All organizations learn, whether they consciously choose to or not — it is a fundamental requirement for their sustained existence. Some firms deliberately advance organizational learning, developing capabilities that are consistent with their objectives; others make no focused effort and, therefore, acquire habits that are counterproductive. Nonetheless, all organizations learn.

But what does it mean that an organization learns? We can think of organizational learning as a metaphor derived from our understanding of individual learning. In fact, organizations ultimately learn via their individual members. Hence, theories of individual learning are crucial for understanding organizational learning. Psychologists have studied individual learning for decades, but they are still far from fully understanding the workings of the human mind. Likewise, the theory of organizational learning is still in its embryonic stage.1

The purpose of this paper is to build a theory about the process through which individual learning advances organizational learning. To do this, we must address the role of individual learning and memory, differentiate between levels of learning, take into account different organizational types, and specify the transfer mechanism between individual and organizational learning. This transfer is at the heart of organizational learning: the process through which individual learning becomes embedded in an organization’s memory and structure. Until now, it has received little attention and is not well understood, although a promising interaction between organization theory and psychology has begun.2 To contribute to our understanding of the nature of the learning organization, I present a framework that focuses on the crucial link between individual learning and organizational learning. Once we have a clear understanding of this transfer process, we can actively manage the learning process to make it consistent with an organization’s goals, vision, and values.

Individual Learning

The importance of individual learning for organizational learning is at once obvious and subtle — obvious because all organizations are composed of individuals; subtle because organizations can learn independent of any specific individual but not independent of all individuals. Psychologists, linguists, educators, and others have heavily researched the topic of learning at the individual level. They have made discoveries about cognitive limitations as well as the seemingly infinite capacity of the human mind to learn new things.3 Piaget’s focus on the cognitive-development processes of children and Lewin’s work on action research and laboratory training have provided much insight into how we learn as individuals and in groups.4 Some of these