Because the extent to which knowledge depreciated varied across the contexts we have studied, these studies provide grist to develop hypotheses about factors affecting the rate of depreciation in organizations. By far the most rapid depre- ciation was found in the fast food study. One important way in which the fast food franchises differed from the other organizations we have studied is their low technological sophistication. An interesting hypothesis that is consistent with our results is that more technologically sophisticated organizations exhibit less depreciation than less technologically sophisticated ones. For high-technol- ogy organizations, much of their knowledge is embedded in their technology— in their layout, software, and hardware. Knowledge embedded in technology may be more resistant to depreciation than knowledge embedded in other repositories.
Another interesting hypothesis worthy of further investigation concerns the role of labor turnover in knowledge depreciation. The turnover in the fast food fran- chises was incredibly high: the turnover rate of employees was approximately 25% per month. The shipyards had an intermediate level of turnover, averaging approxi- mately 10% per month. The turnover rate in the automotive plant was considerably less than this, averaging between 1% and 2% each month. Thus, we found the fast- est depreciation in the organizations that experienced the highest turnover. These results suggest that the average turnover rate might affect the rate of depreciation. Further research is needed to understand the conditions under which knowledge depreciates in organizations and the factors affecting the rate of depreciation.
The following chapter develops these ideas further, introducing the concept of organizational memory and describing various “retention facilities” or “reposito- ries” for organizational knowledge. The implications of where knowledge is embed- ded for its persistence over time and its transfer to other organizations are developed in Chaps. 4 and 6.
Source: Argote Linda (2013), Organizational Learning: Creating, Retaining and Transferring Knowledge, Springer; 2nd ed. 2013 edition.