How Learning Organizations Support the Culture of Change in the

Algerian Banking Sector

AHMED MEDJEDEL1*, HOUARI MOAREDJ2

1Department of Business Management,

Onaizah Private College,

Shabbily Street, Onaizah,

KINGDOM OF SAUDI ARABIA

2Department of Business Administration

University of Ghardaia

Noumerate, Ghardaia 47000

ALGERIA

*Corresponding Author

Abstract: - This study's objective is to experimentally examine how the learning organization and the culture of

change are related. A sample of Algeria's major banks was used for correlation and regression analysis. This

study's application was restricted to banking personnel in Algeria in 2022, and its findings have consequences

for the validity and dependability of the methods employed in the study. The findings are consistent with the

idea that learning organizations influence banks' change-related cultures for the better. The findings deepen our

understanding of how organizational learning contributes to developing a culture of change and sustainable

competitive advantages for banks in emerging economies, where the valuation of the culture of change may be

affected differently by various technological advancements.

Key-Words: Banking Industry, Culture of Change, Algeria, Learning Organizations.

Received: May 22, 2022. Revised: August 23, 2023. Accepted: September 25, 2023. Available online: October 30, 2023.

1 Introduction

For all eras, the development of knowledge and

how it relates to the learning process are crucial,

[1]. It is generally acknowledged that businesses

that invest in the generation of new knowledge and

fostering a culture of change through research and

development activities outperform those that rely

solely on the knowledge that has already been

generated by others, [2]. This emphasizes how

crucial it is to foster a culture of change as a key

element of an organization's capacity to grow and

adapt. The focus of this paper's analysis of the

connections between the learning organization and

culture of change will be further development of

this.

The concept of the learning organization is

more and more applicable to management in the

twenty-first century, [3]. It is crucial to

comprehend what a learning organization is, what

makes it unique, and how it links to the newly

popular concept of culture of change. This paper

explores the issue of whether promoting and

assisting a learning organization at the

organizational level equates to a culture of change.

This paper will present an explanation of the

relationship between the learning organization as

an entity and the field of culture of change in order

to respond to this query.

1.1 General Background to the Problem

The knowledge-based economy forced businesses

to struggle against massive waves of innovation

and competition based on the knowledge that was

generated by humans and for humans. Competition

in the new globalized environment became the

main force for innovation in all sectors of business.

The success of businesses and of national

economies as a whole is more and more dependent

on the culture's capacity for information acquisition

and application. The banks, who are significant

players in the Algerian economic climate, are able

to adapt to changing cultural norms because they

have been structured as learning organizations that

can do so. The banking industry adopted the

learning organization as a solution to deal with this

challenging situation of the culture of change

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because globalization has an impact on all business

sectors, particularly the financial institutions,

particularly those in the banking industry. These

institutions have experienced a dynamic and

competitive environment that must be dealt with by

investment and development in the information

sector.

2 Learning Organization and the

Culture of Change

2.1 Learning Organization

The learning organization, which we define as an

organization that learns as a whole, is one that is

adept at producing, acquiring, and disseminating

knowledge as well as changing its behavior to take

into account fresh information and insights from

the business world. Senge was one of the first to

describe the learning organization as a setting

where people continually develop their ability to

produce the results they want, where fresh and

expansive ways of thinking are fostered, where

group aspiration is allowed to flourish, and where

people are training themselves to view the big

picture (reality) as a whole, [4]. Learning

organizations have five key strategic building

blocks: teamwork and cooperation, shared

leadership and involvement, experimentation-

friendly cultures, the capacity to transfer

knowledge across organizational boundaries, and

clarity and support for mission and vision, [5].

This development can be reached by the

increase in the culture of change that the same

organization can achieve because it is a learning

organization, which is one of the most significant

issues that affect all types of businesses, including

the banking industry. The demand for better

products and services has triggered growth in

managerial development. Senge defines the

learning organization as the methods and efforts for

enhancing organizational effectiveness through a

focus on staff development, approaches based on

behavioral and attitudinal enhancement, as well as

skills, and approaches based on approaches, [6].

Senge identified five learning organization

disciplines (systems thinking, personal mastery,

mental models, creating shared vision, and team

learning) that were embraced in this work and that

he believed were essential for a company to be

considered a learning organization. The learning

organization as defined by David Garvin “A

learning organization is one that is adept in

producing, acquiring, and disseminating knowledge

as well as changing its behavior to account for

fresh information and insights, [7]. The learning

organization, excels in five key tasks: (1)

systematic problem solving; (2) experimentation;

(3) learning from past experiences; (4) learning

from others; and (d) learning from others. Garvin

asserts that evaluation and measurement of learning

are also necessary, [7] .

