149 THE READINESS LEVEL OF FIRMS IN APPLYING LEARNING ORGANIZATION: A STUDY ON SMES OF MANUFACTURING FIRMS IN JOHOR BAHRU, JOHOR DARWINA AHMAD ARSHAD, SAIFULHAFIZI HASSAN School of Business Management, College of Business, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia ABSTRACT The purpose of this study is to investigate the readiness level of firms in applying learning organization. The study focuses on manufacturing SME firms in Johor Bahru, Johor. Obviously, this study is to examine whether the firms are ready for learning organization or not. The dimesions in Systematic Learning Organization Model (SLOM) namely dynamic learning, organizational transformation, empowering people, knowledge management and technology application become a basis to measure the readiness level of firms to apply learning organization. Through the Marquardt’s Learning Organization Analysis (MLOA), the mean value of SLOM variables from descriptive analysis are used to indicate the firm’s readiness for learning organization. By examining 102 respondents, the result shows positive outcomes in which SMEs manufacturing firms in Johor Bahru is ready for learning organization. Due to the lack of studies on this topic in previous literature especially in Malaysia, it is believed that this study will contribute to the body of knowledge and managerial implications. The paper concludes by providing the direction for the future research that work in this field. Keywords: Learning Organization; Systematic Learning Organization Model (SLOM); Small Medium Enterprise (SME). 1. INTRODUCTION Basically, the organization is like human where learning and knowledge in an organization is the key to achieve success. The organization should searching for new findings when the rate of changes has been increased in order to survive in the environment where learning is essential sources for company to acquire competitive advantages (Hasmiah and Noraidah, 2009). Learning organization can affect the way a person thinks and change their behavior in dealing with the environment. So, employers and employees should consider that the aspects of learning process in the firms are lifetime process to improve competitiveness arising from the development and modernization (Malaysian Leadership and Strategies Foundation, 2012). The innovation of knowledge became the major reason for the company to improve efficiency, productivity and competitiveness of the national economy. The innovation of knowledge becomes the main agenda in Malaysia in which the Government will be committed and serious to shift to a new economic model to transform Malaysia through many learning process including innovation in industry (Malaysian Budget, 2010), and it will affect small or large industries in Malaysia including SMEs. Several big countries like United Kingdom, United States of America (USA), and Australia are successes to generate jobs, innovation and growth through the contribution of SMEs in this country (Matlay, 2004; Carter and Van Auken, 2006;and Ehrich and Billett, 2006). In line with the development of industrial, East Asian countries such as Japan, Korea and Taiwan, for example, also depends on SMEs and most of economic resources of the countries are developed by the development of SMEs (Asri and Darawi, 2012). An important role as shown by SMEs to the economic development in particular is to provide job opportunities, promote the process of urbanization, improving the living standards of local residents, and create linkages between industries. In Malaysia, small and medium brought to you by CORE View metadata, citation and similar papers at core.ac.uk provided by UUM Repository