Published by: Asian Economic and Social Society ISSN (P): 2309-8295, ISSN (E): 2225-4226 Volume 5(4)2015, www.aessweb.com 73 LEARNING ORGANIZATION AND COMPETITIVE ADVANTAGE-AN INTEGRATED APPROACH Muhammad Farrukh Institute of Graduate Research, SEGI University Malaysia, Malaysia Abdul Waheed School of Business and Economics, University of Management and Technology, Lahore, Pakistan Abstract The major purpose of this conceptual paper is to integrate the view points of different researchers about leaning organization and competitive advantage and then to develop a proposed model of Learning organization. After the in-depth study of literature we concluded that learning organization is an organization which learns through its members individually and collectively to create competitive advantages by developing a facilitative system through the process of self-development and information sharing by empowering the employees.. The paper also finds some critical factors which must be present in the organization to become a learning organization. These factors are Innovation, facilitative leadership, self-development, empowerment, and information sharing and collective collaboration. The paper tried to explain the similarities and differences among the previously available models of learning organization and proposed a new theoretical model for LO. Keywords: Learning organization, organization learning, innovation, facilitative leadership, empowerment, information sharing, collective collaboration 1. INTRODUCTION* In this dynamic business era organization needs to change, learn and implement those changes to get success, without learning the companies and individual repeat the old practices and when there is no change in process or actions the success is either fortuitous or short-lived. The concept of learning organization has gained importance over the past years as a source of competitiveness. Learning organizations are those organizations which continuously keep on learning to attain desired result and competitiveness. LO facilitates learning of all its members and this aim is to continuously transform itself (Pedlar et al., 1991) in line with the environment needs. It is note-able that learning organization and organization learning are two different concepts and in the past different researchers used these two approaches as synonyms of one another. In the operation of this paper, these two need to be treated separately as explained below. Different researchers have defined difference between organizational learning (OL) and learning organization (LO) where OL is refers to activities within the organization and learning organization is the form of organization. Organization represents the process by which an Corresponding author's Name: Muhammad Farrukh Email address: mfarrukhiqbal@hotmail.com Journal of Asian Business Strategy journal homepage: http://aessweb.com/journal-detail.php?id=5006