THE RELATIONSHIP AS A LEARNING ARENA
Magne Johannessen and Geir Bergvin


Abstract

Organizations learn not only from one another, but also with one another.
This phenomenon is described as relationship learning in this paper. The
authors address central drivers and moderators of relationship learning – as
well as the effect learning may have on relationships.

This paper addresses the relationship as an arena for learning.
Organizations can learn from one another, but never exist in isolation from
their clients, competitors or environments. From this perspective,
organizations also learn with one another. The phenomenon is described as
relationship learning in this paper, based on Norwegian advertising agencies
and buyers of advertising agency services.

Learning in relationships is connected to the term relationship.
Inter-organizational relationships have been subject for major research
since the late 60’s. Numerous organizations wish for close relationships,
presuming that this will contribute to an increased market orientation
(Jørgensen 2002). The term market orientation must at the same time be
observed as a dimension of the learning organization (Farrel 2000, Bake and
Sinkula 1998, Allis 2002, Slater, Narver 1994). When debating the term
relationship learning, market orientation must also be included.


The Norwegian advertising business

The total sales of Norwegian advertising services is expected to be
approximately NOK 14 billion in 2003 (Source; Forbrukerrapporten nr. 2
2003). Ulvnes, Sandvik and Duhan (1998) point out that the clients are
surprisingly disloyal to their agencies, even though an agency switch can
cause substantial costs for them. The relationship’s duration is an
indication of success, and the critical point is the degree of satisfaction
with agency services. Communication solutions are developed through a
dialogue and process between agency and client where the client has a joint
responsibility for the final product. This implies that both parties have a
joint responsibility for exchanging information and generating knowledge in
order to develop the best possible product. Existing literature points out
that this mutual process of learning has an impact on the relationship as
well as the final product (Ulnes, Sandvik and Duhan 1998, Sallis 2002).


Research issues

Research environments and business in general agree that knowledge is a
resource in creating a competitive edge (von Krogh, Ichijo and Nanaka 2001),
perhaps the only source to achieve a competitive edge (Slater and Narver
1995) The gap between theory and practice is, however, wide. Knowledge as a
source of competitive advantage challenges the visions and established
routines of the organization, as it is time consuming and changes the power
structures (Senge 1999; (Krogh. Ichijo. Nonaka 2001).

Market orientation or The Marketing Concept has been the ground pillar for
academics and practitioners since the 50’s. The idea that product
development and marketing activities are most efficient when based on the
clients’ requirements, are considered an obvious and necessary part of any
organization’s strategic orientation (Sandvik 1998).

Less attention has been called to the potential learning processes taking
place between client and supplier (Sallis 2002). Sallis claims that the
difference between relationship learning and traditional theories of
organizational learning is first of all to establish a joint will and
memory. This indicates that there is still a lot of ground to cover. The
research challenge is as follows:

1. What factors can contribute to relationship learning between agency and client?

2. What factors can prevent learning?

3. How does market orientation influence relationship learning?

4. What effect can learning have on the relationship?


Design

The findings and conclusions that can be extracted from this paper are based
on a qualitative study carried out in the winter and spring of 2003.

The study started out with test interviews of 3 advertising agency leaders.
The selection for the main study was made through the use of the following
criteria:

The respondents either had or had been involved in one (1) relationship
lasting for at least 4 years.
The clients had to be in the business-to-business segment and offer complex
products or services (an indication that the agent/client relationship would
be of a similar nature).
The agencies had to be full service agencies (i.e. agencies offering a full
spectre of communication services).

All the client respondents were from medium to large organizations. The
trades represented were: IT and telecom, food industry, courses, tutoring
and energy. After the primary interviews were carried out, 11 respondents
were interviewed.


