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Impact of Transformational Leadership on Organizational Learning

We are living in an era of competition, technological development, globalization, increased workplace diversity and a number of socio-economic factors that have changed the working conditions, processes and structures of the organizations (Gallos,2006).

In this competitive environment organizational learning (an intangible asset and process) is considered as an important driver for the sustainable competitive advantage. Knowledge based view of the firm advocates that the Knowledge and Learning capabilities result in organizational performance as well as the acquisition of sustainable competitive advantage (Lopez, Peon & Ordas, 2005a). According to Garcia-Morales, Llorens-Montes and Verdu-Jover (2006) Knowledge and OL processes are vital for the firms as they are difficult for the competitors to copy or imitate.

Human resource practices (HRP) and leadership styles are two very important factors that can contribute in the long term and sustainable organizational learning. Kandekar and Sharma (2006) argued on the basis of their findings that the organizations well in OL through their HR practices are also good in their organizational performance. They suggest that in order to enhance OL, learning capabilities should be increased by making improvements in learning processes, HR systems and organizational culture.

Literature evidence specific type of HR practices that can contribute to employee motivation, commitment and promote very important attributes in human resources that give competitive advantage and enhance performance of the firm. These specific HR practices are called “best HRM Practices”. The study would find empirically the impact of some of these best practices on OL, through the extensive literature review.

Secondly, Leadership is very important ingredient in organizational learning environment and it also requires revised approach to handle the problems of Knowledge intensive firms and learning organizations. Traditionally leadership views were based on the assumptions of people’s powerlessness, their lack of personal vision and inability cope with diversity and change, where problems and organizational diseases can only be remedied by few great leaders. Against this traditional view a ‘new’ view of leadership that is based ‘subtler and more important tasks’. “Leaders are designers, stewards and teachers. They are responsible for building organizations were people continually expand their capabilities to understand complexity, clarify vision, and improve shared mental models – that is they are responsible for learning….(Senge 1990: 340)”, as cited by Smith, M. K. (2001). In a study Vera and Crossan (2004) identified a direct connection between leadership style and organizational learning and suggested that a mix of the transformational leadership and transactional leadership styles should be adopted for the achievement and maintenance of the OL.

Many researchers have identified the relationship between HR practices and learning styles with the individual and firms performance in the context of Pakistan. But none of them have checked these relationships with the organizational learning which is the core element in the achievement of success and maintenance of competitive advantage.

On the basis of the above discussion this study assumes that the leadership style and HR practices require new vision, best practices and styles for the new requirements of the firms where organizational learning plays its role as the competitive advantage.

On the basis of the extensive literature review the study would find empirically the impact of the selective leadership styles on the organizational learning where best HR practices play a mediating role in the context of educational institutions Pakistan.

Rationale of the Study

From the management perspective, many studies have been conducted that identify the factors facilitating the organizational learning and OL outcomes. But empirical studies of the relationship between HRM and OL is lacking. Most of the studies are qualitative in nature (Lopez, Peon & Ordas 2006). There is a lack of study in the HR field, especially in knowledge intensive firms (KIF). In an article “A review of HR practices in Knowledge-intensive firms and MNEs: 2000-2006”, it is identified that these type of studies in the HR field especially in Knowledge Intensive firms are mostly done in developed countries except few in Asian countries (Majeed ,2009).

The study aim to bridge these identified gaps found in the theory and practice. Furthermore, this study will try to acknowledge the base of the educationists and practitioners about the contribution of leadership styles and HR best practices on Organizational learning.

1.5 Research Question

1. What is the impact of transformational leadership and best HR practices on the OL in Pakistani educational institutions?

Research Objectives

1. To understand the concept of HR best practices, transformational leadership and organizational learning.

2. To find the whether HR best practices play a mediating role between transformational leadership and organizational learning in education institutions of Pakistan.

3. To contribute in the existing literature on this topic as there is lack of empirical

research on this topic in general and specifically in the context of Pakistan.

Transformational leadership

Transformational Leadership has been defined as higher level of the leadership performance that results when leaders of the organizations “broden and elevate the interests of their employees, when they generate awareness and acceptance of the purposes and mission of the group, and when ther stir their employees to look beyond their own self-interest for the good of the group”(Bass, 1990, p.21).