While examining the Learning Organizations,

the organizations must meet the difficulties of the

modern economy. We can distinguishe between

two trends. The first form of organization is

described in terms of dynamic organizational

categories that are focused on their growth, look for

new opportunities on the market, and continuously

improve their effectiveness, efficiency, and

adaptability. These companies that opt for growth

through staff development make up the second

group of learning organizations. These kinds of

organizations foster an environment where their

members can continually advance their knowledge

and abilities, [8] .

Building a learning climate and culture is

necessary to support the learning organization.

Leaders and other important individuals create the

climate and culture by drawing from their own

experience, directing others' learning, and creating

an environment of expectations that mold and

support desired results. In, [8], theory that learning

begins at the individual level aids in explaining

how people create an environment or culture

conducive to learning. Disjunctions, discrepancies,

surprises, or challenges are triggers that cause a

reaction, which occurs when learning occurs. Based

on their cognitive and emotive perception of the

significance of the first trigger, individuals choose

a strategy or action. The person puts a strategy or

plan of action into practice once it has been decided

upon. The plan then either succeeds or fails to get

the desired results. When it fails, there is

dissonance, which starts the cycle all over again,

[9]. While the stages of learning may be

comparable, what matters most at the

organizational level is that learning has evolved

into a combined experience and is now the outcome

of an interactive, interdependent process. The

success of the approach is partly attributed to the

organization's capacity for acting cohesion, which

is enabled by the dynamic scanning of the

organization's environmental setting, both internal

and external. Individuals and departments make

assumptions regarding the success of the

organization's reaction after it has been made. As a

result of these activities, there are repercussions for

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both people and organizations. Before the

organization has a new capacity, significant

individual learning may be needed. Organizational

learning is the cycle's network outcome. Individual

learning is necessary for the organization to

change, but it is insufficient. When individuals

improve their capacity for learning, they can

(cooperatively) enhance the organization's overall

capacity for learning, provided the organization is

receptive to their efforts and implements suitable

mechanisms to enable, support, and reward the use

of what is learned. Individual learning is therefore

tied to organizational learning, even though it is not

equivalent to it and may even be dependent upon it,

[10].

2.1.1 Benefits of Learning Organizations

The twenty-first century is the era of knowledge.

Improving learning ability and knowledge sharing

within a company has numerous advantages:

 sustaining innovation levels and remaining

competitive

 being more equipped to react to pressures

from outside

 having the ability to more effectively match

resources with consumer needs

 enhancing production quality at all levels

 enhancing corporate reputation by

emphasizing people

 Increasing the organization's rate of change,

[11].

2.1.2 The Learning Organization and

Organizational Learning

Increasing an organization's capacity to behave

effectively is the definition of organizational

learning, [12]. For the purpose of simplicity, a

learning organization is defined as one that adopts

(either consciously or unconsciously) the concepts

of organizational learning and fosters an

environment where it can take place. As mentioned

above a useful distinction established between

learning by the organization as a whole, and

organization learning, which refers to learning by

people and groups within the company, [13]. The

term "organization learning" will be used to

describe learning processes in this study and will be

contrasted with the more general concept of

learning organization. However, this paper will

primarily concentrate on the learning organization,

which will be contrasted to banks that are

knowledgeable about the disciplines of the culture

of change.

2.2 Culture of Change

To increase an organization's capacity for effective

action is to engage in the process of organizational

learning, [13]. For the purpose of simplicity, an

organization is said to be a learning organization if

it adopts (consciously or unconsciously) the

principles of organizational learning and fosters an

environment where it can take place. A distinction

has been made between the learning organization,

which refers to learning by the organization as a

whole, and organization learning, which refers to

learning by individuals and groups within the

organization. Some authors drew attention to this

distinction, [13]. The term organization learning

will be used in this paper's discussion of learning

processes, and it will be compared with the more

general process of learning organization. The

learning organization, which will be contrasted to

banks that are knowledgeable in the disciplines of

the culture of change, will, nevertheless, be the

main emphasis of this paper. The layers of the

culture are presented in Figure 1.

Fig. 1: Layers of Culture, [13]

Every culture undergoes change throughout

time. In essence, most societies are conservative

because they resent change. Some people resist

more than others by passing legislation to

safeguard and preserve long-standing cultural

norms while erecting obstacles to foreign concepts

and products. Our depletion of energy resources

and the adoption of new energy sources are other

examples of how culture and the environment are

interconnected. Intangible assets have surpassed the

traditional production elements of land, labor, and

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capital as being increasingly crucial to economic

performance, [14], [15], [16]. Numerous elements

shape organizational culture and have an impact on

it; nevertheless, an analysis of the literature

suggests that these aspects can be divided into three

categories, [17], [18], [19]:

1. Elements that indirectly affect corporate culture

(macro-environment of an organization).

2. Elements that directly affect corporate culture

(micro-environment of an organization).

