Renewal Ability of Organizations: Combining Effective Maintenance, Incremental Development and Radical Innovation in Knowledge-based Organizations

Organizational ability for continuous self-induced innovation, learning and development has emerged as a popular topic in recent management science literature. Nevertheless, there is no widely shared view on how organizational renewal should be defined and what it consists of. Consequently, this paper aims to produce an integrative definition of organizational renewal ability and to examine its most important characteristics. Based on review and comparison of various theories of organizational renewal, it is argued that organizational renewal ability is defined both by the ability of the organization to implement the spectrum of knowledge processes from 1) effective standardization, replication, implementation and maintenance of the existing knowledge, through 2) continuous incremental development of them, to 3) production of radically new knowledge and innovations, and by whether these are balanced in a manner that is consistent with the strategic intent of the organization as well as the external demands posed by its environment. Further, it is argued that organizational renewal ability is pro-active, knowledge-based, dynamic, future-oriented, social, systemic, strategic, and multi-dimensional by nature.