Organizational Learning and Information Systems

V. Balasubramanian

E-Papyrus, Inc., and
Graduate School of Management
Rutgers University
Newark, NJ 07102


Organizations are increasingly paying attention to the concept of organizational learning in order to increase competitive advantage, innovation, and effectiveness. Learning occurs due to the influence of various factors such as structure, strategy, environment, technology, and culture. There has been very little research on the influence of technology, especially information systems, on organizational learning. This paper identifies aspects of organizational learning that can benefit from the use of information systems. A brief discussion is presented on how information systems can support organizational learning processes such as knowledge acquisition, information distribution, information interpretation, and organizational memory. Aspects of learning that require further research by organization scientists and information systems researchers are identified.


Organizational learning is increasingly becoming popular among organizations which are interested in increasing competitive advantage, innovativeness, and effectiveness. Argyris and Schon, two of the early researchers in this field, defined organizational learning* as "the detection and correction of error" (1978: 2). Fiol and Lyles define learning as "the process of improving actions through better knowledge and understanding" (1985: 803). Dodgson describes organizational learning as "the way firms build, supplement, and organize knowledge and routines around their activities and within their cultures and adapt and develop organizational efficiency by improving the use of the broad skills of their workforces" (1993: 377). Huber states that learning occurs in an organization "if through its processing of information, the range of its [organization's] potential behaviors is changed" (1991: 89).

A "learning organization" is a firm that purposefully constructs structures and strategies so as to enhance and maximize organizational learning (Dodgson, 1993). The concept of a learning organization is increasingly becoming popular since organizations want to be more adaptable to change. Learning is a dynamic concept and it emphasizes the continually changing nature of organizations. The focus is gradually shifting from individual learning to organizational learning. Just as learning is essential for the growth of individuals, it is equally important for organizations. Since individuals form the bulk of the organization, they must establish the necessary forms and processes to enable organizational learning in order to facilitate change. Organizational learning is more than the sum of the parts of individual learning (Dodgson, 1993; Fiol & Lyles, 1985). An organization does not lose out on its learning abilities when members leave the organization. Organizational learning contributes to organizational memory. Thus, learning systems not only influence immediate members but also future members due to the accumulation of histories, experiences, norms, and stories. Creating a learning organization is only half the solution to a challenging problem (Prahalad & Hamel, 1994). Equally important is the creation of an unlearning organization which essentially means that the organization must forget some of its past. Thus, learning occurs amidst such conflicting factors (Dodgson, 1993).

The purpose of this paper is to identify if technology (especially, information systems) can help achieve effective organizationallearning thereby improving organizational performance. Survey of literature both in the fields of organization theory and information systems revealed that very little research exists in the area of information systems and organizational learning. This paper is an attempt to identify aspects of organizational learning that can benefit from the use of information systems. This paper will not explore, in detail, all the determinants, outcomes, and measures related to organizational learning. The paper will briefly discuss the goals of organizational learning, the various types of learning, the processes involved in learning, the influence of some contextual factors such as structure, environment, and technology on learning, and the role of information systems in organizational learning.


Learning is a conscious attempt on the part of organizations to retain and improve competitiveness, productivity, and innovativeness in uncertain technological and market circumstances. The greater the uncertainties, the greater the need for learning. Organizations learn in order to be improve their adaptability and efficiency during times of change (Dodgson, 1993). Grantham (1993) states that learning enables quicker and more effective responses to a complex and dynamic environment.

Learning also increases information sharing, communication, understanding, and the quality of decisions made in organizations. In their research on organizations as learning systems, Nevis et al., (1995) report that all the firms they observed were learning systems. The authors describe how learning has changed organizations such as Motorola, Mutual Investment Corporation, Electricite de France, and Fiat Auto Company. All these firms had both formal and informal structures and processes for the acquisition, sharing and utilization of knowledge and skills. The authors observed that even companies that claimed that they were not good learning organizations had certain core competencies that could exist only due to certain learning mechanisms in place. For example, Motorola's learning processes and culture in its engineering and technical areas enabled the full commitment to total quality by product manufacturing groups. Federal Express invests heavily in team learning for its quality improvement (Nevis et al., 1995). The ability to learn continuously is the reason behind the tremendous success of Japanese firms. Stata (1989) states that although learning takes time, once the process has started, it feeds on itself and organizational members get better in their work quicker.