3. A leader's influence factor (primary and

secondary mechanisms, methods of the change

of the organizational culture).

Human economies vary as a result of the need

to adapt how we interact with the environment. The

rest of the culture adapts to the changes in our

economies. The varied attitudes, ideals, and

objectives of the organization’s founders and

leaders are the causes of this. The founders of the

organization have the most impact on how

organizational culture develops, [20], [21]. The

founders construct the organization's fundamental

goals and create the environment in which it

operates. They refocus their labor and efforts in the

organizationally necessary directions. There are

managers who use personal traits like a charm to

build a company and generate an organizational

culture, [17].

Organizational culture is a powerful and

positive factor in the establishment and early

development stages and needs to be further

developed. When an organization is in its growth

stage, subcultures emerge, and managers can use

these subcultures to select values that are

acceptable and change the organizational culture in

the desired direction. When the organization

reaches its maturity stage, the majority of the

elements that make up the organizational culture

must be changed. For the organizational culture

change to be successful, employees must be

concerned, the accomplishments that have already

been made should be constantly highlighted, and

efforts should be The focus on the intended culture

should always be upheld, and every change is only

for the best. Employees should be encouraged to

devote themselves to new ideas, [21].

3 Learning Organization and the

Culture of Change in the Banking

Industry

Every civilization evolves throughout time. In

general, conservative societies tend to be resistant

to change. Some demonstrate greater resistance

than others by passing legislation to safeguard and

maintain long-standing cultural norms while

erecting obstacles to foreign concepts and objects.

Our depletion of energy resources and compelled

adoption of new energy sources are more

indications of the interaction between culture and

the environment. The conventional production

variables of land, labor, and money have lost some

of their significance for corporate performance in

favor of intangible assets, [14], [15], [16].

Numerous elements shape organizational culture

and have an impact on it. Based on an analysis of

the research from a variety of sources, three types

of factors are suggested, [17], [18], [19]:

1. Elements that have an indirect impact on

organizational culture (macro-environment of

an organization).

2. Elements that have a direct impact on

organizational culture (micro-environment of

an organization).

3. The impact of a leader (primary and secondary

mechanisms, methods of the change of the

organizational culture).

As a result of necessity, human economies and

how we interact with the environment change. Our

economies change, and the rest of civilization

follows suit. This is due to the disparate attitudes,

ideals, and objectives of the organization’s

founders and top executives. The founders of the

organization have the most impact on the

development of organizational culture, [20], [21].

The founders determine the fundamental goal of

the organization, create the setting in which it

operates, and refocus their labor and efforts in the

right ways for the business. There are managers

who, through the use of personal traits like charm,

build an organization and its culture, [17].

Organizational culture is a powerful force that

must be further developed during the establishment

and early stages of development. Subcultures

emerge in organizations during the growth stage,

and during this time, managers can select the

subcultures' acceptable values to change the

organizational culture in the desired direction.

However, as the organization matures, a majority

of the elements that make up the organizational

culture must be changed. For the organizational

culture change to be successful, employees must be

concerned, the accomplishments made thus far

must be continually highlighted, and efforts must

be made to ensure that the organizational culture

change is successful. And since every change is for

the better, staff members should be urged to

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commit themselves to innovative concepts and the

desired culture should always be kept in mind, [21].

4 Research Objectives

The purpose of this study is to examine how

learning organizations foster a culture of change.

By filling the gap left by the absence of comparable

studies, the relevance of the relationship between

these two variables is attempted to be established.

5 Research Hypotheses

This research has one main hypothesis:

1.“Learning Organization has a positive impact on

the Culture of Change.”

To test this hypothesis, three other sub-hypotheses

are set up:

1.1 Learning Organization has a positive impact

on factors indirectly influencing organizational

culture (macro-environment of an organization).

1.2. Learning Organization has a positive impact

on factors directly influencing organizational

culture (micro-environment of an organization).

1.3. Learning Organization has a positive impact

on the factor of leader’s impact (primary and

secondary mechanisms, methods of the change of

the organizational culture).

6 Methodology

6.1 Sampling

The study sample was made up of (250) Bank

employees after a random sample of all bank

employees in Algeria was chosen for the study.

Following the recovery of the questionnaires,

correction of any errors, and exclusion of any

invalid responses, the study sample was made up of

(167) replies that can be exploitable for the study.

Table 1 illustrates the sample distribution.

