Organizational forgetting and its causes: an empirical research

Organizational Forgetting and its Causes: an Empirical Research Full name: Vicenc Fernandez Affiliation: Universitat Politecnica de Catalunya E-mail: vicenc.f[email protected] International address: Colom, 11, 08222 – Terrassa (SPAIN) Telephone: +34 93 739 80 25 - Fax: +34 93 739 81 01 Biography: Vicenc Fernandez is lecturer in the Department of Management at Technical University of Catalonia. He received a Ph.D. in organizational absorptive capacity. He has been a visiting researcher at Newcastle University, UK. His research interests include organizational knowledge, organizational communication and decision making. Full name: Albert Sune Affiliation: Universitat Politecnica de Catalunya E-mail: [email protected] International address: Colom, 11, 08222 – Terrassa (SPAIN) Telephone: +34 93 739 80 25 - Fax: +34 93 739 81 01 Biography: Albert Sune is lecturer in the Department of Management at Technical University of Catalonia. He holds a Ph.D. degree in organizational learning. He has been a visiting researcher at INCAE Business School, CR. His research interests include organizational learning and forgetting. Organizational Forgetting and its Causes: an Empirical Research Abstract Purpose – To determine the impact of organizational forgetting on knowledge-intensive firms and the circumstances in which the loss of distinctive knowledge takes place. Design/methodology/approach – The empirical research consisted of a qualitative proposal based on two case studies in Higher Education involving situations of organizational forgetting. Findings – A framework for conceptualising organizational forgetting. Moreover, the results of the case study analysis include a categorization of organizational forgetting and a set of propositions about their causes. Originality/value – Scientific research on knowledge management has focused on the processes of knowledge creation, use and transfer, but has devoted little attention to the processes of knowledge degradation and destruction. Article Type: Research paper Keyword(s): Organizational unlearning; Organizational forgetting; Knowledge destruction; Knowledge change; Knowledge stocks and flows Introduction The knowledge-based view holds that a firm can be conceptualized as an institution for integrating knowledge (Grant, 1996). Based on works by Dierickx and Cool (1989), DeCarolis and Deeds (1999) and others, organizational knowledge can be represented as stocks of knowledge that grow through flows of increasing knowledge (organizational learning) and shrink through flows of depreciating knowledge (organizational forgetting). Scientific research on knowledge management has focused on the processes of knowledge creation, use and transfer, but has devoted little attention to the processes of knowledge degradation and destruction. Since the 1970s and 1980s, the subject of organizational forgetting has been studied by a small number of researchers working in the areas of operations and organization theory. This divergence has engendered two disparate and by no means heterogeneous academic streams on the phenomenon of organizational forgetting. A study of the literature on the subject leads to two questions: what causes the processes of organizational forgetting? and under what circumstances does it occur? Firstly, our paper compiles and unifies the literature produced by the two academic streams to provide a new starting point for research into the phenomenon of organizational forgetting. Secondly, the paper sets out an empirical study based on the analysis of two cases in the field of university education. As a result of this study, we propose a categorization of four types of organizational forgetting based on the codifiability of knowledge (Zander and Kogut, 1995) and the intentionality of the forgetting process (Martin and Phillips, 2003). Finally, the results of our research provide a set of propositions that may explain the possible causes of organizational forgetting. Theoretical framework Knowledge stocks and flows Organizational knowledge may be conceptualized as stocks of knowledge and flows of knowledge or information (Dierickx and Cool, 1989; DeCarolis and Deeds, 1999). This concept is based partly on prior research into information processing and organizational design (e.g. Galbraith, 1973). Since then, both elements (stocks and flows of knowledge) have been central issues in numerous research areas, such as the resource-based view (Barney 2001), the examination of capabilities (Eisenhardt and Martin, 2000; Zander and Kogut, 1995), the information view of new product development (Ancona and Caldwell, 1992) and organizational learning (Bontis, Crossan and Hulland, 2002; Huber, 1991). Stocks of knowledge are described as the accumulation of knowledge assets within a firm, while flows of knowledge represent the streams of knowledge that move between different parts of a firm, or between external agents and the firm, and that can be assimilated and transformed into stocks of knowledge (DeCarolis and Deeds, 1999). There are alternative definitions of the concept of knowledge flow, such as those put forward by Darr, Argote and Epple (1995), Szulanski (1996) and Schulz (2001), although they all link the flow of knowledge to the movement