Organizational memory, downsizing, and information technology: A theoretical inquiry

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.