Organisational unlearning and digitalization: a dynamic capabilities perspective with agility as mediator and environmental turbulence as moderator

In the digital age, digitisation is of utmost importance yet fraught with challenges. This paper examines how firms’ deliberate ‘unlearning’ of outdated beliefs and routines helps drive digitalisation by first building organisational agility, and how environmental turbulence shapes that effect. Drawing on Dynamic Capabilities Theory, we separate unlearning into two types: belief and routine changes, and argue that each boosts digitalisation only through increased agility. We also propose that environmental turbulence strengthens the link from belief changes to digitalisation, while its impact on routine changes peaks at moderate turbulence (an inverted-U effect). Using survey data from 212 Chinese manufacturing firms, we find: (1) both belief and routine changes improve digitalisation solely via agility; (2) turbulence positively moderates only the belief-digitalisation path; and (3) routine change follows the predicted inverted-U pattern. Our findings extend Dynamic Capabilities Theory by positioning unlearning as a foundational capability for digitalisation, identifying agility as the critical mechanism translating unlearning into digital success, and clarifying when unlearning is most effective under varying environmental turbulence.