and use of the stock of knowledge. Flows of knowledge have been classified as (1) horizontal or vertical (Gupta and Govindarajan, 2000; Schulz, 2001); (2) internal or external (Kyriakopoulos and Ruyter, 2004); and (3) input or output (Gupta and Govindarajan, 2000). Dierickx and Cool (1989) introduced a different classification of knowledge flows using the bathtub metaphor. According to this example, the stock of water is indicated by the level of water in the tub and its level will depend on the flows of water into the tub (through the tap) and the flows of water out of the tub (through a leak). Using this metaphor, Dierickx and Cool (1989) posit that a firm’s stock of knowledge can be increased by flows of additional knowledge or diminished by depreciating knowledge flows, that is, flows of organizational forgetting. Organizational forgetting Organizational forgetting has been defined as the intentional or unintentional loss of organizational knowledge at any level (Martin and Phillips, 2003). The earliest contributions by Wickelgren (1976) and Anderson (1985) were developed in the area of operations and based on the study of the degradation of knowledge due to interruptions in the production process. In the field of organization theory, researchers developed the concept of unlearning as an intentional process of discarding obsolete and misleading knowledge (Hedberg, 1981:3). Other authors considered unlearning as a required process to erase dominating ideas in order to become receptive to new ones. “Before organizations will try new ideas, they must unlearn old ones by discovering their inadequacies and then discarding them” (Nystrom and Starbuck, 1984: 53). Following these initial contributions, organizational forgetting has been studied mainly from two standpoints. The first standpoint sees accidental or unwanted forgetting as a degradation of the stocks of organizational knowledge. The second standpoint considers forgetting as an intentional process of unlearning preceding organizational learning. In the first academic stream, the research carried out by Smunt and Morton (1985) and Smunt (1987) reasserted that the “forgetting” or the depreciation of knowledge has far-reaching implications on production programming and planning. The quantitative study by Argote, Beckman and Epple (1990) on the modelling of learning curves broke with the assumption that experience accumulated indefinitely (assessed as accumulated units produced), and confirmed empirically that knowledge acquired in production depreciates quickly. Later research has quantified the value of the depreciation of knowledge in production, with widely varying results. Darr, Argote and Epple (1995) concluded that just 47.4% of the stock of knowledge at the beginning of the month was maintained at the end of the month in pizza franchises. Epple, Argote and Murphy (1996) gave similar results in the automotive industry. Benkard (2000) found that 61% of the stock of experience of a firm that manufactured airplanes was retained in the course of one year. Other experiential studies in the automotive industry analysed longitudinally the learning results of improvement programmes (Carmona and Grönlund, 1998). They found that teams initial learning was supported by intrinsic motivation but when it disappeared, organizational learning became organizational forgetting. The overall conclusion was that forgetting has a negative impact on production capacity, productivity or product quality and that it should therefore be prevented. By contrast, the second academic stream examines intentional forgetting as a preliminary step to organizational learning: “learning often cannot occur until after there has been unlearning” (Starbuck, 1996). This view argues that certain routines, rules, tasks, roles, policies, values and strategies need to be forgotten before new organizational knowledge can be acquired and assimilated (Lei, Slocum and Pitts, 1999). Forgetting is thus viewed as a necessary process for the management of change (Akgün et al., 2007). According to Martin and Phillips (2003), the forgetting process is just as important as the organizational learning process for achieving a sustainable competitive advantage. Several ways of forgetting intentionally were described in previous studies. Nystrom and Starbuck (1984: 58) suggest that the way to unlearn during an organizational crisis is by removing top managers as a group. This is because top managers are bolstered by previous successes and adamantly cling to their beliefs and perceptions therefore rationalizing their organizations’ failures. Change in ownership is often another trigger of forgetting (Markoczy, 1994). When an organization is acquired by another, some restructuring in the acquired company takes place in order to align its routines and processes. Finally, Martin and Phillips (2004), describe purposeful modes of organizational forgetting related to international alliances in the tourism industry. In this field research the authors describe several examples of voluntary forgetting directly transcribed from interviews. Methodology Theory-building research using cases typically answers research questions that address “how” and “why” in unexplored research areas. To determine the impact of organizational forgetting and