Universities' Organizational Learning Rate Dependence on the Level of Participation in the Higher Education Market: The Case Study of Estonia

A modern university must be a flexible and dynamic organization, which is able to successfully operate in a constantly changing environment. In order to fulfil this condition the establishment must conform to the criteria of the learning organization. Using the criteria of the learning organization, the authors compare four institutions providing higher education in Estonia where percentage of state commissioned students is different: Estonian Business School (EBS), Tallinn School of Economics and Business Administration of Tallinn University of Technology (TSEBA), Faculty of Civil Engineering of Tallinn University of Technology (BF) and Faculty of Mechanical Engineering of Tallinn University of Technology (MF). The institutions were selected so as the market participation rates were different. Market participation rate is denoted by the ratio of students who pay themselves for the studies. In order to identify whether and to what extent competition or lack of competition in the market affects the organizations' learning capacity the authors compare four institutions providing higher education using Watkins & Marsick's organization development principles as the theoretical basis of the empirical study. The results of the study show that the extent to what a university has to compete on market of higher education has a significant impact on organization's learning capacity. The investigated institutions of higher education were analyzed by all seven dimensions of the learning organization and different groups of employees (managerial staff, teaching and research staff, administrative staff). The results of all interviewed groups allow to state that there is a light positive correlation between the extent to what a university has to compete on market of higher education and the organization's learning capacity. The organization's learning capacity of the investigated universities is also higher compared to the international average.