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Core Capability and Core Rigidity: Organizational Memory Perspective
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Core competence and core rigidity: Organizational memory perspective
Chen-Yi Tsai 1, Lin, Julia L. 2, Chen, Ching-Hsiang3
1. Doctoral student, Graduate School of Management, I-Shou University.
1959). Firms with coherence outperform less coherent firms (Teece, Rumelt, Dosi,
and Winter, 1994). As capability, being path dependence and embedded within
organizational routines (Nelson and Winter, 1982), becomes competence trap
(Lenard-Barton, 1992), dynamic capability, collectively set of routines (Winter, 2000,
2003), focus on balance between capability exploitation and exploration (Christensen
and Foss, 1997; Ghoshal, Hahn and Moran, 2000; March, 1991). This paper’s
contribution to the evolution of organizational capabilities details as followed:
Why core capability becomes core rigidity?
Core Capability and Core Rigidity: Organizational Memory Perspective
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In trajectory of capability evolution, slack resources (Penrose, 1959) and genies
of routines (Nelson and Winter, 1982) play critical role. The concept of coherence is
path dependent and local learning, which is embedded in tacit routines (Teece et al.,
1994). Firms with coherence will outperform less coherent firms. But accumulation
of slack resources and nature of routines only tell partial story, which core capability
becomes core rigidity. For capability, result of organizational learning (Huber, 1991),
not only resided in routines (procedural memory), but also embodied within
declarative memory. While stability-inertia of routines, that economizes
decision-making, prevails, reversed-U shape between slack resources and innovation
emerges. Declarative memories, while decrease speed, bring novel knowledge,
which is source of organizational dynamic capability.
Drawing from Nelson and Winter (1982)’s concept, routines as organizational
memory, we offer different effects of distinctive form of organizational memory on
capability evolution. That is, organizational capabilities are not only embodied
within routines. Routines can be as organizational memory, but only one of
organizational memory types. In the process of organization capability evolution,
different level and forms of organization memory produce different effects. When
higher level of distributed procedural memory may push routines to be rigidity,
dispersed declarative memory pulls another direction.
Core Capability and Core Rigidity: Organizational Memory Perspective
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This paper suggests distinctive effects of different forms of organization
memory on organizational capability. The relative strength between procedural and
declarative memories needs future research work.
What conditions promote endogenous change?
Coherent firms outperform less coherent firms, but coherent firms may become
inertia, which inhibit firms’ continuous growth. Organizational scholars suggest
dynamic capability to balance of exploitation and exploration (Christen and Foss,
1997; Ghoshal et al., 2000; March, 1991). Not only endogenous slack resources,
accounting for organizational capability accumulation, but also novel knowledge,
stored in external storage bin, contribute firm’s growth. The above statement argues
that turbulence of external environment promote organizational change.
But under environment complexity, organizations have different choices.
Organizational routines may be still habitual regardless of environmental turbulence.
A few organizations may modify routines to absorptive environmental complexity.
Some organizations will select robust transformation to reduce complexity
(Lengnick-Hall and Beck, 2005). Feldman and Pentland (2003) propose agency
perspective to account for the choice. But the question, what conditions promote
endogenous change, still need future research. This paper’s framework suggests TMS
as the facilitator, in which mediates novel and existing knowledge.
Core Capability and Core Rigidity: Organizational Memory Perspective
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CONCLUSION
Organizational memory perspective provides insight to expand existing
knowledge of core capability and core rigidity. For the conceptual paper, we propose
conceptual framework to evaluate rationales and theoretical implication. When
opposite effects of novelty and speed of organizational capability, the relative
strength between procedural and declarative memories needs future research work.
In process of capability accumulation, adaptive fit or robust transformation, the
relations among “Know-how (procedural memory), know-what (declarative
memory), and know-where (Transactive memory) remain future direction. Finally,
empirical research is needed in the future.
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