department of social psychology knowledge, … filei argue that no one theory on organisational...

Department of Social Psychology Knowledge, Organisations and Development Network

KODE

Disaster Related Corporate Memory Loss: How the World Trade Center Attacks Affected Organisational

Memory and Knowledge

Kendall L. Collier MSc Organisational and Social Psychology

London School of Economics August 18, 2003

Disaster Related Corporate Memory Loss 2

Table of Contents

Abstract……………………………………………………………………………….3 Introduction…………………………………………………………………………..4 Context: September 11, 2001………………………………………………….5 Clarifying Organisational Knowledge and Memory…………………………..8 Organisational Memory………………………………………………………12 Transactive Memory………………………………………………………….14

Memory Loss…………………………………………………………………18 Theoretical Development…………………………………………………….22

Research Question…………………………………………………………………..25 Methods……………………………………………………………………………...26 Design………………………………………………………………………...26 Corpus Construction………………………………………………………….28 Coding Framework…………………………………………………………...30 Procedure……………………………………………………………………..32 Results………………………………………………………………………………..33 Memory Problem by Proportion of Employees Lost………………………...33 Formalised Knowledge……………………………………………………….34 Amnesia Type………………………………………………………………...34 Level of Redundancy…………………………………………………………35 Discussion……………………………………………………………………………35 Transactive Memory………………………………………………………….36 Formalised Memory………………………………………………………….37 Culture………………………………………………………………………..38 Level of Redundancy…………………………………………………………39 Linking Back…………………………………………………………………39 Limitations……………………………………………………………………40 Conclusion…………………………………………………………………………...42 References…………………………………………………………………………...43 Appendices…………………………………………………………………………..47 Appendix 1: Sample Articles…………………………………………………48

Appendix 2: Codebook……………………………………………………….54 Appendix 3: Basic Frequencies………………………………………………57 Appendix 4: Cross Tabulation Tables..………………………………………59


Abstract

The September 11, 2001 terrorist attacks on the World Trade Center ruined the two

largest office buildings in New York City. Within the space of an hour, databases,

files, office space, and employees were lost that day, as was the tacit and explicit

knowledge possessed within them. The current study theorises how the organisational

memory and knowledge of the companies that had offices in the World Trade Center

would have been affected. I argue that no one theory on organisational memory and

knowledge is sufficient to explain how organisational memory loss could occur in the

event of destruction of office buildings. From a transactive memory perspective,

knowledge is understood to be held in individuals and in the communication between

individuals. The current paper expands this theory, extending it to include both

explicit, formalised knowledge, and knowledge held in an organisation’s culture, and

to explain pathologies of memory resulting from the violence of the terrorist attacks.

Analogies between individual memory loss and organisational memory loss are made.

Through a content analysis of relevant news articles, it was determined that both

knowledge held in transactive memory systems and formalised knowledge were

affected on 9/11, while knowledge held in organisational culture was not. Retrograde

amnesia was reported more frequently than anterograde amnesia. Results are

discussed within the extended framework of transactive memory.

Key Words: content analysis, September 11, 2001, knowledge, organisational

memory, transactive memory


Social scientists refer to the current era in many ways. “The knowledge

economy” is a catch phrase used by many to refer to the recent strengthening of

service industries and the increasing importance of knowledge in our daily lives.

People now have more access to knowledge than ever before (Castelles, 1996) and

companies are faced with the challenge of manipulating knowledge to maintain

competitive advantage. The knowledge economy has come about as a result of the

restructuring of work processes, shifts in sources of wealth creation, and new

centrality of knowledge work and workers (Newell, Robertson, Scarbrough, & Swan,

2002) and is characterised by accelerated change (Quintas, 2002). Peter Drucker

argues that knowledge is “the central capital, the cost centre and the crucial resource

of the economy” (1969, ix).

A second way of understanding modernity is through examination of the

technological advances that have opened Pandora’s box, allowing an increasing

number of risks to threaten us in the 21st century. Ulrich Beck refers to modernity as

“the risk society,” in which, “risks created by the momentum of innovation

increasingly elude the control and protective institutions of industrial society” (1999,

72). Anthony Giddens also believes that modernity is a risk society, noting that the

risks we face today are new and unfamiliar to us (1991). The idea is not that we live

in a more risky era, but rather we live in a society where risks have fundamentally

changed from being basic and natural to more complex and global.

One risk that has become particularly salient in the last few years is the threat

of terrorism. From the bombings in Bali, to the hostage crisis in a Moscow theatre, to

the demise of the World Trade Center, terrorism has become a common feature in the

news. One scientist predicts that an incidence of bioterrorism will have killed one

million people by the year 2020 (Rees, 2003). Although few have been directly


affected by terrorism as yet, the threat is real, and public sentiment surrounding the

issue is one of fear. With war exacerbating the worldwide situation, one can only

expect terrorism to persist.

The current paper intends to examine the meeting of the knowledge economy

and the risk society through a careful examination of how the terrorist attacks of

September 11, 2001, affected organisational knowledge and memory. So that the

reader may become better acquainted with the topic, I will first discuss knowledge

and memory from an organisational perspective. I will introduce the theory of

transactive memory as a model for understanding organisational memory. Parallels

will be made between other causes of organisational memory dysfunction, such as

downsizing, and memory dysfunction caused by the violence of terrorist attacks. I

then will develop more fully the transactive memory framework in an attempt to

extend the theory to pathologies of memory. I will make analogies between

individual memory loss and organisational memory loss. A content analysis and

careful reading of news articles on the organisational impact of the World Trade

Center terrorist attacks on the companies with offices in the buildings destroyed will

be presented in support of the theoretical development. Results will be discussed

within the expanded framework of transactive memory.

Context: September 11, 2001

September 11, 2001, is a date that most people will never forget. Many things

changed that day from the way families relate, to United States foreign policy, to the

way companies do business. Although the events of this day are well documented and

widely known, a short description of what took place in New York and Washington

D.C. that day will help to paint a picture of how corporate memory could have been

affected.


On the morning of September 11, 2001, terrorists of the Al-Qaeda network

hijacked four planes. At 8:45 a.m., American Airlines Flight 11 hit the north tower of

the World Trade Center in New York City. That building was immediately

evacuated. At 9:03 a.m., United Flight 175 hit the south tower of the World Trade

Center. This building had been partially evacuated, saving thousands of lives. Both

buildings later collapsed. A third plane hit the Pentagon in Washington D.C., causing

a partial collapse of the building. A fourth plane, apparently heading toward

Washington D.C., failed to reach its target and plunged into the ground near

Shanksville, Pennsylvania. All in all, more than 3,000 lives were lost that day

including the 19 terrorists that had masterminded the attack.

In the 134 minutes between the strike on the north World Trade Center tower

and its collapse (although it was the first tower hit, it was the second to collapse),

many employees fled the scene, leaving their work behind. Paperwork, computers

and filing cabinets all were destroyed along with 2,795 lives lost both within and

outside the two buildings. Most of the dead were employees who had been at work.

Many companies lost key executives and a few lost entire departments of employees

when the buildings were attacked.

In the aftermath, companies affected were faced with rebuilding knowledge,

records, technology, and office space and many had the task of hiring new employees

to replace lives lost. Much of this was accomplished with disrupted communications,

as many phone lines were not reconnected until several days after the attacks.

Because of the terrorist attack on the World Trade Center complex in 1993 and

preparations for Y2K, many companies had contingency plans already in place, some

plans including backup office facilities. Not every company was so lucky, however,

and many discovered too late the need to be prepared for any eventuality.


Individuals also were affected on 9/11. Companies were evacuated time and

time again in the days following September 11 and employees suffered from post-

traumatic stress disorder. Friends and colleagues were lost, destroying informal

employee networks, which previously had been well established. New colleagues

were hired and retired colleagues returned, prompting the development of new

employee networks.

The companies that had offices destroyed in the World Trade Center attacks

were predominantly knowledge-intensive firms (KIFs). Many of these companies

were involved in the financial services sector, such as bond broker Cantor Fitzgerald.

Others were insurance firms, such as Aon Worldwide. The employees of these firms

were highly trained, highly skilled knowledge workers and the value of these firms

lay in the know-how of their employees. These companies relied heavily on strong

client relationships and on protecting and preserving client information. When the

World Trade Center collapsed, many pieces and forms of knowledge were affected,

from codifiable records and data, to the tacit knowledge possessed by employees, to

the client and employee networks that carried local knowledge.

It is indeed tragic that this event occurred, and the loss of life is not to be

forgotten or belittled, but it is important for organisations to know what kind of effect

terrorism can have on corporate cognition in order to minimize the impact of future

terrorist attacks. This research project, however, does not intend to make

prescriptions for management to follow in the event of a terrorist attack, but rather to

describe the cognitive functions that might have occurred that day in an attempt to

develop theory surrounding collective organisational memory.

