It is easy enough to suggest that a plausible answer to the question uWhere does the knowledge reside?” is “In the organization’s mem ory.” But where and what is the memory of an organization? We pro pose that the routinization of activity in an organization constitutes the most i mportant form of storage of the organization’s specific operational knowledge. BaSically, we claim that organizations re member by doing – although there are some important qualifications and elaborations.
The idea that organizations “remember” a routine largely by exercising it is much like the idea than an individual remembers skills by exercising them. The point that remembering is achieved largely through exercise, and could not be assured totally through written records or other formal filing devices, does not deny that firms keep formal memories and that these formal memories play an important role. But there must be much more to organizational memory than formal records. Further, cost considerations make ildoing” the domi nant mode of information storage even in many cases where formal records could in principle be kept.
To see how exercise of a routine serves as parsimonious organiza tional memory, consider an organization in fully routine operation and ask what really needs to be remembered, given that such a state has been achieved. Under such a regime, the situations of individual members and of the organization as a whole contain no significant novelties: the situations confronted replicate ones that were con fronted the previous day (or week, month, or year) and are handled in the same way. The scope of the activity that actually takes place in such a static condition and the operational knowledge involved are extremely restricted. Members perform only a minute fraction of the routines they have in repertoire . The lathe operator and the lathe
turn out a few specific parts; there is an indeterminately larger number that they could (after appropriate setup and learning) pro duce. The operator’s skills as truck driver and short-order cook are never drawn upon, and perhaps are unknown to other organization members. Routine operation of the organization as a whole certainly does not require that the lathe operator maintain his skill in cooking bacon and eggs, or in the machining of parts for products that were discontinued three years previously; neither does it require that other members remember that the lathe operator possesses or once possessed these skills. If the same s tate of routine operation is ex pected to continue indefinitely, there is no economic benefit to be anticipated from holding this sort of information in the organiza tion’s memory. (As an obvious corollary, if there is a positive cost to storing information, this sort of “irrelevant” information will tend not to be held in memory under the “equilibrium” condition of con tinuing routine operation.)
What is required for the organization to continue in routine operation is simply that all members continue to “know their jobs” as those jobs are defined by the routine. This means, first of all, that they retain in their repertoires all routines actually invoked in the given state of routine operation of the organization.
There is, however, much more to “knowing one’s job” in an orga nization than merely having the appropriate routines in repertoire. There is also the matter of knowing what routines to perform and when to perform them. For the individual member, this entails the ability to receive ‘and interpret a stream of incoming messages from other members and from the environment. Having received and in terpreted a message, the member uses the information contained therein in the selection and performance of an appropriate routine from his own repertoire. (This may, of course, be merely a “‘relay message” routine, or even a “file and forget” routine.)
The class of things that count as “messages” in this character ization is large and diverse. There are, first of all, the obvious ex amples of written and oral communications that take overtly the form of directives to do this or that. Such directives involve the exercise of formal authority, a phenomenon that has been the focus of a great deal of organizational literature. Then there are the written and oral communications that do not take this form but that are responded to in much the same way. For example, descriptions of what is lineeded/’ when directed to the member whose job it is to meet that need, often function as directives . Even a simple description of the situation, without explicit reference to a need, may function this way. Then there are all the hand signals, gestures, glances, whistles, bell ringing, and so on that can serve in lieu of oral and written com munication for these same purposes. Another broad subclass of ex amples follows a pattern wherein the performance of a routine by one member produces an alteration in the local working environ-ment of another, and the alteration simultaneously makes the per formance of a particular routine feasible and carries the message that it should be performed . An assembly line is one example: the arrival of the partly assembled product at a particular station (as a conse quence of the performances of other members) both makes possible the performance of the operation done at that station and indicates that the performance is now called for. The arrival of a draft of a letter or document on a secretary’s desk makes possible its typing, and may also indicate that its typing is now called for. In still another large subclass, there are messages to which an individual member responds that do not, in any immediate sense, come from other human members. They may come from clocks and calendars -the start of the working day is an obvious example. They may come from meters, gauges, and display boards that convey information on the current state of machines or of other aspects of the working environ ment and the progress of activity. Or they may come from outside the organization, as when an order or invoice or application form ar rives in the mail.
The ability to receive these various sorts of messages involves the possession of certain sensory capacities, plus, let us say, an ordinary ability to understand the natural language of written and oral com munication in the wider society of which the organization is a part. These are abilities that usually characterize an organization member quite apart from his role in the organization-that is, they are the sorts of things a new member typically brings to the organization.
