International Journal of Academic Research in Business and Social Sciences

October 2014, Vol. 4, No. 10

ISSN: 2222-6990

Exploring Relationship among Organizational Learning

Practices, Innovativeness and non-financial
performance: A descriptive study on NGOs Sector
Dr. Asma Imran1
PhD., MBA, MA, PGDIT Department of Management Sciences,COMSATS Institute of Information
Technology (CIIT)Lahore Pakistan
Email: drasmaimran@ciitlahore.edu.pk

Qasim Ali Nisar2

MS Scholar, Department of Management Sciences COMSATS, Institute of Information
Technology (CIIT)Lahore Pakistan
Email: qasimalinisar@yahoo.com

Samra Ashraf3
MS Scholar, Department of Management Sciences COMSATSInstitute of Information Technology
(CIIT)Lahore Pakistan
Email: summer_t_2004@hotmail.com

DOI: 10.6007/IJARBSS/v4-i10/1223 URL: http://dx.doi.org/10.6007/IJARBSS/v4-i10/1223

ABSTRACT. Business markets are now emerging and organizations are welcoming the new
changes to keep their selves at competitive corner. Organizational learning practices &
innovative culture are considered cornerstones and playing crucial role to enhance the
organizational performance and to gain competitive edge. The growing importance of
organizational learning and innovativeness motivated us to conduct this research. The purpose
of this study is to explore relationship between organizational learning, innovativeness and non
financial performance of NGOs. For data collection questionnaire survey method was adopted.
A sample of 120 respondents was received out of 150respondentswithin the period of one
month by using random sampling technique.

Findings reveled that organizational learning practices (employees’ empowerment, behavioral

& cognitive changes and leadership that reinforce learning) and innovativeness (Innovative
culture) have strong positive and significant relationship with non-financial performance of
NGOs. This research bestowhelp to have deeper understandings and guidelines for management
to create learning zone & innovative culturewithinthe organization with a view to enhance
employees and organizational performance. At the last of this article, limitations of research,
implications and suggestions for further research have also been included.

193
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

KEYWORDS: Organizational Learning, Innovativeness, Organizational Performance, NGOs,

Pakistan

Introduction
Organizations are moving towards competitive zone due to globalization and rapidly changing
business environment and they are facing complexity, ambiguity and challengeable situations in
business processes. Global economic landscape and competitive environment putting pressure
and organizations are striving to enhance their core competencies with a view to gain
competitive advantage. Emerging development in the area of strategic management have
proposed importance of organizational learning to improve organizational performance and to
gain competitive advantage. (Dimovski, 1994). Organizational learning is behaving like a catalyst
and playing a focal role which leads to improve the business performance & productivity in a
progressive way (Nafei et al., 2012 ). Serrat (2009) summed up that organizational learning is
the capability of an organization to get insight & understanding from experiences through
observations, analysis, experimentations and willingness to examine the success and failure.
Organizations are facing huge environmental pressure and there is urgent need to adopt
change and its possible through organizational learning process. (Lakomski, 2001). Learning
processes and practices are considered keystone to mitigate the uncertainties and to adopt the
external changes in effective manners to gain & sustain the competitive edge. These practices
can be organized, analyzed, managed and improved with efficiency & effectively to polish the
management learning skills. Continues & effective learning leads to create an innovative culture
which move the organizational performance curve in upward trend.
Learning & innovation are playing crucial role for effective performance and to sustain
competitive position (Senge, 1990). Previous researchers summed up that organizational
learning capabilities and organizational innovation are related to each other.(Fang et al., 2011).
Innovativeness is also playing a vital role to determine the performance and to maximize the
core competencies of organization. As Zahid & Ali (2010) summed up that learning directions
and innovative culture within the organization have positive and strong association with
organization performance. These factors are behaving like cornerstone to improve the
organizational performance. Innovativeness is an essential element to gain the competitive
edge within the market. As organizational learning and innovativeness has positive link so there
should be learning culture within the organization to enhance the innovative capabilities &
performance.
In global scenario organizational learning practices and innovativeness both are considered
valuable strategic management tools to boost up the financial as well as non-financial
performance of organizational. In Pakistan, economic trends are rapidly changing & business
markets are now emerging and welcoming the new changes to keep their selves at competitive
corner. Now organizations are adopting different learning practices and innovative culture to
fine tune their performance levels by gaining competitive environment.
Non-profit organizations are currently operating in a very complex and violating environment
and facing uncertainty, challengeable situation, competitiveness, lack of resources and there is
need of continues change. (Eyal and Kark, 2004; Trautmann, Maher, and Motley, 2007). Non
government organizations are also adopting proactive approaches and introducing different
learning practices i.e. employees’ empowerment, leadership that reinforce to learning,

194
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

behavioral & cognitive changes, knowledge sharing, team work etc. NPOs are now focusing to
enhance the learning capabilities of their employees and creating an innovative culture by using
different learning tools & techniques to maximize their performance levels.
As organizational learning and innovativeness are playing a crucial role to improve the
organizational performance so the purpose of this study is to explore the relationship between
learning, innovativeness and organizational non financial performance. Study is divided into
different sections.