In reflecting on this topic and on the aims of this research, I am aware that I

am writing from what Habermas would call a “practical” interest, which is to describe


and clarify organizing as a complex social process (Willmott, 1997). I have no

intention, however, of seeing reality as given or perpetuating the status quo. Social

construction of reality and bottom-up enactment are both key themes in the


agree. They further develop the concept of knowledge by pointing out two seemingly

conflicting perspectives on knowledge: one that sees knowledge existing in actions

and represented through physical and social artefacts, and one that focuses on

possibilities for knowledge creation and is represented in the latent dimensions of

knowledge. Knowledge in action exists in commodities and its phenomenon of

interest lies in replicating existing knowledge, while knowledge of possibility exists in

the mind and its phenomenon of interest lies in innovation (290-291). Hargadon and

Fanelli argue that these seemingly contradictory perspectives on knowledge actually

are implicitly tied to one another in a cyclical relationship. “In essence, knowledge of

possibilities constitutes action and the knowledge of action constitutes possibility”

(291). These two forms of knowledge cannot be separated or combined with one

another, but rather they interact in a recursive process that includes the generation of

new physical and social artefacts from latent knowledge, the incorporation of the new

artefacts into existing latent knowledge, and the enabling of further generation of new

artefacts, thus beginning the cyclical process again.

This brings us to another perspective on knowledge, one of understanding

knowledge as it occurs in practice (Gherardi, 2000). From this point of view,

knowledge is developed in the process of doing. “Practice is both our production of

the world and the result of this production” (Gherardi, 2000, 215). This is a less

functionalist view of knowledge that allows researchers to understand the socially

constructed nature of knowledge. Knowledge cannot be true and verified, but rather

is constantly negotiated and (re) constituted (Alvesson & Kärreman, 2001). As

Tsoukas notes, “All articulated knowledge is based on an unarticulated background, a

set of subsidiary particulars which are tacitly integrated by individuals” (1996, 17).

There is a context to every piece of knowledge and we therefore cannot say that there


is one truth, but rather many truths and many realities. Furthermore, Tsoukas argues,

“knowledge is distributed in the sense that it is inherently indeterminate: nobody

knows in advance what that knowledge is or need be” (1996, 22).

Proponents of communities of practice also understand knowledge in this

sense. Communities of practice are informal communities that form out of the

necessity to “share cultural practices reflecting their collective learning” (Wenger,

2000). Etienne Wenger (2000) argues that communities of practice grow out of the

interplay between collective competence and individual experience. Collective

competence is composed of a group understanding of a joint enterprise, relationships

of mutuality whereby information sharing is reciprocated, and a shared repertoire of

communal resources (229).

In the same vein, Brown and Duguid (1991) also discuss communities of

practice. Using Orr’s ethnography of photocopy repair technicians at work, Brown

and Duguid analyse how learning can occur in communities of practice. In the

process of working, the technicians cannot rely solely on canonical artefacts such as

job manuals, formal training, or job descriptions, but often have to interpret and learn

through the practice of work. Learning is situated in the work that they do. As Brown

and Duguid note, “The central issue in learning is becoming a practitioner not

learning about practice. This approach draws attention away from abstract knowledge

and cranial processes and situates it in the practices and communities in which

knowledge takes significance” (1991, 48).

As Orr (1990) describes, sometimes a photocopy repair technician will call on

a technical specialist for assistance in solving a complex problem. The answer to the

problem may not be initially known, but may be learned through the combined

experiences of both the technicians. Later, the technicians will often come together


and tell “war” stories, or narratives, about what they have learned, thus allowing the

experience to become a part of the collective memory. “Information from whatever

source is shared freely among the technicians, and this communal understanding or

community memory is sufficiently important that one may think of the technicians as

a community of knowledge” (Orr, 1990, 174).

When knowledge is seen as situated in practice, it naturally becomes a

collective phenomenon (Gherardi, 2000). Knowledge is socially produced and (re)

produced. It lies in the connections and interactions between people. Weick and

Roberts (1993) introduce what they consider a collective mind in organisations. They

describe it as stemming from individual minds, but greater and distinct from

individual minds, “because it inheres in the pattern of interrelated activities among

people” (360). Mind is thus located in the interrelations between individual

employees. By suggesting that interrelating be viewed as a variable process, Weick

and Roberts show how knowledge can be constructed and held. They further argue

that there are distributed representations within the collective mind, allowing for the

conflict inherent in all organisations, social construction of knowledge, and bottom-up

enactment. Furthermore, they argue, as Orr (1990) does, that through the narration of

“war stories,” knowledge that was once individual becomes collectively held.

In summary, the many theorists who have analysed knowledge in

organisations see it as existing explicitly and tacitly (Nonaka, 1991), as socially

constructed (Alvesson & Kärreman, 2001), in the interaction between possibility and

action (Hargadon & Fanelli, 2002), and in practice (Orr, 1990, Brown & Duguid,

1991, Gherardi, 2000, Wenger, 2000). There is some truth in all of these theories, but

none of them is comprehensive enough to incorporate all of the above into one theory.

For the purposes of this research, I will consider knowledge to be socially constructed


In their influential discussion of organisational memory, Walsh and Ungson

assert that:

In its most basic sense, organizational memory refers to stored

information from an organization’s history that can be brought to bear

on present decisions. This information is stored as a consequence of

implementing decisions to which they refer, by individual

recollections, and through shared interpretations. (1991, 61)

Organisational memory transcends individual memory because of its shared nature. It

is also distributed, being stored in many locations. Walsh and Ungson identify six

different storage bins where memory can be stored: individuals, culture,

transformations, structures, ecology and external archives. Individuals hold memory

of events they have experienced and they keep external records and files in which to

store memory. Organisational culture is also a retention facility, which is

communicated through stories, language, etc. Additionally, organisations hold

information in transformations, or processes and practices that take place in an

organisation. Structures as a memory store refer to the social roles and rules within an

organisation. The ecology, or actual physical structure of an organisation, also holds

organisational memory. Finally, memories can be held externally from an

organisation in competitors and former employees.

These memory storage bins are a useful way of assessing the structure of

stored memory, although the categorization of memories as fitting neatly into these

concepts may or may not hold ecological validity. Furthermore, external memory in

the form of codified information is given little significance in Walsh and Ungson’s

(1991) assessment, while culture is emphasised too much. It is impossible to claim

that any company has only one culture (Morgan, 1997). Instead, they may have many

different cultures, holding many different and conflicting memories. In the opinion of

this author, Walsh and Ungson’s analysis of organisational memory is not sufficient


on its own to explain the processes of memory storage and retrieval as they occur in

organisations.

Transactive Memory

Another theory of group mind and memory is Wegner’s theory of transactive

memory (Wegner, Giuliano, & Hertel, 1985; Wegner, 1987; Wegner, Erber, &

Raymond, 1991; Wegner, 1995). Wegner originally used this theory to describe how

intimate couples develop a memory system, but he notes that the theory is additionally

useful for understanding group and organisational memory (1987). Other authors

have since further developed transactive memory and extended the theory to

organisational settings (Liang, Moreland, & Argote, 1995, Moreland & Myaskovsky,

2000). Transactive memory describes the process by which groups use and structure

information. Transactive memory draws an analogy between the individual mind and

the group mind by comparing the functions that they serve, thus avoiding

anthropomorphisms. In short, “A transactive memory system is a set of individual

memory systems in combination with the communication that takes place between

individuals” (Wegner, 1987).

To begin, Wegner discusses how individuals encode, store, and retrieve

information. He notes that during encoding, items and the connections between them

are encoded. The example Wegner uses is that the word tomato and the word red

both are stored, as is the connection between the two (1987, 186). Furthermore,

individuals have metamemory, or memory about memory. This allows us to know

what we are able to remember without specifically remembering it.

We also use external memory, or memory that is stored in the environment as

opposed to in the mind. Norman (1988) argues that we utilise both knowledge in the

head and knowledge in the world. Knowledge in the world, or external memory,


takes the form of reminders. We must encode both a label and a location of these

reminders for external memory to work effectively (Wegner, 1987, 188). For

example, I may not remember every reference I have used in this research report, but I

do know the label (the file name it is stored under) and the location (in which folder it

is stored on my H drive). I am therefore able to use the computer file as a reminder of

the references in this report. As Wegner puts it, “What we normally think of as

internal encoding requires that the item be encoded internally along with the label.

External encoding, however, requires that that location be encoded internally with the

label- and for this reason, the item itself need not even be known” (1987, 189). It is

apparent then that in the process of encoding, storage, and retrieval individuals use

both internal and external memory.

In addition to inanimate objects working as reminders, other people can also

function as external memory stores. Transactive memory systems develop in groups

when group members know one another well enough to use other group members as

external memory stores. We may not know a piece of information, but we know the

location of that information by knowing that a colleague or other group member has

group expertise on that subject. “This allows both people to depend on

communication with each other for the enhancement of their personal memory stores.

At the same time, however, this interdependence produces a knowledge-holding

system that is larger and more complex than either of the individuals’ own memory

systems” (Wegner, 1987, 189).

Transactive memory has the properties of both distributed knowledge and

social construction. No one person can know all that there is to know, and there is no

central command station for information (Tsoukas, 1996), but knowledge can be

uncovered through the informal networks that form as colleagues become more


acquainted with one another. Transactive memory is not located either in the

individual or in the connections between them, but rather it is a property of the group

as a whole (Wegner, 1987, 191).