Transformation leadership is a collective action generated by transforming leaders, which empowers those who participate in the process. In essence transformation leadership is a leadership style that facilitate the redefinition of people’s mission and vision, the renewal of their commitment and restructuring of their system for their goal accomplishments. (Liethwood, 1992).

Transformational leadership gained importance in the current work environments. It is the leadership approach that gives much importance to the intrinsic motivation and can be a suitable solution or fit for the complex working environments, where followers not only seek internal need of the followers to be challenged and empowered in order to become the high performer.

Transformational concept originated from burns (1978) work about political leaders which was based on weber (1964) concept of power and charisma.

According to burns (1979) p. 382, when one or one person engage in such a way that leaders and followers rise one another to higher levels of motivation and morality, which means that it is a two way process from leaders and followers based on internal and intrinsic motivation and morality.

According to Bass and Riggio (2006), transformational leadership has proven effective in different work setting like military, business, government, education and health care and non- profit organizations. They also argued that it is practiced in different parts of the world. Bass and his colleagues have proposed four dimensions of transformational leadership, they are as follows, Idealized influence, individual considerations, inspirational motivation and intellectual stimulation.

According to Zhu, Chew and Spangler (2005), The HRM practices play an important role in the effectiveness of the transformational leadership outcomes. According to Bass and Burns (2006), that there are certain moderators and contingencies influencing the effectiveness of transformational leadership. The study conducted by Zhu, Chew and Spangler (2005) proved that human resource management plays a mediating role in the relationship between CEO transformational leadership and organizational outcomes.

Transformational Leadership

In a learning organization, leaders are designers, stewards and teachers. They are responsible for building organizations were people continually expand their capabilities to understand complexity, clarify vision, and improve shared mental models – that is they are responsible for learning (Senge, 1990, pp. 340)

According to Garcia, Montes and Jover (2006), the environment can provide a high level of personal mastery if the management is more transformational, encourage personal vision and share vision. Specific actions must be undertaken to eliminate the obstacles to share vision. In this way, the leadership plays an important role between organization, environment and increased level of pro activity.

Transactional leadership

According to Verra and Crossan (2004), in order to manage organizational learning, both the transformational as well as transactional leadership are required, depending upon the different situations, to perform there respective functions in support to organizational learning . i.e feed forward learning and feed backward learning respectively. In case of the situations that involve changes to the existing institutionalized learning like firms strategy and routine tasks. The transformational Leadership style plays its role. On the other side Transactional leadership style is required in the situations in which current learning and its institutionalization, reinforcement and refinement are required. These two examples also reflect the feed forward and the feed backward learning respectively.

We empirically reflect the need to strengthen different strategic factors / capabilities

To achieve an adequate level of both organizational capabilities and thus improve

Performance and encourage entrepreneurship. More specifically, personal mastery,

Transformational leadership, shared vision, proactivity and environment help an

Organization to become more innovative and encourage learning more.

Four dimensions of Transformational Leadership

Bass and his colleagues (Bass, 1985; Bass and Avolio, 1994) have proposed

four specific dimensions of transformational leadership:

(1) Idealized influence : entails putting followers’ needs first, being role

models for followers, doing the right thing, demonstrating high moral

standards, and avoiding the use of power either unnecessarily or for

personal gain.

(2) Inspirational motivation: ways by which leaders motivate and inspire

those around them including practices aimed at creating attractive

visions of future states, elevating follower goals and inspiring

enthusiasm and optimism. These practices provide “meaning and

challenge to followers’ work” (Bass and Avolio, 1994, p. 3).

(3) Intellectual stimulation: aimed at developing followers’ capacities to

higher levels, these practices stimulate effort to be innovative and

creative. Assumptions are challenged and problems reframed, for

example. Followers’ new ideas are solicited and creativity is encouraged.

(4) Individualized consideration: paying close attention to each

organizational members’ needs and interests. Coaching and mentoring

are common ways of helping followers elevate their personal potential.

