Organizational unlearning, knowledge generation strategies and radical innovation performance: evidence from a transitional economy

Purpose Empirical results remain unclear as to whether organizational unlearning can improve radical innovation performance. The purpose of this study is to investigate how, and under which conditions, organizational unlearning influences firms’ radical innovation performance. Design/methodology/approach Drawing on the knowledge-based view, this study develops a theoretical model that hypothesizes a positive relationship between organizational unlearning and radical innovation performance, which is mediated by knowledge generation strategies. It also proposes that the impact of unlearning on knowledge generation strategies will be moderated by dysfunctional competition. Using survey data from 191 Chinese manufacturing firms, the hierarchical regressions were used to test the hypotheses. Findings The empirical results show that organizational unlearning not only impacts radical innovation performance directly, but also indirectly affects radical innovation performance through two distinct types of knowledge generation strategies: (internal) knowledge creation and (external) information searching. Moreover, dysfunctional competition plays a dual role, strengthening the positive relationship between organizational unlearning and information search and weakening the positive relationship between organizational unlearning and knowledge creation. Research limitations/implications The present research broadens the understanding of how to promote radical innovation performance, which has great potential to improve the performance of firms on the market. Specifically, it deepens the knowledge of how organizational unlearning facilitates radical innovation performance by focusing on two distinct types of knowledge generation strategies as the crucial links, and enriches existing literature on the effectiveness of organizational unlearning in a dysfunctional competitive environment. Practical implications Practicing organizational unlearning for firms’ long-term success requires firms to develop and implement appropriate knowledge generation strategies in accordance with the characteristics of market competition in their operating environment. Originality/value This study offers new insights into how and under what conditions organizational unlearning affects radical innovation performance, enhancing the understanding of how organizational unlearning can be implemented to drive firm radical innovation.