Transactive memory systems are constructed when group members learn about

each other’s areas of personal expertise or their circumstantial knowledge

responsibility. This can be accomplished through training group members together

(Liang, Moreland, & Argote, 1995; Moreland, Argote, & Krishnan, 1998; Moreland

& Myaskovsky, 2000). If there is no clear expert, then groups often delegate

responsibility to a certain individual for that subject and that person, in effect,

becomes the group expert. Information is channelled to the group expert for storage

so that it can be easily accessed in the future (Wegner, 1987). “In sum, transactive

memory can be built because individuals in a group accept responsibility for

knowledge” (Wegner, 1987, 194). Interestingly, imposition of a false structure,

through assigning people to remember certain items although it may lie in someone

else’s area of expertise, may actually impair transactive memory systems, causing

confusion and forgetting (Wegner, Erber, & Raymond, 1991).

Transactive memory is by no means a static process focusing on the

reproduction of existing knowledge. The creation of new knowledge is equally

important and occurs when two or more group members integrate knowledge that they

each might hold (Wegner, 1987). This creates a cyclical process in which old

memory integrates to yield new creations, which in turn become stored in the

transactive memory system, allowing for the potential for future innovations.

In Wegner’s (1987) discussion of how transactive memory can be applied to

organisational settings, he discusses two features of how organisational knowledge

can be structured. One possibility is that knowledge is differentiated. This occurs


when knowledge is not redundant and different knowledge is stored in different

locations. In this instance, groups would be made up of people who had different and

non-overlapping areas of expertise. The second possibility is that knowledge is

integrated, or redundant. Here, groups would be made up of members who share

expertise and share the responsibility of storing information.

Differentiated memory systems may be more efficient (Wegner, 1987), but

recently organisational theorists have been arguing for the need of knowledge

redundancy, or integrated memory systems which some believe could allow for more

knowledge creation (Nonaka, 1991). For example, allowing for knowledge

redundancy can make explicit knowledge so ingrained in people’s minds that they are

able to see and understand it in a different light, which could allow for innovation.

On the other hand, when tacit knowledge is shared, although difficult, it can be

communicated and made explicit in the embodiment of a new procedure or product

(Nonaka, 1991).

Wegner (1995) comments that knowledge differentiation is a natural

characteristic of transactive memory systems and that these systems become more

differentiated over time. The exception to this is when information is more interesting

to individuals than it is to groups. Furthermore, if knowledge is difficult to

communicate, such as tacit knowledge is, it may not be included in the knowledge

allocation process often found in transactive memory systems (Wegner, 1995). One

can only assume that this kind of knowledge would be more likely to be differentiated

because of the difficulties involved in the learning of it by a large group. However, it

could still be included in a transactive memory system if group members were well

acquainted with what skills each member had. Finally, Wegner (1995) notes that


groups must be able to access differentiated knowledge for the memory system to

work effectively.

Memory Loss

If groups are not able to access information stored in transactive memory

systems due to the violence of terrorist attacks, what will the consequence be? I will

shortly focus on the corporate downsizing literature to gain a better understanding of

what happens when employees are removed from transactive memory systems, as

there is no literature to date on the effects that deaths of members of a transactive

memory system would have on that system.

The impact of downsizing on transactive memory would naturally depend on

the amount of differentiation of a work group’s knowledge. If knowledge is highly

differentiated, with different employees holding different information, downsizing

could indeed be disastrous. When an employee is let go, it is feasible that the

information they possess will be lost to the firm entirely. For example, Cascio (1993)

reported a story of a Fortune 100 company that fired a bookkeeper making $9 an hour,

only to rehire the same bookkeeper as a consultant at $42 an hour because they

realised they had lost valuable institutional memory (99). Alternatively, if knowledge

were highly integrated, downsizing would have less of an impact on organisational

outcomes.

Because of the social and political nature of organising, we can assume that

most organisations have transactive memory systems somewhere in between the

extremes of entirely differentiated and entirely integrated. When people in these

organisations are made redundant, the major impact is the lost connections between

individuals. For example, if a certain executive always went to a particular IT

specialist to solve computer problems, but that IT specialist was no longer with the


company, the executive may not know whom to consult. Likely, there may be another

person with similar knowledge and the capability of fixing the executive’s problem,

but the executive may not be connected with that person, or the external metamemory

may not be in place for that executive to know what information that person has. The

connections in the transactive memory system are what allow information to be

shared and interpreted among group members, and if these connections deteriorate,

then the usefulness of the transactive memory system will decline. As Fisher and

White comment, “It is the interpretative engine at the intersubjective level of the

organization that is most vulnerable to the effects of downsizing” (2000, 246).

Fisher and White (2000) use social network theory to analyse the impact that

downsizing has on learning networks in organisations. Social network theory is

closely related to transactive memory, however the focus of social network theory is

primarily on the connections between people. The theory of transactive memory, on

the other hand, does not focus either on the individual or on the connections between

individuals, but rather sees memory as a feature of the group (Wegner, 1987, 191).

The logic within social network theory “suggests that removal of individuals in dense

networks with many redundant linkages would not necessarily impact organizational

learning capacity in a significant way” (Fisher & White, 2000, 247). The exception

would be if the person who is removed were a “hub,” connecting unlinked clusters

within the network. When those people are removed, the two clusters may lose their

ability to communicate, meaning that any transactive memory that those hubs shared

would be inaccessible.

Returning to the previous example, the executive who lost his or her contact in

the IT department would not be at too much of a loss because he or she is likely to

know other people who work in IT, or at least know people who do know them.


Transactive memory then remains intact and the only thing lost is a small amount of

time enacting the right connections. On the other hand, if there were two departments

in two separate locations which handled all communication through a designated

liaison, and that liaison were to be removed from the network, relinking the two

departments may prove to be more difficult. These two departments are likely to have

differentiated information in their memory stores and the loss of a liaison could

damage the transactive memory system because the two departments would not know

who to ask or where to look for specific knowledge.

Kelly and Stark (2002), in their analysis of the impact September 11 had on

the firms affected, argue that companies need generative redundancies, not just of the

knowledge itself, but of the actual connections between workers. In this way, if a

connection is broken, it can easily regenerate around missing links.

Another potential problem that has been discussed in the downsizing literature

is the overzealous downsizing of certain departments, to the point that communities of

practice are affected. Burke, for example, provides the following story:

One insurance group, having slimmed its claims department, found

itself settling large claims both too swiftly and too generously.

Belatedly, the group discovered that it had sacked a handful of long-

term employees who had created an informal -- but highly effective --

way to screen claims. The company was eventually forced to reinstate

them. (1997, 12)

Burke explains this story in terms of organisational memory loss. In this instance,

enough people were let go that the transactive memory system disappeared. There

was no one left who knew enough about the informal practice, which was developed

within the community of practice, to continue with it. The company in this story lost

their memory storage.


Complexity theory is another popular way of describing the effects that

downsizing has on organisations. Within this theory, the organisation’s relationship

with the environment is seen as important because organisations tend to co-evolve

with their environments (Lewin, Long, & Carroll, 1999). Because of this, for firms

that face a complex task environment relying heavily on organisational knowledge,

such as the knowledge-intensive firms that had offices in the World Trade Center,

downsizing may have a disastrous effect (Lin, 2000). “The impact of restructuring

may be more devastating to organizations as the environment depends more on

organisational knowledge” (Lin, 2000).

It would be inadvisable to argue that memory loss is entirely a bad thing.

Nystrom and Starbuck (1984) argue that if an organisation is to learn, it must first

unlearn. There are many ways of doing this, but they suggest removal of top

management as the way forward. However, they also see the link between

redundancies and memory loss. In fact, they argue that memory loss is just what a

company needs to avoid organisational crisis. As they note, “Removal of people is a

quick, effective way of erasing memories” (327).

Layoffs due to downsizing and the deaths caused by the World Trade Center

attacks are not exactly the same phenomena. The key difference is that downsizing is

done intentionally in an effort to proactively or reactively increase efficiency and

effectiveness (Freeman & Cameron, 1993). The terrorist attacks were not intentional

on behalf of the firms affected and had deeper implications then layoffs would.

Employees were murdered at random, instead of being purposefully selected for

redundancy because of their position, job function or past performance. This meant

that CEOs and secretaries alike were removed from the transactive memory system, as

were entire departments and communities of practice. Not only did this have an


impact in terms of random employee loss, but also the emotional impact of deaths of

colleagues would naturally outweigh the laying off of a colleague.

Furthermore, technology and office space was also affected. Given the

context of this research, it is important to recall that modern organisations can be

considered socio-technical networks, “wherein human practices and technological

affordances negotiate an evolving structural equilibrium” (Kelly & Stark, 2002,

1526). Business is very dependent on technology and the interface between people

and that technology. Many forms of technology were affected on September 11, from

the loss of mainframe computers, to the destruction of an employee’s Rolodex. Much

of the technology served as an external memory store, which held vital intellectual

capital.

Theoretical Development

The primary reason to study organisational memory loss is to shed light on

normal memory and knowledge processes in organisations. However, none of the

theories surrounding normal organisational memory and knowledge provide a

sufficient picture of what the consequence of organisational memory loss due to

violent terrorist acts would look like. Clearly, because of the complex context of this

research project, theoretical development is necessary in order to compose an

understanding of what the real effects in terms of memory would be if organisational

cognitive trauma occurred. Through expansion of Wegner’s transactive memory

framework, a clearer picture of how organisational memory can be affected by

terrorism will emerge.

Wegner (1987) bases his theory of transactive memory on an analogy between

an individual mind and group mind. It is here then that this theory must be expanded.

