Is organizational innovation always a good thing? When is innovation negative? What are the damaging effects of innovation? In this article, it is argued that innovation has negative impacts on organizational performance when the newly introduced knowledge is not compatible with an organization’s prior knowledge. In this instance, an organization may experience knowledge loss or organizational dysfunctions, such as avoidance, resistance, struggle, alteration, and conversion processes. To avoid the negative impacts of innovation, we suggest that organizations should first recognize the incompatibility between the new knowledge and prior knowledge and then reformulate the newly introduced knowledge. Implications for theory and research are offered as well as suggestions for practice.
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