Negative aspects of counter-knowledge on absorptive capacity and human capital

Abstract

Purpose

People live and work in a world where they do not have complete knowledge and, as a result, they make use of rumours, beliefs and assumptions about relevant areas of concern. The term counter-knowledge has been used to refer to knowledge created from unverified sources. The purpose of this paper is to examine the relationship between counter-knowledge and human capital (HC) as well as investigating interactions between absorptive capacity (ACAP) and HC.

Design/methodology/approach

A model is tested to examine the relationship between counter-knowledge, HC and the financial performance of 112 companies listed on the Spanish Stock Exchange.

Findings

The results are calculated using structural equation modelling. This leads to the main conclusion that while the increasing presence of counter-knowledge leads to a reduction of ACAP and, by extension with HC. However, in the context of the sample, HC has positive effects on firms’ performance. Therefore, consideration must be given to the evaluation of the real cost of counter-knowledge or inappropriate assumptions on HC.

Practical implications

The key managerial implication of this paper is that management should actively develop an organizational culture which questions the source of any knowledge and favours evidence-based reasoning over reasoning based on “gut instinct”, what has worked in the past and reasoning based on rumours and gossip.

Originality/value

This paper provides empirical support for the argument that the all so-called “knowledge” generated from the sharing of unverified news is not necessarily good knowledge. Rumours or gossip shared thanks to unverified sources are some examples that illustrate people possibility to create inappropriate or false beliefs via unsupported explanations and justifications.

Citation

Cegarra-Navarro, J.-G., Cepeda Carrión, G. and Wensley, A. (2015), "Negative aspects of counter-knowledge on absorptive capacity and human capital", Journal of Intellectual Capital, Vol. 16 No. 4, pp. 763-778. https://doi.org/10.1108/JIC-01-2015-0010