Landry (1992) also states that organizational learning is essential for innovation. Brown and Duguid (1991) view learning as a bridge between work and innovation. These views are similar to the concept of innovating adhocracies by Miller (1986) and Mitzberg (1979).


Argyris and Schon (1978) describe three types of organizational learning:

Single-loop learning (SLL): Organizational learning occurs when errors are detected and corrected and firms carry on with their present policies and goals. According to Dodgson (1993), SLL can be equated to activities that add to the knowledge-base or firm-specific competencies or routines without altering the fundamental nature o the organization's activities. SLL has also been referred to as lower-level learning by Fiol and Lyles (1985), adaptive learning or coping by Senge (1990), and non-strategic learning by Mason (1993).

Double-loop learning (DLL): DLL occurs when, in addition to detection and correction of errors, the organization is involved in the questioning and modification of existing norms, procedures, policies, and objectives. DLL involves changing the organization's knowledge-base or firm-specific competencies or routines (Dodgson, 1993). DLL is also called higher-level learning by Fiol and Lyles (1985), generative learning (or learning to expand an organization's capabilities) by Senge (1990), and strategic learning by Mason (1993). Strategic learning is defined as "the process by which an organization makes sense of its environment in ways that broaden the range of objectives it can pursue or the range of resources and actions available to it for processing these objectives." (Mason, 1993: 843)

Deutero-learning (DL): Deutero-learning occurs when organizations learn how to carry out single-loop and double-loop learning. The first two forms of learning will not occur if the organizations are not aware that learning must occur. Awareness of ignorance motivates learning (Nevis et al., 1995). This means identifying the learning orientations or styles, and the processes and structures (facilitating factors) required to promote learning. Nevis et al., 1995) identify seven different learning styles and ten different facilitating factors that influence learning. For example, one of the facilitating factors is identifying the performance gap between targeted outcomes and actual performance. This awareness makes the organization recognize that learning needs to occur and that the appropriate environment and processes need to be created. This also means recognizing the fact that lengthy periods of positive feedback or good communication can block learning (Argyris, 1994).

Double-loop and deutero learning are concerned with the why and how to change the organization while single-loop learning is concerned with accepting change without questioning underlying assumptions and core beliefs. Dodgson states that the type of organizational learning also depends on where in the organization learning occurs. Thus, learning can occur in different functions of the organization such as research, development, design, engineering, manufacturing, marketing, administration, and sales.


In his literature review on organizational learning, Huber (1991) describes the following processes or constructs that contribute to organizational learning:

Knowledge Acquisition: Learning occurs when an organization acquires knowledge. Acquisition of declarative knowledge or facts and information is achieved by monitoring the environment, using information systems to store, manage, and retrieve information, carrying out research and development, carrying out education and training, patent watching, and bibliometrics (Dodgson, 1993). Learning occurs not only due to knowledge acquisition from outside the organization but also due to the rearrangement of existing knowledge, the revision of previous knowledge structures, and the building and revision of theories.

Information Distribution: Information distribution refers to the process by which an organization shares information among its units and members, thereby promoting learning and producing new knowledge or understanding. Knowledge in the form of tacit know-how, letters, memos,informal conversations, and reports are captured and distributed. Brown and Duguid (1991) contend that a lot of learning and innovation takes place in informal "communities of practice". Very often, learning in an organization takes place by members sharing stories or anecdotes of actual work practice as opposed to what is mentioned in formal job descriptions or procedure manuals. Greater sharing or distribution of information leads to greater organizational learning.

