While it generally asserted that a goal of organizational memories is to improve performance, the potential for creation of organizational pathologies and neuroses can not be overlooked. This paper adapts a model of individual beliefs to suggest how beliefs may create and sustain self-defeating organizational outcomes. It is significant that these beliefs may be used effectively but problems arise when organizations, in times of stress, use automatic memory retrieval processes to guide actions based on multiple, extreme or disturbed beliefs. The model is illustrated by reviewing the current circumstance of three well-known businesses encountering difficulty. Avoiding these consequences requires exposing and labeling beliefs to aid the process of crafting remedies. In addition to self-help and consulting interventions, individuals and organizations may need the assistance of mental health professions if the dysfunctions are severe.

An organization can be its own worst enemy. Finney and Mitroff [ 7:332]