1. Literature Review
Organizational Learning & Performance
Concept of organizational learning & learning organization has been widely accepted
(Shrivastava, 1983; Levitt and March, 1988; Huber, 1991; Gopinath, 1994; Miner and Mezias,
1996; Easterby-Smith, 1997; Edmonson and Moingeon, 1998; Tsang, 1997; Sharma, 2001;
Sharma and Sharma, 2002) but no common model and theory has been emerged due to the
deviation in different approaches and perceptions. Although some researchers and authors
developed learning theories for learning and some organizational theorists referred back to
Taylors’ preface to repitative tasks to boos up productivity. Abdullah et al. (2013) explained that
organizational learning and knowledge management both have direct and positive influence on
organizational performance but learning has more positive effect on non financial performance
e.g. employees motivation and satisfaction. In competitive environment it is the need of time to
invest on organizational learning and knowledge management practices to improve the
employees’ knowledge base. This knowledge has relationship with non-financial and financial
performance of organization. Benefits of learning and knowledge management are same for
the public as well as private organizations. Similarly Chiu & Huang (2013) mentioned in their
study that in globalization scenario, effective and efficient use of learning capabilities are
considered important source to maximize the organizations’ innovation and performance with
a view to gain competitive advantage. Organizational learning capabilities have significant
association with innovativeness. Organizational learning culture has positive relation with
organizational innovation performance and learning capacity. Organizational learning
capabilities played a crucial role to boost up firms’ performance.
In addition Individual, group and organizational levels of learning also have significant impact
on performance. There is a positive relation between group learning and organizational
learning. Learning leadership also positively affects to the personal, group and organizational
levels and organizational performance. Due to competitive environment Organizations are now
trying to move towards a learning zone to encounter the competitive pressure and challenges.
(Koupahi et al., 2013).Organizations need to adopt learning orientation to retain their selves at
competitive zone. Learning orientation positively associated and liked up with innovation which
leads to improvement in performance. Organizations with learning practices have clear
understanding of their environment, customers, suppliers, competitors and emerging
technology.(Calantone at al., 2001). Organizational learning, change and knowledge sharing
positively influences on knowledge management and knowledge management ultimately
affects to the performance of organization. Multinational companies are paying extra attention
for learning practices and knowledge management by introducing management strategies and
seeding financial and non-financial resources to enhance performance and to enjoy the edge at

195
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

competitive environment. (Danish et al., 2012). As Nafei at al (2012) said that Adoptive &
general organizational learning have direct and significant association with output of university
performance. Employees evaluative attitudes have differences towards organizational learning
and performance. Organizational learning is emerged and becomes a crucial part of
management and organization. As learning improve the organizational performance so
companies at developing countries are now motivated to enhance their learning practices.
Learning is an important factor to direct the employees’ attitudes and behaviors to promote the
performance.
Furthermore Zahid & Ali (2010) explained that learning directions and innovative culture within
the organization have positive and strong association with organization performance. These
factors are behaving like cornerstone to improve the organizational performance.
organizational learning and innovativeness has positive link so there should be learning culture
within the organization to enhance the innovative capabilities & performance.
Learning practices within the organization can be considered as antecedent factor for
organizational commitment, effectiveness and efficient performance. These learning practices
have moderate positive relation with effectiveness and strong positive relation with
organizational commitment. (Chi Tseng, 2010). Similarly Hernaurs et al. (2006) summed up that
organizations having learning mechanism and showing progress in their learning processes can
improve their performance but financial measures alone are not enough to judge the
organizational performance. Employees’ measures are effectively & strongly related with
learning capabilities. Dimovski & Skerlavaj (2008) described that organizational learning has
well-built, positive & significant relationship with financial and non-financial measures and
performance. As organizations with handsome financial position can build better & long term
relations with employees, customers and suppliers. Organization learning is considered a vital
concept in strategic management due to its effectiveness. In present situation organizations
should put organized efforts to gain the strategic learning. Organizations that will manage and
develop the higher level learning will gain in terms of profitability and employees value addition
relative to their rivals.
Organizational learning is playing a crucial role to enhance the organizational performance.
Learning has a significant correlation with performance. Human resource activities affect the
Learning of organization. Due to globalization, new learning requirements are considered
important for the continues improvement. Learning practices are the route to achieve the
success, better performance and competitive advantage. (Khandekar & Sharma, 2006).

