Harmony in flux: Unraveling the green innovation with organizational forgetting, absorptive capacity, and the jazz of organizational improvisation

Abstract Organizations are advised to consistently seek and assimilate novel information from external sources to enhance their adsorptive capacity and better understand and address environmental challenges. Despite the evident influence of external knowledge on absorptive capacity and green innovation performance (GIP), there is a notable dearth of discussion on the internal mechanisms facilitating this transformation, potentially leading to adverse consequences for GIP. In response to this gap, our research intends to explore the direct impact of organizational forgetting (OF) on GIP, both independently and through potential absorptive capacity (PAC) and realized absorptive capacity (RAC). Further, this investigation incorporates the moderating role of organizational improvisation (OI) to provide a comprehensive understanding of an encompassing model. Utilizing structural equation modeling (SEM) on data from 321 respondents from Chinese manufacturing firms, our findings reveal that OF significantly contributes to GIP, PAC, and RAC. Moreover, this association is partially mediated by both PAC and RAC. Further, OI expressively moderated the targeted relationships in confounding ways. Importance–performance map analysis also highlights the pivotal role of PAC with a notable performance value (68.812), while OF takes precedence in importance with a substantial value (0.572) compared to all exogenous variables. These insights contribute to an enriched understanding of the vital role OF plays in enhancing PAC, RAC, OI, and GIP—an aspect that has yielded inconsistent results in prior studies. Consequently, our findings advocate for increased investment by managers and policymakers in cultivating the capacity to absorb new knowledge as a strategic imperative for fostering innovation and GIP within industries.