Organizational Learning

According to Lopez et. al. (2006) OL is a dynamic process of creation , acquisition and integration of knowledge aimed at developing the resources and capabilities that allow the organization to achieve a better performance.

Literature reveals that OL improves the development by introducing new technology , productivity or commercialism. Nonaka & Takuchi (1995) argued that learning is vital for product innovation which means that it is not limited to only acquisition and retention of knowledge but it is used to get the required outcomes.

Knowledge oriented view of the organizations argue that knowledge and learning capacity influences the organizational performance and also directs the firm to achieve sustainable and continuous competitive advantage (Zhang, 2008). In last thirty years extensive research have been conducted on the OL and it has contributed a lot in the organizational development and change management, but still there is a little consensus on what is meant by the term OL and its nature. (Crossan, Lane & White,R.E,1999 ; Huber,1999 & Kim,1993). The reason for this problem is that the OL has been studies by many disciplines and perspectives (Lopez, et al, 2006). According to (Argyris, 1995), ” learning occurs whenever errors are detected and corrected or when a match between intentions and consequences is produced for the first time.” (p.20). According to Huber (1991) OL is a process and argued that “OL is the process of knowledge acquisition, information distribution, information interpretation and Organizational memory”. Huber further assumed that learning occurs in the organization if any of its unit acquires knowledge, which it considers or identifies as potentially useful to the organization. This is also supported by DeNisi & Griffin (2008) that “OL is the process by which the organization “learns” from past mistakes and adapts to its environment.”

From these definitions, it is concluded that OL is a process whereby organization gets knowledge and removes the problem and adapts to its environment to survive or succeed. A very comprehensive definition from the managerial perspective is given by

Lopez, et al. (2006) that OL is a dynamic process of creation, acquisition and integration of knowledge aimed at developing the resources and capabilities that allow the organization to achieve a better performance.

2.1.1 Levels of Organizational Learning

In 1965, Cangelos and Dill described OL at three different levels, Individual, group, and organizations. So mostly learning is studied and investigated considering these three levels. Since individual are the basic units of an organization, it is a common belief among most of the researchers that OL occurs when individual members learn (Kim, 2006) as cited by DeNisi and Griffin (2008) , p.243). It is argued by most of the researchers like Argyris and Schon in 1978 and Sange in 1990 that although the OL occurs through individuals. Individual learning does not mean OL but without individual learning, OL cannot be achieved. First the OL process begins with individual learning and change, secondly the individual learning process is a cognitive one and OL depends more on social processes and sharing of information. Thus individual learning is necessary but not a sufficient condition for OL to occur (DeNisi & Griffin, 2008, p.243). According to Marquardt (2002), there are three types of OL, adaptive, anticipatory and action. They are not exclusive of one another and can be adopted by individuals, teams, and organizations at the same time where adaptive learning takes place from experiences and reflections. In case of Anticipative learning, it occurs in the organization where OL takes place from anticipating various futures considering good results and experiences. The action learning involves working of real problem focusing on the acquisition of knowledge and implementing solutions.

2.1.3 .Dimensions of Organization Learning

A number of scholars have studied the OL from the perspective of its stages or dimensions. The extensive literature review reveals that different dimensions or stages of the OL. (Huber 1991.p82) elaborated four processes or dimensions of the OL. They are knowledge acquisition, information distribution information interpretation and translation in to OL memory.

Similarly Tippins & Sohi (2003) pointed out four dimensions of the OL, the dimensions are information acquisition, information dissemination, shared interpretation and development of OL memory Lopez, et al. (2005), and Hong 1999) identified:-

Knowledge acquisition

Distribution

Interpretation

Organization memory

On the basis of literature review, this study has taken knowledge acquisition, distribution, interpretation & organizational memory as the dimensions of the organizational learning.

2.1.3.1. Knowledge acquisition

Huber (1999) identified knowledge acquisition as the process and collection of knowledge. The collection of information, both from internal and external sources. (1 to 2) with in the boundaries of the organization (i.e.) thorough interaction with the customers, supplies, new technology, and economic conditions require that organizational members interact across the boundary of the organization.

