Exploring the latent variables which support SMEs to become learning organizations

Abstract The purpose of this paper is to explore the latent variables which support small and medium-sized enterprises (SMEs) in becoming learning organizations. These latent variables represent abstract ideas that cannot be measured directly in practice, and they need to be explored by using different sets of other variables or indicators defined specifically for certain research of the business environment. The concept of “the learning organization” has been introduced into knowledge management literature about 30 years ago, but due to its complexity and high level of abstractness, its implementation in real life or organizations produced insufficient results for developing a well-defined model and a convincing managerial approach. However, the attractiveness of the learning organization is so appealing that researchers continue to investigate the complex mechanisms and processes supporting it. Our research is such an effort in exploring the latent variables for the small and medium-sized enterprises from the North-Easter region of Romania in their drive of becoming learning organizations. Our research is based on a comprehensive literature search and a quantitative approach supported by a survey and statistical processing of the collected data. We processed 950 valid questionnaires obtained from 147 small and medium-sized enterprises from the North-Eastern region of Romania. Statistical processing was done by using specialized software. We perform a Factor Analysis with IBM SPSS v.19, and then a Confirmatory Factor Analysis with AMOS v.18. Finally, we obtained six latent variables that support the transformation of SMEs into learning organizations.