Information Interpretation: In order for information to be shared, such information must be interpreted. Information interpretation is the process by which distributed information is given one or more commonly understood meanings. Sense-making or the formation of meaning is called procedural knowledge by Dodgson (1993). Huber (1991) state that individuals and groups have prior belief structures which shape their interpretation of information and thus the formation of meaning. These belief structures are stored as a rule-base or a profile which is automatically applied to any incoming information in order to form a meaningful knowledge that can be stored. The interaction between stored mental models and interpretation is critical to understanding how organizations learn. Greater learning occurs when more and more varied interpretations are developed.

Organizational Memory: Organizational memory refers to the repository where knowledge is stored for future use. It is also called "corporate knowledge" or "corporate genetics" by Prahalad and Hamel (1994). Decision makers store and retrieve not only hard data or information but also "soft" information, that is, information with meaning. This soft or interpreted information can be in the form of tacit know-how, expertise, biases, experiences, lists of contacts, anecdotes, etc. Organizational memory plays a very critical role in organizational learning. Both the demonstratability and usability of learning depend on the effectiveness of the organization's memory. The major challenge for organizations exists in interpreting information and creating organizational memory that is easily accessible.


Dodgson (1993) states that learning is stimulated both by environmental changes and internal factors (individuals, culture, etc.) in a complex and iterative manner. Fiol and Lyles (1985) state that contextual factors such as environment, structure, culture, and strategy influence organizational learning. The adoption of certain structures and strategies encourages learning. Strategy influences learning by providing a boundary to decision-making and a context for the perception and interpretation of the environment. The strategic options chosen depend on the learning capacity of the organization. The amount of information flow or communication between organizational units and individuals determines learning. Poor communication between people and organizational units can be a major block to learning and quality improvement. Organizational culture (beliefs, ideologies, values, and norms) and the amount of resources (money and personnel) also determine the quality and quantity of learning. While single-loop learning occurs in a number of organizations, very few organizations experience double-loop learning or deutero learning. This is due to the fact that organizational members resort to defensive reasoning tactics in order to "avoid vulnerability, risk, embarrassment, and the appearance of incompetence" (Argyris, 1994: 80). This can be attributed to the difference between what people say ("espoused theory") and what they practice ("theory in use"). Double-loop learning is required in such situations to bridge the gap between theory and practice.

In the following sections, we will explore, in some detail, influences of structure, environment, and technology on organizational learning. Greater emphasis is placed on the influence of technology since we are specifically interested in the use of information systems to facilitate organizational learning.


A centralized, mechanistic structure tends to reinforce past behaviors or single-loop learning while an organic, decentralized structure promotes double-loop learning (Fiol & Lyles, 1985). Centralization creates a more fragmented structure which does not support people to think for themselves. Thus, individuals do not have a comprehensive picture of the whole. This, in turn, encourages the development of a political and parochial system that stifles learning. Highly sophisticated single-loop learning mechanisms (conformance to existing norm and behavior) may in fact take the organizations on the wrong course, since people may not be able to challenge underlying assumptions. That is, single-loop learning prevents double-loop learning from occurring. Therefore, in order to encourage learning,organizations must move away from mechanistic structures and adopt a more flexible and organic structure. This requires a new philosophy of management which encourages openness, reflectivity, and the acceptance of error and uncertainty (Morgan, 1986).

In a learning organization, a leader is not just a charismatic decision maker but also a teacher, a designer, and a steward of change (Senge, 1990). The essential function of leadership is to build an organization's culture and shape its evolution. Leaders as designers should help build a strong foundation of purpose and core values. They should shape the design of the organizational structure and policies so as to best fulfill the corporate mission. Leaders should foster systems thinking and system dynamics to facilitate both individual and organizational learning (Stata, 1989). System dynamics can be used as a training tool while planning and quality improvement can accelerate organizational learning. Leaders as teachers should help individuals restructure their views of reality by identifying and challenging prevailing mental models and fundamental assumptions and by promoting double loop learning. Leaders as stewards should have a sense of purpose and commitment to the organization's larger mission.

