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Managerial Interpersonal Competencies - Benefiting from Learning Organization Characteristics in SMEs

Abstract To succeed in today’s ever-changing business environment, enterprises must rely heavily on their own abilities to learn and manage acquired knowledge. In this sense, the concept of learning organization has been proposed as an ideal type of organization for competing and surviving in the contemporary, highly demanding business environment. The presumption that employees will be more open to discussions, new ideas, to acknowledge and correct their own mistakes in a favorable and supportive work environment implies that managers potentially play significant roles in developing such environments. The behavioral approach that managers take in interpersonal dynamics with their subordinates stands out as a particularly important factor in developing favorable work environments for learning and change, i.e., encouraging employees to engage in, for them, often risky and unpleasant processes of learning and changing their initial ideas, standpoints and eventually mental models. In the relevant literature, these topics have been explored a number of times in large enterprises, while they are, with a few exceptions, mostly neglected in the case of small- and medium-sized enterprises (SMEs). Therefore, the purpose of this paper is to investigate the role that managers’ interpersonal competencies (MIC) have in the emergence and the development of learning organization characteristics (LOC) in their enterprises. In addition, this paper investigates the effects of the interrelationship between MIC and LOC on overall managerial effectiveness in order to gain a deeper insight into the potential managerial and organizational benefits of the dynamics between MIC and LOC. To provide answers to the stated research agenda, empirical research has been conducted on the sample of 87 employees and managers from Croatian SMEs. Collected data were processed via SPSS 23.0 and Microsoft Excel. Results obtained suggest that there is a significant interplay between MIC and LOC and that LOC may play a positive mediating role in the effect of MIC on managerial effectiveness.