The Mutual Transmission of Knowledge and Competencies between Generations: an enabler of Dynamic Capabilities

The purpose of this article is to propose a generational view of the organization in order to think about the firm evolution between continuity and adaptation. Especially, we suggest that the “intergenerational transmission of knowledge and competencies” may be an enabler of assets reconfiguration in the ambit of dynamic capability. Since the 1980’s, the resource-based view of the firm (RBV) (Penrose 1959; Wernerfelt 1984; Barney 1986) has pointed out the role of internal and idiosyncratic resources of the firm to gain in competitive advantage. Knowledge and competencies are regarded as being the main strategic assets that the firm should identify, protect, exploit and renew. We sum up these strategic assets in a four-stage systemic model, ranging from the 1) individual knowledge and 2) competencies, to the 3) collective competencies and 4) organizational capabilities. Yet, in a changing environment, firm has to evolve and transform itself in order to sustain its competitive advantage. The ability of a firm to extend and modify its strategic assets to do so is called dynamic capability (Teece and al. 1997; Helfat et al. 2007). However, the question about how, concretely, the assets reconfiguration manifest itself in a local level has not been answered yet. This is an important issue, considering the systemic and socially embedded nature of knowledge and competencies: these are sticky assets (Szulanski 1996) that hardly evolve. Recently, the on-going retirement of baby boomers has emphasized the need of an intergenerational transmission: it is fundamental to retain their knowledge and competencies which represent the strategic assets of the firm. However, the one-way transmission from the elder to the younger is not sufficient to ensure the survival of the firm. The strategic assets of the firm also need adjusting and updating through time. Therefore, the intergenerational transmission should be seen as a dynamic capability. Based on this parallelism, we put forward that the concrete functioning of strategic assets reconfiguration may be observed through the analysis of the intergenerational transmission of knowledge and competencies. Then, we try to define the concept of generation so as to explain the issues related to the strategic assets reconfiguration. Two generational concepts in management are identified and rejected: the “societal generation” and the “life cycle generation”. A third and new concept of generation is proposed: the “generation of knowledge and competences” which refers to a group of people representing a homogeneous area of knowledge and competencies. Building on this definition, we advocate that the intergenerational transmission may act as an enabler of firm assets reconfiguration between continuity and adaptation. Then, a better understanding of the former could contribute to the management of the latter. Implications for future research are discussed.