Why Firefighting Is Never Enough: Preserving High-Quality Product Development
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 defin...
| Main Authors: | , |
|---|---|
| Format: | Working Paper |
| Language: | en_US |
| Published: |
2003
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/3956 |
| _version_ | 1811071662102151168 |
|---|---|
| author | Black, Laura Repenning, Nelson |
| author_facet | Black, Laura Repenning, Nelson |
| author_sort | Black, Laura |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T08:54:45Z |
| format | Working Paper |
| id | mit-1721.1/3956 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T08:54:45Z |
| publishDate | 2003 |
| record_format | dspace |
| spelling | mit-1721.1/39562019-04-10T19:40:56Z Why Firefighting Is Never Enough: Preserving High-Quality Product Development Black, Laura Repenning, Nelson implement TQM TQM process improvement initiatives challenge management science organization theory front-line workforce incentives job security lay-offs agency system dynamics firefighting 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. National Science Foundation, grant SBR-9422228, the Ford Motor Company and the Harley-Davidson Motor Company. MIT Sloan School of Management, Center for Innovation in Product Development 2003-12-17T19:23:11Z 2003-12-17T19:23:11Z 2000 Working Paper http://hdl.handle.net/1721.1/3956 en_US 248982 bytes application/pdf application/pdf |
| spellingShingle | implement TQM TQM process improvement initiatives challenge management science organization theory front-line workforce incentives job security lay-offs agency system dynamics firefighting Black, Laura Repenning, Nelson Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title | Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title_full | Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title_fullStr | Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title_full_unstemmed | Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title_short | Why Firefighting Is Never Enough: Preserving High-Quality Product Development |
| title_sort | why firefighting is never enough preserving high quality product development |
| topic | implement TQM TQM process improvement initiatives challenge management science organization theory front-line workforce incentives job security lay-offs agency system dynamics firefighting |
| url | http://hdl.handle.net/1721.1/3956 |
| work_keys_str_mv | AT blacklaura whyfirefightingisneverenoughpreservinghighqualityproductdevelopment AT repenningnelson whyfirefightingisneverenoughpreservinghighqualityproductdevelopment |