Innovativeness & Performance

Zahid & Ali (2010) explained that learning directions and innovative culture within the
organization have positive and strong association with organization performance. These factors
are behaving like cornerstone to improve the organizational performance. Dedication to learn,
shared vision, open mindedness and knowledge sharing within the organization positively
attachment with innovative culture and performance. Innovativeness is an essential element to
gain the competitive edge within the market. Organizational learning and innovativeness has
positive link so there should be learning culture within the organization to enhance the
innovative capabilities & performance. Innovation is significantly & positively associated with
organizational performance. Innovativeness provides a competitive advantage in the

196
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

marketplace. In globalization scenario, effective and efficient use of learning capabilities are
considered important source to maximize the organizations’ innovation performance with a
view to gain competitive advantage. (Vincent, 2009). Innovativeness is a tool to direct the
organizational performance positively and it’s a tool which emphasize on the willingness of
organization to change. (Calantone at al., 2001).

Employees Empowerment with respect to Learning

Employees’ empowerment is an important tool for organizations. Human resources are
considered strategic assets for any organization and employees’ empowerment approach is
valuable for human resources development due to which organizational performance, products
& services, quality and productivity enhanced. Employees’ empowerment is significantly
attached with the productivity of organization. Sense of empowerment in employees motivate
them to achieve the organizational goals. Employees with empowerment easily & happily
accept their responsibilities and have positive attitudes for others and environment. (Asgarsani
et al., 2013). Employees Empowerment and leadership also influence the performance of
organization.(Abdullah et al., 2013). Moreover Akbar et al. (2011) explored that employees
empowerment has significant association with employees’ job satisfaction. When employees
will be more satisfied they will work with more concentration and automatically organizational
performance will enhance. Employees’ empowerment in terms of decision making can be
useful for employees’ satisfaction.
Employees Empowerment has positive and significant relation with organizational
effectiveness. Empowerment can influence the development, effectiveness and efficiency of
organization. If organizations make proper use of employees’ abilities, it can be very beneficial
for organization in terms of financial or non financial performance. Globalization and tough
competitive environment leads the employees empowerment has a significant role in
management because organization with skilled, committed, satisfied, empowered and
motivated employees will be able to improve their performance and retain their selves at
competitive environment. Similarly (Dizgah et al., 2011). Employees Empowerment toward the
vision have also positive alliance with organizational effectiveness and commitment. (Chi Tseng,
2010). Similarly Hassan et al. (2013) mentioned that employees creativity has positive
association with organizational innovation and performance. In services sector creativity is an
important factor and has impact on performance. Organizations can’t ignore the value of
creativity to retain their selves at competitive world. There is a direct relationship of
supervisory relationship and job complexity with employees’ creativity.

Leadership and Behavioral & Cognitive Changes with respect to Learning

Leadership that support to learning is playing a crucial & significant role to transform the higher
education institutes into learning organizations. Leaders’ Behavior influence the organizational
learning positively and leaders are considered as key factor to create a learning & innovative
atmosphere within the organization. Leaders should be forward thinker & visionary to create
the learning surrounding within organizations. (Malik et al., 2012). In addition leadership styles
(Transitional & Transformational) have direct, positive and statistically significant relationship
with organizational learning. Due to rapid changing and continues improvement in
organizations, leaders become important and demanding and they playing a significant role to