Contribution to theory

In existing literature, organizational learning is related to numerous names
and approaches, value based leadership, competence leadership, organization
leadership. Still, organizational learning is dependent on each individual,
an area that holds substantial research traditions. Primarily the psychology
of learning is the basis for research in organizational learning. Two
theories have been very distinct: behaviorism and cognitive psychology.
Behaviorism considered learning as a stimulus-response process. Will,
objectives and cognitive elements were excluded from the learning process.
Cognitive psychology on the other hand has defined learning as a change of
knowledge levels based on cognitive processes; information handling and a
search for problem solving information.

March and Argyrsi have had a great influence on our understanding of
organizational learning today. Both consider learning as a result of
stimulus-response, and the organization is described as an adaptive,
rational system. The organization adapts to the environment and develops
standard procedures. March represents the theory where an organization
adapts to external demands, while Argyris considers organizational learning
as developing joint ideas and attitudes (Hustad 1998).

Literature on organizational learning represents a wide learning concept –
incorporating both simple and complex learning processes – but focusing
mainly on adaption. The perspective is decriptive. The introduction of the
concept of organizational learning created a turning point, especially
represented by Peter Senges’ The Fifth Discipline, where the perspective is
descriptive. Learning is not solely a response to outer stimulus, but also a
process based on knowledge. The basis for learning is based on goals formed
by both individuals and groups.

Sallis and Selnes (1999) claim that relationship learning is different from
traditional organizational learning. Relationship learning calls for a will
from both parties to share information and to make information meaningful.
The respective organizations have no mandatory right to exchange – often
sensitive – information. The relationship will also develop a joint memory.
This memory influences future information processes and behavior.

Based on interviews with 13 buyer and seller dyads Salsnes and Selles (1999)
suggest the following definition:

A supporter and client can learn in a relationship to the degree that
information is shared among the two parties. The information is jointly
interpreted and then integrated into relationship-domain specific memory
that will change the range of likelihood of potential relationship-domain
specific behavior.

Learning orientation can hardly be seen as isolated from marketing
orientation. Slater and Narver (1995) claim that marketing orientation is
the foundation for organizational learning. Farrel (2000) points out that a
marketing oriented culture facilitates learning, and that the phenomenons
have a joint positive influence on each other. A partial focus on marketing
orientation can, however, be a limitation. The narrowed focus is mainly on
existing clients and competitors, which – at best – leads to adaptive
learning. Baker and Sinkula (1999) claim that learning orientation combined
with marketing orientation is the best solution to create a permanent
competitive edge.


The analysis

Based on a quasi-grounded theory approach (Grennes 2001, Sallis 2002) the
results were evaluated in relation to literature.


Drivers of relationship learning – external motivation

The classical theory of organizational learning is based on behavioral
psychology (Hustad 1998). Organizations respond to external stimuli and
adapt their behavior accordingly. The profound interviews in this study
support existing literature. The element of insecurity related to
environment influences the learning motivation. But even if external stimuli
motivates learning, it does not necessarily lead to the desired learning
quality. Several of the respondents claimed that even though competition
motivated learning, external stimulus lead to single loop (Argyris) or
adaptive (Senge) learning.

Hustad (1998) points out that this is one of the weaknesses of the
traditional learning theory. Learning processes appear only when external
circumstances shake the organization. Learning will occur, but is limited to
creating a balance. Senge (1999) emphasizes that generative learning
requires that reality perception must not be influenced by focus on single
incidents. That means that the relationship’s ability to handle external
stimuli has an impact on the learning quality. All the respondents confirmed
that external stimuli were transmitted to the relationship, creating
disturbance. A possible explanation is that the relationship mirrors its
surroundings. Studies of cognitive processes in organizations have pointed
out that the surroundings self-reinforce their own organization
characteristics. This leads to an environment with internal competition,
exaggerated individualism and self-centred behavior. Knowledge is acquired,
but not shared. All you get is an extremely competitive working environment
when it is based on developing knowledge (von Krogh, Ichijo and Nonoka 2001;
64).