What about the ability to interpret the messages -to make the link between a message and the performance that it calls for? It is just as necessary as knowing the job, but much more specific to the orga nization and the job. It is one thing to know how to tell time; it is an other to know when to arrive at work, and what it is that you do at about 10 A.M. on the last working day of the month. It is one thing to see a partly assembled automobile in front of you on the line and another to see it as a call for the particular steps that are yours to per form. Even directives that appear to be in “plain English” often re quire interpretation in a manner that is quite specific to the organiza tional context. For example, they often omit reference to the typical locations of objects or individuals named in the directives; only someone who has been around the place long enough can easily supply the interpretation. But, in addition, the internal language of communication in an organization is never plain English: it is a dialect full of locally un derstood nouns standing for particular products, parts, customers, plant locations, and individuals and involving very localized meanings for “promptly, ” “slower,” ” too hot,” and so on.4 The activity of formulating and sending appropriate messages we regard as the performance of a routine by the organization member concerned . This view seems convenient because, as we have noted, there is an important range of cases in which message origination occurs incidentally in the performance of a routine that nominally is directed to other ends. For example, no distinct problem of message formulation arises if the message is conveyed by the partly finished product, passed along to the member who should deal with it next. The burden of the communication process in this case and many similar ones falls upon the receiver who (to know his job) must be able to discern the implications for his own action that are implicit in the changes in his immediate environment- changes that others, by merely doing their jobs, have produced. But there are, of course, many organizational roles whose performance does involve message formulation in a conventional sense. For organization members in such roles, there are additional requisites of knowing the job that parallel the ones involved in receiving and interpreting such mes sages. These include, again, the abilities to speak and write the na tu ral language of the society to which the organization belongs, but also the important additional requirement of command of the organi zational dialect. Such command is certainly not to be taken for granted in a new organization member, but is imputed by assump tion to members in an organization in a state of routine operation.
The overall picture of an organization in ro utine operation can now be drawn. A flow of messages comes into the organization from the external environment and from clocks and calendars . The organi zation members receiving these messages interpret them as calling for the performance of routines from th eir repertoires. These per formances include ones that would be thought of as directly productive -such as unloading the truck that has arrived at the loading dock- and others of a clerical or information-processing nature- such as routing a customer’s inquiry or order to the appro priate point in the organization. Either as an incidental consequence of other sorts of action or as deliberate acts of communication, the performance of routines by each organization member generates a stream of messages to others. These messages in turn are interpreted as calling for particular performances by their recipients, which gen erate other performances, messages, interpretations, and so on. At any given time, organization members are responding to messages originating from other members as well as from the environment; the above description of the process as starting with information input from external sources or timekeeping devices is merely an exposi tional convenience. There is, indeed, an internal equilibrium “cir_ cular fl ow” of information in an organization in routine operation, b ut it is a flow that is continuously primed by external message sources and timekeeping devices.
For such a system to accomplish something productive, such as building computers or carrying passengers between airports or teaching children to read and write, some highly specific conditions must be satisfied, different in each particular case. The specific fea tures that account for the ability of a particular organization to ac complish particular things are reflected, first of all, in the character of the collection of individual members’ repertoires. Airlines are the sorts of organizations that have pilots as members, while schools have teachers. The capabilities of a p articular sort of organization are similarly associated with the possession of particular collections of specialized plant and equipment, and the repertoires of organization members include the ability to operate that plant and equipment. Finally, of course, the actual exercise of productive capability re quires that there be something upon which to exercise it- some computer components to assemble, or passengers to carry, or chil dren to teach. These are the considerations recognized in the “list of i ngredients” level of discussion of productive capability, which is standard in economic analysis. There is also a “recipe” level of dis cussion, at which “technologies” are described in terms of the prin-ciples that underlie them and the character and sequencing of the subtasks that must be performed to get the desired result. This is the province of engineers and other technologists, and to some extent of designers and production managers.
But just as an individual member does not come to know his job merely by mastering the required routines in the repertoire, so an organization does not become capable of an actual productive per formance merely by acquiring all the “ingredients,” even if it also has the “recipe .” What is central to a productive organizational per formance is coordination; what is central to coordination is that indi vidual members, knowing their jobs, correctly interpret and respond to the messages they receive. The interpretations that members give to messages are the mechanism that picks out, from a vast array of possibilities consistent with the roster of member repertoires, a col lection of individual member performances that actually constitute a productive performance for the organization as a whole .5 To the ex tent that the description above is valid, skills, organization, and “technology” are intimately intertwined in a functioning routine, and it is difficult to say exactly where one aspect ends and another begins. This is another way of arguing that “blueprints” are only a small part of what needs to be in an organizational memory in order that production proceed effectively. rurthermore, once the set of rou tines is in memory by virtue of use, blueprints may not be necessary save, perhaps, as a checkpoint to assess what might be wrong when the routine breaks down.
Given this picture, it is easy to see the relationship between rou tine operation and organizational memory or, alternatively, to identify the routinization of activity as the “locus” of operational knowledge in an organization. Information is actually stored pri marily in the memories of the members of the organization, in which reside all the knowledge, articulable and tacit, that constitutes their individual skills and routines, the generalized language competence and the specific command of the organizational dialect, and, above all, the associations that link the incoming messages to the specific performances that they call for. In the sense that the memories of individual members do store so much of the information required for the performance of organizational routines, there is substantial truth in the proposition that the knowledge an organization possesses is reducible to the knowledge of its individual members. This is the perspective that one is led to emphasize if one is committed to the view that “knowing” is something that only humans can do.
