Factors influencing transfer of the learning organization concept to small to medium size firms in China

Due to competition from low cost manufacturers from other developing countries, manufacturing companies in Southern China are facing strong pressures to upgrade their business models from a traditional OEM (Original Equipment Manufacturing) model to an ODM (Original Design Manufacturing) or OBM (Original Brand Manufacturing) business model. This calls for a transition from a labour-intensive into a knowledge-intensive organization. One way of achieving this transition is through the formation of a Learning Organization. This research investigates the factors that influence the transfer of the Learning Organization concept, adopted from Western countries, into manufacturing companies in Southern China. Specifically, this research examines how Traditional Chinese culture and International Influence affect the adoption of the Learning Organization concept by manufacturing companies in Southern China. Through a critical review of the literature, six hypotheses and an associated research model are derived. This model links the four variables in our study: Traditional Chinese culture, International Influence, Learning Organization culture, and Organizational performance. A questionnaire with forty-one questions that measure the four key variables was mailed to electronics manufacturing companies in the Shenzhen and Dongguan area of Southern China. Seventy-two valid responses were received. The data collected was then analysed using statistical techniques including correlation, multiple linear regression and partial least squares structural equation modelling (PLS-SEM). The results showed that International Influence does not impact Traditional Chinese culture or Learning Organization culture, but it positively impacts Organizational Performance. Traditional Chinese culture positively impacts Learning Organization culture but negatively impacts Organizational Performance. Learning Organization culture enhances Organizational Performance and is a mediating variable between Traditional Chinese culture and Organizational Performance. The empirical data and analysis results from this study contribute to the knowledge and understanding of Learning Organizations in a Chinese context. Furthermore, the findings from this study allow companies in Southern China to gain a better understanding of the influence of Traditional Chinese culture and International Influence on the building of a Learning Organization. With this knowledge, they can better manage their transition into a Learning Organization and thus improve their overall competitiveness.