Based on these results it can be concluded that relationship learning – as
well as organizational learning – is influenced by external stimuli, that
leads to adaptive and generative learning.


Internal motivation; the relationships’ complexity

Complexity appears on two levels; transaction complexity and relationship
complexity (Selnes and Sallis 1999). Transaction complexity is understood as
the product and/or service characteristics, how many and whether these are
experienced as technologically advanced.

Relationship complexity is understood as the degree of complexity added to
the external contact points of the relationship. The respondents in this
study did not consider the relationship very complex. This can be due to the
nature of the advertising agency. The agency’s task is to coordinate
sub-contractors within reproduction and printing, as well as external
contributors like photographers, illustrators etc. The client will in most
cases deal with a consultant or a team. The products’ complexity will
motivate the learning process. A high degree of transaction complexity can
be seen in relation to the client’s products and services. This is also
related to which products and services the client buys from the agency.
These elements are in a direct relationship with each other. The client’s
services, products and markets are, therefore, a critical factor for the
learning process. The client respondents emphasize the importance of the
agency knowing their products and markets. This is confirmed by Ulvnes,
Sandvik and Duhan (1998). The author describes this as a
relationship-specific investment in relationship-specific skills; skills
that the agency can’t automatically transfer to other clients.
Relationship-specific skills are described as “learning by doing”, knowledge
accumulated as time goes by. Several of the respondents said that the time
factor was significant in a learning process.


Intentionality

The traditional theories in organizational learning do not deal with
intentionality; the will to act. Behavioral changes are based on external
stimuli (Hustad 1998). A relationship consists of individuals. An
interesting result of this survey is the respondents’ explicit will to learn
with one another – independent of external influence. Senge (1999) seeks a
broader insight regarding what motivates the individual to learn. If you
regard an individual as a means to reach the organization’s goals, you
devalue the importance of the relationship between the individual and the
organization. The respondents in this survey explained that the will to
learn often was the most important motivation. This finding is included in
Selnes’ and Sallis’ (1999) contribution to theories of relational learning,
a new dimension. It is also interesting to confirm that the respondents find
that intentionality creates generative learning. The problem with
intentionality, however, is that theories are limited in existing
literature.


Moderators of relationship learning; the relationships’ purpose

The relationship can have several missions, varying from tactic operational
to a development of new products or services (Selnes and Sallis 1999). The
respondents expressed that some tasks could be regarded as routine matter,
while others were of a more strategic character. The relasjonship’s purpose
will thus have consequences in establishing a joint goal. This is according
to a cognitive theory of how expectations of future rewards govern behavior
(Buch, Vanebo 2000). The respondents expressed that joint opinions and goals
were of great importance for the learning environment. This issue is
supported by existing literature.

The purpose of relationships is among other things to release potential for
improvement in one another (Jørgensen 2002).


Trust

Without exception the respondents describe trust as an important
relationship component. This is supported by existing literature (Morgan and
Hunt 1994, Jørgensen 2002, Selnes 1993). The respondents described both
inter-organizational trust and trust between individuals. A typical
characteristic of service products is that the service is non-existent at
the purchasing moment (Lovelock 2001). Morgan and Hunt (1998) point out the
importance of trust because the client buys the service before it can be
experienced. This was a repeated issue with the respondents.

Selnes and Sallis (1999) show that trust is of greater importance between
individuals than on an inter-organizational level. The findings of this
study support this.

Developing communication activities is typical for project work. All
respondents expressed how important communication was when working together.
Morgan and Hunt (1994) refer to the connection between trust and
communication where communication is described as the glue binding a
distribution channel together. Even though the authors point out the lack of
empirical investigations supporting this, they claim that communication has
a great importance for developing trust. The respondents in this study
support this assumption. Typical statements were that “we trust that they
tell us what kind of information we need to do the job”.