Morgan (1986) and Grantham (1993) suggest that leaders should encourage the exploration of multiple viewpoints to any problem through dialogue and discussion. Double-loop learning can be encouraged by adopting a bottom-up or participatory approach. Actions should emerge as a result of the learning process and should not be imposed from above. Organizational learning also requires commitment from executives for a long-term process with adequate budget and resources (Grantham, 1993).


Fiol and Lyles (1985) state that many researchers feel that in order for learning to occur, organizations must align themselves with the environment so as to remain competitive and innovative. "Alignment implies that the firm must have the potential to learn, unlearn, or relearn based on its past behaviors" (Fiol and Lyles, 1985: 804). If the external and internal environments are complex and dynamic, learning may not take place. It can occur only when there is a balance between change (the new) and stability (the old).

Learning organizations will treat competition more as a means of learning than a hostile force (Mason, 1993). Competition enables organizations to compare their own performance with others in the industry and learn from that exercise. Learning must occur within the organization as a result of the firm's interaction with the environment and this can be achieved through information processing. Information processing reduces uncertainty and hence increases learning (Mason, 1993). Organizations scan the environment and acquire information through "information brokers" or "boundary spanners". These individuals facilitate exploration and exploitation by carrying out sense-making and interpreting activities.

Organizations acquire knowledge at birth, through experiences, through competitive intelligence units (which collect information on other organizations), by searching the environment, and by hiring new skills (grafting) (Huber, 1991). Searching can be for solutions to hitherto unsolved problems or for already identified solutions to known problems. Organizations will acquire and store information only if such information is of any significance to them. This means recognizing that the information is meaningful. This requires some preliminary interpretation of information and evaluation of its potential value to the organization.


In this section, we will discuss the influence of a specific kind of technology, that is, information systems. Researchers such as Dodgson (1993), Brown and Duguid (1991) merely make a passing mention of the influence of technology on learning. Both suggest that new technologies such as multimedia communications, computer-aided learning, information dissemination and training will be a great ground for future research in this area. Grantham (1993) states that technology can be used to clarify assumptions, speed up communications, elicit tacit knowledge, and construct histories of insights and catalog them. Dodgson does state that researchers in organization theory have been slow in addressing these technology-related issues. The influence of information systems, in particular, can be considered two-fold: direct influence and indirect influence. Information systems can indirectly influence organizational learning by affecting contextual factors such as structure and environment which, in turn, influence learning. They can also directly influence the organizational learning processes discussed earlier. In the following paragraphs, we will examine both these indirect and direct means of influence.

The introduction of information systems flattens the structure of the organization and promotes greater dissemination of information to all individuals. This makes the organization more informed, flexible, and organic. Increased availability of information helps members share information thereby increasing learning. Information systems not only automate but also "informate" the organization (Zuboff, 1988). These systems are capable of generating new streams of information thereby expanding knowledge. In an informated organization, the locus of control shifts from managers to workers, who are now empowered with all the information required for their effective performance. Knowledge thus becomes the core of an organization's assets.

Although Mason (1993) has attempted a discussion on the application of information systems to organizational learning in terms of Huber's constructs, he does not elaborate on the types of systems that can be used and the types of benefits that can be realized. We will now review the direct influence of information systems on learning in terms of Huber's constructs.

Knowledge Acquisition

According to Dodgson (1993), organizational learning occurs when we create an organizational knowledge base, firm-specific competencies, and routines. Knowledge-bases are created by acquiring, storing, interpreting, and manipulating information both from within and outside the organization. Strategic applications of information systems for knowledge acquisition can take two forms (Mason, 1993): capabilities for assimilating knowledge from outside (such as competitive intelligence systems acquiring information about other companies in the same industry) and capabilities for creating new knowledge from the reinterpretation and reformulation of existing and newly acquired information (such as executive information systems or decision-support systems). They can also be environment scanning and notification systems, and intelligent and adaptive filters.