the circumstances in which this takes place, we used qualitative data due to its ability to explicate the complex social processes involved. Multiple cases create more robust theory because the propositions are more deeply grounded in varied empirical evidence (Eisenhardt and Graebner, 2007). To this end, we proposed an exploratory study based on two case studies in Higher Education involving situations of organizational forgetting. The cases consist of a longitudinal study of two Engineering degree subjects, which were taught at a European Public University. These subjects were selected for their representation in the degree, for the easy access to the staff that developed these subjects and for the large amount of secondary sources of information that they offered. Subject A was a compulsory subject worth 4.5 credits (45 class hours) taken during the first year of an Engineering degree course, taught on a semi-distance basis during the fall semester. Subject B was a compulsory subject worth 6 credits (60 class hours) taken during the second year of an Engineering course, which was taught on a face-to-face basis during the spring semester. Both subjects involved 8 lecturers and a thousand of students during the research period. The data were gathered in the last semester of 2006 and centred in the forgetting processes that had taken place from their creation in 1998 to 2006. The information required to carry out a study of this nature was not readily available from secondary sources. We therefore collected information from primary sources through several focused interviews on different interest groups. Before collecting these data, we analyzed some secondary information sources (e.g. the lecturer assignment tables and the course guides) in order to identify everyone that had been involved in the two cases during the research period. Moreover, we carried out two pilot interviews of an open-ended nature with a coordinator and a lecturer which allowed us to build the structure and the main topics of the interviews (the staff, teaching materials, students, methodologies used, the learning tools, and the required knowledge to carry out the course) and a set of questions for the following interviews. Both respondents also suggested other people to interview (e.g. former coordinators and some specific students and the Vice-President for Academic Innovation), and some other secondary sources of evidence (e.g. documentation about students’ complaints). The following interviews were personal and private, following a semi-structured script, where we asked them for a short period of time – around an hour – about the evolution and the development of the subject according to the previous topics, as well as their opinions about these events. To increase the reliability of interviews and observational evidence, both authors carried out the interviews together. Finally, we interviewed twelve lecturers and professors involved in both cases during the analyzed period, four course coordinators, the Vice-President for Academic Innovation and a sample of selected students according to some lecturers' suggestions. In some cases, we had to interview informants on several occasions due to conflicting events (e.g. the reasons for modifying some course teaching materials) and new events that we identified after the first interview (e.g. time dedicated to prepare a session). We realized that some informants had not detected loss of knowledge up to the interview due to the fact that they had not considered it before. We collaborated interviews data with information from other secondary sources in order to avoid bias, poor recall and poor or inaccurate articulation. Moreover, these secondary sources allowed us to complement, to some degree, the lack of information obtained from the interviews (e.g. some changes in course teaching materials). Finally, we gathered information from the following historical documents: teaching guides, course guides, course evaluation questionnaires, lecturers assignation tables, students’ complaints, slide collections and teaching handbooks. These documents allowed us to identify, mainly, changes in teaching materials and the goals of the subjects (e.g. a new version of the textbook and new topics in the course contents). These secondary sources of information were used to triangulate the validity of our findings (Eisenhardt, 1989). Analysis We gathered a huge amount of data from the previous information sources, so we reduced and processed it following the strategies proposed by Miles and Huberman (1994). The reduction of the data was made by means of successive codifications of the collected data from the interviews and the historical materials. This codification permitted us to reduce this large amount of data into a smaller number of analytic units. The process used to reduce the data followed a two-level schema. Firstly, we built a general accounting scheme for codes in order to structure the gathered data. This scheme, which followed the suggestions of Lofland (1971), was made up by acts (e.g. change of the textbook), activities (e.g. teaching methodologies), meanings (e.g. comments about the results of the course), participation (e.g. students and teachers’ behaviour), relationships (e.g. working atmosphere), settings (e.g. kind