197
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

enhance the team & organizational performance .So organizations should adopt transitional &
transformational leadership styles to satisfy and motivate their employees in order to make
their contribution towards organizational learning. Due to this employees performance will
enhance and organizational can gain the competitive advantage. (Nafei & Menoufia, 2012).
Similarly Giannopoulou (2011) summed up that transactional and strategic leadership behaviors
are more effect in nongovernment organizations. Leadership behaviors of top executives of
NGOs are considered important for innovation, ability to learn and performance of
organization. Strategic leadership showed strong and positive relationship with organizational
learning and innovation. Organizational learning is a pathway to improve the effectiveness of
NGOs. According to Awan et al. (2012) there is a positive & significant relationship between
servant leadership style, employees motivation and performance. Effective leadership is
appropriate for NGOs and other organization to motivate the employees and this motivation is
playing a crucial role to enhance the performance, commitment, outcomes and satisfaction.
transformational leadership has positive and direct association with organizational
performance. (Elenkov, 2002).
Furthermore Hafeez at al. (2010) mentioned that to enhance the learning in educational sector,
leadership should be improved. Organizations must adopt the effective leadership tools to
enjoy the Journey of learning. For improvement in learning, leaders should encourage the
creativity and views of subordinates to maximize the performance. Leaders should encourage
the multi-dimensional views, listen attentively and ask probing questions from employees with
a view to improve their performance. Organizations can b m
oved towards success through effective leadership in which employees are empowered and
committed with organizational goals. In addition Abbas & Yaqoob (2009) mentioned that there
is a strong positive association between leadership development and employees performance.
Different dimension and factors of leadership i.e. empowerment, delegations, participation,
training & development and coaching have relationship with employees performance.
According to Limpibunterng & Johri (2009) Executives perform different leadership tasks and
these tasks are significantly affects to the organizational learning capabilities and these
Learning capabilities significantly affects the organizational performance. Top leadership and
executives play a crucial role to build and improve learning capabilities and performance.
Behavioral and cognitive changes in learning are most important to boost the Organizational
performance. The implementation of behavioral & cognitive changes are most important to
convert words into action form, if there is no change in behaviors means no effective learning is
there. To maximize the positivity in behavioral and cognitive changes managers should convert
the close minded, aggressive and autocratic behaviors into open mindedly behaviors to handle
two way information. (Hernaurs et al., 2006). Similarly Dimovaski (1994) explained that there is
a positive relation between behavioral & cognitive change and organizational performance.
Organizational learning practices have association with learning outcomes with respect to
behavioral and cognitive change. A Significant relation exists between learning outcomes and
performance of an organization. In learning outcomes behavioral change occurs more that
cognitive change within the organizations.

198
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

2. Theoretical Framework
After studying the number of articles and having review of articles regarding organizational
learning and innovativeness we have developed our research framework which is expressing
relationship among learning practices, innovativeness and performance of organization.

Organizational Learning
practices

 Employees Empowerment
 Leadership Reinforce for Organizational
Learning Performance
 Behavioral & Cognitive  Employees Performance
Change
 Suppliers Performance
Hypothesis Development:

Innovativeness

 Innovative Culture

3. Hypothesis Development
H1; There is a positive association between organizational learning and non financial
performance of organization
H2; There is a positive association between innovativeness and non financial performance of
organization.
H3; There is a positive association between organizational learning practices and
innovativeness.
H4; Employees Empowerment has significance association with non-financial performance of
organization
H5;Leadership that reinforce learning has significance association with non-financial
performance of organization
H6; Behavioral & Cognitive Change has significance association with non-financial performance
of organization.

4. Gap Identification
A large number of researchers have already done lot of work on organizational learning and
innovation with different dimensions but we have found that in Pakistan, literature is available

199
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

at small quantity at non government sectors, so we have conducted our research in NGOs
sector because it’s ignored area regarding learning and innovativeness research. We have also
differentiated our research by introducing a unique dimension of learning “Behavioral &
Cognitive Change”. In Pakistan scenario few articles are there which are covering this dimension
so we have examined that how this factor of learning can contribute in performance
enhancement.

5. Problem Statement

Kaupahiet al.(2013) stated that organizations are striving to sustain theirselves in globalized and
competitive environment. They are facing ambiguity,complexity and challengeable situations in
business processes. Due to intensive economic pressure and competitive environment
organizations are facing problems and they are probing different ways to enhance their core
competencies with a view to gain competitive advantage.Abdullah et al. (2013) explained that
intensive competitive environment force organizations to keep theriselves updated and learned
about organizational environment in which they operate. This is an issue that how
organizations can increase their intellectual assets and learning capabilities with a view to
retain in competitive zone.

6. Purpose of Study
The purpose of this study is to exploring the relationship among organizational learning,
innovativeness and organizational non-financial performance. Our core theme is to analyze that
how effective learning practices and innovative culture can contribute to enhance the
organizational performance.

7. Significance of Our Study

In knowledge based and dynamic rapid change Organizational learning is a strategic tool in
business management to enhance organizational performance and gain competitive advantage.
Learning practices are considered keystone to mitigate the uncertainties and to adopt the
external changes in effective manners to gain & sustain the competitive edge. These practices
can be organized, analyzed, managed and improved with efficiency & effectively to polish the
management learning skills. Continues & effective learning leads to create an innovative culture
which move the organizational performance curve in upward trend. Innovation can lead an
organization towards growth and improvement in business processes which ultimately leads to
get core competencies and competitive edge. Under study variables have significance
importance to grow organizational performance.