The respondents claim that trust creates close relationships. This can,
however, also have a negative aspect. Exaggerated trust can lead to an
opportunistic behavior in one party. This is supported by existing
literature (Morgan and Hunt 1998). In these cases one of the parties will
lose trust in the other party, and if this is not corrected, there is great
likelihood that the relationship will be ended.

Trust can further create closeness and an atmosphere of confidence and
friendship. This can lead to a working environment avoiding disagreements,
which in turn limits learning rewards. The respondents from some agencies
expressed that they wished limited client socializing to avoid strong
emotional bonds. This is supported by Sallis (2002). Selnes (1993) uses the
description “friends” and “acquaintances” to classify different types of
relationships. Friends are according to Selnes clients where a closer
relationship is relevant because they have a larger reward potential than
acquaintance relationships. Selnes defines reward not only as income, but
also values like competence, references etc.

This leads to a paradox where organizations seek close relationships
motivated by the desire of loyalty and profit, even though close
relationships can limit learning processes.

The last aspect is the establishment of joint value visions. Morgan and Hunt
(1998) point out joint values as facilitating trust and commitment. As
previously mentioned, joint goals and understanding are of great importance
for the relationship. There will, however, be a problem when joint
understanding and mutual trust create a joint relationship identity. This
leads to group thinking where the parties have nothing to contribute to each
another. Several of the respondents emphasized the importance of being
conscious of their personal roles in a relationship. This is supported by
existing literature (Sallis 2002, Hustad 1998).


The nature of relationship learning

So far we have looked at elements that can lead to and influence
relationship learning. We have not focused so much on what relationship
learning can consist of, an issue we will deal with in the following
passages.

Sallis and Selnes (1999) claim that relationship learning is different from
traditional organizational learning. The parties must be willing to exchange
information and the relationship should develop a joint memory. This memory
influences future information processing and behavior.

In this study all the respondents emphasized the importance of gathering and
exchanging information. Some of the respondents saved information in
reports, intranet etc., but the respondents had different views on the
importance of this. The joint memory was described as a network of personal
contacts and the learning process as a kind of joint problem solving. This
can be described as a participation learning system (Hustad 1998). The
theory of participation learning systems is found in organizational
learning, but can be adapted to relationship learning. The organisation
creates working groups for solving tactic and strategic tasks by using
participation learning systems. The goal with groups like these is not to
develop information alone. Participative learning systems also try to
develop an understanding of other viewpoints. The respondents in this study
described relationship learning more as mutual dialogue and joint problem
solving.

This can be related to the character of the agency/client relationship. It
is practically impossible to develop a brief that covers all eventualities
between agency and client. This requests that agency and client adapt to one
another through gradual learning when the relationship is in development. In
the course of developing communication solutions, joint problem solving can
lead to new insight, thus forcing both parties to involve themselves. The
respondents mentioned the importance of integrating different knowledge.
This is done through joint problem solving. Seeking new relationship insight
is dependent on degree of intentionality. Senge (1999) mentions critical
factors for group learning. First of all the group must reflect on complex
issues. Further the group must develop an environment that makes the group
operative and able to act. The relation to intentionality is important. The
findings in this study support the theory. The respondents pointed out that
relationship learning was more about supplementing one another than relating
to a formalized memory. Those emphasizing the importance of formalized
documentation connected it more to a desire for less failures. It seems as
though creation of new knowledge is obtained through dialogue and joint
problem solving. This is according to von Krogh, Ichijo and Nonaka (2000)
and Stacey (2001).

The perspective of the customer as a co-producer is described by Troye
(1999) and illustrates the processes in the relationship. Here clients put
in an own effort to develop the services.

One research issue was exploring the connection between learning orientation
and marketing orientation. The respondents defined market orientation mainly
as focusing on the clients and doing a satisfactory job for the clients.
Very few had observed the connection between marketing orientation and
learning orientation. Making theories about other connections in addition to
the theories already discussed, is therefore difficult.