codified knowledge. The use of new standard procedures is an example of this type of organizational forgetting. It involves the elimination of old procedure handbooks (normally codified on paper) and their replacement by new procedure handbooks. A part of the organization’s stock of codified knowledge must be eliminated to introduce a new stock of knowledge. Examples of the first type of forgetting in the case studies are change or replacement of teaching materials like textbook, case studies, slides and presentations, decided to be replaced or updated by lecturers. The second type of organizational forgetting comprises the unintentional loss of the stock of codified knowledge. Examples of this type of forgetting would be the loss of documents in a computer by mistake or breakdowns, or the loss of part of the codified knowledge held by employees when they are dismissed. In the first case, the written or codified documents are lost due to reasons beyond the organization’s control. However, in the second example a decision relating to people management indirectly involves the loss of codified knowledge that employees may have had on their computers or files, and which they had not yet shared with their fellow workers. While the first example of a loss of the stock of knowledge is due to a circumstance beyond the lecturer’s control (e.g. closure of a teaching intranet and opening of a new one due to a new software policy, and the replacement of old teaching materials to adapt to the characteristics of the new intranet), in the second example the loss of the stock of knowledge was caused by a publisher decision to replace the textbook with a new edition. Examples in this category are the loss of teaching materials and learning tools (teaching intranet) imposed by outsiders or by former lecturers who left the subject without having shared their codified resources. The intentional loss of a stock of non-codified knowledge is the third type of organizational forgetting. An example of this type of organizational forgetting occurs in organizations in which an attempt is made to change the corporate culture; for example, by increasing the degree of employee involvement. In these situations, workers have certain beliefs as to their role in the organization that are reflected in their conduct and in certain organizational routines. This conduct and these routines are not defined or codified in any form and therefore they are difficult to identify. However, in order to attain a more participatory culture, existing beliefs and routines must be eliminated, so that they can be replaced by new beliefs, new conducts and new organizational routines. Examples of the third type of forgetting in the case studies are the evolutionary changes in methodologies and lecturers skills to improve the subjects. Lastly, the fourth type of organizational forgetting involves the unintentional loss of a stock of non-codified knowledge. In this situation, vacation periods or the resignation of a salesperson from an organization may involve this type of organizational forgetting. Workers on production lines acquire habits and routines through daily experience that allow them to improve their performance; however, vacation periods result in a reduction of that noncodified knowledge and, consequently, a poorer performance by workers returning from their vacations. The resignation by a salesperson also involves a loss of non-codified knowledge, since the salesperson may be familiar with certain peculiarities about customers that are not recorded in any document and, consequently, a former salesperson may be more efficient than a new salesperson who lacks this knowledge. We also found several examples of this category in the case studies. Some technical knowledge, processes, routines, skills and methodologies embodied in lecturers, were lost in unexpected situations. For example, when a lecturer or a coordinator left the subject unexpectedly they took their knowledge with them. Moreover, when the teaching team remains, knowledge seemed to degrade and lecturers had to devote a lot of time to recover lost knowledge through preparing sessions and remembering what they have taught before. In addition, changes in the external environment turned some knowledge or teaching skills obsolete and lecturers had to adapt to the new situation, and forget previous ways of performing. Results and discussion In order to carry out a generalition or extrapolation, we developed a set of propositions from the empirical results of the two case studies and the existing literature on organizational forgetting. It’s necessary to mention that our goal was not to make an inference about a population (or universe), but to make generalizations to theoretical propositions (Yin, 2003). We present these propositions in the following paragraphs. Several examples of organizational forgetting show that internal innovation (innovation driven by agents who belong to the framework of analysis) is one of the main factors leading to the intentional loss of stocks of codified information. The replacement of all or a part of the teaching materials to update the specific technical knowledge on the course (OF5, OF13, OF15 and OF16) or to reduce the dispersion of teaching materials (OF17) are examples of innovation