Many theorists have suggested that organisational and individual memory is similar in


place, was destroyed, storage was destroyed. Many companies, however, had backup

systems that saved information in off-site locations. In these instances, much of the

firm’s formalised knowledge was not lost. Retrieval problems could occur, however,

when the location or label or access code was unknown.

Another type of memory that has been discussed in organisational memory

literature is the supra-individual memory that is organisational culture (Walsh &

Ungson, 1991). Because of its nature, culture would only be affected if so many

people died that it also faded. However, no company in the World Trade Center lost

every person. Additionally, culture has a unique reciprocal relationship with the

organisation’s environment in which the environment enacts the organisation and the

organisation enacts the environment. Because former employees and competitors

survived, the likelihood that an organisation’s culture would be destroyed is slim.

To return to the analogy of individual memory and organisational memory,

companies affected by terrorism could suffer from either retrograde or anterograde

amnesia. In terms of cognitive psychology, retrograde amnesia occurs when amnesic

patients fail to remember memories acquired prior to trauma, while anterograde

amnesia when amnesic patients fail to remember events that occur after trauma

(Sternberg, 1999). Deaths, employee attrition and destruction of files are all examples

of how retrograde amnesia could occur in organisations affected by terrorism.

Employees unable to access information due to posttraumatic stress disorder would be

an example of anterograde amnesia. The human mind has an amazing way of healing

itself, and through plasticity, it can reform connections and relearn information.

Organisations also have this ability, often referred to as enactment. Employees have a

way of unconsciously recreating their world through interpretation (Weick, 1995).


Through enactment, the healing process should occur, and although some memories

will be lost forever, new memories and new realities will be created.

In summary, memories in organisations can take the form of formalised

memories, external human memories, or culture. Formalised memories exist in data

and documents, computers and office space. These memories were likely affected

primarily by access problems, as many backup systems were in place to protect this

intellectual capital. External human memories are similar in function to Wegner’s

transactive memory systems, but incorporate both knowledge held in other people and

knowledge held in communities of practice. If a company lost many employees, it

would likely experience primarily knowledge storage problems as the memories held

by these people and by the communities of practice within the firm would be lost

forever. On the same note, these companies would also be more likely to face

retrograde amnesia than anterograde amnesia. Culture holds memories at the supra-

individual level in a firm, and is not likely to have been affected by the terrorist

attacks. Finally, the more differentiated a company’s knowledge was, the more likely

it would be lost to that firm, and thus, firm’s with highly differentiated knowledge

may face a turbulent future.

Research Question

The objective of this research is to better understand everyday organisational

memory through the analysis of pathology of organisational memory. On the

individual level, cognitive psychologists often study amnesic patients to gain a better

understanding of normal memory functions (Eysenck & Keane, 1995, 157). Through

theoretical expansion and a content analysis conducted to gain support for this theory,

I hope to contribute theoretically to a topic in organisational psychology that has had

few agreements and many controversies (Swan & Scarbrough, 2001). Through


understanding a real-world situation of memory loss, I hope to inform the wider

debate about knowledge and memory in organisations.

Specifically, the research question at hand is: how was organisational memory

affected by the terrorist attacks of September 11, 2001? In order to investigate this

research question and the theory expanded above, the following hypotheses were

formed:

Hypothesis 1: In companies that lost at least 1/3 of the employees

in their World Trade Center offices, issues of storage will be discussed

more than issue of access, while in companies that lost less than 1/3 of

the employees in their World Trade Center offices, issues of access

will be discussed more than issues of storage.

Hypothesis 2: Formalised memories, such as data and files, will be

reported as not negatively affected the most, problems of access will be

reported as second most, and problems of storage will be reported the

least.

Hypothesis 3: In companies that lost a large proportion (at least 1/3) of the

employees in their World Trade Center offices, retrograde amnesia will

be reported more than anterograde amnesia, while in companies that

lost less than 1/3 of the employees in their World Trade Center offices,

anterograde amnesia will be more common.

Hypothesis 4: Overall, companies that lost differentiated knowledge will

report a more dismal outlook.

Method

Design

This study was of descriptive design, utilising content analysis as a

hypothetico-deductive research method to answer the research question. Although


content analysis is a quantitative analytical method, I also performed a close reading

of the same texts to provide the richness that comes with qualitative analysis. Given

the nature of the research question and the expansion of the transactive memory

framework, narrative interviews of employees in the affected organisations coupled

with questionnaire data for triangulation would have perhaps been more ideal research

methods. However, given the complexity of the context of the terrorist attacks, this

was not possible. I contacted three organisations in an attempt to gain research

access, but was unsuccessful. Reasons given for refusal included understandable

ethical issues concerning discussion of a traumatic event with employees, possibly

causing emotional stress, as well as concerns over employees’ limited time schedules

and the inability of these organisations to honour every research request in a time

when there is much research interest in these firms. Denied access was only a minor

stepping-stone as these firms have been in the public eye over the last two years and

have offered many interviews to media organisations, allowing for numerous news

articles relevant to my research question. As Bauer suggests, content analysis is an

appropriate method when the research context is inaccessible to the researcher (2000,

132). Furthermore, content analysis is unobtrusive, solving both ethical issues of

possible emotional trauma that interviews would cause and time issues for busy

employees (Webb, et al., 1966).

The content analysis I conducted counted the number of times instances of

organisational memory issues were mentioned in news articles about the companies

directly affected by the terrorist attacks on the World Trade Center, as well as

organising those instances by type of memory mentioned and the level of impact

reported. In this way, content analysis was a useful tool for reconstructing “maps of

knowledge” within these texts (Bauer, 2000). Many of these articles included


interviews with employees and executives at the relevant firms. While on their own

they hold little information on how organisational memory could have been affected

by the terrorist attacks, taken together the relationships between variables becomes

clear and a map can be drawn showing how terrorism can affect organisational

memory.

Content analysis as a research method has received a large amount of criticism

because it simplifies and imposes judgment on texts. However, “it does not suggest a

single valid reading of the texts” (Bauer, 2000, 132). Instead, “it steers a middle

course between the single truthful meaning and ‘anything goes” (Bauer, 2000, 132).

It is a process of social construction, and is always interpreted within the framework

that a researcher has imposed. However, it is still useful for theory testing because

specific questions can be asked, leading to a more complex understanding of the texts.

Content analysis, “can neither assess the beauty, nor explore the subtleties, of a

particular text” (Bauer, 132). Therefore, I employed close reading of the texts to

allow for a deeper understanding of the research topic as some texts proved to be

more telling than others.

Corpus Construction

The population of texts in which I was interested was all relevant news articles

between September 11, 2001, and July 15, 2003. As there is no single listing of every

relevant article, I had to employ an unusual sampling technique. I sampled for rare

cases, conducting on-line searches in ABI Inform, Lexus Nexus, and the Guardian

archives. These databases included articles from both newspapers and news

magazines. After determining the names of the companies most affected, I searched

the databases by company name. If more than 150 articles were returned, I limited

my searches by “September 11.” This allowed me to more easily access relevant


news articles, as many articles published on the companies that were affected by the

September 11 terrorist attacks give no mention to the attacks or to how the attacks

affected organisational memory. Each article was read during the search process to

determine its relevance. Articles were deemed relevant if 1) they mentioned some

aspect of business operations (from employee stress to communications issues) of one

or more companies that were directly affected by the attacks on the World Trade

Center (they lost office space, employees, or both) and 2) they mentioned

organisational knowledge in regards to the attacks (memories either negatively

impacted or not impacted).

My searches yielded 73 independent news articles, eight of which were later

excluded due to irrelevancy. Seventeen of the remaining 65 relevant articles were

later split, often more than once, yielding 84 thematic sampling units that were

codifiable. Splitting the articles was done so that no data was excluded or overlooked.

It also served to increase the number of sampling units, allowing a larger sample size

to facilitate hypothesis testing. Articles were split according to the organisation under

discussion and the type of knowledge affected. If an article mentioned relevant

organisational memory issues for more than one firm, the article was split into smaller

sampling units. Furthermore, if an article thoroughly discussed more than one type of

memory issue for the same company, the article was split into smaller sampling units.1

If more than one article mentioned the exact same memory issue for the same

company, only the first article would be used because otherwise an issue that received

more attention in the press would be coded multiple times, skewing the data in favour

of that issue. See Appendix 1 for examples of how articles were split into sampling

units.

1 In this case, the company outlook reported in the article was only coded for the first sampling unit so as not to augment that article’s report of the outlook for an individual company.


The search for relevant articles was exhaustive of the databases used and I

stopped searching for articles when only duplicate articles turned up. I certainly have

not coded the entire population of relevant news articles, for not every news

publication was represented in the databases used, and it is possible that the selected

search terms excluded some relevant articles. It is, however, reasonable to believe

that my sample includes a large proportion of the unknown population, and is fairly

representative of that population, given the exhaustive search, the number of

databases used, and the wide array of news publications in the sample. Although the

sample size is not large, “A small sample, systematically selected, is far better than a

larger sample of materials collected conveniently” (Bauer, 2000, 137).

Coding Framework

The coding framework was developed in an iterative process during the course

of the research, and is based on the theoretical framework. The original coding

framework included six variables. I conducted a pilot test on 69 articles to determine

its applicability. After the pilot, I determined that refining was in order so that criteria

could be applied more systematically. More specifically, one variable was added due

to refinement of the theoretical framework, and many levels of the remaining

variables were combined, in a way that theoretically made sense, because their

occurrence was low and they held more meaning when combined than when alone.

