The concept of organisational learning has experienced a huge growth in the last decade, both in academic and business domains. The rationale for the development and growth of material in this area can be attributed to the changing dynamics of the business world, coupled with the extensive analytical value of organisational learning in contributing to the development of understanding the SME firm and their activities, (McElroy, 2003). The SME firm and its management process are quite contextually specific and are dependent or related to a wider number of factors making it difficult to specifically and rationally identify learning criteria which would allow and enable for the development of a learning environment. The paper sets out to suggest that knowledge in the SME enterprise is embodied as evident in such notions as tacit knowing and learning, and embedded grounded in the situated social historic contexts of individual lives and work. This supports the view that the nature of knowledge is inherently indeterminate and continually evolving. \ud \ud \ud Current academic literature has widely acknowledged that the SME enterprise learns through action oriented processes, and much of this learning is context dependent and experientially based. Firm learning can be conceived as something else which develops primarily through activities such as complex problem solving, experimentation, and simply learning by mistakes such events in these firms occur informally in a ad-hoc manner, and as a result it seems that learning in the SME firm occurs through opportunistic moments, incidentally facilitated by other workers or the owner/manager in the firm. Such a focus on firm knowledge and knowing is particularly appropriate in the consideration of the demands which have been placed on the small firm to be innovative and creative, especially in competitive environments, where the development and delivery of new services and products is of huge importance. The paper seeks to extend the current conceptualisations of organisational learning by considering how a practice based perspective of knowledge is useful in this regard. In this perspective, learning is no longer equated with the appropriation or diffusions of pieces of knowledge, but rather it is viewed as the development of situated identities based on participation in a process of social engagement and interaction. This provides an alternative to the dominant cognitive models, which considers learning as an individual process, where the individual is someone who processes information and modifies their mental structure as a result
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