Informal thinkering — how is it important?: Case studies of technical change processes: an industrialized–industrializing country comparison

This paper examines innovation processes or technical change-generation processes at the firm level. It emphasizes the notion that the element of technical and technological change that is a determinant of productivity growth is strongly induced by internal factors related to the firm's behavior, via investment in R&D but also, and importantly, on the basis of “informal thinkering” within plants.This research is unique in that it seeks first, to examine the pattern of technical change and its ensuing productivity growth, and second, to make a comparison between an industrialized and an industrializing country. This comparison is conducted by empirically comparing mills in the pulp and paper manufacturing sector in two countries: Canada and India. The overall analysis is based on direct observations at the mill level, face-to-face interviews and on analysis of mill documentary records.This paper highlights the importance of managing change as a continuous process. The introduction of intermittent, “step-jump” technical changes contributed little to explain the differences in performance between the mills. Much more important are (i) the continuing sequences of smaller investments in technical change, often linked to the larger step-jumps, and (ii) the existence of steady streams of changes and improvements that are unrecorded as capital expenditure.     

Knotting the action net, or organizing between organizations

This paper presents a study of a successful organizing process, namely the knotting together of different types of action by “translating” them into one another. The connections thus established were then stabilized to form a unit that can be designated as an “action net”. This instance of organizing occurred in the course of a project in the Swedish health care sector, with a view to establishing coordination between care units in three separate organizations. Different laws regulated their tasks, their operations were financed by different principals, and the everyday work of their members was undertaken at different point in time and in different places. Despite this, the participants in the studied project were able to establish a lasting net of connections that contributed, in the eyes of the environment, to an instance of “good care”. In this paper we examine in detail the creation of an action net, and offer a tentative theory of organizing in action nets.     

The use of simulation in system design: A case study using the precision location strike system

The purpose of the article is to illustrate the use of computer simulation study and modeling in the design of complex systems. When new systems are designed, decision-makers rely heavily upon judgment, intuition and experience. The method discussed is intended to enhance these executive attributes by providing a vehicle with which the decision-maker may be proactive before implementing the system rather than being solely reactive after implementation.The application of a method known as the “systems science paradigm” is discussed and illustrated using the U.S. Air Force's Precision Location Strike System. The problem was to design a logistical support structure for the Strike System. The three major options proposed were to locate repair and resupply structures at the point of equipment use in Europe, to have a mixed system, or to locate support at a base in the continental United States.The research employed the paradigm suggested to develop an experimental Q-GERT simulation model of the processes and structures envisioned. Data development for abstract systems is illustrated and methods to experiment with alternate structures are developed and discussed. The concept of multiechelon inventory and repair are addressed within the problem's context.A proposed design alternative resulted from application of the process. Methods, other than cost effectiveness, to evaluate the system are also suggested. Implementing the design process for ill-defined systems appears to be an effective method for dealing with such design problems.     

A fuzzy-QFD approach to supplier selection

This article suggests a new method that transfers the house of quality (HOQ) approach typical of quality function deployment (QFD) problems to the supplier selection process. To test its efficacy, the method is applied to a supplier selection process for a medium-to-large industry that manufactures complete clutch couplings.The study starts by identifying the features that the purchased product should have (internal variables “WHAT”) in order to satisfy the company's needs, then it seeks to establish the relevant supplier assessment criteria (external variables “HOW”) in order to come up with a final ranking based on the fuzzy suitability index (FSI). The whole procedure was implemented using fuzzy numbers; the application of a fuzzy algorithm allowed the company to define by means of linguistic variables the relative importance of the “WHAT”, the “HOW”–“WHAT” correlation scores, the resulting weights of the “HOW” and the impact of each potential supplier.Special attention is paid to the various subjective assessments in the HOQ process, and symmetrical triangular fuzzy numbers are suggested to capture the vagueness in people's verbal assessments.     

