The effect of organizational memory on organizational agility. Testing the role of counter-knowledge and knowledge application
| Published date | 12 March 2020 |
| Pages | 459-479 |
| DOI | https://doi.org/10.1108/JIC-03-2019-0048 |
| Date | 12 March 2020 |
| Author | Juan-Gabriel Cegarra-Navarro,Silvia Martelo-Landroguez |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
The effect of organizational
memory on organizational agility
Testing the role of counter-knowledge and
knowledge application
Juan-Gabriel Cegarra-Navarro
Department of Business Economics, Universidad Polit
ecnica de Cartagena,
Cartagena, Spain, and
Silvia Martelo-Landroguez
Department of Management and Marketing, Universidad de Sevilla, Sevilla, Spain
Abstract
Purpose –Intellectual capital includes what employees know and the agility to search and retrieve knowledge
(organizational agility). Organizational agility could be seen as the result of using validated routines and
protocols (knowledge application), but also as the result of using unproven theories, rumors, colloquial
expressions, or sayings (counter-knowledge), which means that organizational memory may enable both the
application of good knowledge and the mitigation of counter-knowledge. This study examines the links
between a firm’s organizational memory, counter-knowledge, knowledge application, and organizational
agility.
Design/methodology/approach –Using SmartPLS 3.2.8 in a sample of 112 companies, the following
questions were addressed: Does the improvement of organizational memory result in the growth of
organizational agility? Does the growth of counter-knowledge and knowledge application at the same time
hinder the enhancement of organizational agility?
Findings –The results support that organizational memory not only enhances the application of gained
knowledge but also allows the spreading of rumors, gossip, and inappropriate or false beliefs (counter-
knowledge). Furthermore, results support thatthe knowledge that emerges from the development in parallel or
simultaneous of counter-knowledge and knowledge application provides bad references, which will lead to a
degradation of organizational agility.
Practical implications –When supporting organizational agility, managers should be conscious of the
urgency of counteracting the misuse of counter-knowledge.
Originality/value –These findings make an important contribution to what is potentially a barrier to
innovation and creativity, helping managers overcome the problems associated with misunderstandings or
wrong assumptions derived from counter-knowledge.
Keywords Organizational memory, Knowledge application, Counter-knowledge, Organizational agility,
Intellectual capital, PLS-SEM
Paper type Research paper
1. Introduction
Intellectual capital is the sum of the intangible assets a company has at its disposal that can
be used to create competitive advantages (Bueno et al., 2006;Lentju
senkova and Lapina,
2016). An important component of intellectual capital is “intellectual agility,”which is defined
as the environments in which the staff are willing to modify structures and to think of
innovative strategies to face challenges (Bontis et al., 2000,2002;Ditillo, 1998). This concept is
closely connected to that of “organizational agility,”which means the capability of firms to
adjust/adapt their strategic direction or redeploy/redirect their resources to create value
(Charbonnier-Voirin, 2011;Doz and Kosonen, 2008;Teece et al., 2016). This study reports that
organizational agility (OA) may be considered as an extension of intellectual agility and
defines it as the result of transferring and retrieving knowledge from one context to another
(Pereira et al., 2018;Weber and Tarba, 2014).
Effect of
organizational
memory on
agility
459
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 7 March 2019
Revised 16 August 2019
7 December 2019
Accepted 20 January 2020
Journal of Intellectual Capital
Vol. 21 No. 3, 2020
pp. 459-479
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-03-2019-0048
In order to grow and prosper in the current context of crisis and uncertainty, it is necessary
for companies to respond rapidly to the rapid high-tech and environmental challenges (Cai
et al., 2019;Lu and Ramamurthy, 2011;Pereira et al., 2018). For these reasons, the literature
has attempted to present structures for achieving agility (Chakravarty et al., 2013;Wahyono,
2018). In such contributions, it is observed that the ability to examine the market in search of
opportunities or threats and to harmonize them within the company depends on the
knowledge available both inside and outside the organization. This means that OA is not only
the result of using validated routines and protocols (i.e. knowledge application (KA)), but it
may also be the result of using unproven theories, rumors, colloquial expressions, or sayings
(i.e. counter-knowledge (CK)).
Although KA and CK may signify the exchange of knowledge, the utilization of verified
and unverified information involves the use and development of different knowledge
structures with different characteristics. Whereas KA involves using knowledge learned to a
new context and is usually a formal process (Martelo-Landroguez and Cegarra-Navarro,
2014), CK involves the dissemination of unsubstantiated information and is an informal and
flexible process, which is in the hands of the parties (Cegarra-Navarro et al., 2015a). Since
there are authors who suggest that CK can lead to a degradation of knowledge (Chapman and
Ferfolja, 2001;Darr et al., 1995;Fernandez and Sune, 2009;Markoczy, 1994), it is important to
base the decision-making process on knowledge and not on the influence of CK (Allameh,
2018;Cegarra-Navarro et al., 2015a).
As the simultaneous pursuit of verified and unverified information may hamper the
development of intellectual capital and OA (Cegarra-Navarro et al., 2015b), it is important to
make use of “organizational memory”to better support the networking of employees,
managers, and companies (Al-Faouri et al., 2014). Organizational memory (OM) is considered
a key factor to create and sustain a firm’s competitive advantage (Anderson, 1983;Ebbers
and Wijnberg, 2009;Moorman and Miner, 1998) and implies more than just good experiences
and habits. It is the total integration of structures and processes within a business that allow
it to apply knowledge with the purpose of better achieving objectives (Ebbers and Wijnberg,
2009). OM involves retaining information in companies in forms of standard operating
procedures, structural artifacts, and mental models (Walsh and Ungson, 1991).
Bearing the aforementioned ideas in mind, we suggest that OM may facilitate both the
application of good knowledge and the mitigation of CK (Harvey, 2012;Lee et al., 2011;
Wexler, 2002). Our understanding of OA, as a result of applying both verified knowledge and
CK, is limited, if not nonexistent. In addition, studies focused on CK and intellectual capital are
scarce, with only a few exceptions (Cegarra-Navarro et al., 2015a;Echajari and Thomas, 2015).
This research aims to examine the links between a firm’s OM, CK, the process of KA, and OA.
This study explores those links by addressing the following two questions: Does the
improvement of OM result in the growth of OA? Does the growth of CK and KA at the same
time hinder the enhancement of OA? The answer to these questions lies in the effort needed to
maintain a balance between applying the right knowledge and counteracting the harmful
effects of bad CK. This study uses SmartPLS 3.2.8 in a sample of 112 companies listed on the
Spanish Stock Exchange. In the following section, an examination of the concepts discussed
earlier is presented. The third section explores the potential relationships between these
constructs. The fourth section describes the methodology used in the study. Then, we present
the findings. Finally, we state the discussion and conclusions.
2. Conceptual framework
2.1 Organizational agility
OA has been defined in various ways, including an intellectual viewpoint. Roos et al. (1997)
revive the concept of “intellectual agility,”which describes how individuals can integrate
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