Abstract :

Organizations are trying to attain and sustain competitive advantage in the highly competitive business world settings. It is argued that one of the strategies to achieve competitive advantage is to form learning organizations. Diversification strategies of organizations are important growth decisions managers need to make. In this paper, organizational learning, learning organization, fundamental diversification strategies and the link between learning and diversification in the literature were discussed shortly. Then, the link between them was revisited considering the literature with a schema. At last, a causal model was introduced. Model suggested that When a company decides to expand its operations by adding new products related to existing product line, with the aim of exploiting its existing knowledge base, this company can reach superior financial performance  (financial performance means profitability) through generative learning. When a company decides to grow by adding a new product line irrelevant to existing product lines, with the aim of exploring new knowledge, then through generative learning, this company can introduce or develop new technologies in forms of new products/services, in other words make innovation. Unrelated diversification does not directly provide high financial performance. But gradually, as the innovation gain awareness, it brings in superior financial performance more than related diversification can bring in.

---

Keywords :

Adaptive Learning., Diversification, Generative Learning, Learning Organizations, Organizational Learning

---

References :

1. Harvey, C., & Denton, J. (1999). To come of  age:  the  antecedents  of  organizational  Journal of Management Studies, 36(7), 897-918.
2. Thomas, K., & Allen, S. (2006). The learning organization: a meta-analysis of themes in literature. The Learning Organization, 13(2), 123-139.
3. Senge, M. (1994) The Fifth Discipline: The Art and Practice of the Learning Organization, Bantam Doubleday Dell Publishing, New York.
4. Garvin, D. A. (1993). Building a learning organization. Harvard Business Review, July-August, 78-91.
5. Beer, M., Voelpel, S. C., Leibold, M., & Tekie, E. B. (2005). Strategic management as organizational learning: developing fit and alignment through a disciplined process. Long Range Planning, 38(5), 445-465.
6. March, J. G. (1991). Exploration and exploitation in organizational learning. Organization science, 2(1), 71-87.
7. Barney, J. B., & Hesterly, W. S. (2008). Strategic management and competitive advantage: concepts. Pearson/Prentice
8. Chatterjee, S., & Wernerfelt, B. (1991). The link between resources and type of diversification: theory and evidence. Strategic Management Journal, 12(1), 33-48.
9. Lau, C. M. (1993). Diversify with care: diversification strategies and organization development. International Journal of Organizational Analysis, 1(1), 55-72.
10. Chatterjee, S., & Wernerfelt, B. (August, 1988). “Related or Unrelated Diversification: A Resource Based Approach.” In Academy of Management Proceedings (Vol. 1988, No. 1, pp. 7- 11). Academy of
11. Bing, C., & Quian, L. (August, 2010). “The Research on the Effect of Organizational Learning on Diversification and Capital Structure Strategy in Small and Medium-Sized Enterprises: An Empirical Research Based on Structural Equation Modeling.” International Conference on Management and Service Science (MASS). (Available at http://ieeexplore.ieee.org/xpl/articleDetails.jsp?arnumber=5576173, Access Date: 11.12.2020).

12. Dangol, R., Sharma, S. K., & Ahmed, N. (2008). Diversification-performance: analyzing the relationship from the learning school perspective. Proceedings of Annual Decision Sciences Institute Conference, 3281-3286.
13. Tidd, J., & Taurins, S. (1999). Learn or leverage? Strategic diversification and organizational learning through corporate ventures. Creativity and Innovation Management, 8(2), 122-129.
14. Kim, D. H. (1993). The link between individual and organizational learning. Sloan Management Review, Fall, 37-50