A THEORETICAL EXAMINATION OF ORGANIZATIONAL DOWNSIZING AND ITS EFFECTS ON IS ORGANIZATIONAL LEARNING, MEMORY, AND INNOVATION

摘要

In this paper, we present the antecedents of organizational downsizing, and examine the effects of downsizing on information systems organizational learning, memory, and innovation. The current economic condition is forcing companies to downsize with perceived benefits being economic (such as reduction of costs, increased earnings) and even organizational (such as enabling faster decision making). Historically however, very few companies have actually realized benefits from downsizing. According to a study, only 37% of companies surveyed have realized long-term gains in shareholder value. Furthermore, the loss of key people in downsizing disrupts learning and knowledge structures of a firm. Additionally, but not frequently reported, downsizing also affects the knowledge structures of the IS organization within a firm hindering its ability to be a learning and innovative IS organization. In this paper, we present our research model to examine the organizational impacts of downsizing. Specifically, our model focuses on the effects of organizational downsizing on IS organizational learning, memory and innovation. We argue that the long-term affects of downsizing are anything but beneficial to the IS department.