Problem: Organizations compete on the basis of their resources. The strongest organizations usually win the competitive battles if their managers develop effective strategies and implement them well. To be competitive, managers use the organization's resources to create capabilities to act.107 A critical component of these capabilities is knowledge. In fact, Bill Breen of Fast Company suggests that "Companies compete with their brains as well as their brawn. Organizations today must not only outgun and outhustle competitors, they must also outthink them. Companies win with ideas."108 Given the importance of knowledge in gaining a competitive advantage, learning is critical to organizational success. Managers and associates must continuously learn if they are to stay ahead of the competition. Perception is a key component of learning. It is particularly important to top executives, as they must carefully and thoroughly analyze their organization's external environment, with special emphasis on competitors. If they do not perceive their environment correctly, these executives may formulate ineffective strategies and cause the organization to lose its competitive advantage. Understanding the concepts of learning and perception, then, is absolutely essential to the effective operation of an organization.

Critical Thinking Questions

1. How does the knowledge held by managers and associates affect the performance of an organization?

2. What are some important ways in which associates can learn and thereby enhance their stock of knowledge? What role does perception play in the learning process?

3. What are the connections between learning, perception, and organizational strategies?