initiated and managed by the lecturers teaching the subject. Proposition 1a: The process of intentional forgetting of codified knowledge is set in motion by the presence of internal innovation. Another factor causing the intentional loss of stocks of codified knowledge is the obsolescence of knowledge. For example, the press articles used in Subject B (OF14) were discarded because they were no longer up-to-date and, consequently, could not fulfil their purpose, which was to show how the content of the subject could be used to explain the events occurring in society at the time. From the standpoint of the academic year, the projects and presentations submitted by the students were also discarded (OF19) at the end of the year, since their purpose was for the students to learn while preparing the materials rather than gaining from the results themselves. Proposition 1b: The process of intentional forgetting of codified knowledge is set in motion by the obsolescence of the knowledge. As found in the preceding situation, one of the main factors leading to the unintentional loss of a stock of codified knowledge is innovation, although in this case it was initiated from outside the framework of analysis. We have given three examples of organizational forgetting that reflect this fact (OF8, OF10 and OF18) in the cases analyzed. The replacement of the teaching intranet (a decision taken from outside the course) led to the replacement of part of the teaching materials in use due to their incompatibility with the former intranet. In Subject B, the textbook was replaced because a new version had been published. Proposition 2a: The process of unintentional forgetting of codified knowledge is set in motion by the presence of innovation from outside. In Subject A, the unplanned departure of the coordinator caused the loss of all the teaching materials used for the course (OF4) because the only copy of these materials existed on the coordinator’s computer, to which the replacement did not have access. The fact that all the teaching materials were located in just one place meant that a small change gave rise to loss of the full stock of knowledge in the form of teaching materials and the need to generate this full stock knowledge once again from scratch. Therefore, the unintentional loss of a codified stock of knowledge is sensitive to the effectiveness of the organizational memory (Olivera, 2000). Proposition 2b: The process of unintentional forgetting of codified knowledge is set in motion by the loss of the repository of the stock of knowledge if it is highly centralized. The main cause of the intentional loss of a stock of non-codified knowledge is the degree of internal innovation, according to the cases studied. Two examples of organizational forgetting confirm this assertion (OF1 and OF12), and both are related to changes in the teaching methodology due to internal decisions that affect each of the courses. Given the semi-distance nature of Subject A, the coordinator decided to replace classroom teaching skills with other skills to adapt the students’ learning process to the characteristics of the course. In the other case, the changes made to the teaching methodology for Subjet B led to the replacement of certain lecturing skills (2002–03 academic year) and certain participation skills (2005–06 academic year) as a result of an internal change of the course coordinator. Proposition 3: The process of the intentional forgetting of non-codified knowledge is set in motion by the presence of internal innovation. The innovation, initiated by the university, which involved replacing the teaching intranet, meant that the teaching skills developed up until that time had to be replaced by new teaching skills based on group learning (OF9) in Subject A. In this case, the innovation is considered external to the course because the decision was taken without the participation of its agents. On the basis of this example, we adduce that external innovation is a cause of the unintentional loss of the stock of non-codified knowledge, where the teaching skills that were replaced represent this stock of knowledge. Proposition 4a: This process of the unintentional forgetting of non-codified knowledge is set in motion by the presence of external innovation. Another cause of the unintentional loss of a stock of non-codified knowledge occurs when this knowledge is located in just one person who leaves the organization. The skills relating to the management of Subject A (OF3) were lost due to the unplanned departure of its coordinator and the loss of the specific technical knowledge embodied in the coordinators and lecturers of the two cases studied (OF2 and OF11). Proposition 4b: The process of unintentional forgetting of non-codified knowledge is set in motion by the person who embodies that knowledge on leaving the organization, if the stock of knowledge is highly centralized. Two examples of organizational forgetting show that the repetition frequency in the use of knowledge is a possible cause of the unintentional loss of a stock of non-codified knowledge. The excessive time spent preparing classroom sessions (OF6) due to the fact that they are repeated only once yearly helps to illustrate this fact. We can assume that in situations in which a class or