Furthermore, I added a sub-variable, which was a variant on one of the original

variables, so that transactive memory could be further understood in light of the

terrorist attacks of September 11, 2001. From these refinements, I developed the final

coding framework, which incorporates seven variables and one sub-variable

(Appendix 2).


The variables of interest that make up the coding framework include company

name, proportion of employees lost, type of memory affected, resulting memory

problem, the level of redundancy of the knowledge affected, type of amnesia

occurring, and company outlook. Company name was coded primarily for ease of

understanding how individual companies were affected and to later code for the

proportion of employees lost. The proportion of employees lost was determined by

information on company web sites or in news articles, and was coded for according to

which company the reporter discussed in the sampling unit. Type of memory affected

incorporated the types of organisational memory outlined in the theoretical framework

developed above. Two of the levels of the ‘type of memory affected’ variable were

combined for a sub-variable, “type of memory affected 2” in order to conduct certain

analyses. This was possible because both of the levels under consideration can

theoretically make up a new level to better analyse transactive memory. Memory

problems resulting from the terrorist attacks were inferred based on what the article

discussed in regards to the type of memory affected and how it was affected. Level of

redundancy was also inferred based on information in the article regarding how much

duplication of the pieces of knowledge affected there was and based on theoretical

insights into the level of redundancy of knowledge held in communities of practice

and culture. Type of amnesia was determined according to when the knowledge

affected would have been encoded (i.e. prior to or after the terrorist attacks). Finally,

company outlook was coded according to the outlook the author reported, if any, for

the future of the organisation.

Given the time and budget restraints of an MSc dissertation, I was unable to

hire a research assistant to perform a second, independent coding of the data.

However, I coded the data twice on my own and performed reliability tests on the two


sets of codes. Reliability was determined to be high. Overall, I agreed with myself on

95.65% of the scores. Reliability varied by code, with straightforward codes, such as

company name, yielding higher levels of reliability. Reliability ranged from 91.3% to

100% for independent codes. When a disagreement over an individual score

occurred, the coding unit was reread and coded according to the third interpretation.

Procedure

I searched databases using the terms mentioned above. Most searches turned

up a majority of irrelevant articles and, for this reason, each article had to be skimmed

or read for relevancy. During the reading, articles were highlighted and flagged for

post-quantitative analysis close reading. As articles were found, each was printed and

recorded in a database. The database was organised by name of publication, date of

publication, topic covered, article length, and the URL for the article. This allowed

me to search for duplicate articles within my sample and to link to articles if I was

unsure about duplication.

Once data collection became exhaustive and piloting was complete, I began

with the coding of the material. As Deacon, Pickering, Golding and Murdock (1999)

suggest, when a situation arose where a sampling unit did not fit neatly into the

coding framework, a decision was made regarding how to treat that unit and this

solution was noted so that it could systematically be applied in the future. After I

coded the data, I systematically applied the coding framework to the data again to

check for reliability. The data then was entered into SPSS for quantitative analysis.

Once results were obtained, the flagged articles were reread for a qualitative analysis

of the same texts.


Results

Appendix 3 shows the basic frequencies in percentages for the variables.

Overall, formalised knowledge was discussed as being affected most frequently.

However, when memories held in communities of practice and external human

memory were combined, this new level was far more frequent than the reporting of

issues involving formalised knowledge. These two levels can be conceptually

combined because they are both aspects of Wegner’s (1987) transactive memory

framework. Therefore, the news articles reported transactive memory as being

affected more frequently than both formalised knowledge and knowledge held in

culture.

Memory Problem by Proportion of Employees Lost

Hypothesis 1 was partially supported. I can reject the null hypothesis that in

the population of relevant news articles, there is no association between the proportion

of employees lost and the memory problems that resulted, Χ² (2) = 10.7, p = .001. I

am able to assume that there is some association between these two variables. By

looking at the cross tabulation table, presented in Appendix 4, it is clear that in

companies with a larger proportion of lost employees, storage issues are more of a

problem. In companies with at least 1/3 of their employees lost in the terrorist attacks,

storage issues were reported in 87.2% of the sampling units, while access issues were

reported in only 12.8% of the sampling units. There was no indication, however, that

the second part of Hypothesis 1, which predicted that for companies with a smaller

proportion of employees lost, access issues would be reported more frequently, was

correct. In companies with a smaller proportion of employees lost in the terrorist

attacks, the sampling units were distributed evenly between reports of storage

problems and access problems. Analysis of lamda (λ = .111), a PRE measure of


association, suggests that knowledge of the proportion of employees lost allows me to

predict what kind of memory problem would occur with an 11.1% reduction in error.

Coding units reporting no memory problems were excluded from this analysis

because the aim of this hypothesis was to understand only the kinds of problems that

occurred. However, it is important to note that, overall, memories were reported as

being not negatively affected 20.2% of the time.

Formalised Knowledge

The second hypothesis was not fully supported. Formalised memory was most

commonly reported as either being affected by storage problems (40%) or not being

negatively affected (40%), while access problems (20%) were reported less

commonly.

Amnesia Type

The third hypothesis also received only partial support. In companies with a

larger proportion of employees lost in the terrorist attacks, retrograde amnesia was

reported more frequently than anterograde amnesia. This appeared to also be true for

companies with a smaller proportion of employees lost, and thus the Chi Square test

did not reveal a significant association between proportion of employees lost and type

of amnesia. For companies more severely affected by deaths of employees,

retrograde amnesia was reported in 83% of sampling units, while anterograde amnesia

was supported in 17% of sampling units. For companies with a smaller proportion of

deaths, retrograde amnesia was reported in 75% of the sampling units while

anterograde amnesia was reported in 25% of the sampling units. The cross tabulation

table for this analysis also appears in Appendix 3.


Sampling units reporting no amnesia were not included in this analysis as the

aim of this hypothesis was to understand the instances where amnesia did occur.

Amnesia was reported as not occuring in 20.2% of the total sampling units.

Level of Redundancy

There was not enough evidence to properly assess the final hypothesis, that in

sampling units reporting differentiated knowledge affected, the outlook of those firms

would be reported as more dismal. This was because a large proportion of the

sampling units did not mention the outlook for the companies.

The findings of the current study suggest numerous possibilities for how the

terrorist attacks of September 11, 2001, could have affected organisational memory in

the companies which had offices in the World Trade Center. First of all, it is clear

that these firms faced pathologies of both memory storage and memory retrieval,

although, despite the fact that computers and records were destroyed, it was possible

to recapture data and other formalised knowledge. For both companies that were

severely affected by many deaths and those that had fewer deaths, retrograde amnesia

was the biggest concern as many key individuals holding differentiated knowledge

and communities of practice were destroyed. There was not strong evidence

suggesting that anterograde amnesia was a serious problem. In companies severely

affected, issues surrounding the human elements of transactive memory were a more

common concern, whereas in companies not as severely affected, issues surrounding

formalised knowledge were a more common concern. Exploration of each variable,

including examples from the articles reviewed, will allow for a more complete picture

of how terrorism can affect organisational memory.


Transactive Memory

The September 11 terrorist attacks appear to have impacted transactive

memory systems more than other forms of memory. Not only was this apparent in the

content analysis, but careful reading of the articles also revealed the severity of the

problem. For example, The Wall Street Journal reports that employees at Fred Alger

Management sit around and discuss what their colleagues would decide before

making particular business decisions (Brown, 2002). Another article interviewed a

client of Cantor Fitzgerald who no longer knew who to contact there because all of the

contacts he used to know died (Lauricella, 2001). An article in Fortune Magazine

reports that the two people who had run the syndicate desk for the last eight years at

Sandler O’Neill died in the attacks. “With the syndicate team dead, no one at Sandler

knew how to put together the many pieces of the deal” (Brooker, 2002). These

problems with transactive memory systems were typical, and are examples of

pathology of memory storage resulting in retrograde amnesia.

Anterograde amnesia also affected transactive memory systems in

organisations, although it was not reported as frequently. This form of amnesia

occurred when the stress of the terrorist attacks prohibited surviving employees from

going to work or from being able to concentrate while at work. In these instances,

access problems arose because transactive memory systems were unavailable. For

example, the senior managing partner of Sandler O’Neill, a key person in the

transactive memory system, reported that he was having trouble remembering things

(Smith, R., 2002). This was primarily affecting newer memories and is an example of

how anterograde amnesia can affect organisational learning. In another instance, a

Cantor Fitzgerald client noted that he had to wait several days in the aftermath of 9/11


to place an order because many of the surviving Cantor employees were out of the

office attending funerals (Knox, 2001).

Formalised Memories

In addition to knowledge stored in transactive memory systems, formalised

knowledge also was affected in both companies that lost a large proportion of

employees and those that lost a smaller proportion of employees. This kind of

knowledge, however, was not always negatively impacted because of the backup

systems that many of the firms had in place. Storage of this formalised knowledge

was reported as destroyed more often than access was interfered with, although many

of the articles implied that access issues were only temporary. For example, one

article quoted a Cantor Fitzgerald employee discussing how the data was backed up,

but the access codes for it were not known. Colleagues of the deceased sat around

discussing pet names, children’s names and other personal information until they

figured out the access code (Kelly & Stark, 2002). In this sense, an issue of access to

formalised knowledge did occur, but was eventually resolved through utilisation of

the remaining transactive memory system. As one author noted, “The problem last

year [September 11, 2001] was not that information evaporated but that people and

information had become separate” (Zwick & Collins, 2002).