8. Methodology
This study demonstrates and explores relationship between organizational learning practices,
innovativeness and organizational performance. Employee empowerment, effective strategic
leadership, behavioral & cognitive change and innovative culturecombined effect on the
performance of an organization has been measured.
All under study variables in the study have been operationalized using scales from prior studies.

200
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

8.1 Questionnaire Design

We have used survey method to explore relationship among organizational learning practices,
innovativeness and performance of organization. Questionnaire is used in survey.
Questionnaires is comprises two sections. First section is related to the personal profile of the
respondents including their gender, age group, and educational level, nature of employment
and length of employment. Second section deals with the under study variables (organizational
learning practices, Innovativeness & Non-financial performance of organizations).

Employees empowerment measured through Marsick and Watkins scale (2003).Scale consists
on 3 items. To measure the leadership that reinforces the learning we adopted scale of Garvin,
Edmondson, and Gino (2008). Scale consists of 11 items. Behavioral and cognitive change
measured by adopting scale of Zahra and Covin (1993). Behavioral & cognitive change is
measured with 14 items. Innovative culture is measured with 5 items. Employees and suppliers
performance is measure by adopting the scale of Dimovski and Škerlavaj, 2005; Škerlavajet al.,
2007. Scale comprises of 15 items.

8.2 Sampling:
Our population is all NGOs in Gujranwala and Lahore. As for as sample size is concerned, Kilne
(2005) suggested that determination could b considered on the basis of ratio of cases to free
parameters(10:1 or, even better, 20:1). Bentler and Chou (1987) also suggested that the
sample-to-parameters ratio for structural equation modeling should be between 5:1 and 10:1.
So our sample size was 150.

8.3 Data Collection:

We obtained the list of NGOs from official website that registered under different Ordinances.
We have distributed 150 questionnaires in different NGOs working for women & human rights.
The core reason behind the selection of NGOs sector was that we have not found too much
literature and research work in this sector regarding learning and innovativeness. We received
130 questionnaires out of which six have missing values and four were incomplete.

8.4 Demographics:
Demographic section depicts the information about respondents’ gemder, age, education level,
nature of employment and length of service. We distributed 150 questionnaires to collect the
responses of respondents out of which 120 valid questionnaires received. 70 filled by female
and 50 filled by male respondents whose percentage is 58.3% and 41.7% respectively. Mostly
respondents were between the age group of 26-44 whose percentage is 62.5%. Following to
this 29.2% and 8.3% were age group of up to 25 and age group of 46-55 respectively.
Furthermore respondents were 45%, 54.2% and 0.8% belonged to Bachelors’, Masters’ and
others category of educational level respectively. Mostly respondents were highly educated
with 45% Master degrees. 52.5%, 46.7% an 0.8%, respondents were doing their jobs as
permanent employees, contractual employees and internees respectively. 48.3% respondents
have 2-5 years length of service and 24.2%, 16.7% and 10.8% respondents have 5-10 years, up
to 1 year and more than 10 years length of service at visited NGOs respectively.

201
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

9. Analysis &Findings
To explore relationship among organizations’ learning practices, innovativeness and
performance. we used different statistical tools and tests. To test the reliability of study
Cronbach’s Alpha test is brought into play. Pearson correlation and regression analysis test
applied to explore relationship among under study variables. Cronbach’s Alpha is 0.815 that
shows 81.5% reliability of the survey. To observe the influence of organizational learning
practices and innovativeness on organizational performance linear regression analysis was
utilized and Pearson correlation was applied to ensure the link between study variables.

Table. 1.1
Variables Mean SD 1 2 3 4 5 6

1. Organizational Learning 2.0960 0.40863 .488** 0.691**

2. Innovativeness 2.2150 0.47468 0.616**

3. Organizational 2.15 0.456 1

Performance

4. Employees 2.0694 0.50561 0.525

Empowerment

5. Leadership that 2.0740 0.46588 0.529

Reinforce Learning

6. Behavioral & Cognitive 2.1446 0.44866 0.748

Changes

N = 120

In Table 1.1 data speaks itself the reliability and behavior of collected data. Mean value for
organizational learning, innovativeness, Organizational performance, employees
empowerment, leadership and behavioral & cognitive changes is 2.0960, 2.2150, 2.15, 2.0694,
2.0740 and 2.1446 respectively. Standard deviation is helpful to realize the dispersion in under
study variables. Table 1.1 showing that organizational learning, innovativeness, organizational
performance, employees empowerment, leadership and behavioral & cognitive changes is
deviating from central point with 0.40867, 0.47468, 0.456, 0.50561, 0.46588 and 0.44866
respectively and it means that if we examine reliability of variables, organizational learning
(independent variable) is more reliable than innovativeness and performance as its standard
deviation values is less than others. Table 1.1 also indicates the correlation of independent
variables (Organizational Learning, innovativeness) and learning dimensions (employees
empowerment, leadership and behavioral & cognitive changes) with dependent variable
(organizational performance). Table 1.1 indicating that organizational learning and
innovativeness are positively associated with Organizational performance with (r= 0.691, p <
0.05 and r= 0.616, p < 0.05) respectively and both are significant at 1%. The correlation 0.691