Towards an holistic understanding of disruptions in Operations Management

The paper reviews the literature on maintenance management, integrates key dimensions of maintenance within a taxonomy of maintenance configurations, and explores the impact of differing configurations on contextual factors and operational performance. “Prevention”, “hard maintenance integration” and “soft maintenance integration” were identified as key maintenance variables. Data were collected from 253 Swedish manufacturing companies, and three distinct clusters were identified. “Proactive Maintainers” emphasized preventive maintenance policies. “IT Maintainers” relied on computerized and company-wide integrated information systems for maintenance. “Maintenance Laggers” emphasized all maintenance dimensions to lesser extent than the others. The importance of maintenance prevention and integration differ between contexts. There were subtle performance differences across identified configurations, but preventive and integrated maintenance were more important for companies seeking competitive process control and flexibility. There existed no group with any great emphasis on all three maintenance dimensions, but attaining truly high performance may require a rare mix of the three dimensions. This mix of variables could constitute a hypothesized “World Class Maintenance” group.     

Business formation — a network approach

This article suggests that the key to entrepreneurial success is to be found in the ability to develop and maintain a personal network. In elaborating this proposition I regard the environment of the business venture as “enacted”. The inexperienced new entrepreneur needs support to create a personal network and to manage the enacted environment. The concept of the “organizing context”, defined as a clustered sociocentric network, is introduced to provide a tool with which the entrepreneur can deal more efficiently with the different subprocesses that create his or her reality. The approach supplies a framework within which various forms of entrepreneurship — indigenous, corporate, etc. — can be compared and analysed beyond their institutional differences. The interaction between various forms of entrepreneurship and organizing contexts is empirically illustrated from case studies.     

In at the deep end: Conducting processual research on organisational change

This article provides a series of reflections on the practice of carrying out processual research on organisational change. At a broad level, some of the main tasks associated with conducting company case studies are described and the benefits of this approach for dealing with complex change data are outlined. At a more specific level, the article addresses three main areas tied to the actual “doing” of processual research. First, the notion of tacit knowledge and “getting your hands dirty” by engaging in ongoing in-depth fieldwork. Second, the design and implementation of a longitudinal case study research programme. Third, the advantages and concerns of combining a range of different data collecting techniques in carrying out processual studies. Overall, the main intention is to provide some useful reflections and practical insights, as well as providing something of the flavour of carrying out this type of research.     

“Agreeing to disagree” type results: a decision-theoretic approach

This paper explores interactive epistemology within Morris’ [S. Morris, Alternative definitions of knowledge, in: M.O.L. Bacharach, L.-A. Gerard-Varet, P. Mongin, H.S. Shin (Eds.), Epistemic Logic and the Theory of Games and Decisions, Kluwer Academic Publishers, Amsterdam, 1997, pp. 217–233] framework of knowledge. Specifically, this paper proves a generalized “agreeing to disagree” result. The major features of this formalization are: (i) non-expected utility receives a unified treatment; (ii) the information structure is not necessarily partitional; (iii) Aumann’s celebrated result of “agreeing to disagree” and Milgrom and Stokey’s well-known result of “no trade” are derived as special cases. This paper also presents some new extensions of the “no trade theorem”.     

Explicit filters and supply chain design

Due to the complexity of present day supply chains it is important to select the simplest supply chain scheduling decision support system (DSS) which will determine and place orders satisfactorily. We propose to use a generic design framework, termed the explicit filter methodology, to achieve this objective. In doing so we compare the explicit filter approach to the implicit filter approach utilised in previous OR research the latter focusing on minimising a cost function. Although the eventual results may well be similar with both approaches it is much clearer to the designer, both why and how, an ordering system will reduce the Bullwhip effect via the explicit filter approach. The “explicit filter” approach produces a range of DSS designs corresponding to best practice. These may be “mixed and matched” to generate a number of competitive delivery pipelines to suit the specific business scenario.     

Subprime lending and the housing bubble: Tail wags dog?

The cause of the “housing bubble” associated with the sharp rise and then drop in home prices over the period 1998–2008 has been the focus of significant policy and research attention. The dramatic increase in subprime lending during this period has been broadly blamed for these market dynamics. In this paper we empirically investigate the validity of this hypothesis vs. several other alternative explanations. A model of house price dynamics over the period 1998–2006 is specified and estimated using a cross-sectional time-series data base across 20 metropolitan areas over the period 1998–2006. Results suggest that prior to early 2004, economic fundamentals provide the primary explanation for house price dynamics. Subprime credit activity does not seem to have had much impact on subsequent house price returns at any time during the observation period, although there is strong evidence of a price-boosting effect by investor loans. However, we do find strong evidence that a credit regime shift took place in late 2003, as the GSE’s were displaced in the market by private issuers of new mortgage products. Market fundamentals became insignificant in affecting house price returns, and the price-momentum conditions characteristic of a “bubble” were created. Thus, rather than causing the run-up in house prices, the subprime market may well have been a joint product, along with house price increases, (i.e., the “tail”) of the changing institutional, political, and regulatory environment characteristic of the period after late 2003 (the “dog”).     

