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Views the organization as a learning system and focuses on three key characteristics of a learning organization: learning process, learning orientation and facilitating factors within an organization. The interrelation and details of these topics are described in detail. Posits that a measurement methodology and communications medium must be formalized to enable an organization to become a learning organization. Develops a model against which a desired state can be defined for an organization. States that initiating necessary changes to create a successful learning organization must begin at the top of an organization. Examines the questions of progress measurement and implementation of policies and processes.

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