Knowledge Management

Citicorp’s Waste

A persistent mistake is also evident in the way Citicorp regularly changes its regional organizational structure (Abrahamson, 2000). In recent years it has alternated between combining sales and operations, and keeping them separate. When they realize that sales is not getting the attention it needs in the highly competitive financial services industry, they separate them once again. The waste of resources has been colossal.

Elsewhere, there is a large insurance group that is a good example of a similar case of forgetting as a result of downsizing (The Economist, 1996). Having slimmed its claims department, it found it was settling big claims too swiftly and too generously. It discovered it had laid off several long-term employees ...