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Does Organizational Forgetting Affect Vendor Quality Performance? An Empirical Investigation

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The development of organizational knowledge and the depreciation of knowledge within organizations are processes that invariably occur concurrently. In the quality domain, many researchers have examined how the development of organizational knowledge (organizational learning) enhances quality performance. We build on this literature and investigate how the depreciation of organizational knowledge (organizational forgetting) affects quality performance. We analyze information on 2,732 quality improvement initiatives implemented at 295 vendors of a car manufacturer, and find that organizational forgetting affects quality gains obtained from learning-by-doing (autonomous learning) and from quality improvement initiatives (induced learning); over 16% of quality gains from autonomous learning and 13% of quality gains from induced learning depreciate every year. Further, the impact of organizational forgetting i) differs across the types of quality improvement efforts (quality gains from process improvement initiatives depreciate while those from quality assurance initiatives do not), and ii) depends on where quality knowledge was embedded (depreciation is lower for knowledge embedded in technology than for knowledge embedded in organizational routines or organizational members). Our results highlight the ubiquity of organizational forgetting and suggest the need for continued attention to sustain and enhance quality performance in supply chains.
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... Forgetting" The classic learning curve model asserts that knowledge accumulated from prior learning does not depreciate. Lately, researchers have empirically examined the element of organizational forgetting (OF) in the learning process, thereby developing a new approach incorporating both aspects, i.e., learning and forgetting (Agrawal and Muthulingam 2015;Argote 2013;Carmona and Grönlund 1998;Causholli 2016;Kim and Seo 2009;Thompson 2007). Forgetting is defined as an inadvertent loss of knowledge, routines, or practices from organizational memory due to personnel turnover, disuse of knowledge, and failure to capture/ codify new knowledge (Agrawal and Muthulingam 2015;Argote 2013;Easterby-Smith and Lyles 2011;Fernandez and Sune 2009;López and Sune 2013;Martin de Holan and Phillips 2004a;Meschi and Métais 2013). ...
... Lately, researchers have empirically examined the element of organizational forgetting (OF) in the learning process, thereby developing a new approach incorporating both aspects, i.e., learning and forgetting (Agrawal and Muthulingam 2015;Argote 2013;Carmona and Grönlund 1998;Causholli 2016;Kim and Seo 2009;Thompson 2007). Forgetting is defined as an inadvertent loss of knowledge, routines, or practices from organizational memory due to personnel turnover, disuse of knowledge, and failure to capture/ codify new knowledge (Agrawal and Muthulingam 2015;Argote 2013;Easterby-Smith and Lyles 2011;Fernandez and Sune 2009;López and Sune 2013;Martin de Holan and Phillips 2004a;Meschi and Métais 2013). Easterby-Smith and Lyles (2011) analyze OF from cognitive, behavioral, and social perspectives. ...
... In contrast, forgetting does not involve replacing existing practices with better ones since it is accidental in nature. Consequently, unlearning is a functional process leading to higher learning levels, whereas forgetting is a dysfunctional process leading to an adverse impact on organizational performance (Agrawal and Muthulingam 2015;Azmi 2008;Causholli 2016;López and Sune 2013;Meschi and Métais 2013). ...
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... For these devices, as the days since the previous usage increase, the duration of the surgery significantly increases, suggesting that the knowledge about how to use the devices depreciates. Agrawal and Muthulingam (2015) compare the extent to which knowledge embedded in three different repositories in the supply chain of a manufacturing facility depreciates. The researchers find that knowledge embedded in technology exhibits the least depreciation over time, knowledge embedded in routines evidences intermediate depreciation, and knowledge embedded in individuals exhibits the most depreciation. ...
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... Unlike the above papers, we study both autonomous cost reduction due to learning-by-doing and induced cost reduction due to process improvement investment. Closest to our work, Agrawal and Muthulingam (2015) used a data set from an automobile company to study the impact of organizational forgetting on quality improvement due to learning-bydoing and improvement investment. Unlike them, we use the analytical modeling approach to study the competition between the vendors to win the client's secondperiod requirements. ...
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