Learning organization - Definition and Overview

Peter Senge defined a learning organization as dynamical systems (as defined in Systemics) that are in a state of continuous adaptation and improvement. That is, organizations that are adapted for maximum organizational learning and that build feedback loops deliberately to maximize their own learning.

An example is the zero base budget technique whereby an organization or division must redefine itself with each budget cycle, with no prior assumptions about how it is organized or what model of activity-based costing should apply. Such a technique ensures that every manager can justify the total cost of operations of every aspect of their division or work.

Another example is the back to the floor method whereby an executive must regularly visit the shop floor as an ordinary worker.