Consequences of relationship learning

We also wanted to shed light on what effect learning has on the
relationship. Existing literature shows that willingness to co-operate and
share information is dependent on relationship quality. In low-quality
relationships the potential for developing information and for learning is
less apparent (Selness 1999). The client respondents were in – and had been
in – various relationships with agencies. Broken off relationships were due
to low satisfaction with agency services. This is according to Ulnes,
Sandvik and Duhan (1998). The reason for low satisfaction was described as
failing trust. This is also according to existing literature (Morgan and
Hunt 1998). One interesting observation was the advertising agencies’
emphasis on creativity, something the clients were less engaged in. This can
be due to the advertising industry’s focus on creativity as its raison
d’être (Selfors 2000).

Client respondents expressed satisfaction with the agency. The learning
effect was described on several levels. Commission quality increased and
relevant solutions were chosen. This is according to existing literature
(Selnes and Sallis 1999).

The respondents on both sides of the relationship emphasized that learning
contributes to lower costs. People work quicker and more efficiently. All of
the respondents claimed that relationship learning creates higher
satisfaction, contributing to increased loyalty.

Learning also functions as a channel for avoiding problems and conflicts.
This is according to Morgan and Hunt’s 1998) emphasis on vital information
being given at the right moment. One conclusion could be that relationship
learning has an impact on the commission quality as well as the relationship
environment.


Conclusion

The purpose of this study was to explore the phenomenon relationship
learning. The findings in this study are in accordance with existing
literature. A lot of available theories on organizational learning and
learning organizations appear to be relevant for relationship learning. The
study revealed that relationship learning is motivated by internal and
external circumstances. The outside drivers are external circumstances like
competition and uneasy markets. Still the findings in this study indicate
that external circumstances motivate adaptive learning. The relationship’s
complexity motivates relationship learning and functions as an internal
driver. The findings in Norwegian advertising agencies and advertising
buyers reveal, however, that another variable is of great
importance…intentionality. The degree of intentionality creates the best
learning rewards. Relationship learning is moderated by the purpose of the
relation and the development of joint goals and interests. Trust is also an
important moderating element. This is not unexpected since research has
shown its importance in the development and nurturing of relationships.
Trust can also have a negative effect on learning. It can lead to a
conflict-avoiding environment or group thinking, a development that hinders
creativity and innovation.

The theories show that organizational learning is closely related to
information handling. Information is based on opinion and can be described
as the foundation of knowledge. Knowledge on the other hand is continuous,
because knowledge deals with convictions, values and will. Relationship
learning can be described as an arena for adaptive learning based on
stimulus-response. Through the use of intentionality as a variable, the
phenomenon of organizations learning from one another can be described as
relationship learning. Senges’ (1999) definition of learning organizations
can thus be adapted to the relationship learning. A possible definition of a
learning relationship can therefore be:

A learning relationship is a relationship where the members continuously
learn with one another, and the relationship is capable of creating its own
future opportunities.

The distinction between relationship learning and learning relationships are
vital for our attitude to relationship as a learning arena. Finally this is
a value issue; are human beings caught up in a joint affair, or do we have
the choice of breaking out, setting ourselves free and being innovative? The
findings presented in this paper indicate that this potential exists. It is
essential to have a joint responsibility in order to release this potential
in relationships.

With regards to market orientation and learning orientation this paper does
not bring any new knowledge. The respondents lacked a conceptual
understanding of the many implications involved in the terms. The findings
in this study prove that learning has a positive influence on relationships
depending on how the commissions are solved and given prioritized. One of
the effects, among other things, is lower costs and increased loyalty.


Further research

The study reveals one element of vital importance: intentionality. It would
be interesting to test this element in an empiric model. Relationship
learning should also be of interest to practitioners and researchers within
human resources. It has been claimed that employees often show a calculated
loyalty. If the relationship develops into an arena for learning, it can
simultaneously become an arena for growth and self-fulfillment. This opens
for a number of new questions related to loyalty, commitment and
relationships.


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