2.1.3.2. Distribution

Acquisition of knowledge is not enough but the knowledge should be communicated to other employees and should be available throughout the organization, and organization must use this information to adopt change and align itself according to the environment which gives an advantage over competitors, (DeNisi & Griffin, 2008, p.342). Through information distribution, information can be shared in vast range of organizational members and can be used, revised and can be utilized further to create new ideas, which increases the value of information (Huber 1991).

2.1.3.3. Interpretation

According to Lopez, et al. (2005) in interpretation process, individuals share and incorporate aspects of their knowledge that are not common to all of them, thereby achieving shared understanding as well as contributing in decision making.

2.1.3.4. Organization Memory.

It is the collective organization record of past events, which is important to be maintained formally and physically like writing and storing electronically that enables the organization to lean from the previous events (DeNisi & Griffin, 2008).

This memory can also consist of informed sources like a worker’s experiences of a particular event, when event is stored in his mind it enables him to help others through his experience. According to Lopez, et al. (2006) tries to store knowledge for future uses which means that. It is actually, storing of knowledge for further use about the past events, though utilization of formal and informal resources. (Procedures and other systems).

3.1. Human Resources Practices: (Best practices)

Majeed (2009) in the article “A review of HR practices in knowledge-intensive firms and MNEs: 2000-2006.”, grouped twelve hr practices that are studied in the era from 2000-2006, they are recruitment, training, culture, IT and communication, Rewards, Project Teams, Leadership, Management Support, Knowledge Sharing and Knowledge Management and others.

He also identified that these type of studies in the human resource field, especially in Knowledge intensive e firms (KIFs) are mostly conducted in Denmark, Sweden, Spain, Australia, UK, America. Only one study by Khandekar and Sharma in 2006, is conducted in Asia.

The literature evidence that specific type of HRM practices can contribute to employee motivation, commitment and promote very important attributes in the human resources that give competitive advantage and enhance performance of the firm. These specific HR practices an called “best HRM practices”, he further identified these practices as high level of Teamwork, performance related pay decentralized decision making, comprehensive employee recruitment and selection procedures, limited status differences, extensive training, employee involvement and internal communication arrangements, internal career opportunities and broadly defined job descriptions, identified in different studies impacting mostly performance & effectiveness of the organization (Theriou & Chatzoglou, 2007).

The research study conducted by the Lopez, et al.(2005b) and Lopez, et al. (2006) provide evidences that the best HR practices selective hiring, strategic training, employee participation in the decision making and are significantly supporting to the OL. Where as contingent reward system do not affect the OL in Spanish country. Whereas, the study conducted by Zhang (2008) in china about the human resource management systems, organizational performance & OL reviled the results that a HRMS can fall in to two dimensions-commitment system and recruitment and development system. Under Chinese context OL can be divided in to three dimensions. They are Knowledge acquisition, information distribution, and information interpretation and OM (Organizational Memory).

On the basis of the literature, this study has adopted four HR best practices as adopted by Lopez, et al. (2006) to find the impact of selection, training, selective compensation (Pay for performance and mixed system of reward) and employee participation in decision making on the OL of the educational institutions in the context of Pakistan.

Leadership Styles and Organizational Learning

Leadership is an important driving force for organizational learning. It requires revised approach to handle the problems of Knowledge intensive firms and learning organizations. Traditionally leadership views were based on the assumptions of people’s powerlessness, their lack of personal vision and inability to cope with diversity and change, where problems and organizational diseases can only be remedied by few great leaders. Against this traditional view a ‘new’ view of leadership that is based on more important tasks’. “Leaders are designers, stewards and teachers. They are responsible for building organizations were people continually expand their capabilities to understand complexity, clarify vision, and improve shared mental models – that is they are responsible for learning….(Senge 1990: 340)”, as cited by Smith, M. K. (2001). In a study conducted by Vera and Crossan (2004), they identified a direct connection between organizational learning and leadership style and suggested that a mix of the transformational leadership and transactional leadership styles should be adopted for the achievement and maintenance of the OL, depending upon the different situations, to perform their respective functions in support to organizational learning. i.e feed forward learning and feed backward learning respectively. In case of the situations that involve changes to the existing institutionalized learning like firms strategy and routine tasks. The transformational Leadership style plays its role. On the other side Transactional leadership style is required in the situations in which current learning and its institutionalization, reinforcement and refinement are required. These two examples also reflect the feed forward and the feed backward learning respectively.

