Double-loop learning entails the modification of goals or decision-making rules in the light of experience. The first loop uses the goals or decision-making rules, the second loop enables their modification, hence "double-loop". Double-loop learning recognises that the way a problem is defined and solved can be a source of the problem. This type of learning can be useful in organizational learning since it can drive creativity and innovation, going beyond adapting to change to anticipating or being ahead of change.
Double-loop learning is contrasted with "single-loop learning": the repeated attempt at the same problem, with no variation of method and without ever questioning the goal. Chris Argyris described the distinction between single-loop and double-loop learning using the following analogy:
[A] thermostat that automatically turns on the heat whenever the temperature in a room drops below 69°F is a good example of single-loop learning. A thermostat that could ask, "why am I set to 69°F?" and then explore whether or not some other temperature might more economically achieve the goal of heating the room would be engaged in double-loop learning
Double-loop learning is used when it is necessary to change the mental model on which a decision depends. Unlike single loops, this model includes a shift in understanding, from simple and static to broader and more dynamic, such as taking into account the changes in the surroundings and the need for expression changes in mental models. It is required if the problem or mismatch that starts the organizational learning process cannot be addressed by small adjustments because it involves the organization's governing variables. Organizational learning in such cases occurs when the diagnosis and intervention produce changes in the underlying policies, assumptions, and goals. According to Argyris, many organizations resist double-loop learning due to a number of variables such as resistance to change, fear of failure, and overemphasis on control.
The Western Approaches Tactical Unit of the Royal Navy during WW2 is an example of an organization that received information and takes action, but the result is not desirable. The development of corrective measures requires an assessment of the organization's essential characteristics is double loop learning. This means that errors are detected and remedied in ways that change the organization's basic standards, policies and goals.
The Western Approaches Tactical Unit was able to develop and update anti-submarine tactical doctrine between 1942 and 1945 as new with new technology and assets became available. We were able to collect, transfer and integrate information to achieve our three goals of challenging norms, objectives and applicable policies for merchant shipping protection; promotes doctrinal innovation to counter changing German submarine tactics and technology used to attack convoys and to teach doctrine to Naval Officers appointed as North Atlantic Escorts and Royal Air Force (RAF) Coastal Commanders. 
A Behavioral Theory of the Firm (1963) describes how organizations learn, using (what would now be described as) double-loop learning:
An organization ... changes its behavior in response to short-run feedback from the environment according to some fairly well-defined rules. It changes rules in response to longer-run feedback according to more general rules, and so on.
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