Organizational Learning Capacity and Its Impact on the Results in a Government Agency in Chile

ABSTRACT

Rising demand for quality, efficiency, and openness in the management of collective problems and their solutions has prompted successful government agencies to consider knowledge as a key resource. Government agencies make intensive use of human capital and knowledge in the performance of their duties. Knowledge represents the most important strategic resource, and its skillful management is a key capability in institutional performance. Using structural equation modeling, we analyze the relationship between the learning capability of an organizational system, characterized by the dynamic interaction of stocks and flows of knowledge, and its impact on performance. Our results support the view that learning capability, especially knowledge flows and stocks, has a positive impact on the performance of public institutions.

ACKNOWLEDGEMENT

The authors are grateful to IPMJ Editor Steve Kelman for his considerable time and effort in reviewing the manuscript as well as for his valuable suggestions that have improved the manuscript.

Notes

Note: N/A = not applicable.

Note: N/A = not applicable.

^*** p < 0.001; ^* p < 0.01; ^* p < 0.05; ns: not significant (based on a distribution t (499) of student of a tail: t(0.05, 499) = 1.64791345; t(0.01, 499) = 2.333843952; t(0.001, 499) = 3.106644601).

^*** p < 0.001;.

^** p < 0.01;.

^* p < 0.1.

For a historical review of the different definitions of organizational learning, see the study by Bontis, Crossan, and Hulland (2002), which reveals the level of scholarly disagreement over the definition of organizational learning and its identification and study (Askim, Johnsen, and Knut-Andreas 2008).

Social spending stands at around 66% of public expenditure in Chile (http://www.dipres.gob.cl/572/articles-88002_doc_pdf.pdf).

See http://www.inp.cl/portal/Documentos/bgi2007vc.pdf.

The Directorate of Budgets (Dirección de Presupuestos) Government of Chile (Dipres 2005) lists the following definitions: Effectiveness: Degree to which the aims are fulfilled, without considering the resources that are allocated for such purposes. Efficiency: Describing the relation between two magnitudes—the physical production of a product (goods or service) and the inputs or resources that were used to attain this level of production. Economy: Related to the capacity of an institution to generate and to mobilize appropriate financial resources within the framework of its aims. Quality of Service: The capacity of the institution to respond to the needs of its customers, users, or beneficiaries via opportunity, accessibility, accuracy, and continuity in the delivery of the service, and convenience and politeness of client services.

Reflective indicators represent reflections, manifestations, or functions of the unobserved construct. On the other hand, formative indicators are measurements that give way to and, when algebraically combined, constitute the latent theoretical construct (Polites, Roberts, and Thatcher 2012). One of the advantages of the PLS technique is that it allows operating simultaneously with both types of measurements.

The second-order (or higher-order) constructs are measured with simpler first-order constructs. In this way, the indicators are used twice. Once, to measure the first-order components and once again, to measure the second-order construct (as the first-order components are also used in its measurement). The advantage of this approach is specifically that the second-order factor model can be estimated using the normal PLS algorithm (Chin, Marcolin, and Newsted 2003).

As a measure of internal consistency reliability (ρc), the composite reliability fulfills the same task as Cronbach's alpha. However, composite reliability is more suitable for PLS since it does not assume that all indicators are equally weighted. The interpretation of both indexes is similar (Roldán and Sánchez-Franco 2012).

This value, proposed by Carmines and Zeller (1979) (Roldán and Sánchez-Franco 2012), is used in all literature using PLS (see, for example, Bueno and Salmeron 2008; Garrison 2009; Loureiro and Kastenholz 2011; Moneva and Ortas 2010; Miranda, Chamorro, Murillo, and Vega 2012; Vitell, Ramos, and Nishihara 2010).

It must be pointed out that this measurement is only applicable for constructs with reflective indicators and, therefore, it is not applicable to the second-order aggregated constructs: OLC and Performance.

10. http://www.dipres.cl/574/articles-38097_doc_pdf.pdf.

11. http://www.dipres.cl/574/articles-38094_doc_pdf.pdf.

12. http://www.dipres.cl/574/articles-38097_doc_pdf.pdf.

13. http://www.dipres.cl/574/articles-38094_doc_pdf.pdf.

Additional information

Notes on contributors

M. ÁNGELES OVIEDO-GARCíA

M. Ángeles Oviedo-García ([email protected]) is Associate Professor in the Department of Business Management and Marketing at the University of Seville (Spain). Her research interests include organizational learning capacity, marketing strategy, social media, and tourism management.

MARIO CASTELLANOS-VERDUGO

Mario Castellanos-Verdugo ([email protected]) is an Associate Professor in the Department of Business Management and Marketing at the University of Seville (Spain). His main research interests are organizational learning capacity, social economy companies, and social media and marketing strategy interaction.

JULIO GARCÍA DEL JUNCO

Julio García del Junco ([email protected]) is Professor in the Department of Business Management and Marketing at the University of Seville (Spain). His current research interests focus on human capital, organizational learning capacity, entrepreneurship, and social economy companies.

ADRIANA RIQUELME-MIRANDA

Adriana Riquelme Miranda ([email protected]) is part-time Assistant Pro-fessor at University Mayor and Autonomous University of Chile (Temuco, Chile). Besides, she is consultant in Temuco Town Hall in Management and Statistic Implementation area. Her research interests include public management and management evaluation through indicators.