one’s employing organization has been shown to provoke in some people deep feelings of rejection, loss, guild and grief (LaFarge & Nurick, 1993). Even the arrival of a new, more hard-line manager into an organization can provoke frightening images and deep-seated ontological fears—as evidenced, for example, in Tebbutt and Marchington’s (1997) reports of a new manager as a ‘fierce rottweiler’, ‘witch’ and ‘vampire’, leaving staff feeling deeply fearful and profoundly wronged in the face of the ‘dehumanized, blood-sucking aspects of the new corporation’ (p. 729).

However, the ontological interest is not restricted to situations where change is occurring. In the face of the kinds of pressures which typify modern commercial organizations, many investigators have reported how organizational members, individually and in groups, try to protect their ontological core. They may, for example, try to protect against excessive control by using strategies such as storytelling, gossip and jokes (Gabriel, 1995). Denial and idealization can also be used to avoid feelings of powerlessness in environments dominated by powerful technologies (Feldman, 1989). Groups also try to project outwards (for example, onto ‘management’ or ‘the company’) primitive impulses which are anti-knowledge and anti-life (Hoggett, 1998), thereby keeping the group intact.

In the face of such external and internal threats, considerable learning occurs. Whether such learning is ‘organizational’ is a point that I shall come to a little later, but certainly such threats result in shared knowledge, shared perceptions and shared behavioral responses at interest group level.

4 CASE STUDY

Data sources

In order to explore the relationship between the ontological interest and organizational learning, I would like to report on research conducted in the call center of a large financial organization during 1998. The study involved interviews conducted over a period of approximately 10 months, at a time when a new pay and performance management approach was being introduced.

The company

ServiceCo is a long-established company in the area of insurance, finance or information. I want to emphasize that there is nothing unusual about ServiceCo. The changes that have occurred there are similar to changes occurring in many large to medium-sized commercial organizations.

During the 1980s, long-serving managers and employees describe life in ServiceCo as fairly comfortable. Some people, mainly managers, would link the level of comfort with considerable excess and waste. Others, mostly employees, look back fondly to a time when at least they knew what they had to do. Life was simpler.

During the early 1990s, and like many Australian organizations, ServiceCo suddenly entered a period of rapidly declining profits, with threats of takeovers, and considerable pressure to change products, services and systems. One important outcome was that everything became more output-focussed, with pressure to manage people’s pay and performance in order to improve productivity reducing costs.

As part of these changes, the old local branch environment from the 1980s gave way to larger regional offices, which gradually were combined into huge centralized cites.

In this case study, I will focus on one large part of ServiceCo, namely customer relations. Two centers are involved in customer relations:

· a Customer Service Center. This is essentially a large call center, staffed by mainly young, well-educated employees. Customer Service Center staff are well regarded by ServiceCo senior management. One reason for this is that the Customer Service Center staff operate on a new pay and performance management approach, which I’ll call ‘New Ways’. Essentially, the new system requires high levels of multiskilling and flexibility, and in return, pays for skill and productivity.

· a Product Center. This center processes FinanceCo’s main products, which could be something like insurance policies or building society loan applications. Employees in this center tend to be older and fairly traditional. The product center has a reputation for being very hierarchical and status conscious, and staff are viewed as inadequately skilled. When my research began, management were trying to convince Product Center staff to also accept New Ways.

In the remainder of the paper, I’ll use this case to examine some aspects of organizational learning.

‘Organizational’ learning in the transition to New Ways

Learning in relation to the move to New Ways seems to have occurred on two levels concurrently. On one level, a considerable amount of learning was technical. For example, people had to learn about work organization concepts, pay rates, and other technical details of the new scheme.

On a deeper,’underbelly’ level, learning related to the political and ontological interest, and was often full of feeling. I asked a team-leader whether the changes which were being introduced, aimed at improving people’s skills and productivity, meant that it was becoming increasingly difficult to resist pressure from management to perform. He replied:

“That is a big issue. But I don't believe that is the monster behind the concept, though. The beautiful part of it is creating a dynamic learning environment.”

Given that I had not implied that anything monstrous was involved, these comments and others during the interview seem to suggest a feared scenario, with its origins in the previous troubled history of the company. In this scenario, New Ways would give management absolute and quite unrealistic power over working conditions—that is, there is a ‘monstrous’ ruthlessness lurking behind the ‘beautiful’ new learning rhetoric. Perhaps, in order to reassure himself as well as me, the interviewee denies this ‘monstrous’ scenario.

