| Summary: | To better understand the factors that support or inhibit internally-focused change, we
report the results of an inductive study of one firm's attempt to improve two of its core
business processes. Our data suggest that the critical determinants of success in efforts
to learn and improve are the interactions between managers' attributions regarding the
cause of poor organizational performance and the physical structure of the workplace,
particularly delays between investing in improvement and recognizing the rewards.
Building on this observation, we propose a dynamic model capturing the mutual
evolution of those attributions, managers' and workers' actions, and the production
technology. We use the model to show how managers' beliefs about those that work
for them, workers' beliefs about those who manage them, and the physical structure of
the environment can coevolve to yield an organization characterized by conflict,
mistrust, and control structures that prevent useful change of any typ
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