Downsizing and Building Organizational Memory: A Paradoxical Relationship between “Brain-Drain” and “Brain-Gain”

Recent business practices over the past decade have been tainted with corporate restructuring strategies such as downsizing, reorganizations, and job redesigns. With the hopes of increasing efficiency, gaining productivity, and reducing costs, many companies have participated in such efforts. However, one must consider the irony behind this shrewd, if not tactfully harsh, business practice. While organizations continue to decrease their workforce in an effort to regain acceptable profit margins, cut back on “waste” and become “leaner”, they also stress the importance of sharing knowledge among employees and building organizational memory. How can a company effectively share knowledge and build organizational memory when its employee base is shrinking? This is an interesting question that has stirred much debate over recent years, both in the public and private sector. As such, this book chapter attempts to explore the paradoxical relationship between downsizing (brain-drain) and building organizational memory (brain-gain).