When Do Organizational Routines Work Well? A New Approach to Knowledge Management

The organizational routine—defined here as a coordinated, repetitive set of organizational activities—is an important element of organizational learning and knowledge management. Some scholars even consider routines to be the only source of sustainable strategic advantage for firms. Yet we know little about the actual operation of routines, particularly what makes them work well. This study helps fill this gap in the literature by examining two knowledge-intensive routines—one involving explicit knowledge; the other, tacit knowledge—in four large companies. Three main findings emerge from comparative case analyses both within and across these firms. First, in contrast to much of the knowledge and learning literature, which has tended to focus on capabilities, I find that capability alone is not enough to ensure even shortor medium-term success. Rather, I find that participants must have the desire, the capability, and the power to implement the routine. Second, I find that, while strong personal relationships help the functioning of a routine, it is not relationships per se, but interpersonal trust (with or without a prior relationship) that appears to be the underlying mechanism leading to better outcomes. Third, I find that certain capabilities (e.g., having sufficient technical competence) are critical for routines involving tacit knowledge but not necessarily for routines involving a lot of explicit knowledge, where other capabilities (e.g., finding intelligent ways to reduce complexity) are more important. Implications for theory and practice are discussed.