Analysis and design of focused demand chains

The paper describes the evolution of focused demand chains over an extended period of time as a major UK lighting manufacturer has sought to remain an international player in a fast changing business environment. Analysis and design procedures make use of the concepts of Wickham Skinner and Marshall Fisher to answer the strategic questions “what facilities are required and how should they be laid out to enable the necessary focused demand chains?” and to answer the tactical question “which focused demand chain is appropriate for this product?” The case study then details how the company has been transformed from operating within a traditional supply chain to driving change via the engineering of four focused demand chains. The paper concludes with a comparison of operations enablers, customer choice, and business performance metrics covering the transition period culminating in the current focused demand chain scenario. By matching products to the appropriate value stream there is a consequential reduction in product development time of 75%; manufacturing costs reduction of up to 27%; and up to 95% reduction in delivery lead times.     

INSTITUTIONALISED JUSTIFICATION OF CORPORATE ACTION: INTERNATIONALISATION AND THE EU IN CORPORATE REPORTS

This paper provides an institutional analysis of the way a set of Finnish firms have used the concept of internationalisation and the EU in justifying major strategic decisions. They have used internationalisation, and in particular the then new possibility of Finland joining the EU, as an argument in support of radical change. An analysis of their annual reports reveals a number of institutional arguments which are strong because they are generally accepted, a priori, as being important not only to firms but indeed to Finland as a whole. In using institutional arguments firms are aligning their own interests with those of the country, and in so doing are able to justify radical changes in most parts of their own organisations. We are not claiming that Finnish firms should not react to the challenges which EU represents. Rather, we suggest that by using institutional arguments they are borrowing legitimacy from a wider public. The arguments used are typically very broad, invoking very general visions of the role of Finland in the EU. We call these arguments “easy rides” because, even if they are only partially explicated, it is generally assumed that they will become accepted without questioning by public and employees alike. Certain specific patterns of “easy rides” can be distinguished: i) The mobilisation of a “national mission”, ii) “Sacrifice now, reap the benefit later”, and iii) “Bigger is better”. The paper concludes with a methodological discussion about the difficulty of distinguishing between the technical/functional and the institutional arguments.     

A theory of the temporary organization

The idea of the firm as an eternal entity possibly came in with the era of industrialism. In any case, the practical consequences of this idea contrast sharply with many ideas about projects and temporary organizations. Mainstream organization theory is based upon the assumption that organizations are or should be permanent; theories on temporary organizational settings (e.g., projects) are much less prevalent. In this article, we address the need for a theory of temporary organizations, thus seeking to supplement traditional project management wisdom. We also suggest some components of such a theory by elaborating on certain ideas about projects. “Action”, as opposed to “decision”, is one such component which is central to a theory of the temporary organization. In some respects we are thus dealing with antipoles, in other respects with concepts similar to those in established mainstream organizational theory. The role of “time” in the firm is different as compared to its role in the temporary organization. The differences have several important implications and we are able to suggest a coherent outline of a theory which we believe could be useful and which also covers several important aspects of temporary organizations.     

The block metric and the law of markets

The “Law of Markets” as originally stated by Fetter and amended by Hyson and Hyson is based on the assumption that the transportation of goods is along a line segment from firm to customer. In many situations the assumption that transportation is along a block-like network of roads is a better approximation of reality. In this paper we establish the “law of markets” appropriate to the block metric. We discover that with such a metric there exist significant discontinuities in a firm's demand functions and we argue that these discontinuities have important implications for the types of competitive strategies open to firms.     

