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Synthesizes the ideas of the “transformational change” and “learning organization” literature. The concept of the action learning organization is presented as a bridge between learning and transformation as it involves collaborative questioning by organizational members of their own actions. Discusses the characteristics of an action learning organization in terms of its bias for reflection‐in‐action, formation of learning alliances, development of external networks, multiple reward systems, creation of meaningful information, individual empowerment,leadership and vision. The knowledge‐generating organization is the one which is most likely to be able to survive both equilibrium and chaos.

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