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
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.
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