Evaluating shifts in Japan's quality-of-life

This paper presents a Data Envelopment Analysis/Malmquist index (DEA/MI) analysis of the change in quality-of-life (QOL), which is defined as the state of a social system as measured by multiple social-indicators. Applying panel data from Japan's 47 prefectures for the period 1975–2002, we identify significant movement in the country's overall QOL using a “cumulative” frontier shift index. Results suggest that Japan's QOL rose during the so-called “bubble economy years” (second half of the 1980s), and then dropped in the succeeding “lost-decade” (1990s). We also identify those prefectures considered most “responsible” for the shift(s) in QOL. Moreover, the use of both upper- and lower-bound DEAs enabled an evaluation of both “good” and “bad” movements in QOL.     

Developing breakthrough products: challenges and options for market assessment

Competitive pressures and market forces are augmenting the importance of product innovation as a source of competitive advantage. Key drivers underpinning market success have the capacity to develop the “right” products for the “right” customers, using the “right” channels, with a shorter development cycle than competitors. But when breakthrough products (BTPs) are involved, how do we sort out what is “right”? How do we identify customers' future requirements when the technology platforms are still unfolding, products are still in development and customers lack experience with the product? Traditional product development market research techniques are problematic since they assume the customer has historical experience with products similar to those being created. The objective of this paper is to raise the awareness of the OM community with the strengths and weaknesses of existing methodologies for developing and introducing innovative products to market. Further, it suggests promising future directions for both practice and research when BTPs are involved. This is important because of the central role OM plays in managing the success of the BTP development process.     

Equivalence of central place and economic base theories of urban growth

Economic base theory is discredited as a theory of urban growth; central place theory, although receiving some criticism, continues to enjoy some acclaim. In this paper I show that these two theories are equivalent so that previous criticisms of base theory also apply to central place theory. None-theless, the market expansion in both theories can lead to productivity increases because “the division of labor is limited by the extent of the market.”     

“100% EDI-connected suppliers” projects: An empirical investigation of success factors

Electronic Data Interchange (EDI) is becoming increasingly important, and new organizational forms based on EDI suppliers’ capabilities are emerging. Therefore, taking advantage of recent technological changes, especially the development of Web-based EDI systems, many big industrial buyers are seeking to get all their suppliers EDI-connected. Based on previous research on EDI adoption, we conducted a survey to study the opportunities of success of such a “100% EDI-connected suppliers” policy using data from the vehicle industry. Findings from our survey helped us to understand suppliers’ responses to such a policy and to provide recommendations to industrial buyers who are seeking to succeed in a “100% EDI-connected suppliers” project. This includes employing tailored communication strategies and selecting appropriate incentives that take into account different levels of suppliers’ EDI-capabilities and suppliers’ dependence.     

Microworlds and Simuworlds: Practice fields for the learning organization

Management is one of the few professions, the authors note, in which members have no formal “rehearsal space” for honing their skills. In response to this need, organizations such as The Center for Creative Leadership, MIT's Learning Center, and The Stern School of Business at New York University have created a brave new world of management simulations—“practice fields” for the learning organization. Some of these new games (“simuworlds”) use computer programs to replicate an entire industry and give participants an opportunity to play out one company's strategy in that setting. Other simulations (“microworlds”) engage participants in complex behavioral role playing, based on scenarios that typically develop within a company. Still other simulations combine both approaches. The authors take their point of departure from Peter Senge's definition of the “learning barriers” that develop in any organization: solving fragmented “problems” rather than dealing with systemic issues; overemphasis on competition at the expense of cooperation; and a failure to innovate until forced to do so. The new simulations, the authors argue, are particularly useful in helping managers learn how to overcome these barriers.     

On Certain Indices for Ordinal Data with Unequally Weighted Classes

In this paper, some new indices for ordinal data are introduced. These indices have been developed so as to measure the degree of concentration on the “small” or the “large” values of a variable whose level of measurement is ordinal. Their advantage in relation to other approaches is that they ascribe unequal weights to each class of values. Although, they constitute a useful tool in various fields of applications, the focus here is on their use in sample surveys and specifically in situations where one is interested in taking into account the “distance” of the responses from the “neutral” category in a given question. The properties of these indices are examined and methods for constructing confidence intervals for their actual values are discussed. The performance of these methods is evaluated through an extensive simulation study.