Other access issues surrounding formalised knowledge occurred because of

computer crashes. Employees at Merrill Lynch had to contact clients for copies of

recent reports until their computer system was up and running again (Lauricella,

2001). Storage issues occurred when knowledge was lost and not retrievable. For

example, Cantor Fitzgerald had difficulty contacting employees and family members

after the disaster because all of their personnel files were destroyed when the

buildings collapsed (Pagano, 2001). Paper records were extremely vulnerable, but,


“Because paper records have been declining in importance relative to computer-based

records for many years, organisations that have aggressively applied new technologies

to automate their business processes are much less vulnerable than those that have

not.” (Stephens, 2003).

Many of the companies in the World Trade Center had backup data systems in

place, an initiative taken in response to the 1993 terrorist attacks and preparation for

Y2K. However, these systems were not always terrorist-proof. Marsh McLennan lost

major data centres and servers that were stored in One World Trade Center

(Greenberg, 2002) and another firm had its backup data stored in the basement of the

Tower 2 (Lewis, 2003).

Culture

Another memory source exists in an organisation’s culture. Culture is

something that is socially constructed and often shared widely in the firm. In

companies that had a large proportion of their workforce lost in the terrorist attacks, it

is feasible that aspects of their culture could demise with the lost employees.

However, culture is not simply the aggregate of individuals within the firm.

Organisations have a relationship of co-evolution with their environment and the

environment enacts culture just as culture enacts the environment. Because of this,

sources in the environment, such as competitors and former employees also hold this

knowledge. Some firms hired former employees, which “enabled the firm [Fred

Alger] to right itself with much of its institutional knowledge intact” (Smith, 2002).

The chairman of Keefe Bruyette and Woods mentioned a similar concern regarding

culture, “We’ve been trying to preserve our culture. We’ve been really cognizant of

people’s personalities and whether they’ll fit in [during the recruitment of replacement

employees]” (Bernard, 2002). Reports of culture being affected were very rare,


except the occasional mention of how admirable the culture of a firm was during the

crisis, or how surviving the attacks would become a part of the culture.2

Level of Redundancy

Theoretically, dispersed knowledge is more likely to cause amnesia for a

company than is integrated knowledge. If a person who holds dispersed knowledge,

such as the person who knew the access code for the backup system at Cantor

Fitzgerald, dies, that information may die with that person. One consultant in a

Fortune magazine article noted, “The biggest challenge is HR, [trying to replace]

people who knew how to run things that were never written down” (Tully, 2001).

This includes the leaders in a company, many of who were lost on September 11.

However, knowledge is often integrated, even when others do not realise so. For

example, every phone number of every client at Sandler O’Neill was destroyed in the

terrorist attacks, but the company was able to recover this important information

because of a back-office assistant who had dialled the numbers so frequently that she

had memorised them all (Brooker, 2002). The knowledge of the phone numbers was

integrated and because the back-office assistant survived, the knowledge survived.

Linking Back

Through the analysis of pathologies of memory caused by violent terrorist

attacks, we are better able to understand everyday organisational knowledge and

memory. It is clear that the many theories on memory and knowledge reviewed in the

introduction to this research paper present only partial pictures, as none of them offer

a complete view on how memory loss could occur. Nonaka (1991) suggests that

knowledge can be both explicit and tacit, but he uses the term in a very individualistic

sense and fails to see knowledge as it occurs in practice. Proponents of communities

2 These were not coded during the content analysis because they were not related to how the attacks could have affected the organisational memory stored in culture at the time of the attacks.


of practice, on the other hand, see knowledge as existing on the collective level

through work practice. This theory fails to recognize the importance of formalised

knowledge. Hargadon and Fanelli (2002) see knowledge as a cyclical process

occurring through the interaction between the empirical and latent dimensions of

knowledge. This theory, however, provides no insight into what would happen in the

event of memory loss. Wegner’s (1987) transactive memory framework provides a

better picture of organisational memory, but is limited in that it excludes formalised

memories as well as organisational culture.

The current research understands memory as being socially constructed and

socially held. It exists in transactive memory systems, residing externally in other

colleagues and in communities of practice. Knowledge and memory also exist

explicitly in the formalised artefacts that a firm possesses. Furthermore, memories

can reside in a company’s culture. The research presented here provides support for

this theoretical expansion. On September 11, 2001, formalised memories and external

human memories were both affected while organisational culture remained primarily

intact.

Limitations

Although the current study revealed some important insights into how

terrorism can affect organisational memory, it is not without limitations. The primary

limitation lies in the method chosen. Content analysis was appropriate given the

inaccessible context, but was not ideal for fully understanding the research question.

News articles report on interesting topics from the reporter’s perspective. However,

there may have been many more interesting memory issues that were not deemed as

journalistically interesting, and therefore not reported on. Furthermore, many of the

companies reviewed are privately held and intensely secretive. For this reason, it is


doubtful that a journalist would have an accurate picture of the functioning of these

firms. Executives also would want to present their company in a good light and

would therefore not be very likely to report any severe negative impacts that the

terrorist attacks may have had.

Additionally, because the time period of the content analysis spread over the

period of two years, the articles at the beginning of the period and at the end were

qualitatively different. For example, many of the articles were written in the

immediate aftermath of the event and therefore reported no outlook for the

performance of the firms affected. Articles published later were often more in-depth

and reflective follow-up stories. This is a methodological dilemma because different

memory pathologies may have been apparent at different times. For example, data

lost may have been an immediate concern, whereas employee attention issues may

have arisen only several months later. For these reasons, the validity of this study

may be tenuous. Additionally, the small sample size was another limitation,

restricting the statistical tests I was able to perform. As Deacon, Pickering, Golding,

and Murdock note, “research is inevitably affected by the availability and

comprehensiveness of archival sources” (1999, 120).

For the research question posed, another research method would have been

more ideal. Because this study engaged in theory building, a more inductive method

would have revealed more in the way of theoretical development. Additionally,

content analysis did not seem well suited to testing this theory, especially as many of

the codes were theoretically linked out of necessity, without prior empirical evidence

in support of the theory.

Future research on organisational memory and terrorism should be conducted

utilising an interview or ethnographic methodology. This would allow the researcher


to gain a better insight on the pathologies of organisational memory caused by

terrorist attacks. Additionally, analysis of financial statements would provide more

complete information on the financial outlook of the firms in the aftermath of memory

loss, although many factors could influence these statements. This was not possible in

the current study because most of the firms analysed are privately held and do not

provide public information on their financial performance.

Conclusion

The terrorist attacks of September 11, 2001 provide insight into the meeting of

knowledge economy and risk society. As the threat of terrorism continues, companies

should consider taking steps to protect their knowledge assets. It would be impossible

to completely understand how terrorism can affect organisational memory and

knowledge because we never know when or where terrorists may strike and can

therefore only analyse the topic after the fact. However, through an indirect analysis

of news articles relating to the terrorist attacks, I hope that I have contributed to the

understanding of how terrorism can affect organisational memory and knowledge and

to the understanding of everyday organisational knowledge and memory.

Just as the human brain demonstrates plasticity in the healing process,

organisations may also heal through the process of enactment and relearning. Data

will be recaptured, connections between employees will form anew, and transactive

memory systems will develop between old and new employees. Although the terrorist

attacks of September 11, 2001 were a genuine tragedy, the firms affected have all

survived. The World Trade Center Attacks may have affected organisational

memory, but as Nystrom and Starbuck (1984) suggest, unlearning old memories may

not be entirely a bad thing.


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Appendices


Appendix 1 Sample Articles

Article 1: Cowan, L. (2002, Sept. 9). Rebuilding Wall Street: Survival test came early- Wall

Street firms hit hardest by attacks make big changes. Wall Street Journal, C14.

N.B. This article was split because it independently discusses four companies affected by the terrorist attacks. Each shaded section represents a different sampling unit. The first sampling unit, discussing Cantor Fitzgerald, was excluded from the final analysis because the issue discussed here was coded for in a previous article.

Copyright Dow Jones & Company Inc Sep 9, 2002

Washington -- FOR THE FOUR WALL STREET firms hit hardest by the attacks on the World Trade Center, the key was surviving the first few weeks.

The operations of the firms -- Cantor Fitzgerald LP; Keefe, Bruyette & Woods Inc.; Fred Alger Management Inc.; and Sandler O'Neill & Partners LP -- have been changed dramatically. None of the four has returned to the Wall Street area; the sixth floor is the highest floor they occupy. Most have had to alter the way they do business.

But they do business, something that wasn't a foregone conclusion on Sept. 11.

"I think everybody would be dishonest if they said early on, in the first couple of days afterward, that there wasn't the thought in the back of our minds that `This is something we can't do,' " said Fred D. Price, chief operating officer of Sandler O'Neill, a boutique investment bank. "But we decided that we would not let this be the end of the business."

