2. Evolution of Continuous Improvement Programs and Six Sigma
2.3.3. Variation in organizational work practices
Variations are akin to genetic mutations in the biological context, and, in the organizational context, refer to deliberate changes in incumbent work practices (Romanelli, 1991). Variations in practice-combinations involve departing from incumbent ways of conducting or organizing jobs such that the new ways are more conducive to making process improvements. For example, by introducing participative teams and transferring authority to such teams for making improvements in processes, an
organization implements a new coordination system - - a practice - - that enables faster improvements. There are different parameters of variance and these are listed in Table 2.1 and explained in the following paragraphs.
2.3.3.1. Search for variation: Variations in work practices take place as a result of organizational members at and above the managerial level searching for better ways to conduct or organize processes at worker levels (Hannan et al., 2003; Zollo and Winter, 2002). Such search for variations in incumbent practices may be conducted internally, through ideas for change generated by organizational members, or externally, by studying other organizations and/or employing consultants (Henderson and Stern, 2004; Van de Ven and Poole, 1995). Thus, the result of the search may result in internally generated changes, or external adoption of practices or existing popular sets of practices (CI programs), completely or partially.
2.3.3.2. Motivation for variation: Variations are initiated due to internal or external pressures, and each of the motivators – internal and external – can either be based on justified cause-effect reasons such as higher efficiencies, or on superficial reasons, such as pressures for adoption (Abrahamson and Fairchild, 1999). Justified internally motivated variations are frequently spurred by persisting problems that are adversely affecting organizational performance (Kolesar, 1993; Li and Rajagopalan, 1998), e.g. a high defect-rate in several processes that the organization has failed to reduce or an inability to sustain improvements given current process-improvement practices. Alternatively, an organization may be spurred to vary practices proactively as a result of internal misalignments (Siggelkow, 2001). These misalignments may be the
result of changes in strategic outlook such as a shift in the definition of defects and process improvement from one focusing on a cost-reduction perspective to an innovation- centric outlook. An even more proactive stance may be taken by organizations that generate impetus for change continually through a culture of promoting experimentation with new work practices at the managerial level (Smith et al., 2005; Teece et al., 1997).
On the other hand, superficial internally motivated variations are caused by forces such as changes in top leadership (Tushman et al., 1986) or organizational mergers (Inkpen and Currall, 2004).
Justified externally motivated variations occur because of a need to align with external environment changes such as change in predominant technology that requires new ways of organizing practices, e.g. changes from large integrated steel mills to mini mills, or change in prevailing labor laws. Alternatively, in the case of superficial externally motivated variations, organizations may simply be imitating other organizations (DiMaggio and Powell, 1983). Such imitations may be induced by dominating suppliers or customers (Westphal et al., 1997), or by the association of a CI program with legitimacy and innovativeness among peer firms (Gibson and Tesone, 2001). For example, suppliers of Walmart adopted radio frequency identification (RFID) technology (McClenahen, 2005) following Walmart’s dictate. Organizations have also been known to adopt enterprise resource planning (ERP) systems in order to portray their legitimacy among peer organizations (Benders et al., 2006). Apparent successes of a CI program in other organizations may cause an organization to adopt the CI program without analyzing fit within its own context (Abrahamson and Fairchild, 1999).
2.3.3.3. Extent of variation: Variations range from small incremental changes to existing work practices such as introducing cross functional teams, to fundamental changes such as moving from a bureaucratic top-down work coordination system to an organic participative-teams system (Abrahamson, 2004; Romanelli and Tushman, 1994).
As a result of a search for radical variations, an organization may internally develop a novel and unconventional bundle of practices (for the time) that proves beneficial not just for the pioneer-organization but for other organizations as well. Such a bundle may gain popularity as the next CI program (Massini et al., 2002). On the other hand, the extent of variation or displacement in incumbent practices required for adopting a practice or CI program from outside the organization will be path-dependent as explained in the following section; even the capacity of the firm to search for incremental and radical changes (internally and externally) is affected by existing practices (Cohen and Levinthal, 1990).