explanation must be repeated several times over a short period, the preparation time will gradually decrease. The ongoing non-improvement of classroom sessions in Subject A (OF7) is another example that upholds this proposition. In this case, the learning achieved by a lecturer in a classroom session had no effect on the following academic year, since this knowledge deteriorated over time. The solution arrived at by the coordinator was to convert it into codified knowledge by means of record sheets, so that its infrequent use would not contribute to its loss. Proposition 4c: The process of the unintentional forgetting of non-codified knowledge is set in motion by a low frequency of repetition in the use of the knowledge. Table II: Propositions on the causes of organizational forgetting Intentional Unintentional Codified Prop.1a: Internal innovation Prop.1b: Obsolescence of knowledge Prop.2a: External innovation Prop.2b: Loss of a knowledge repository Noncodified Prop.3: Internal innovation Prop.4a: External innovation Prop.4b: Persons who embody the knowledge leave the organization Prop.4c: Low frequency of use Conclusions Our research is based on the premise that the stock of knowledge held by organizations is in a state of ongoing change rather than an increasing resource. From a theoretical standpoint, this change can be attributed, on the one hand, to flows of learning that increase the stock of knowledge and, on the other hand, to flows of forgetting that reduce the stock of knowledge. The previous literature has defined the concept of organizational unlearning (e.g. Hedberg, 1981) and organizational forgetting (e.g. Smunt, 1987); some authors have even attempted to unify these two initial academic trends (e.g. Martin de Holan and Phillips, 2004). It has also described different examples and ways to forget at an organizational level (e.g. Carmona and Grönlund, 1998; Nystrom and Starbuck, 1984). Finally, some studies have quantified the amount of lost knowledge through forgetting curves (e.g. Darr, Argote and Epple, 1995). However, the existing literature has paid little attention to the causes of organizational forgetting, as the low number of longitudinal field studies show. In order to identify and classify the causes of organizational forgetting, we have carried out an empirical study in higher education. This study presents an integrated framework that gives rise to a set of propositions about the causes of organizational forgetting. On the basis of our analysis, we conclude that forgetting is closely related to innovation. When innovation is internal, the type of forgetting generated will be intentional, since the specific purpose of innovation is to abandon the use of prior knowledge. The quantity of knowledge that is renewed is determined by the speed of innovation. This speed can be slow if the intention is an exploitation of the stock of knowledge, or fast if the intention is to give priority to the exploration of new knowledge. In both case studies, we observed that the speed of innovation in Higher Education depends on the coordinator of the subject. In other contexts, this dependence would correspond to the team leader. When innovation is external, the type of forgetting generated will be unintentional. This is the case with a type of innovation that is not managed internally by the empirical framework, but instead imposed from outside. The attitude of the agents involved in an external innovation can be proactive or reactive. In the analyzed cases, when the attitude was proactive, the agents adopted the innovation and generated a major forgetting and subsequent learning. When the attitude was reactive, the agents tried to forget the minimal stock of existing knowledge, adapting partially to the innovation, and underused it. In addition to external innovation, the loss of the knowledge repository and the infrequent use of knowledge are identified as other causes of unintentional forgetting. The nature of the knowledge repository will differ, depending on whether the stock of knowledge is codified (e.g. a computer file or written document) or non-codified (e.g. employees or organizational routines). The interviewees evaluated the cost of forgetting caused by the rotation of a lecturer in two academic years. In addition, it was observed in our research that if the person who leaves the course is the coordinator or team leader, the speed of internal innovation is also affected. The possible limitations of our work, given its nature as a piece of inductive research, are mainly connected to the fact that a small number of cases were studied. With the aim of enhancing the maturation of the research, we selected two case studies, which reported nineteen pieces of evidence, belonging to the same organization. To resolve this limitation, we suggest that the study sample be broadened to include other empirical frameworks and other business activities. In addition, it is important to highlight that there is no forgetting involved in all change processes. We found some examples of change where forgetting did not take place (e.g. introduction of podcasting in subject A); however, we did not mention it because our study has focused only on facts related to organizational forgetting. 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