Information distribution

In addition to traditional forms of information distribution such as telephone, facsimile, face-to-face meetings, and memorandums, computer-mediated communication systems such as electronic mail, bulletin boards, computerized conferencing systems, electronic meeting systems, document delivery systems, and workflow management systems can facilitate the sharing of information. Studies have shown that such systems increase participation and result in better quality decisions since decisions are made by consensus and not by domination (Hiltz & Turoff, 1993). These systems, also called groupware or collaborative systems, allow the joint construction and distribution of experiences and insights. They also enable social construction or the creation of social networks of members narrating and sharing their stories. These systems also support feedback and review mechanisms among members of a team. Thus, they not only support communication but also collaboration. The development of such information systems-enabled communities results in better interpretation of information and greater understanding. In addition, groupware enables equal participation at all levels and supports members learning from each other simultaneously (unlike traditional learning systems which are usually top-down and time-consuming) thereby reducing cumulative learning cycle time. Group calendars and workflow management systems can help ensure the timely participation of members in the learning exercise.

Hypermedia systems are emerging as a new class of complex information management systems which allow people to create, annotate, link together, and share information from a variety of media such as text, graphics, audio, video, and images. Gershman and Gottsman (1993) report the successful use of such hypermedia-based learning systems for corporate knowledge dissemination at Andersen Consulting. Emerging technologies such as the World Wide Web (based on the concept of hypermedia) enable organizational members to link and share multimedia documents across time-zones and distance both from within and outside the organization. This promotes greater learning and understanding of both internal and external issues. Turoff, Rao, and Hiltz (1991) have also suggested the use of collaborative hypermedia to provide collaborative groups the ability to link large numbers of information units in a dynamic manner. Such systems would be of great help in recognizing, understanding, defining, investigating, evaluating, and solving a problem as a group.

Very often an organizational unit looking for information may not know where to look for such information, while another unit having such information may not know who might benefit from that information. This can be facilitated by an expertise locator service or a company-wide electronic distribution list of people, their areas of expertise, and the projects they are currently working on, similar to an online yellow pages service. Electronic mail can also help in this regard where a broadcast could be sent out to the whole organization asking for locations where such information could be found. The coming together of these organizational units will not only lead to new information but also to new understanding.

Information Interpretation

Huber (1991) stated that organizational learning occurs when organizations undertake sense-making and information interpretation activities. Organizations are faced with uncertainty and equivocality when interacting with the environment (Daft & Lengel, 1986). Uncertainty is reduced by acquiring and processing more information while equivocality or ambiguity is reduced by carrying out discussions and face-to-face meetings. That is, the richer the media, the better is the understanding of information. Face-to-face discussions can be simulated these days with multimedia conferencing systems which enable members of an organizational unit or project to collaborate across time and distance barriers sitting in the comfort of their offices. Such systems enable transmission of live video, joint-authoring of documents, and online discussions.

Very often, the decision-making process is not fully captured in organizations but only the endpoint or outcomes of the process (except in the meeting minutes noted by one individual which may or may not be easily accessible at a later date). When information is required about the rationale behind certain decisions made earlier, such information may not be fully available at a later date. The ability to review and question the rationale behind decisions made earlier is the basis behind double-loop learning. Decision support systems and issue-based information systems can support not only the storage and retrieval of information going into the decision-making process but also the process itself and the outcomes. This can be used as a tool to promote learning and awareness among individuals and groups. This approach also prevents members from taking decisions for granted. Information systems can help in the establishment of learning laboratories which can be small-scale models of real-life settings in which management teams learn how to learn together (Senge, 1990). These learning laboratories can combine meaningful business issues with interpersonal dynamics, and allow participants to make decisions and experience the consequences of their decisions through simulation games.

In a number of organizations, double-loop learning does not take place because the atmosphere is not conducive enough for members to question basic values and assumptions due to the fear of being reprimanded. With the advent of conferencing systems which have facilities to preserve anonymity of participants, members can openly discuss "controversial issues or ideas" without the fear of facing "dire consequences". Anonymity promotes greater interaction, equal participation, objectivity, and better problem-solving.

