<p>In the context of the knowledge economy, organizations increasingly rely on intangible assets such as culture, identity, and learning capacity to sustain innovation. Among these, corporate folklore—informal, recurrent stories that circulate within organizations—remains an under-theorized yet powerful mechanism for shaping knowledge practices. This article develops a theoretical framework positioning corporate folklore not as peripheral narrative, but as a dynamic form of knowledge infrastructure embedded in innovation culture. Drawing from organizational learning, knowledge management, and innovation theory, the paper demonstrates how stories structure tacit knowledge, guide behavior, regulate norms, and mediate innovation outcomes across the full innovation cycle. The dual role of folklore—both as an enabler of creativity and a potential inhibitor of change—is examined in depth. Through this reframing, the paper proposes storytelling as a symbolic knowledge layer that supports adaptive capacity, strategic alignment, and organizational sensemaking. It concludes by outlining future theoretical directions, including the development of narrative capital, ethical dimensions of storytelling, and the integration of folklore into foresight and ecosystem-level innovation analysis. The article contributes to a more culturally grounded understanding of how knowledge circulates and how innovation is lived, remembered, and narrated within organizations.</p>