In this paper we explore organizational forgetting, the notion that firms’knowledge can be lost through human capital decay. An in-depth case studyresearch, which is guided by the conceptualization of a system dynamics model,is conducted. The evidence appears to support the presence of forgetting. Thisgives rise to the possibility of productivity falling in spite of continued outputaccumulation, due to changes in the characteristics of the resource whereexperience resides. Most prior research on learning curves, however, assumesthat productivity will always increase with cumulative firm output.
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