Proceedings of the 3rd European Conference on Intellectual Capital

Ulrica Pettersson and James Nyce
How can we study problems <strong>of</strong>ficers meet given this hierarchy? This is necessary to understand if we
are to find solutions and make <strong>the</strong> kinds <strong>of</strong> changes that can reduce friction within <strong>the</strong> organization
and enable <strong>the</strong> organisation to adjust and change.
2. State <strong>of</strong> <strong>the</strong> art
Organizational learning can be defined as <strong>the</strong> creation, acquisition and transfer <strong>of</strong> innovative, ‘state <strong>of</strong>
<strong>the</strong> art’ practices throughout <strong>the</strong> organization.. This is considered effective when it increases <strong>the</strong>
organization’s ability to fit into and adapt to its environment (Espejo, Schuhmann, Schwninger and
Bilello 1996). However, <strong>the</strong>re is a difference between individual and organizational learning. Individual
learning occurs <strong>of</strong>ten when a mistake is observed and corrected, and when a mistake is defined as an
occasion where <strong>the</strong>re is ‘lack <strong>of</strong> fit’ between consequences and intentions (Argyris 1965, Espejo et al.
1996). Argyris (1965) argues that <strong>the</strong>re is a significant difference between experiential adaption and
learning from experience. There is, for example, no guarantee that an individual can learn something
simply through experience, however unique or significant it might be. To make a prediction we need
<strong>the</strong>ory. Without prediction, experience and examples teach nothing. “To copy an example <strong>of</strong> success
without understanding it with <strong>the</strong> aid <strong>of</strong> <strong>the</strong>ory may lead to disaster” (Deming, 2000 p.103).
Organizational learning on <strong>the</strong> o<strong>the</strong>r hand <strong>of</strong>ten occurs when knowledge is shared between groups in
<strong>the</strong> organization in order to influence its progress (Koutsoukis and Mitra 2003, Eden 2009).
Fur<strong>the</strong>rmore, to institute change, new processes or lessons learned in <strong>the</strong> organization must be
incorporated with discretion. Changes in an organization should also be well designed and motivated.
“The members <strong>of</strong> an organization or society for whom plans are made are not passive instruments,
but are <strong>the</strong>mselves designers who are seeking to use <strong>the</strong> system to fur<strong>the</strong>r <strong>the</strong>ir own goals” (Simon
1996, p.153). In an effort to succeed in making changes in an organization, a determining factor
seems to be organizational culture. This reflects <strong>the</strong> organization’s policies and attitudes towards
human error, trust and openness <strong>of</strong> communication between management and staff (Woods, Prineas,
Thavaravy, Beaumont and Cartmill 2003). According to Stewart (1997, p 1) intellectual capital is “…a
guide to <strong>the</strong> strategic and practical issues <strong>of</strong> identifying, capturing, and using knowledge to improve a
company’s competitive advantage. It explains not only why intellectual capital will be <strong>the</strong> foundation <strong>of</strong>
corporate success in <strong>the</strong> future, but also <strong>of</strong>fers practical guidance to companies about how to make
best use <strong>of</strong> <strong>the</strong>ir intangible assets”.
Reason (2000) describes two different approaches towards human error; a ‘person approach’ and a
‘system approach’. The first one focuses on <strong>the</strong> individual and his/her personal mistakes.
Fur<strong>the</strong>rmore, this approach tends to blame <strong>the</strong> persons involved in <strong>the</strong> problem. To do so seems to
be a serious weakness, as it isolates <strong>the</strong> error from <strong>the</strong> context where it occurred. Conversely <strong>the</strong>
system approach presumes that failure is a natural end result <strong>of</strong> all systems involving humans. In this
case <strong>the</strong> approach has total focus on <strong>the</strong> conditions and circumstances under which <strong>the</strong> problem
occurs. Reason (1997) also states that human reaction to making mistakes is almost never frank
confession. There could be several reasons for this, e.g. it will lead to extra work and scepticism <strong>of</strong>ten
exists regarding management’s willingness to act upon such reports. O<strong>the</strong>r issues involved concern
trust absence and fear <strong>of</strong> consequences. May my report damage my own or my colleague’s career?
Reason (1997) later stresses that <strong>the</strong> most significant element in a successful reporting program is
trust. Every organization with a reporting program must iteratively work to protect and promote this
cornerstone. A single case where an individual is punished for his/her report can undermine this trust.
This by extension can negatively impact not just <strong>the</strong> flow <strong>of</strong> reports but <strong>the</strong> reporting program itself.
“We cannot change <strong>the</strong> human conditions, but we can change <strong>the</strong> conditions under which humans
work” (Reason 2000 p 769).
A ‘just culture’ is an expression where individuals in <strong>the</strong> organisation in reality want and dare to be
open about mistakes and failures. A great number <strong>of</strong> organisations say <strong>the</strong>y want everything in <strong>the</strong>
open but in <strong>the</strong> bitter end <strong>the</strong>y do not tolerate everything. The solutions to create a ‘just culture’ could
be found in <strong>the</strong> balance between accountability and safety. All individuals should feel comfortable
reporting accident and failures. The absolutely most important component in a ‘just culture’
organisation is trust (Dekker 2007, Reason 1997).
In medicine, which is <strong>of</strong>ten practiced in large, very hierarchical organizations, we can find <strong>the</strong> same
problem regarding incidents and reports. Lucian and Leape (1994) state that <strong>the</strong> most important
reason that nurses and physicians have not developed a more effective method <strong>of</strong> error prevention is
to be found in <strong>the</strong> culture <strong>of</strong> medical practice. Bosk’s study (2003) <strong>of</strong> medical error comes to much <strong>the</strong>
same conclusion. To improve hierarchical organizations, staff must accept that errors are an
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