Organizational Memory

Organizational memory can be made of both hard data such as numbers, facts, figures, and rules as well as soft information such as tacit knowledge, expertise, experiences, anecdotes, critical incidents, stories, artifacts, and details about strategic decisions (Morrison, 1993). We need ways to store and retrieve both kinds of information. Most organizations have various kinds of information systems such as inventory control systems, budgetary systems, and administrative systems to store and retrieve "hard" data or facts but do not have similar systems to capture "softer" information. Brown (1991) states that ideas generated by employees in the course of their work rarely gets shared beyond a small group of confidants or team members. Greater organizational learning can occur if these experiences and narratives are stored electronically for future reference. Brown has reported research efforts at Xerox PARC to capture such collective knowledge, created by communities of practice.

Isakowitz (1993) has suggested the incorporation of hypermedia into organizational information systems in order to manage organizational memory and thus reduce uncertainty and equivocality. Hypermedia-based information systems are highly beneficial in areas that deal with large, complex, richly connected, and cross-referenced bodies of information (Balasubramanian, 1994). These systems along with full-text retrieval systems and document management systems can help store and retrieve vast amounts of organizational knowledge with the use of modern access facilities such as navigation, queries, and personalized pathways. This enables organizational learning to be tailored to the pace and style of the individuals or groups.

Another emerging trend is not to be limited to expert systems (which make inferences based on a fixed set of rules) but more on systems that would involve the intervention of humans in the decision-making and interpretation processes with the use of embedded textual knowledge. Emerging technologies such as network publishing on the Internet, and the information superhighway can facilitate the creation of such organizational memories. These tools can not only capture formal knowledge such as training manuals, employee handbooks, training material, etc., but also informal knowledge such as tacit know-how, expertise, experiences, stories, etc., which are most often ignored in organizations. This informal knowledge or non-canonical practice (Brown & Duguid, 1991) is the key to organizational learning. Brown and Duguid (1991) assert that new collaborative technologies should be designed based on these non-canonical, communities of practice rather than on formal descriptions of work. The resulting knowledge base can be treated as "group memory" or "collective intelligence". Encouraging members to share such information to be stored in electronic form may be a difficult task since they may not desire to give up valuable information for fear of losing their individual competitive edge. The first step towards removing such fears is to have an open and flexible organizational atmosphere as mentioned earlier. The use of information systems to manage organizational memory improves precision, recall, completeness, accuracy, feedback, and review, far better than the human components currently involved in organizational memory.


Organizational learning occurs due to the interplay of various factors such as structure, strategy, environment, technology, and culture. In this paper, we briefly reviewed some of the theoretical concepts related to learning without going into much detail about the various determinants and outcomes. We have not discussed details about how organizational learning can bring about change and increase effectiveness in organizations. More and more organizations have realized that in order to be successful in a highly competitive environment, they must encourage double-loop and deutero learning. The implications of not becoming a learning organization can be costly. Grantham (1993) states that it will result in loss of market share, loss of competitive edge, loss of intangibles such as reputation and the ability to attract only the best and brightest.

Information systems can facilitate this learning process by supporting the processes of knowledge acquisition, information distribution, information interpretation, and organizational memory. With the displacement of people due to downsizing efforts, organizations are discharging vast amounts of organizational knowledge without realizing the long-term implications of such short-term actions. The only way organizations can preserve that knowledge and further promote organizational learning is to use information systems to store and retrieve such collective knowledge. In this paper, we reviewed some of the potential impacts of information systems on organizational leaning. As mentioned earlier, very little work has been done in this area and there is general agreement among researchers that organization theorists and information systems researchers need to come together to explore this topic further.

Information systems developers should focus on how systems can support the central features of work practice such as narration, collaboration, and social construction as suggested by Brown and Duguid (1991). As applications are developed, studies also need to be conducted to evaluate the effectiveness of such information systems in promoting organizational learning. Learning is important for organizations to survive and sustain competitive advantage and promote innovation. Information systems can enable this survival strategy, the innovative spirit, and the competitive edge.


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