Contract learning is an invaluable tool in organizational learning and management development. A contract can incorporate teacher-directed learning (TDL) and self-directed learning (SDL), as appropriate. Substantial research has revealed the power of SDL; the trick is to harness this learning for the benefit of the organization. The literature on organizational learning speaks of individuals learning new knowledge, skills, and attitudes for the benefit of the organization. Many authors have abandoned the term organizational learning for the idea of a "learning organization" (LO). The environment for successful SDL and the environment for a flourishing LO share characteristics that emphasize participation, employer support, and collaboration. Creation of a LO environment that encourages SDL clearly enhances efforts at management development. Three types of skills are necessary for success as an executive or manager. TDL appears to be appropriate in acquiring technical skills; SDL is appropriate in acquisition of people and conceptual skills. A contract among the supervisor, manager/learner, and human resource development representative can incorporate TDL and SDL, as appropriate. These contracts provide guidance for the individual manager and a way to capture, document, and share knowledge throughout the organization. (Contains 20 references.) (YLB)