202
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

indicates that organizational learning and Organizational performance explain variance in one
another to the extent of (0.691)2 48%. The correlation 0.616 indicates that innovativeness and
Organizational performance explain variance in one another with to the extent of (0.616) 2 38%.
Table 1.1 also showing the correlation of sub dimensions (employees empowerment,
leadership and behavioral cognitive changes) of under study independent variables with
dependent variable. Employee’s empowerment is correlated with organizational performance
(r= 0.525, p< 0.05). Similarly leadership is also correlate with organizational performance (r=
0.529, p< 0.05) Behavioral & cognitive change also associate with performance (r= 0.748, p<
0.05) and innovative culture positively correlate with Organizational performance (r= 0.616, p<
0.05). All variables are significance at 1%. All above results are supported by previous research.
Table 1.2

Regression Analysis
Model Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate Durbin-Watson
a
1 .761 .580 .573 .29845 1.760
a. Predictors: (Constant), Innovativeness, Organizational Learning
b. Dependent Variable: Organizational performance
Table 1.2 illustrated that summary of results where R = 0.761 which shows 76% variance in
organizational learning, innovativeness and Organizational performance. R square indicates the
variation in Organizational performance (dependent variable) due to organizational learning
and innovativeness (independent variables). R square value is 0.580 which means that
organizational learning practices and innovativeness have 58% influence on Organizational
performance. Durban Watson is used to examine the nature of correlation whether it is
positive, negative or zero. Durbin Watson value is 1.760 which is less than 2 which demonstrate
that there is a positive correlation among studies variables.

203
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Table 1.3
ANOVA

Model Sum of Squares Df Mean Square F Sig.

1 Regressio 14.374 2 7.187 80.685 .000a

n

Residual 10.421 117 .089

Total 24.795 119

a. Predictors: (Constant), Innovativeness, Organizational Learning

b. Dependent Variable: Organizational performance

Table 1.3 illustrates the level of significance whether it is acceptable or not. Results indicate
that significance value is 0.000 which is less than 0.05. Thus it is acceptable and show strong
impact of organizational learning practices and innovativeness on Organizational performance.

204
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Table 1.6 indicating the Beta value which means the individual independent variable influence
on dependent variable. Results indicated that organizational learning has strong positive
influence on Organizational performance with beta value 0.513. It indicates that 51% variation
in Organizational performance is due to organizational learning which is significant at 0.000 and
supported our H1. Similarly innovativeness also has positive influence on performance with

Coefficient

Model Unstandardized Standardize t Sig.

Coefficients d
Coefficients

B Std. Error Beta

1 (Constant) .166 .158 1.050 .296

Organizational .573 .077 .513 7.469 .000

Learning

Innovativeness .351 .066 .365 5.321 .000

Employees .149 .067 .165 2.228 .028

Empowerment

Leadership that .044 .081 .045 .544 .038

reinforce learning

Behavioral & .532 .089 .523 5.998 .000

Cognitive Changes

a. Dependent Variable: Organizational performance

beta value 0.365. It indicates that 36.5% variation in Organizational performance cause due to
innovativeness which is significant at 0.000 and supported to our H3. Employees empowerment
also has positive influence on organizational performance with beta value 0.165 at 0.28 an
supported to our H4. In addition leadership and behavioral & cognitive changes also have
positive influence on organizational performance with beta value 0.045 and 0.523 at 0.038 and
0.000 significance value respectively which is supported our H5 & H6.

205
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Conclusion & Discussion

In global scenario organizational learning practices and innovativeness both are considered
valuable strategic management tools to boost up the financial as well as non-financial
performance of organizational. The core purpose behind this study was to explore relationship
among organizational learning practices, innovativeness and organizational non financial
performance in NGOs sector. For this purpose survey questionnaire method was used. Data
were collected by suing random sampling technique from NGOs at Lahore and Gujranwala
within the period of 1 month. After applying all necessary tests in SPSS results revealed that
organizational learning practices and innovativeness has strong positive influence on
organizational non financial performance. Learning practices have more influence on non
financial performance than innovativeness. We have applied statistical tools on sub diminutions
of our study variables to examine their effects on dependent variable. With respect to
organizational learning Employees empowerment, leadership and behavioral and cognitive
changes also have positive association with non financial performance.
We summarized out study that learning practices are playing crucial role to enhance the
knowledge and to polish the management skills and expertise. Effective learning environment
in organizations leads to create innovative environment. Learning and innovative culture both
contribute to improve performance and to gain competitive advantage.