Zagoršek, Dimovski, and Škerlavaj(2009) found that transformational leadership

have a strong impact on four constructs of organizational learning.

Transformational leadership and HR best practices

Transformational leadership and hiring.

According to Bass (1990), Transformational Leadership can be effectively utilized in recruitment process. The prospects or candidates can be attracted to an organization where the charisma of the leader (CEO) is a main trait and secure public image as a confident, successful, optimistic, dynamic leader. Secondly the prospects with good intellect can be impressed and effectively motivated through intellectually stimulating contacts they make during the recruitment and hiring process.(p.45-25).Further more transformational leadership factors can be identified and measured during the selection of the employees .According to bass and Riggio(2006) TL creates opportunities for the development of the organizational image, recruitment, selection, promotion, change management, teamwork, training, development, and ability to innovate.

Transformational leadership and training.

Kirby, Paradise and King (1992) argued that the qualitative results of the studies indicate that the ordinate’s or follower’s professional development has immense importance in relation to performance and suggest that instead of personality of the leader, specific leadership behaviors influence the followers to perform at high levels.

The transformational leadership is actually practiced from top to bottom level but there are certain conditions that the lower level supervisors have to adopt this style. Bass (1990) argued that the transformational leadership can be learned and it can be improved with the help of training and development of the leaders. Leaders in all level can be given training to become charismatic. In a case study the researchers conducted an experiment to check the impact of training on the employees in the context of different leadership styles they concluded that all the groups of different leadership styles shown improved performance but transformational leadership was at the top and along with good performance it also improved productivity, absenteeism and citizenship behavior among the inmates.

The above discussion directs us to the point that in case of transformational leadership, training is an important ingredient for the leader at all level and also for the followers.

That training leads to the improvement in TL performance and transformational leadership increases the development and training opportunities for the followers to increase their performance. This leads us to the hypothesis that there is a positive impact of leadership on the training of the employee.

Transformational leaders and participation

The transsformational leadership facilitates or create environment for participation.

According to bass and riggio (2006), transformational leaders can share the vision and ideas and encourage the followers to participate in the change process. This participation of employees results in developing sense of membership and identity in the social group. It also leads the followers to higher level of commitment.

Geijsel, slaggers and liethwood and Jantzi (2003), the research conducted in Dutch and Canadian schools illustrates that in the education and non educational contexts, the dimensions of transformational leadership i.e., vision building, individual consideration. Intellectual stimulation have positive impact on participation which directly effects the teachers extra efforts to the teachers commitment to change.

McKee (1991) stated that the leadership style greatly effects the faculty job satisfaction. He is of the view that those supervisors who show (creating and maintaining) social relationships strongly effects the employee job satisfaction in the areas of self esteem, development opportunities, accomplishments, job expectations, respect, and fair treatment, amount of supervision, informal in job and participation. As cited by Gaham and Messner (1998), transformational leadership at every level have great impact on the participation, both on educational and non educational contexts that develop job satisfaction, commitment and efficiency in the employees.

On the basis of this, it can be stated that transformational leadership has an impact on the higher educational institutes in Pakistan.

Transformational leadership and compensation

Compensation means contingent rewards i.e. rewards based on the performance. According to Armstrong (2009) “Contingent rewards additional financial rewards that are related to performance, contribution, skill or service in the great. This may be added to base pay that is consolidated. If such pays are not consolidated, (i.e. paid as cash bonuses) described as variable pay. This compensation is identified by Majeed (2009) in the analysis of the best HR practices that compensation is

A sample contingent reward item where “The leader makes clear what one can expect to receive when performance goals are achieved”. Antonakis, Avolio and Sivasubramaniam (2003). They also identified two types of contingent rewards, transactional (when rewards are monetary or in physical in nature) and transformational (when rewards are psychological such as praise). Transformational leadership unlike transactional leadership emphasize on this psychological aspect of reward whereas transactional rewards are more related to physical compensation. It is also argued that transformational leadership is an expansion of transactional leadership.

