Situated learning theory is based on the idea that learning happens in the same context in which it is applied, it is unintentional and depends on the context and culture in which it takes place. Simply coined as a 'community of practice' by Jean Lave and Etienne Wenger, it means the shared learning practices among people who are doing the same craft. It posits that abstract knowledge offered in classroom settings is hard to retain, so it highlights that real learning takes place only when it is meaningful and contextual, meaning that learning is embedded within the activity, so it is situated.

This theory favors practice-based knowledge over theoretical knowledge, and it states that learning is unintentional as it is embedded within the activity. As learners become involved in a “community of practice”, social interaction and collaboration among individuals, who are expected to acquire common beliefs and behaviors, are essential components of this theory. Individuals' aim is to move from the periphery of a community and heading towards being an expert through active engagement with the context and the culture of that particular community. Learning advances via collaborative engagement, the social construction of knowledge, and social interaction among individuals.

Group activities, role-playing, scenario-based learning, and technology use are some of the ways to apply this theory as "situated learning environments place students in learning situations where they are actively immersed in an activity while using problem-solving (critical thinking) skills. In addition, these opportunities must include a social community that imitates real-world situations. Finally, this experience will motivate learners to activate their prior knowledge and collaborate with other individuals in their context.

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