Organizational Memory, Downsizing, and Information Technology: A Theoretical Inquiry

Article excerpt

Organizational memory refers to the stored information from an organization's history that can be brought to bear on present decisions. Despite its critical role in supporting the overall efficiency of the organization, organizational memory can be damaged by downsizing, a popular strategy. This paper suggests that the implementation of information technology (IT) contributes to the maintenance and development of organizational memory during downsizing. Strategically implemented IT does not only enhance accessibility to knowledge repositories but also promotes flat organizational structure, which improves the efficiency of information processing. The paper calls for a strategy combining downsizing and IT implementation so that organizational memory is sustained while labor cost is reduced.

Introduction

As organizations try to adapt to the increasingly competitive market by developing their learning and creation capabilities, organizational memory, a construct that is critical to a learning organization, receives more and more discussion in the literature (Anand, Manz, and Glick, 1998; Hargadon and Sutton, 1997; Johnson and Hasher, 1987; Moorman and Miner, 1997, 1998; Pavlou & El Sawy, 2010; Richardson-Klavehn and Bjork, 1988; Walsh and Ungson, 1991). These studies show that organizational memory contributes to organizational effectiveness as a mechanism of acquisition, storage, and retrieval of information. Using organizational memory properly, organizations can speed up problem solving by recognizing problems in recurrent situations and generating solutions from past experience. They can also perform efficiently by automatically processing and applying the stored information, routines and skills (Walsh and Ungson, 1991). Moreover, organizations with supportive culture can recombine information from different domains to create solutions in novel situations (Hargadon and Sutton, 1997; Moorman and Miner, 1998).

Organizational memory exists in both individual and collective levels. At the individual level, employees remember the events, rules, and special skills to perform their roles in the organizational context. At the collective level, organizational culture stores collective beliefs, values, as well as implicit rules directing people's behaviors and decision-making (Walsh and Ungson, 1991). The collective organizational memory can also be observed in the social networks in the organizations, where people share their knowledge, skills, and memories in interactions, communications, and meetings (Hargadon and Sutton, 1997). Consequently, personnel withdraw from the organizations may cause the loss of organizational memory due to the loss of individual repositories, interruptions to the patterns of team coordination, and damages to the social networks. Such a situation tends to be severe when organizations engage in massive downsizing strategies. In fact, the literature attributes the failure of downsizing to its potential of destroying organizational memory (Fisher and White, 2000; Mellahi & Wilkinson, 2010; Shah, 2000).

Efforts have been made to transfer organizational memory into information technology (IT) solutions such as OMIS (organizational memory information systems) (Wilnjoven, 1999). This indicates the possibility of developing organizational memory in the form of information systems. Besides this specific OMIS, literature in business process reengineering suggests that common IT implementation tends to induce process changes in the organization (Grover and Kettinger, 2000). The changes are strategic, not only including changes in operation process, but also concerning changes in the patterns of information acquisition, retention, and retrieval, as well as the content of information stored (e.g., beliefs, routines, etc.). This implies that IT can play a critical role in improving several aspects of organizational memory

Previous research rarely discusses IT outcomes in terms of its impact on organizational memory. …