How institutional memory can improve an organizations

When you take a position in a company of any size, you are entering into a community that has its own rules and regulations as well as its own history. This is often called "institutional memory" and not knowing it can put you at a disadvantage. I am looking for a formal essay that explains at least one aspect of a company's institutional memory and how it should or should not impact future decisions.

Institutional memory is a polarizing and contentious issues within the business community. For one, institutional memory, when done correctly, can have a large advantage within a organization. Here, institutional memory is engrained with the overall culture of the organization, creating a work environment that is empowering and inspirational. Companies that are able to leverage this institutional memory are better able to attract, retain, and promote competent talent with their respective organizations. By leveraging institutional memory, organizations are better able instill positive policies that can be used to help influence futures decisions. Aspects related to product expansion, product innovation, or other business elements can be applied used the principles engrained through institutional memory. Examples include Tesla and Google who are using their institutional memory to create new and differentiated products designed to help improve mankind. In the example of Tesla, the company is pioneering elective vehicle technology that can be adapted to help reduced societies dependence on foreign oil and gas. This ultimately will lower greenhouse gas emissions and prevent an overheating of the planet. In addition, Google has pioneered the idea of information exchange thus enhancing the transparency between businesses and consumers. Due to this information portal, consumers are able to shop for better prices, look for important information, and even entertain themselves much more efficiently (Alavi, 2001). All of these innovations occurred due in part to institutional memory that was leveraged in a positive manner. Likewise, institutional memory can also be a detriment to organization. An organization predicated on cutting corners or that lacks integrity can hamper economic development. In some cases, this institutional memory can undermine the enter financial system as a whole. For example, Wells Fargo has shown how institutional memory can negatively impact the financial performance of a company, thus placing its employees, its communities, and the economy overall at risk. In these instances, the negative institutional memory was associated with a culture predicated on fraud. Here, Wells Fargo heavy focused on a culture of sales. Many of the company’s compensation programs were centered around sales and generating new business. Although this institutional memory is not negative on its own, Wells Fargo took it to an extreme level. Due in part to the intense pressure for sales, many Wells Fargo employees opened fraudulent accounts, to make their sales goals. They put customers in products they didn’t ask for, opened new accounts, and even gave customers products that they would not have been eligible for ordinarily. All of this occurred due to an intense pressure to make sales goals and quotas. Here, the institutional memory prevailing in the organization caused a negative impact on not only the organization but society at a large. Individual consumer finances, credit history, credit reporting and their trust in the financial system overall were damage. This example illustrates the power of institutional memory and how it can either help or hinder economic development (Bailey, 1996).

Not have a general idea of the institutional memory of an organization prior to joining the community can place an individual at a large disadvantage. The primary disadvantage is associated with a misalignment of values and beliefs. It is important to understand the institutional memory of the organization prior to joining to ensure that the individuals vision matches that of the organization. Otherwise, the individual will not be fulfilled in their job responsibilities due to the misalignment of interest. It is therefore much more beneficial for individuals to pursue organization that are highly correlated to their overall passion in life. This can help ensure an alignment of interest and therefore a much more productive and fulfilling career (Argyris, 1996).

One aspect of a company’s institutions memory is it culture. Here institutional memory helps to reinforce the culture to allow the company to sustain itself through various economic cycles. Alibaba, a Chinese e-commerce giant embodies have a strong institutional memory that allows it to impact future decisions. This institutional memory is embedded within its culture. To preserve its culture, Alibaba has all new employees, irrespective of position, engage in a 4-week training program. The program details the origins of the business, its values, its mission and why it is important to uphold these principles. The company itself has said it wants to last at a least 102 years. Found in 1999, the company wants to be apart of three different centuries. This institutional memory is therefore predicated on innovation and long-term thinking. To last 102 years and to dedicate large amounts of resources to training requires a long-term perspective. The company accomplishes this through institutional memory and allowing employees to work on forward looking ideas they may not yet have a viable market. The company is willing to take losses to allow for ideas to incubate and develop into more promising businesses ideas. Here, institutional memory provides a culture that enables the exchange of information in a very efficient and productive manner. The world environment encourages mistakes and an incubation period in which ideas can be further analyzed and assessed. This allows employees to feel empowered about their work and their work environment. This creates a stronger sense of commitment and engagement from the Alibaba employee. This institutional memory is this engrained in new employees who are onboarded to allow for a much more institutionalized approach to innovation and creativity (Barriball, 1994).

This concept of institutional memory has manifesting a number of new innovations within the Alibaba ecosystem. One of the most recent innovations is autonomous driving robots. Although a fledgling industry in America, it has become much more mainstream in China due to the institutional memory engrained within the Alibaba culture. For example, the autonomous driving robot division of Alibaba delivered 1 million packages just one year after its launch. The company accomplished this with just 200 robots, carrying parcels to over 200,000 consumers in 52 cities, in 22 Chinese provinces. Due in large part to institutional memory, the company still continues to innovate and make progress. Within the next three years, the company hopes to delivery 1 million packages a day by expanding its fleet to 10,000 robots. The above is an example of how institutional memory can be leverages to improve business operations. These operations not only improve company profitability, but it also helps society live more efficient and productive lives (Beccera-Fernandez, 2004).

Research has also validated the need for institutional memory to be ingrained in businesses particularly due to their rapid change and innovation. Here the definition of institutional memory must be expanded to encompass the collective set of facts, concepts, experiences, and know-how held within an organization. Data, according to recent research will become the next large natural resources for society, very similar to oil during the industrial revolution. For many companies critical information is often siloed within specific departments, specific individuals or in specific locations. As a result, it is often difficult for organizations to access this knowledge is very seamless and integrated manner . This occurs because much of the information required is located is some many distinct locations, it is difficult to compile it all in a cost-effective manner. Institutional memory, and processes around its adoption look to mitigate this concern by centralizing product know-how, expertise, and other experiences. This allows the company to better leverage these assets as a competitive advantage against new challengers to their market share.

To accomplish this companies must segment Institutional memory into tangible and intangible information. Tangible information such as documents, legal agreements, certificates, personal information, sales figures, and financial statements can all be housed in centralized databases. Sensitive information such as product specifications and intellectual property documentation can also be housed internally in very secure protections. Here, anything document that provides direct value to the organization can be stored centrally through to help preserve institutional memory.