10. Limitations
This study can be more accurate and perfect by increasing sample size. In our study sample size
was too small and we also have financial and time constraints and also limited to NGOs located
in Lahore and Gujrawala.

11. Practical Implication

This study provides insight understanding the growing importance of organizational learning
practices and innovative culture. So profit and non profit organizations can utilize our findings
and can apply different learning tools to create innovative culture with a view to increase their
performance.

12. Directions for Further Research

In future researches can expand this study by adding other variables to predict the performance
of organizations. They can make accurate study by adopting untouched dimensions of learning
practices. Further studies can be carried out with large sample size. Our study is limited to few
dimensions of organizational learning and innovativeness to judge the performance but general
outlines can also apply to other dimensions and activities like marketing and future studies
researchers can also create link other dimensions with learning. Due to globalization and rapid
economic changes there is an opportunity for researchers to test applicability of organizational
learning and innovativeness in other cultures and cross national level.

References
Abbas, Q., & Yaqoob, S. (2009). Effect of leadership development on employee performance
in Pakistan. Pakistan Economic and Social Review, 269-292.

206
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Abdullah, I., Rashid, Y., & Umair, T. (2013). Effect of Organizational Learning and Knowledge
Management Practices on Organizational Performance.
Aydin, B., & Ceylan, A. (2009). Does organizational learning capacity impact on organizational
effectiveness? Research analysis of the metal industry Development and Learning in
Organizations, 23(3), 21-23.
Calantone, R. J., Cavusgil, S. T., & Zhao, Y. (2002). Learning orientation, firm innovation
capability, and firm performance. Industrial marketing management,31(6), 515-524.

Chiu, L. J., & Huang, N. T. N. A Study on the Relationships among the Organizational Learning
Capacity, Organizational Learning Culture, and Organizational Innovation Performance.
Dizgah, M. R., Chegini, M. G., Farahbod, F., & Kordabadi, S. S. (2011). Employee Empowerment
and Organizational Effectiveness in the Executive Organizations.
Dimovshki, V. (1994). Organizational Learning and Competitive Advantage:A Theoratical and
Emperical Anaysis. Thesis Submission.
Easterby-Smith, M. (1997), “Disciplines of organizational learning: contributions and critiques”,
Human Relations, Vol. 50 No. 9, pp. 1085-112.
Edmonson, A. and Moingeon, B. (1998), “From organizational learning to the learning
organization”, Management Learning, Vol. 29 No. 1, pp. 5-20.

Elenkov, D. S. (2002). Effects of leadership on organizational performance in Russian

companies. Journal of Business Research, 55(6), 467-480.
Eyal, O., and Kark, R. (2004), “How do Transformational Leaders Transform Organizations? A
Study of the Relationship between Leadership and Entrepreneurship”, Leadership and
Policy in Schools, Vol. 3, No. 3, pp. 211 – 235.
Fang, C. H. Chang, S. T & Chen, G. L. 2011. Organizational learning capability and
organizational innovation: The moderating role of knowledge inertia. African Journal of
Business Management, 5(5), 1864-1870.
Giannopoulou, C. Leading for Impact: Learning, Innovation, and Effectiveness in Greek
Nonprofit Organizations.
Gopinath, M. (1994), “Organizational learning”, South Asian Journal of Management, April June,
pp. 43-59.
Huber, G. (1991), “Organizational learning: the contribution process and the literature”,
Organizational Science, Vol. 2, pp. 88-115.
Hernaus, T., Škerlavaj, M., & Dimovski, V. (2008). Relationship between organisational
learning and organizational performance: the case of Croatia.Transformations in
business & economics, 7(2), 32-48.
Hassan, M. U., Malik, A. A., Hasnain, A., Faiz, M. F., & Abbas, J. (2013). Measuring Employee
Creativity and its Impact on Organization Innovation Capability and Performance in the
Banking Sector of Pakistan. World Applied Sciences Journal, 24(7), 949-959.
Hamidreza Asgarsani, O. D. (2013). Empowerment And Its Impact On The Organization
Productivity. INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN
BUSINESS , volume 4 No. 11.

