All entries for Tuesday 15 October 2013
October 15, 2013
In a class discussion ahead of a presentation based on organisational learning, myself and a class mate had a discussion on whether organisational learning is something only an exisiting organisation uses, or whether it can be used by an organisation who have yet to establish themselves. We discussed whether a new organisation could launch based on knowledge obtained from watching competitors, contacting suppliers and communicating with potential customers to determine what goods/services may be required or whether an organisation needs to have been established to obtain the necessary knowledge required to act upon the knowledge obtained.
A potential example of a new organisation using organisational learning to break into a market and steal a market share can be seen by looking at the company Ryan Air. By applying Dixon's Organizational Learning Cycle, (consisting of interpret, act, generate and integrate), we can see how Ryan Air achieved its dramatic success. Ryan Air was initially a very small competitor to Aer Lingus and British Airways, that initially made a loss. However, under Michael O'Leary, they radically changed their direction and changed the very nature of European air travel. By 'interpreting' the current industry different to their rivals, who still viewed air travel as a luxury service, Ryan Air decided to explore cheap fares, quick turnaround, no frills for onboard services, no business or first class and to operate just one type of aircraft to increase efficiency. Ryan Air subsequently 'Acted' in a different way to their competitors, and managed to seize a large chunk of the market share and redefine how European air travel is viewed and how business operate within that industry.
I feel this is an extremely good example of how a new business can use knowledge and organisational learning to radically redeine the expected parameters of a business within a certain industry, and how that business can subsequently act in a different way to their competitors to try and secure a competitive advantage over their rivals to obtain a higher market share.