In transformational leadership, the leaders instill such charismatic influence that the followers are more satisfied with the internal satisfaction when rewards are also of the same nature. (Bass and Riggio, 2006).

So it can be made clear that transformational leadership is very much effective and have a strong impact when it comes to rewards and compensation for employees.

Theoretical Framework

Training

Selective Hiring

Organizational Learning

Participation in Decision Making

Compensation

Transformational Leadership

Human Resource Management and Organizational Learning

Human resource management consists of a group of managerial activities and tasks that are used to developing and maintaining a qualified work force, in ways that contribute to organizational effectiveness, which means effective and efficient human resource practices and human resource contribute to the organizational effectiveness. ( DeNisi & Griffin, 2008). Knowledge based view of the firm is based on the conception that knowledge and learning capacity determine OL performance as well as the acquisition of sustainable competition (Zhang, 2008).

Identifying the importance of the relationship between HRM and OL in the KIV, Lopez, et al. (2005b) argued that the previous literature demonstrates the direct impact of HR practices on the organization effectiveness, is failed for some measures, which are the out comes of the human resources practices and which draw impact on the performance, enhancement, They further more stressed on the importance of OL for human resource practices, pointing out that High performance human resource system can contribute in achieving sustainable competitive advantage, to the extent that they impact on the knowledge, skills, attitudes and behaviors that form the basic of OL. The previous literature review supports the relationship between HRM practices and organizational learning (Zhang, 2008, Lopez, et al. 2006 & Lopez, Peon & Ordas, 2005a). HRM Plays an Important Role in OL. The literature review identifies the strong relationship between HRM and OL. “The studies like Hamel and Pahalad (1994), Komoche (1996), Snell, Yourdt and wright (1996) argued the importance of the HRM for effective organizational learning (Zhang, 2008). Lopez, et al. (2006) identified the impact of selective HRM activities on OL. In this study they collected data from 195 Hispanic firms and found this relationship by using structural equation model. They also pointed out that in general, empirical studying of the relationship between these two valuables is lacking. But most of them have adopted the case study methodology or description studies. Dechawatanapaisal (2005) identified that how human resource practices, can shape OL and argued that their findings demonstrate that HRM practices need to be managed with more attention to OL process. Teriou and Chatzogiou (2007) in the analyses of different relationships with HR reported those significant contributions of Jaw and Liu (2003), Khandekar and Sharma (2005) and Jacksan et al (2004). The researchers reported that invisible assets as knowledge are embodied in people, therefore polices regarding HR are critical to organizational learning (Jaw & Liu 2003). Arguing the importance of the alignment of the human resource strategy with the business strategy Saks and Haccoun (2007) suggested that the alignment of human resources practices with an organizations business strategy is very important and the HRM strategy influence the organization strategy from learning to training which will determine the types of training a development activities. If organizations are seeking competitive advantage through HR, they should design HR system in ways that allow it to leverage and exploit knowledge based resource and enable employee to use the knowledge for competitive edge (Khandeher & Sherma, 2005).

Khandekar and Sharma (2006) found that in order to enhance organizational learning, learning capabilities should be increased by making improvements in learning processes, HR systems, and organization culture. On the basis of their findings they commented that the organizations well in OL through their HR practices are also good in their organizational performance and position in their financial reports.

H1: The HRM has a positive impact on the OL in the educational institutions of Pakistan.

Selective Human Resource Practices:

Human resource best practices and OL

Human resource management consists of a group of managerial activities and tasks that are used to developing and maintaining a qualified work force, in ways that contribute to organizational effectiveness, which means effective and efficient human resource practices and human resource contribute to the organizational effectiveness. (DeNisi & Griffin, 2008).

Teriou and Chatzogiou (2007) in the analyses of different relationships with HR reported the significant contributions of Jaw and Liu (2003), Khandekar and Sharma (2005) and Jacksan et al (2004) identifying this relationship. The researchers reported that invisible assets as knowledge are embodied in people, therefore polices regarding HR are critical to organizational learning (Jaw & Liu 2003). Arguing the importance of the alignment of the human resource strategy with the business strategy Saks and Haccoun (2007) suggested that the alignment of human resources practices with an organizations business strategy is very important and the HRM strategy influence the organization strategy from learning to training which will determine the types of training a development activities. If organizations are seeking competitive advantage through HR, they should design HR system in ways that allow it to leverage and exploit knowledge based resource and enable employee to use the knowledge for competitive edge (Khandeher & Sherma, 2005).