207
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Hafeez, S., Saleem, H., Haidar, I., & Rafiq, A. Leadership that Reinforces Learning: A Study of
Education Sector of Pakistan. Studies, 2(2).
Hunjra, A. I., Yousaf, M., Haq, N. U., & Akbar, S. W. (2011). Impact of employee
empowerment on job satisfaction: an empirical analysis of Pakistani service
industry. Interdisciplinary Journal of Contemporary Research in Business, 2(11), 680-685.
Koupahi, M., Fakhri, K. P., & Ghanimat, P. (2013). The Relationship between Learning and
Organizational Performance. Journal of Basic and Applied Scientific Research, 99-105.
Khandekar, A., & Sharma, A. (2006). Organizational learning and performance understanding
Indian scenario in present global context. Education+ Training,48(8/9), 682-692.
Khurram Zafar Awan, i.-e.-W. Q. (2012). THE EFFECTIVE LEADERSHIP STYLE IN NGOs: Impact of
Servant leadership Style on Employees’ work Performance and mediation effect of work
motivation. International Journal of Economics and Management Sciences , 43-56.

Lakomski, G. (2001). Organizational change, leadership and learning: Culture as cognitive

process. The International Journal of Educational Management, 15(2), 68-
77.http://dx.doi.org/10.1108/09513540110383791.
Levitt, B. and March, G. (1988), “Organizational learning”, Annual Review of Sociology, Vol. 14,
pp. 319-40.
Limpibunterng, T., & Johri, L. M. (2009). Complementary role of organizational learning
capability in new service development (NSD) process. Learning Organization, The, 16(4),
326-348.
Malik, M. E., Danish, R. Q., & Munir, Y. Determinants of Learning Organization in Higher
Education Institutes of Pakistan: A Correlational Study.

Miner, A. and Mezias, S. (1996), “Ugly duckling no more: pasts and futures of organizational
learning research”, Organization Science, Vol. 7 No. 1, pp. 88-99.

Nafei, W. A., Khanfar, N. M., & Kaifi, B. A. (2012). Leadership Styles and Organizational
Learning An Empirical Study on Saudi Banks in Al-Taif Governorate Kingdom of Saudi
Arabia. Journal of Management and Strategy,3(1), p2.
Nafei, W. A., Kaifi, B. A., & Khanfar, N. M. Organizational learning as an approach to A chieve
outstanding performance: an applied study on Al-Taif University, Kingdom of Saudi
Arabia.
Rizwan Qaiser Danish, M. M. (2012). Impact of Knowledge Management Practices o
Organizational Performance; An Evidence From Pakistan. International Journal of
Scientific & Engineering Research , Volum 3.

Senge, P. 1990. The leaders’ new work: Building learning organizations. Sloan Management
Review, 32(1), 7-23.
Sharma, A. (2001), “Factors related to strategic human resource management: a study of global
organizations in India”, dissertation, Indian Institute of Technology, Delhi.

208
www.hrmars.com
 International Journal of Academic Research in Business and Social Sciences
October 2014, Vol. 4, No. 10
ISSN: 2222-6990

Sharma, A. and Sharma, A. (2002), “The purpose of learning: a strategic human resource
perspective”, Proceedings of the 3rd Conference on HRD Research and Practice across
Europe, January 25-26, University of Napier, Edinburgh.
Shrivastava, P. (1983), “A typology of organizational learning systems”, Journal of Management
Studies, Vol. 20 No. 1, pp. 7-28.

Skerlavajb, V. D. (2010). Organizational learning and its impact of financial and nonfinancial.

Trautmann, K., Maher, J. K., and Motley, D. G. (2007), “Learning Strategies as Predictors of
Transformational Leadership: The Case of Nonprofit Managers”, Leadership and
Organization Development Journal, Vol. 28, No. 3, pp. 269 – 287.
Tseng, C. C. (2010). The effects of learning organization practices on organizational
commitment and effectiveness for small and medium-sized enterprises in
Taiwan (Doctoral dissertation, UNIVERSITY OF MINNESOTA).
Tsang, E. (1997), “Organizational learning and the learning organization: a dichotomy between
descriptive and prescriptive research”, Human Relations, Vol. 50 No. 1, pp. 73-89.
Vincent, L. H., Bharadwaj, S. G., & Challagalla, G. N. (2004). Does innovation mediate firm
performance?: a meta-analysis of determinants and consequences of organizational
innovation.
Zahid, S. M., & Ali, I. (2011). Learning Orientation, Innovation Capability, and Organizational
Performance: Evidence from Banking Sector of Pakistan. In 3rd SAICON International
Conference on Management, Business Ethics and Economics (ICMBEE) hosted by
COMSATS Institute of Information Technology. 28th to 29th December.

209
www.hrmars.com