History Creates Ripples in Organizational Decision Making

QUESTION: What is history / heritage’s role in organizations?

organizational decision-makingAccording to George David Smith and Laurence E. Steadman, “scholarly historical research on strategy, structure, and the decision-making process is useful to company managers” and the study of a company’s history is essential to the success of employees and managers alike.

One of the key takeaways from the Smith and Steadman reading was the suggestion that employees have a need for company history that is “larger than their own experience.” The challenge, as presented by Smith and Steadman, lies in whether or not company managers will allow their decisions to be guided by history or by their “accumulated knowledge of the way things work” i.e. experience.

It should be stressed that, while most decisions are made in the here and now, to ignore the decisions of the past and how they affected the company’s success rate would be a naive attempt at conducting business, an ineffective strategy for organizational decision making, and grounds for immediate dismissal of any executive.

Since the ripple effect of one mistake could set in motion the wave that could end of the company, it would be wise for small and large organizations to pay closer attention to their organizations’ history instead of only reviewing “history” during five, ten, and 25 year anniversary promotions that are often thought of being “superficial” and “abstract” to actually benefit the organization’s ability to communicate its history internally or externally.

25th anniversary businessWith the all too common 25th anniversary marketing ploy in mind, one could appreciate Smith and Steadman’s use of Citicorp’s ten-year planning effort as an example of corporate history done right. Having recently celebrated its 200th anniversary, Citicorp (now commonly referred to as “Citi”) certainly has a long list of past events and decisions that can teach future executives what not to do in terms of corporate management.

In this Business Insider article one can easily identify 20 or more conflicts of interest, unsavory business practice, romantic scandal, and financial ruin (to name a few). That being said, if the top management at Citi has not learned how to improve their candidate screening process; if the Board has not created policies to better oversee the chief executive officer’s activities; and if their public relations department has not had more than one meeting to discuss ethical practice and disclosure—they haven’t learned anything in their 200 years of business.

To take a quote from Smith and Steadman, “The present is a moment in the past’s trajectory into the future,” so it is essential that one study the history of her organization before attempting to conduct business for fear of creating the next ripple that will soon be declared “The Beginning of the End” in tomorrow’s headlines.

Suggested Reading

  • Smith, G.D. and Steadman, L.G. (1981). “Present value of corporate history.” Harvard Business Review, 6(59), 164-173.
  • Deloitte | Organizational Decision Making: Is It a Competitive Advantage?

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Yasheaka Oakley Owens

Yasheaka Oakley Owens is the owner of YOakleyPR, a woman-owned small business that provides public relations, social media, and online marketing support services to small businesses and 501(c)(3) nonprofit organizations in Southeastern Pennsylvania, Southern New Jersey and Delaware.

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