Why Firefighting Is Never Enough: Preserving High-Quality Product Development
Name
BlackandRep_doc.pdf
Size
243.15 KB
Format
Adobe PDF
Checksum (MD5)
a185bd11c32272f4d5403aee32f38bec
Author(s)
Black, Laura
Repenning, Nelson
Date Issued
2000
Abstract
Understanding the wide range of outcomes achieved by firms trying to implement TQM and similar process improvement initiatives presents a challenge to management science and organization theory: a few firms reap sustained benefits from their programs, but most efforts fail and are abandoned. A defining feature of such techniques is the reliance on the front-line workforce to do the work of improvement, thus creating the possibility of agency problems; different incentives facing managers and workers. Specifically, successfully improving productivity can lead to lay-offs. The literature provides two opposing theories of how agency interacts with the ability of quality-oriented improvement techniques to dramaticlly increase productivity. The 'Drive Out Fear' school argues that firms must commit to job security, while the 'Drive In Fear' school emphasizes the positive role that insecurity plays in motivating change. In this study a contract theoretic model is developed to analyze the role of agency in process improvement. The main insight of the study is that there are two types of job security, internal and external, that have opposite impacts on the firm's abilty to implement improvement initiatives. The distinction is useful in explaining the results of different case studies and can reconcile the two change theories.
Subjects
implement TQM
TQM
process improvement initiatives
challenge
management science
organization theory
front-line workforce
incentives
job security
lay-offs
agency
system dynamics
firefighting
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