Question

Which of the following typically results in a loss of organizational memory?

1) The processes used to make a unique product are incorrectly documented.
2) The company lays off nearly one-quarter of its workforce.
3) The company sells one of its divisions (including employees in that division) to another organization.
4) All of the answers are correct.
5) Only "A" and "B" are correct.

Answer 1

All of the options provided typically result in a loss of organizational memory. This is because they involve losing the accumulated knowledge and skills of employees, either due to incorrect documentation, workforce reduction, or the selling of a company division.

Step-by-step explanation:

Which of the following typically results in a loss of organizational memory? The correct answer is 4) All of the answers are correct. Organizational memory includes the accumulated body of data, information, and knowledge created in the course of an organization's existence. When processes are incorrectly documented, vital knowledge on how to perform specific tasks or make certain products can be lost, leading to a decay in organizational memory. Furthermore, laying off employees or selling a division and its employees means the company is losing people who carry valuable skills, experiences, and company-specific knowledge which cannot be easily replaced.

Furthermore, the exit of a company from the market or the downsizing of its workforce can lead to a significant loss of organizational knowledge. This can occur due to various reasons such as the company's failure to achieve profit goals or a sustained pattern of losses. Such events are not only disruptive to remaining employees but also result in the erosion of institutional knowledge painstakingly built over time.