All lost large portions of their New York staff. Asset Manager Fred Alger Management lost 35 of its 45 World Trade Center employees, and company founder Fred Alger came out of retirement in Switzerland to run the firm in place of his younger brother, David, who died in the attack. Bond broker Cantor Fitzgerald lost 658 of its 960 New York employees. At boutique investment bank Keefe Bruyette, 67 of its 171 New York employees were killed. Sandler O'Neill lost 66 of its 148 New York staffers.

So for the firms, the possibility of shutting down was real. At a Keefe Bruyette board meeting soon after the attack, someone noted that the company could choose to dissolve the business and move on. One by one, each attendee said it would be best to continue operating. "We felt the next chapter of KBW had to be more positive," said Tom Michaud, vice chairman and chief operating officer.

At Cantor and its publicly traded electronic bond trading unit, eSpeed Inc., it was decided early on that the firm needed to survive to support families of employees who had died. But no one was sure whether clients would return in force, or how hard it would be to handle their orders with fewer employees. "In general, for Cantor and eSpeed, the first few weeks were very much about survival for us," said Amy Nauiokas, director of marketing for the firm.


Such a dire outlook seems unwarranted nearly a year later. All four firms have continued operations, and one is on track to repeat the record year it had in 2001. Executives said part of their success was due to their ability to hire talented people quickly at a time when many larger investment banks were laying off staff. And it didn't hurt that clients, former employees and competing firms that weren't damaged by the World Trade Center attacks rallied around Fred Alger, Sandler, Keefe Bruyette and Cantor, sending business their way and donating office space.

In the case of Cantor, which lost more people than any other firm, the third quarter's financial performance was affected negatively, but profits rebounded in the fourth. Cantor, which is private, has donated 25% of its profits to deceased employees' families, a practice it plans to continue for five years. ESpeed had its first-ever profit in the fourth quarter, and reported record results in its second quarter, the most recent operating period available.

"Certainly, Cantor's business isn't as profitable as it was before, but it's miraculous that we rebounded so strongly," said Ms. Nauiokas.

Nearly all its stock sales and trading employees in Manhattan were killed, but the company's 10 stock-trading offices around the nation made it possible for the firm to operate the business when the equities markets reopened on Sept. 17.

Keefe Bruyette, which specializes in the banking and securities industries, was hardest hit in its research department and the sales and trading floor. Like Cantor, Keefe Bruyette relied on its regional offices, and was able to continue operating out of Hartford, Conn., and Boston offices. An outpouring of support from other firms helped Keefe Bruyette participate as a lead adviser in 13 mergers and acquisition deals after the attacks, and it ended 2001 as a lead adviser on 37 bank deals -- more than any other firm on Wall Street. Through June, it had advised on seven bank deals. Keefe Bruyette ended up having a record year in 2001, and on an annualized basis, is on track to about match that level again in 2002, said Mr. Michaud.

Sandler O'Neill, an investment bank that specializes in the small and midsize banking industry, lost 20 out of 24 stock sales and trading employees from its offices on the 104th floor of the south tower. A majority of its bond-sales employees also were killed, but about one-third of that staff was traveling on Sept. 11, so the group was able to scrape by while Sandler hired more people.

Sandler doesn't expect its profits in 2002 to be as strong as a year earlier. Mr. Price, the chief operating officer, blames that more on the general market environment than on the impact of Sept. 11. He said there was an outpouring of business to Sandler after Sept. 11 from other firms to help the company back to its feet, but that trailed off by the beginning of 2002.

"This year is much more normalized. People are doing business with you not because of any good will from Sept. 11, but because they're really looking for competency and service," Mr. Price said. "It's almost a comfort to employees."

Fred Alger lost a majority of its fund managers, and several institutional clients withdrew their money initially. All except one client have returned. Seven former employees also came back to fill in some key positions that were left vacant by employee deaths.


Of course, Cantor, Fred Alger, Keefe Bruyette and Sandler aren't the same firms they once were. Cantor made a decision early on to leave the voice brokerage business in U.S. bonds, moving clients to eSpeed's electronic trading platform, something it had planned to do on a more gradual basis prior to Sept. 11. It closed an office it had in Paris. It rebuilt its stock-trading business, which had lost all but four traders based out of its Manhattan office. The firm now has 475 employees in New York, about half its pre-Sept. 11 level.

Keefe Bruyette actually has grown, with 261 employees, more than the pre-Sept. 11 level of 225. But it is delaying plans to expand into Europe. Sandler wasn't able to return to market making until January, nearly four months after the disaster. But the firm now has the same level of employees it did pre-Sept. 11.

Fred Alger hasn't had an easy time rebuilding investment performance, particularly in a year when the company's growth investing style is out of favor. Its two largest mutual funds, Capital Appreciation and Large Cap Growth, have both lost about a quarter of their value year to date, lagging behind more than three-quarters of their peers, according to Morningstar Inc.

---

Yuka Hayashi of Dow Jones Newswires contributed to this article.

Credit: Dow Jones Newswires


Article 2: Ridge, P. S., & Chaker, A. M. (2001, Oct. 2). Rebuilding Wall Street: In financial

district, constant reminders. Wall Street Journal, C1. N.B. This article was split because it independently discusses two different memory issues for the same company. Each shaded section represents a different sampling unit. Copyright Dow Jones & Company Inc Oct 2, 2001 Rob Sibarium, managing director of the MetLife Inc. agency in the World Trade Center, escaped from his 89th-floor office along with 11 of his 13 workers who were present the morning of Sept. 11. Now he estimates another 20% of his 48 remaining employees will quit because of emotional scars from the terrorist attacks.

"I have one person that took a leave of absence and went back to his home in Trinidad," he says. "I had two, three other people that indicated that they just can't recover. One of our key management people has already said he'll help us through this crisis and then move on because he doesn't want to relive this day in and day out."

Mr. Sibarium himself still is feeling the effects. He recently was conversing with a client on a train. But when a colleague brought up the conversation later, he had no recollection of it. "I still don't know who the person was."

While all Americans mourn the loss of life in the terrorist attacks, thousands of New Yorkers back at work in the financial district are faced with constant visceral reminders. But many feel compelled to keep business going to show the terrorists that they haven't won.

Indeed, events yesterday again showed the contrast between Wall Street's efforts to return to normalcy and its grief. The American Stock Exchange reopened its trading floor for the first time since the attacks, amid "God Bless America" and cheers from traders. Not long after, bond firm Cantor Fitzgerald LP -- which had 1,000 employees in the Trade Center, 600 of whom are missing -- held an emotional, two-hour private service in Central Park.

Michael M. Faenza, president and chief executive of the National Mental Health Association in Alexandria, Va., says that, normally, when a person loses someone close, the loss isn't tied to the person's work ethic. But now grieving people feel driven to keep working, both to be around co-workers and to get the city back on its feet.

"They have bucked up, and now they are going to start showing some symptoms," says Mr. Faenza.

For Andrew J. Gershon, an assistant attorney in the New York Attorney General's office, it is the sight of the World Trade Center ruins below his 26th-floor office windows that is his daily burden.


Matthew Kelly finds himself coming up from the subway each morning, looking toward the Twin Towers to get his bearings on the way to his law office. Instead of sighting the vanished landmarks, he says, "Sometimes you look up at the rubble and see your friends underneath."

And the smoke still emanating from "the zone" keeps Luz F. Santiago, a clerk at the nearby Bank of New York, and her co-workers on edge. "If we hear a loud noise, everybody jumps," she says.

Employers have been taking steps to help workers cope, starting with counseling services right after the attacks.

Merrill Lynch & Co., which has about 9,000 workers in the Trade Center area, most of whom are now relocated in other Merrill offices, says counselors are helping managers to identify signs of posttraumatic stress.

Some workers who haven't been able to come back to work are simply being allowed to stay home. "We're not treating it as vacation, we're just letting them do it," says a spokeswoman. She notes it is "probably too soon to tell" if some workers may choose to never return to the job.

Morgan Stanley had 3,700 employees working in the World Trade Center complex and lost six in the disaster. The company has relocated workers to a couple of contingency sites it had previously set up in case of an emergency. Others have been sharing space in Morgan Stanley offices in midtown.

"It's certainly far from the ideal work atmosphere, but these people are heroes," says Steve Liguori, the managing director in charge of retail marketing for Morgan Stanley. There are things, both big and small, that the company is doing to help. It is providing a free lunch for employees and keeping coolers stocked with sodas and water.

And Morgan Stanley brought in a bell that is rung each day at the start of trading on the New York Stock Exchange and again at the close. "It's a great morale-booster," Mr. Liguori says. People clap when the bell is rung and then move on to their tasks.

Psychologists advise companies to hold memorial services to help employees. Morgan Stanley held a prayer service at St. Patrick's Cathedral in New York on Sept. 20.

On Friday, insurer Marsh & McLennan Cos., one of the hardest hit in the attack, held a memorial service for colleagues and family members at the cathedral that was simulcast to two other locations in New York as well as to other cities.

Marsh lost 292 people on Sept. 11, and several thousand turned out Friday afternoon to grieve their passing and to console their families. The cathedral was full to overflowing and so was a theater in midtown where the service was simulcast. Others stood on 51st Street, where a big screen was put up for the simulcast.

Barry Williams, 44 years old, works for ACE USA, an insurer, and has relocated to midtown from downtown. On Friday afternoon, he attended the Marsh memorial service simulcast at the nearby theater. He has many colleagues at Marsh and wished to pay his respects and offer support to the living.