The literature evidence the specific type of HRM practices, that can contribute to employee motivation, commitment and promote very important attributes in the human resources that give competitive advantage and enhance performance of the firm. These specific HR practices an called “best HRM practices”, he further identified these practices as high level of Teamwork, performance related pay decentralized decision making, comprehensive employee recruitment and selection procedures, limited status differences, extensive training, employee involvement and internal communication arrangements, internal career opportunities and broadly defined job descriptions, identified in different studies impacting mostly performance & effectiveness of the organization (Theriou & Chatzoglou, 2007).

The literature demonstrates that the best human resource practices like recruitment and selection, training and development, contingent compensation, performance appraisal and participation in decision making have vital impact on the OL (Dechawatanapaisal, 2005, Lopez et.al. 2005b, 2006).This study would consider the relationship between HR best practices (Selective Hiring, Training, Decision Making and compensation) and OL.

3.2.1 Selective Hiring: and Organizational Learning

Scarbrough (2003) identified that the traditional methods to recruit and select employees an required to be revised, and modified in order to be effective in today’s diverse environment and innovation pressures.

Stressing on the need to hire appropriate people for the today’s diverse environment Soliman and Spooner (2000) and Gardner, Leat and Sakler-Smith (2001), argued to cope with this issue (selection of knowledge workers) organizations may require to concentrate on continuous learning by obtaining suitable people or rotating multiple skilled employees across different work settings. The OL recognizes that the way in which this takes places in affected by the context of the organization and its cultures

The modern concept of recruitment and selection stresses on those capabilities of the individuals that enable them to create and share knowledge, whereas searching for applicants with the necessary skills is secondary as compared to the social background and character references (DiBelle, et al. 1996).

According to Schlosser, Templer & Ghanam (2006) in order to achieve OL, two things i.e. adaptability and knowledge management are important inputs and they argued that outsourcing of human resources can negatively affect the OL, whereas the employees serving on permanent positions of the organization play an important role in enhancing OL. Dichawatanapaisal & Siengthai (2006) identified that the recruitment and selection processes that are in accordance to the corporate strategy, establishes a strong ground to enhance ability to learn and leverage knowledge in the work place.

According to Zhang (2008) in Chinese context, the overall affect of recruitment and development systems, information acquisition, information interpretation and organizational memory are significant to financial performance. On the basis of the literature, which supports that the employee which is going to be selected should have the capabilities that are required to adopt and adjust the organizational culture. So, on the basis of literature review, we propose that the selective hiring process plays a significant positive role on OL.

H2: Selective Hiring has a positive impact on the OL in educational institutions of Pakistan.

3.2.2. Training and Organizational Learning

According to Kim (1993), the employee has a key position in the large organizational strategy. Individuals are the basic units of an organization; it is a common belief among most of the researchers that OL occurs when individual members learn (Kim, 2006). It is argued by most of the researchers like Argyris and Schon (1978) and Sange (1990) that although the OL occurs through individuals. Individual learning does not mean OL but without individual learning, OL cannot be achieved. First the OL process begins with individual learning and change, secondly the individual learning process is a cognitive one and OL depends more on social processes and sharing of information. Thus individual learning is necessary but not a sufficient condition for OL to occur (DeNisi & Griffin, 2008, p.243). Employees acquire knowledge through learning and enhancing their own individual skills and knowledge that is know how from others in the organization and they absorb the new resulting knowledge that is generated as a consequence of the collective knowledge processing that takes place at the organizational level. Saks & Haccoun (2007) commented that formal training and development are most important inputs for the organizational learning as far as OL is concerned, it only occurs if individual learns and of the major ways that individual learns is though training and development (p.51).

According to Majeed (2009) it is argued by most of the authors that distinctive set of practices are important for managing knowledge workers for knowledge sharing, continuous coaching instead of routine training, strategic approach for trust and a company culture which makes employees feel secure. On the basis of literature review, training is an important regressor for the OL and has a positive impact on it because the individual learning is indispensible for the OL.