Table 1. Sample distributions

Variables

Levels

Percentage

Gender

Male

45.5

Females

54.5

Experience

Less than 5 years

36.4

5-10 years

22.7

More than 10 years

40.9

Qualifications

Bachelor or below

144

86.4

Graduate

13.6

6.2 Instrument Validity and Reliability

The researchers created an instrument to assess the

study's variables and created a study tool in order to

accomplish the study's objective (60). Reliability is

a technique used to verify that test questions, when

answered by several test takers, are internally

consistent with each other. Employees were handed

25 surveys to measure reliability. The sample's

overall Cronbach's alpha was 0.89, indicating very

high statistical internal consistency. By

interviewing 20 managers and banking industry

professionals who consented to complete the

questionnaire and provide feedback on the scales

used, the questionnaire was "pilot-examined" in

order to strengthen the content validity of the

research instrument. After gathering their feedback,

certain changes were made to increase the

questionnaire's validity.

The boundaries of the study and its determinants

are as follows:

 The application of this study was limited to

employees in the Algerian banking industry in

2022.

 Therefore, implications for the validity and

reliability of the tools used in the study cannot

be extrapolated or generalized.

6.3 Analytical Procedures

The use of statistical software programs for the

social sciences (SPSS 23) to respond to the study's

questions helped to achieve the study's goals.

6.4 Hypotheses Test

We utilized the SPSS 23 program to conduct

research in order to evaluate hypotheses. Below is a

discussion of the analysis findings.

Hypothesis 1.1: Learning Organization has a

positive impact on factors indirectly influencing

organizational culture (macro-environment of an

organization):

Hypoth

esis 1.1

Depend

ent

variable

Independ

ent

variable

squ

are

Stand

ard β

T-

test

Result

Learning

Organiz

ation

Factors

Indirectly

Influencin

Organizat

ional

Culture

0.29

0.280

3.9

Confir

med

The calculated Beta Standard ratio is 0.280,

which is noteworthy based on the findings.

Consequently, this assumption is supported, and

learning organizations have a favorable effect on

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the variables indirectly affecting organizational

culture (macro-environment of an organization).

Hypothesis 1.2 Learning Organization has a

positive impact on factors directly influencing

organizational culture (micro-environment of an

organization):

Hypoth

esis 1.2

Depend

ent

variable

Independ

ent

variable

squ

are

Stand

ard β

T-

test

Result

Learning

Organiz

ation

Factors

Indirectly

Influencin

Organizat

ional

Culture

0.25

0.184

2.6

Confir

med

According to the results, the Beta Standard

ratio is calculated at 0.184 which is significant.

Thus, this hypothesis is confirmed and learning

organization has a positive impact on factors

directly influencing organizational culture (micro-

environment of an organization).

Hypothesis 1.3: Learning Organization has a

positive impact on the factor of leader’s impact

(primary and secondary mechanisms, methods of

the change of the organizational culture):

Hypoth

esis 1.3

Depende

variable

Indepen

dent

variable

squa

Stand

ard β

T-

test

Result

Learning

Organiz

ation

Factor

Leader’s

Impact

0.20

0.225

3.3

Confir

med

The computed Beta Standard ratio is 0.184,

which is noteworthy according to the results. Thus,

this claim is supported, and learning organizations

have a favorable effect on the variables directly

affecting organizational culture (micro-

environment of an organization).

7 Conclusion

It has been established that the ideas of the learning

organization and culture of change are

interconnected and mutually beneficial. The

banking industry must invest in order to transition

into a learning organization, which will then

increase the culture of change and allow it to

advance in the competitive worldwide

environment. The learning organization is like the

heart and lungs of a living body.

The management task now is to further enhance the

meanings and consequences coming from the

combined exploitation of these disciplines after the

synergies between the learning organization and

culture of change have been formed. The key

takeaways from this study and potential areas for

additional study can be summed up as follows:

 To the extent that they should keep in mind the

bank industry planners, learning organizations,

and the culture of change are intimately related.

 The generation of new corporate knowledge

from the entirety of the environment in which

the organization operates should be a primary

focus for organizations, as should the fostering

of the cultural environment that supports it and

ensures its ongoing development.

 To manage the culture of change and respond

to the dynamics of the information economy

facilitated by a culture of change, the majority

of banks have modified or changed their

management styles and business structures.

Many of these institutions have adopted a

culture of change management without even

realizing it. Bank managers should arm

themselves with the most recent information so

they can adapt to future events.

 As was previously said, this crucial task is

made possible with competent personnel under

competent management. Managers should also

be aware that the fact that companies are

working in a vacuum is not surprising given the

lack of methods and tools available to them for

analyzing organizational learning flows and the

culture of change capital stocks.

Despite the drawbacks of data use, the current

study offers insightful information about the

relationship between a culture of change and

financial performance. Finally, this research

contributes to expanding the field of learning

organizations' present research agenda in the

discipline of the culture of change.

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

The authors equally contributed in the present

research, at all stages from the formulation of the

problem to the final findings and solution.

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

No funding was received for conducting this study.

Conflict of Interest

The authors have no conflicts of interest to declare

that are relevant to the content of this article.

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