Continuous Learning about Markets

This characteristic of market-driven organizations is reasonably supported by both theory and empirical research. For example. Kohli A.J. Jaworski B. [“Market Orientation: The Construct. Research Propositions, and Managerial Implications,” Journal of Marketing, 54 (April 1990); 1–18] define market orientation as the organization-wide generation of market intelligence, dissemination of this intelligence across departments, and organization-wide responsiveness to it. Similar definitions are by Narver J.C. Slater S.F. , “The Effect of a Marketing Orientation on Business Profitability,” Journal of Marketing, 54 (October 1990); Shapiro B.P. , “What the Hell is Market Oriented?” Harvard Business Review, 66 (November/December 1988): 119–125. Supportive research evidence can be found in Jaworski B. Kohli A. J. , “Market Orientation: Antecedents and Consequences.” Journal of Marketing, 57 (July 1993): 53–70.

Although researchers have had difficulty defining and studying organizational learning, there is reasonable acceptance of the information processing view of learning that is adopted here. See Levitt B. March J.G. , “Organizational Learning,” in Scott R. Blake J. , eds., Annual Review of Sociology, 14, (1988): 319–340; Fiol C.M. Lyles M.A. , “Organizational Learning.” Academy of Management Review, 10 (1985): 803–813: Imai K. Nonaka I. Takeuchi H. , “Managing the New Product Development Process: How Japanese Firms Learn and Unlearn,” in Clark K. Hayes R. Lorenz C. , eds., The Uneasy Alliance (Boston. MA: Harvard Business School Press. 1985), pp. 337–376; and Hedberg B. , “How Organizations Learn and Unlearn.” in Nystrom P.C. Starbuck W.H. , eds., Handbook of Organizational Design (London: Oxford University Press, 1981), pp. 8–27. For a recent attempt to synthesize this burgeoning literature, see Garvin David A. , “‘Building a Learning Organization,” Harvard Business Review, 71 (July/August 1993).

This final stage in the learning process is the key idea behind double-loop learning, in which efforts are directed beyond solving immediate problems to addressing the underlying reasons for the problem. See Argyris C. , On Organizational Learning (Cambridge, MA: Blackwell, 1993).

The adverse consequences of security blanket or confirmatory research are described in Barabba V.P. Zaliman G. , Hearing the Voice of the Market (Boston, MA: Harvard Business School Press, 1991).

For provocative insights into the reasons for the lack of trust on both sides of the researcher/manager relationship see Zaltman G. , The Use of Developmental and Evaluative Market Research (Cambridge, MA: Marketing Science Institute, Report #89–107, 1989).

See “The Bloodbath in Marketing Research,” Business Week, February 11, 1991, pp. 72 and 74.

The potential insights from front-line contact personnel are described in von Hippel E. , The Sources of Innovation. (New York, NY: Oxford University Press. 1988).

Main J. , “How to Steal the Best Ideas Around.” Fortune October 19, 1992, pp. 102–106.

The dedication to continuous experimentation and improvement is epitomized in the Japanese philosophy of kaizen that embraces everyone in the organization. See Imai M. , Kaizen: The Key to Japan's Competitive Success (New York. NY: Random House. 1986).

This study is described in Wyckhoff D. , “New Tools for Achieving Service Quality.” Cornell Hotel and Restaurant Administration Quarterly (November 1984), pp. 78–91.

This example was based on a joint presentation to the Planning Forum Annual Conference on May 3, 1992 by the author and C.C. Gregory, Director of Market Analysis, IBM Marketing and Services, IBM Corporation.

Bartlett C.A. Ghoshal S. [Managing Across Borders: The Transnational Solution] (Boston, MA: Harvard Business School Press, 1988)] describe Euroteams and other mechanisms for transferring learning throughout global organizations.

A growing body of research suggests persuasively that it is the structure and content of these simplified cognitive portrayals of environments (mental models) that actually drives strategic decisions. Useful references are Pfeffer J. Salancik G.R. , The External Control of Organizations: A Resource Dependence Perspective (New York, NY: Harper & Row. 1978); Weick K. Daft R.L. , “The Effectiveness of Interpretation Systems,” in Cameron K.S. Whetten D.A. , eds., Organizational Effectiveness: A Comparison of Multiple Models (New York, NY: Academic Press, 1983), pp. 71–93; Porac J. Thomas H. , “Taxonomic Mental Models in Competitor Definition,” Academy of Management Review, 15 (1990): 224–240; and Walsh J.P. , “Selectivity and Selective Perception: An Investigation of Managers Belief Structures and Information Processing.” Academy of Management Journal (1988).

Such mental models behave like managerial frames of reference. See Hamel G. Prahalad CK . “Strategy as Stretch and Leverage,” Harvard Business Review, 71 (March/April 1993), pp. 75–85.

Kanter R.M. , The Change Masters: Innovation and Entrepreneurship in the American Corporation (New York. NY: Simon and Schuster. 1983).

See Clark K.B. Fujimoto T , Product Development Performance (Boston. MA: Harvard Business School Press. 1991): And Dougherty D. , “Interpretive Barriers to Successful Product Innovation,” Cambridge. MA. Marketing Science Institute. Working Paper #89–114, 1989, for the consequences of divergent thought worlds.

Ohmae K. explores this phenomenon further in “Getting Back to Strategy,” Harvard Business Review (November/December 1988), pp. 149–156.

Day G.S. Wensley R. , “Assessing Advantage: A Framework for Diagnosing Competitive Superiority.” Journal of Marketing, 52 (April 1988): 1–20.

Because mental models shape the search for information, the selection of what is relevant, and the interpretation of what is important, they also play an influential role in forming assumptions about key relationships and trends upon which decisions are based. Because of this congruency, procedures for surfacing and testing assumptions [such as Emshoff J.R. Finnel A. , “Defining Corporate Strategy: A Case Study Using Strategic Assumption Analysis.” Sloan Management Review (Spring 1979), pp. 41–52] can be used to gain insights into the structure of the underlying mental model.

de Geus A.P. , “Planning as Learning.” Harvard Business Review (March/April 1988), pp. 70–74.

As Kim D.H. notes, the majority of an organizations knowledge that constitutes the active memory lies in the mental models in individuals heads] “The Link Between Individual and Organizational Learning.” Sloan Management Review, 35 (Fall 1993): 44.

Ealey L. Soderberg L. , “How Honda Cures Design Amnesia.” The McKinsey Quarterly (Spring 1990), pp. 3–14.

Senge P.M. , The Fifth Discipline: The Art and Practice of the Learning Organization (New York, NY: Doubleday, 1990).

Stata R. , “Organizational Learning: The Key to Management Innovation.” Sloan Management Review, 30 (Spring 1989), 63–74.

For more details on the purpose and practice of mapping see Davenport T. , Process Innovation: Reengineering Work through Information Technology (Boston. MA: Harvard Business School Press, 1993: And Hammer M. Champy J. , Reengineering the Corporation: A Manifesto for Business Revolution (New York. NY: Harper Business. 1993).

Zuboff S. , In the Age of the Smart Machine (New York: Basic Books. 1988).

See the special issue of the International Journal of Research in Marketing. 8 (April 1991), which is devoted to the topic of expert systems.

Cespedes F.V. , “Market Research and Marketing Dialects.” Marketing Research, 5 (Spring 1993). 26–34.