Strategic Renewal: Learning, Unlearning, and Organizational Wisdom

Abstract

Sustaining long-term viability requires that firms undergo many changes throughout their lifecycles. When a firm recognizes that its current strategy is unsatisfactory, it may engage in strategic renewal—a process of redirecting the firm’s strategic intent and capabilities. But what exactly is being renewed and how does a firm go about this? I argue that strategic renewal involves renewing organizational knowledge through the mechanisms of technological innovation as firms alter their path dependence. In a series of three studies, my dissertation encompasses investigations of how organizational learning, unlearning, and wisdom relate to the process of strategic renewal. Study 1 proposes that organizational learning precedes strategic renewal as firms explore new knowledge while balancing internal exploitation of current knowledge and the external adoption of its current technologies. Study 2 introduces a process of unlearning as firms must shed obsolete or misleading knowledge in order to substantially change their knowledge bases for strategic renewal. Study 3 suggests that the strategic renewal process of changing knowledge through innovation results in achieving organizational wisdom.