Value-added statement as a trigger to organizational unlearning

Abstract

Purpose Organizational unlearning is easier said than done. Organizations are usually not cognizant of the ripe time to start questioning and discarding their existing paradigms and past success formulas. This paper aims to recommend the use of a financial metric, i.e. value-added statement, as a trigger to unlearning in organizations. Design/methodology/approach This paper uses a review of existing literature on organizational unlearning to highlight that although prescriptive studies on unlearning are abundant, “how” and “when” organizations should contemplate and discard the obsolete knowledge and routines is still inconspicuous. Findings Value-added statement is an adequate reporting measure that incorporates the contribution of organization toward not only its shareholders but also other stakeholders such as employees, providers of long-term finance, government, and public. It supplements income statement and provides an insight of how organizations are serving its interest groups. A decline in value addition by an organization in a reporting period can serve as a trigger to question the existing practices and break organization’s over-dependence on “one size fits all” approach. Originality/value Unlearning is considered as a means to attain financial performance in an organization. This paper attempts to recommend a financial metric which incorporates the economic, social, and environmental aspects of business, i.e. value-added statement. The rationale for not recommending other financial metrics as a trigger for unlearning is based on grounds of possible manipulation. Moreover, these financial statements are affected by legal, political, and economic context of a nation.