Each day it seems to be getting a little easier to carry on, says Mr. Williams. But he adds, "Then you run into an obstacle -- like looking at an e-mail from someone who is no longer here."

At yesterday's Cantor service, some children expressed their feelings with pictures. Jacinda Brown brought her drawing of the Twin Towers, with a plane crashing into one of them. Above one tower, a heart floated; above another, a flower. In between the towers, she wrote, "I love you Daddy," and pasted the picture under Lloyd Brown's name on a memorial wall.

Meanwhile, the usual daily travails of life in the city have been exacerbated. Commutes have been made more grueling by service disruptions caused by damage from the attack, as well as by periodic shutdowns of bridges, tunnels and subway lines for security checks.

Some people are thinking about leaving downtown. Ronald Gill, an attorney who works in the heart of the financial district, says that "at times I contemplate not even coming back and moving my office to some other location."

On Sept. 11, Rick Bryan, a MetLife attorney, was "just working at my desk preparing for a 9 a.m. meeting" when he felt the impact of the plane on his building. These days, as he tries to slog through the work he knows he has to do, he relives that impact in periodic episodes. "I find my body tensing constantly in anticipation of the impact of the airplane hitting the building. I find myself looking out the building all the time to see if there's an airplane coming."

Yesterday morning was particularly difficult when Mr. Bryan woke up in his Manhattan apartment to the sound of construction workers using jackhammers on a nearby apartment. He says: "I jumped out of bed because I attributed the sound of those jackhammers to the impact of the plane hitting the building."

---

Lynn Cowan of Dow Jones Newswires contributed to this article.

Credit: Staff Reporters of The Wall Street Journal


Appendix 2 Codebook

Summary of Variables

Company Name Code Cantor Fitzgerald 0 Keefe Buryette 1 Sadler O’Neill & Partners 2 Fred Alger Management 3 Aon 4 Marsh McLennan 5 Merrill Lynch 6 All WTC tenants 7 Other WTC tenant 8 Company Name Notes: All WTC Tenants- this level was used for coding units that reported on all companies directly affected by the terrorist attacks. Other WTC tenants- this level was used for coding units that reported on companies which were mentioned less than three times in the total number of coding units. Proportion of World Trade Center Employees Lost Code More than 1/3 of employees lost 0 Less than 1/3 of employees lost 1 Proportion of WTC Employees Lost Notes: More than 1/3 of employees lost- Cantor Fitzgerald, Keefe Buryette, Sadler O’Neill & Partners, and Fred Alger Management all lost more than 1/3 of the their total number of World Trade Center employees. Less than 1/3 of WTC Employees Lost- Aon, Marsh McLennan, Merrill Lynch, and most of the other WTC tenants lost less than 1/3 of their total number of World Trade Center employees. Type of Memory Affected Code Formalised Memory 0 External Human Memory 1 Culture 2 Communities of Practice Memory 3 Type of Memory Affected Notes: Formalised Memory- Refers to knowledge not held in people- data, files, records, intellectual property, systems, artefacts, office space, etc. External Human Memory- Refers to knowledge held in people that can be used in a transactive memory system. Includes affected knowledge held in key employees, employee networks, employee/client relationships, etc.


Culture- Refers to knowledge held within the culture of the firm Communities of Practice Memory- Refers to knowledge held in within the practices of the firm. Would be affected when entire departments, practice groups, or teams were lost. N.B. Theoretically, both external Human Memory and Communities of Practice Memory can combine to form a separate level- transactive memory. Since these levels can be treated either individually or combined, a sub variable, Type of Memory Affected 2 was formed for the purpose of certain analyses. Type of Memory Affected 2 Code Formalised Memory 0 Transactive Memory 1 Culture 2 Types of memory Affected 2 Notes: Transactive Memory- Memory held in transactive memory system. This includes all external human memory sources as well as memory held in practice. Memory Problem Code Storage 0 Access 1 Memory not Negatively Affected 2 Memory Problem Notes: Storage- Refers to issues of memory storage. Access- Refers to issues of memory access. Memory not Negatively Affected- This level was included because articles often would report that there was no problem with a certain aspect of memory. Absence of a problem is equally as significant as either access or storage problems. Level of Redundancy Code Integration 0 Differentiation 1 Not mentioned/not applicable 2 Level of Dispersion Notes: Integration- Refers to knowledge that is highly redundant and is stored in multiple locations. Differentation- Refers to knowledge that is not highly redundant and is not stored in many places.


Amnesia Code Retrograde Amnesia 0 Anterograde Amnesia 1 No amnesia 2 Amnesia Notes: Retrograde Amnesia- Refers to the forgetting of knowledge held prior to the terrorist attacks Anterograde Amnesia- Refers to the forgetting of knowledge learned after the terrorist attacks, or the inability to encode new memories. Company Outlook Code Positive Outlook 0 Negative Outlook 1 Other 2 Company Outlook Notes: This variable refers to what the article reports for the future of the firm. Other- Includes coding units that do not mention outlook, as well as coding units in which the reporter was unclear or uncertain of the outlook for the firm.


Appendix 3 Basic Frequency Counts for Content Analysis Variables

Company Name PercentCantor Fitzgerald 26.20%Keefe Buryette 13.10%Sadler O’Neill & Partners 13.10%Fred Alger Management 9.50%Aon Corporation 4.80%Marsh McLennan 8.30%Merrill Lynch 3.60%All WTC tenants 4.80%Other WTC tenants 16.70%n = 84 Intra-coder reliability = 100% Proportion of Employees Lost PercentMore than 1/3 of WTC employees lost

63.10%

Less than 1/3 of WTC employees lost

36.90%

n = 84 Intra-coder reliability = 100% Type of Memory Affected PercentFormalised Memory 41.70%External Human Memory 34.50%Culture 3.60%Communities of Practice 20.20%n = 84 Intra-coder reliability = 97.10% Type of Memory Affected 2 PercentFormalised Memory 41.70%Transactive Memory 54.80%Culture 3.60%n = 84 Intra-coder reliability = 97.10% Memory Problem PercentStorage 60.70%Access 19.00%Memory not negatively affected 20.20%n = 84 Intra-coder reliability = 95.65%


Level of Redundancy PercentIntegration 20.20%Differentiation 47.60%Not mentioned/Not applicable 32.10%n = 84 Intra-coder reliability = 91.30% Amnesia Type PercentRetrograde 64.30%Anterograde 15.50%No Amnesia 20.20%n = 84 Intra-coder reliability = 95.65% Company Outlook PercentPositive Outlook 15.20%Negative Outlook 19.70%Other 65.20%n = 66 Intra-coder reliability = 94.20%


Appendix 4 Cross Tabulation Tables

Memory Problem by Proportion of Employees Lost

MEMPROB * COPROPOR Crosstabulation

41 10 5187.2% 50.0% 76.1%

6 10 1612.8% 50.0% 23.9%

47 20 67100.0% 100.0% 100.0%

Count% within COPROPORCount% within COPROPORCount% within COPROPOR

0

1

MEMPROB

Total

0 1COPROPOR

Total

This analysis excludes level 2 of Memprob (memory not negatively affected)

Chi-Square Tests

10.700b 1 .0018.750 1 .003

10.034 1 .002.003 .002

10.541 1 .001

67

Pearson Chi-SquareContinuity Correctiona

Likelihood RatioFisher's Exact TestLinear-by-LinearAssociationN of Valid Cases

Value dfAsymp. Sig.

(2-sided)Exact Sig.(2-sided)

Exact Sig.(1-sided)

Computed only for a 2x2 tablea.

1 cells (25.0%) have expected count less than 5. The minimum expected count is4.78.

b.

Directional Measures

.111 .102 1.008 .314

.000 .000 .c .c

.200 .179 1.008 .314

.160 .099 .001d

.160 .098 .001d

SymmetricMEMPROB DependentCOPROPOR DependentMEMPROB DependentCOPROPOR Dependent

Lambda

Goodman andKruskal tau

Nominal byNominal

ValueAsymp.

Std. Errora Approx. Tb Approx. Sig.

Not assuming the null hypothesis.a.

Using the asymptotic standard error assuming the null hypothesis.b.

Cannot be computed because the asymptotic standard error equals zero.c.

Based on chi-square approximationd.


Type of Amnesia by Proportion of Employees Lost AMNESIA * COPROPOR Crosstabulation

8 5 1317.0% 25.0% 19.4%

39 15 5483.0% 75.0% 80.6%

47 20 67100.0% 100.0% 100.0%

Count% within COPROPORCount% within COPROPORCount% within COPROPOR

antero

retro

AMNESIA

Total

0 1COPROPOR

Total

This analysis excludes level 2 of Amnesia (no amnesia)

Chi-Square Tests

.571b 1 .450

.175 1 .676

.551 1 .4581.000 .862

67

Pearson Chi-SquareContinuity Correctiona

Likelihood RatioFisher's Exact TestN of Valid Cases

Value dfAsymp. Sig.

(2-sided)Exact Sig.(2-sided)

Exact Sig.(1-sided)

Computed only for a 2x2 tablea.

1 cells (25.0%) have expected count less than 5. The minimum expected count is3.88.

b.

department of social psychology knowledge, … filei argue that no one theory on organisational...

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