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After you read the article, post your reaction to the article and what you learned about radical organizational change from reading it.Memory loss? Corporate knowledge and
radical change

Nicholas J. Scalzo

An organization’s ability to collect, store and use knowledge it has generated through experience

can have important consequences for its performance. Storing and using stored knowledge

effectively can buffer the organization from the disruptive effects of turnover, facilitate

co-ordination, contribute to the development of innovative products, and may even serve to

rebuild an organization (Olivera, 2000, p. 811).

Seeking ways to keep their firms viable and sustain or enhance profitability, organizational

leaders are making changes in how their organizations are run, paying closer attention to

customer needs, and restructuring whole divisions and business lines. Many are using

voluntary early retirement options, and reductions in force to balance the ratio between the

work and staffing levels that may have grown to unprecedented levels during the late 1990s.

These initiatives have a direct impact on bottom-line expenses in the current and near-term

fiscal quarters. However, few leaders look at the long-term implications these initiatives will

have on their organization. Many times these initiatives create unintended problems.

One such problem is the loss of organizational memory (the knowledge and information from

the organization’s past which can be accessed and used for present and future

organizational activities). As long-tenured staffs begin to leave, they take with them their

knowledge, skills, and other valuable job-related information – components of the

organization’s memory that may become inaccessible to the organization. Additionally, this

loss may disrupt organizational memory systems as these components are part of

organizational knowledge that may be dispersed across actors, systems, and interactions in

organizations. Organizational leaders are realizing that more of what is valuable about how

to do the work resides in people’s heads. Olivera (2000) found turnover had an impact on

accessibility of the experiential knowledge within social networks. The organizational

knowledge literature posits the importance of knowledge to an organization’s ability to make

decisions, solve problems, meet competitive challenges, and ultimately be successful.

The study

This case study was intended to expand our understanding of what happens to elements of

organizational memory systems during, and in the aftermath of, radical change initiatives (a

significant shift in structure, function, values, culture, strategy, power distribution, and

control systems). Specifically this study explored the tacit and explicit knowledge aspects of

organizational memory systems.

The impetus for this inquiry began with the events of September 11, 2001. With the terrorist

attacks and subsequent collapse of the World Trade Center towers, significant numbers of

employees were lost. One organization, the bond-trading firm Cantor-Fitzgerald, lost

approximately 700 emp

  
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