But the knowledge stored in human memories is meaningful and effective only in some context, and for knowledge exerci sed in an organizational role that context is an organizational context. It typi cally includes, first, a variety of forms of external memory-files, message boards, manuals, computer memories, magnetic tapes that cOlnplement and support individual memories but that are maintained in large part as a routine organizational function. One might, therefore, want to say that they are part of organizational memory rather than an information storage activity of individual members. Second, the context includes the physical state of equip ment and of the work environment generally. Performance of an organizational memory function is in part implicit in the simple fact that equipment and structures are relatively durable: they and the general state of the work environment do not undergo radical and discontinuous change. A fire or severe storm may break the continu ity. The destruction caused by such an event is informational as well as physical, for there is a disruption of the accustomed interpretive context for the information possessed by human members. One might therefore be tempted to say that an organization “remembers” in part by keeping-and to the extent that it succeeds in keeping-its equipment, structures, and work environment in some degree of order and repair. Finally, and mo st important, the context of the information possessed by an individual member is established by the information possessed by all other members. Without the crane operator’s ability to interpret the hand signal for “down a little more” and to lower the hook accordingly, the abilities to perceive the need for the signal and to generate it are meaningless. To view organizational memory as reducible to indivi dual member memories is to overlook, or undervalue, the linking of those individual memo ries by shared experiences in the past, experiences that have estab lished the extremely detailed and specific co mmunication system that underlies routine performance .
What requires emphasis in the foregoing account is the power of the supposition that “the organization is in a state of routine opera tion” to limit the scope of the organizational memory function that needs to be performed. While each organization member must know his job, there is no need for anyone to know anyone else’s job. Neither is there any need for anyone to be able to articulate or con ceptualize the procedures employed by the organization as a whole. Some fraction of the necessary coordinating information may be communicated among members in explicit, articulated form, but there is heavy reliance on the communication implicit in perform ances that nominally serve other, directly productive purposes. There is no need for an exhaustive symbolic account of the organiza tion’s methods; in any case, because much of the knowledge in volved is tacit knowledge held by individual members, such an ac count cannot exist. Yet the amount of information storage implicit in the successful continuation of the routinized performance of the organization as a whole may dwarf the capacity of an individual human memory. The complexity and scale of the productive process may far surpass what any “chief engineer,” however skilled, could conceivably guide.
It is by no means the case, however, that routinization entirely frees organizational memory and organizational ” performance from constraints imposed by human memory limitations. It is important here to distinguish between the memory requirements of a complex coordinated performance taking place at a given time and the re quirements of a flexible performance in which the organizati on as a whole does quite different things at different times. The complexity of performance at a given time can be greater in a larger organiza tion. With a larger number of members and thus a larger number of human memories among which the organizational memory function can be divided, greater complexity can be consistent with constant or declining demands on the memories of individual members. All members can, simultaneously, remember their jobs by doing them. The situation is quite different with respect to flexibility of organiza tional performance o ver time. Flexibility involves variation of the organizational performance in response to variation in the envir onment.7 For the organ iz ation to respond routinely with a wide vari ety of specialized routine performances, each “customized” for a particular configuration of the environment, members must be able to retain in repertoire the specialized individual routines involved, and to recall the meaning of a set of messages sufficiently rich to dif ferentiate all the req ui red performances from one another. They must do so in spite of the long time intervals elapsing between the per formances of at least some specialized routines and the receipts of some particular messages. (That there are such intervals is of course implied by the supposition that the list of performances or messages to be distinguished is long.) Especially in the case of the tacit compo nents of high skill, the phenomenon of memory loss or increasing rustiness over time is important. A skill that is only exercised briefly every year or two cannot be expressed with the smoothness and reli ability of one consistently exercised five days a week . And unex pected lapses by individual members tend to have amplified disrup tive effects on organizational performance, since by themselves they create further novelties in the organization’s state- novelties with which existing routines and communication systems may be unpre pared to deal.
These are the considerations that link routine operation with remembering by doing. It is not just that routinization reflects the achievement of coordination and the establishment of an organiza tional memory that sustains such coordination. It is that coordina tion is preserved, and organizational memory refreshed, by exercise-just as, and partly because, individual skills are maintained by being exercised. It may be possible to achieve flexibility by schedul ing drills for the specific purpose of maintaining infrequently exer cised capabilities, or even by having standby units that do nothing but drill for particular contingencies. But these are obviously costly ways of maintaining organizational memory, at least as compared with genuine “doing” that is directly productive. And, as is well known, the quality of the practice afforded by a drill is inevitably de graded by the fact that it is merely a drill.
Source: Nelson Richard R., Winter Sidney G. (1985), An Evolutionary Theory of Economic Change, Belknap Press: An Imprint of Harvard University Press.