H3: Training has a positive impact on OL in educational institutions of Pakistan.

3.2.3. Selective Compensation and organizational Learning

According to Majeed (2009) it is argued by most of the researchers that for the retention and motivation of the employees in the context of knowledge management, the idea of “job filling” is less important than the concept of filling knowledge gaps. There should be rewards for empowerment and knowledge management to develop organizational performances. Which means that if individuals are non motivated to share and apply knowledge, then OL will be hampered, so on the basis of this concept, it is suggested to have such compensation system in the organization that motivate the employee to get, share, and apply knowledge in the organization (Wong, 2005).

The findings of the study conducted by Dechawatanapaisal (2005) demonstrated that the pay for performance and recognition are the contributing factors in the organizational learning. Especially recognition that is easy to implement and does not require large investment, can powerfully increase the employee moral and that support their learning. Khandekar & Sharma (2006) pointed out that HRM practices like Strategic planning, recruitment and selection and improved reward system plays an important role in strengthening the learning capabilities of the organization which leads us to propose that the selective compensation and reward system that create a powerful motive for the employees to get, apply and share knowledge has a positive impact on OL. Selective compensation means pay based on performance.

H4: The selective Compensation has a positive impact on OL in educational institutions of Pakistan.

3.2.4. Participation and Organizational Learning

Most of the literature on HRM practices focuses on the empowerment and autonomy of the workers in the context of knowledge management (Majeed, 2009). Dechawatanapaisal, (2005) stressed the need to align HR practices with the today’s changing environment and the atmosphere supporting the people participation, to achieve the learning behavior that leads to the successful OL. According to Lopez et al (2006) the research findings show that the employee participation is an essential element of learning organization which is closely related to the learning processes. The study further uncovers the fact that manager worker relationship should emphasize the participation of worker in decision making. In the learning organizations, people take care of each other and have strong trust for one another; therefore problems prevailing in the organization can be disclosed without fear of consequences. This particular type of organizational culture leads to the proper feedback and disclosure of new experiences or problems, which provide the chances to the organizational members to learn from them. As far as the management is concerned, the managers perform their duties as the facilitators for experimentation and learning experiences and give enough time to get feedback on the achievements by facilitating learning in the organizations (Marquardt, 2002).

In the context of educational institutions of Pakistan, where the competition is prevailing at a very high degree, innovative ideas and new processes are required for the success. It is hypothesized that employee participation in decision making has positive impact on the organizational learning in the educational institutions of Pakistan.

H5: Employee participation has a positive impact on OL in the educational institutions of Pakistan.

Hypotheses:

H1: Transformational leadership has a positive impact on HR practices.

H2: Transformational leadership has a positive impact on Organizational learning.

H3: HR practices have a positive impact on Organizational learning.

H4: HR practices play a mediating role between transformational leadership and

organizational learning.

3. Research Methodology

3.1 Variables

Dependent : Organizational learning

Independent : Leadership

Mediating : HR best practices

3.2 Sample

Educational institutions would constitute the sample for the study in the vicinity of Islamabad & Rawalpindi.

Data will be collected from Head of departments, Deans, Vice Chancellors, Chairmen and Coordinators of these institutions.

3.3 Data Collection:

Self administered questionnaire will be developed after extensive literature review to collect data for analysis.

3.4 Time Frame

The study would take approximately 2 to 3 months to conduct the survey.

3.5 Type of study

The study would be hypothesis testing type.

3.6 Type of investigation

The type of the investigation would be correlation, because there would be minimum interference in the normal course of work.

3.7 Study Setting

The study will be conducted in a non-contrived setting i.e. in the field instead of Lab Settings.

3.8 Unit of Analysis

Individuals will be our unit of analysis in this study.

3.9 Time Horizon

The type of study that is going to be conducted would be cross-sectional.

3.10 Hypothesis Testing

Hypothesis will be developed on the basis of extensive literature review.

3.11 Analysis

Appropriate inferential statistical tools and techniques would be used in hypothesis testing.

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