Staff at FinanceCo had learnt from the company’s troubled employee relations history that senior management had a tendency to see employees as just another expendable resource. Describing this turbulent period in FinanceCo’s history, and the massive redundancies that accompanied it, one team leader explained:

“In 1995, we employed a lot of people to replace the ones retrenched, but we’ve still got some of the people around who saw the strike. It was a mess. The majority left, and the ones who stayed—instead of acknowledging improvement, keep saying, ‘remember back then, when that happened’?”

This statement is describing the results of ontological-level learning. Circumstances where one’s jobs and work-live is threatened provide a catalyst for learning. This learning then shapes our perceptions, and can make us unreceptive, even when positive changes are offered (and it should be mentioned here that New Ways offered many advantages for employees over the old pay system).

However, the threat to employees’ sense of well-being, and the associated level of trauma during the earlier periods, meant that many people in the Product Centre found it very difficult to change. According to manager on the New Ways change team:

“They see New Ways as a threat to their existence. I think there are some people who just won’t change. They won’t, because of the damage that has been done some time back. They’re in the stage of denial.”

It is worth noting that the phrase ‘the stage of denial’ relates to the stages of grieving associated with death and dying (Kubler-Ross, 1969). It reflects the level of trauma experienced by some employees in the transition to centralised sites. At the same time, it parallels an important issue in individual psychotherapy—group memory may perpetuate a sense of threat, and associated constraints on risk-taking, even if the actual threat is no longer present. It must happen that external signs of management ruthlessness resonate with internal anti-learning forces for some individuals and groups. In thinking about the ontological interest as I conducted this research, it was not clear to what extent groups aligned around, and ‘learnt’ in relation to, real external threat, or around shared misperception of threat.

In another interview, a team leader was asked about the views of employees who were opposed to New Ways, replied:

“ If someone is just around the corner from retirement, this could be a chop in the arm for them.”

Once again, we can see pain and violence in the phrase ‘a chop in the arm’. It is reasonable to assure that, for the group of older employees at the Product Centre, this is the level of confrontation that New Ways represented. For this group, there had been a decade of learning about the new order within FinanceCo, as well as more general learning about changes happening elsewhere in the white-collar industries.

At the start of the 1990s, many of the older Product Centre employees were in middle-ranking positions within branches. They had considerable status, and this was reflected in their pay. Certainly, there would have been no doubt, in this early period, that their work was much more complex and demanding than Customer Service. However, New Ways cut directly across the status barrier between the two work areas. It treated staff in both centres as equivalent, and even fused the skill set which they needed to draw on.

Their learning, therefore, was about their loss of personal power and status in relation to younger, well educated employees in the Customer Relations Center. They learnt that their experience was no longer highly valued, and that FinanceCo wanted younger, better educated employees with the skills and flexibility to work in either Customer Relations or the Product Center. As one of the team leaders commented:

“[The older employees] are afraid that once they have reached the peak, where do they go from there? To add insult to the wound, even if you agree to go along with New Ways, you have to wait another six months to be assessed.”

The terms used here—‘afraid’, and ‘the wound’—underline the distress that must be felt by long-serving employees who see both their immediate work context, and the broader industry and professional context changing in ways that threaten the ontological interest. I leave open the question of how much such feelings relate to external economic and technocratic realities, and how much to internal dynamics such as envy of the rising status of younger customer service staff, or hatred of the senior managers who overturned the old order with New Ways and left older employees feeling exposed.

5 SUMMING UP…

To sum up, it seems to me that ‘organizational’ learning does not only serve technical and economic interests, but political and ontological interests as well. In this paper, I’ve focussed on the ontological interest. As the case study material illustrates, the ontological interest is associated both with a lot of emotion—the chop in the arm, the wound, people feeling afraid—and frightening imagery—the monstrous scenario, profound loss.

I would argue that such feelings and images are shared by a considerable number of people; they are retained and transmitted by the group, independent of any one individual; and they profoundly affect behavior. On those grounds, they can be thought of as group-level learning. Whether such learning is ‘organizational’ is debatable, but then it is debatable whether technical and other types of learning are organizational as well.

In fact, many accounts of ‘organizational learning’ are based on an interview with a single chief executive, and a great deal of the data cited in the organizational learning literature draws directly on such interviews. The chief executive can talk about what ‘we’ (implying the organization) have learnt, but I suspect that this learning is often restricted to a small group of senior managers who share technical and economic interests.

For many employees lower down in the organization, ‘we’ does not encompass the whole organization, but only others with whom one shares interests. In fact, this case study and other research which I’ve conducted suggests that may be all there is—so-called ‘organizational learning’ comes down to learning by groups which form or are created in order to protect their technical, economic, political or ontological interests.

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