The relationship between knowledge management and the learning organization, a learning organization concept should be first identified and discussed, with the emphases on the specific features of contemporary organization and the essential role of leaders when developing their organizations. Organizational learning and new knowledge creation should be described, elaborating further on the kinds of processes those leaders and managers should be involved in and responsible for. The concept of the learning organization itself has gone through many combinations and permutations in terms of theoretical development and attempts at practical application. The interest in the learning organization and the underlying cause for recent emphasis on organizational learning and knowledge management and the source of competitive advantage is the ability and rate at which an organization can learn and react more quickly than its competitors. Learning organization represents a shift to organizational development, collective learning and growth and is an advanced state of organizational development which is the vital qualities for today's organizations, such as teamwork, empowerment, participation, flexibility and responsiveness.
Management in many organizations have also come to believe that the way in which an organization learns is a key index to its effectiveness and potential to innovate and grow. While elements of learning organization’s principles and practices can be implemented on an individual or localized level, a learning organization does not emerge from commitment but becomes established through the vision of senior leaders who have formal authority to make policy, allocate resources, and set strategic direction. Leaders are committed to and responsible for the vision, their task is to be stewards for the organizational vision while managing it for the benefit of others. Leaders learn to see their vision as part of something larger. One of the first...