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Knowledge originates within and is applied by units of an organization to evaluate and utilize experience and information effectively.Knowledge can become embedded within repositories, routines, processes, practices, tools, and norms, depending on the relationship between information, experience, and knowledge.
A real-world example of organizational learning is how a new pizza store will reduce the cost per pizza as the cumulative production of pizzas increases.
As the staff creates more pizza; they begin to make pizzas faster, the staff learns how to work together, and the equipment is placed in the most efficient location leading to cheaper costs of creation.
However, individuals' knowledge only facilitates learning within the organization as a whole if it is transferred.
Individuals may withhold their knowledge or exit the organization.
Knowledge is the applied version of information, a combination of information within experience, framing, value, contextualization, and insight.
Experience is knowledge that is generated through exposure to and application of knowledge.Two distinct forms of knowledge, explicit and tacit, are significant in this respect.Explicit knowledge is codified, systematic, formal, and easy to communicate.The most common way to measure organizational learning is a learning curve.Learning curves are a relationship showing how as an organization produces more of a product or service, it increases its productivity, efficiency, reliability and/or quality of production with diminishing returns.Organizational learning "involves the process through which organizational communities (e.g.groups, departments, divisions) change as a result of experience." An example of organizational learning is a hospital surgical team learning to use new technology that will increase efficiency.As an aspect of an organization, organizational learning is the process of creating, retaining, and transferring knowledge.Knowledge creation, knowledge retention, and knowledge transfer can be seen as adaptive processes that are functions of experience.Organizational learning has received contributions from the fields of educational psychology, sociology, economics, anthropology, political science, and management science.Organizations gain knowledge in one of the four organizational communities of learning: individual, team, organizational, and inter-organizational.