Continuous improvement is one of the most popular topics in present-day management research. In this article, the author sought to understand the processes and dynamics of continuous improvement (CI) in two Finnish manufacturing organizations. In this article, CI is discussed as organizational renewal; the latter usually involves strategic and tactical changes at the managerial and organizational levels.
The researcher defines CI as “a company-wide process of focused and continuous incremental innovation”. The study relied on empirical methodology and longitudinal study design, to explore the implementation of continuous improvement processes in two manufacturing organizations. Open-ended and semi-structured interviews, as well as written documents and materials, served as the main instruments of data collection. The main findings of the article are:
- CI implementation is a cyclical process;
- external forces and changes are primarily responsible for the development of the CI ideology;
- managerial and non-managerial support plays the key role in the success of CI implementation; and
- there is no best method to implement CI, and companies have to consider the influence of their behavior and decision-making patterns on the CI implementation cycles.
These findings have far-reaching implications for organizations and suggest that, when implemented properly, continuous improvement exhibits an unprecedented competitive potential.
Key Learning Points
As the national and global business competition increases, firms seek ways to maximize their competitive potential. Quality improvement ideologies exemplify a new stage in the development of competitive strategies in the manufacturing and services sector. Based on the article, the key learning points include
- the main components of the quality improvement ideology;
- history and continuity of quality improvement in manufacturing enterprises;
- factors affecting the quality and efficiency of continuous improvement (CI) initiatives;
- direction and cyclical nature of CI.
Quality improvement is not a set of rigid doctrines but, rather, a system of flexible principles and practical frameworks that shape a new way of thinking in organizations. The article suggests that the main components of any quality improvement ideology are
- a broad concept of quality,
- uniform realization of the quality and quality improvement value,
- customer satisfaction as the fundamental criterion of quality;
- CI as a process encompassing systematic product, service, and process improvements;
- managerial and leadership support;
- employee involvement and empowerment, through cooperation, collaboration, education, and training.
The success of most CI ideologies and processes depends upon the length and continuity of process implementation. Both companies in the discussed study had their CI strategies initiated at least ten years prior to the study. The article shows that most, if not all, CI ideologies were implemented in response to essential industry-wide changes affecting businesses. For example, the researcher writes that construction companies were compelled to restructure their activities, as mass construction was declining and the entire market was no longer seller-dominated. The article shows that the earlier CI was implemented the better where the companies’ chances to achieve the desired quality improvement goals.
A large number of factors affect CI implementation within organizations. In the discussed article, the most important factors of difference in CI implementation between the two companies were identified. First, managerial and non-managerial support greatly affects the quality of CI achievements. Second, organizational structure and counter forces can facilitate or impede CI implementation. Third, industry-specific factors and business contexts do play a role in how CI works.
As previously mentioned, the duration of the process and methodological orientations are extremely important for the success of companies’ CI initiatives. Finally, the cyclical nature of continuous improvement should not be disregarded: the researcher writes that CI implementation is never straightforward. Rather, CI implementation processes face resistance and other organizational changes, which either confirm the relevance of the CI course or demand the creation of new CI ideologies.
Statements Relevant to the Session
- “While the interest of organizations in adopting and implementing CI has significantly increased, […] research on CI has not been able to produce a sound theoretical basis”.
- “Imitable competitive advantages can be realized through developing CI”.
- “In the process of CI development, managerial and non-managerial actors, coalitions of these actors, the intensity of their actions, and organizational and environmental factors all have an impact on how CI evolves over time”.
- The common features of CI implementation in companies are “first, outside influence in bringing in or gathering ideas; second, an external force driving the developmental activities; third, the cyclical developmental pattern”.
The importance of the discussed research was justified by the absence of a single, relevant theoretical basis for continuous improvement and its implications for organizational development and growth. That the researcher applied empirical methods added rigor to the study findings. The main implication of the discussed research is not that CI is cyclical but that CI is an effective form of adaptive behaviors in organizations.
This is mainly because organizations use CI processes to (a) respond to external, industry-wide changes and processes and (b) use CI to strengthen their competitive position. The article suggests that cycles of economic development exemplify the most fundamental and prominent external force affecting the CI focus among organizations. The researcher claims that profitability increases and quality improvement activities tend to occur simultaneously, whereas economic recessions cause a decline in openness to new CI ideologies.
Despite the relevance and validity of the findings, two questions remain unanswered. First, according to the article, there is no single theoretical basis for quality and CI implementation. However, the discussed article implies that no best definition of quality is ever possible. Different organizations interpret the notion of quality in entirely different ways, depending on the standards of the manufacturing process and customers’ quality expectations. In the meantime, the factors of CI identified in the article shape the basis for creating a holistic theory of continuous quality improvement in manufacturing organizations.
Another question is how newly created organizations initiate and implement quality improvement initiatives. The article identifies duration as an essential factor of CI success. Does that mean that ‘fresh’ organizations have few opportunities to improve the quality of their products and processes? Or does that mean that newly created organizations face quality improvement challenges at the later stages of their development and growth? These questions require further empirical analysis. As more organizations are being formed, managers need better CI awareness and knowledge. Practical experiences of mature organizations can serve as a guideline for younger companies, who choose to pursue the quality improvement path.
Translating research into practice is one of the main challenges faced by organizations. The discussed article provides several suggestions regarding the implementation of CI. First, there is no best way to implement continuous improvement. Therefore, organizations must consider a broad range of company- and industry-specific behavior patterns, which are likely to affect their CI initiatives. Second, CI implementation is cyclical but never closed.
Organizations must be prepared to provide regular input in CI progress and developments. This is possible if organizations encourage employee and managerial participation in CI processes. Employees must be empowered to participate in CI. Organizations must establish and maintain two-way communication channels, to ensure the continuous inflow of relevant information and continuity of quality improvements.
Third, since managerial and employee support is crucial to the success of CI implementation, organizations must ensure that managers and employees understand the essence and significance of continuous improvement. Organizations must communicate the message of continuous improvements to all organization players, in a meaningful and comprehensible way. The researcher implies that managers and the quality of their cooperation with owners predetermine the quality and efficiency of CI processes.
The article recommends that organizations emphasize and foster the spirit of innovativeness among managers and develop managers’ commitment to a sustained renewal. Only managers who understand the meaning and process of CI implementation can develop a commitment to CI values; thus, organizations must invest considerable resources in educating and training their staff. It is through training and education that companies can build and sustain managers’ commitment to CI implementation in the long run. In summary, to guarantee the success of CI initiatives, organizations must
- identify and analyze industry- and company-specific factors affecting quality improvement,
- encourage continuous information input and innovations through employee participation and empowerment,
- provide training and education, to build managers’ commitment to and support of all CI processes.
That CI is company-specific and cyclical is probably the most important learning point. Organizations must realize that temporary declines in CI activity are inevitable. These declines, however, do not necessarily mean failure; they simply provide more room for process analysis and improvements. It is noteworthy, that most CI attempts occur as a result of external, environmental changes. According to the researcher, economic shifts cause a major impact on continuous improvement across organizations; simultaneously, the speed and intensity of CI depend upon the number of internal resources available at the moment. Based on the article, managerial influence is of primary importance for the success of all CI endeavors.
CI implementation exhibits an unprecedented competitive potential, but practicing managers need to be aware of the essence and value of a continuous improvement. The researcher concludes that managers must realize how to use available resources and implement CI in a company-specific way. Thus, only organizations that invest resources in training and education and encourage innovativeness and participation have great chances to meet their CI objectives.
Future research is needed, to develop coherent CI implementation frameworks, which will be used by newly created organizations to avoid trial and error difficulties and unnecessary costs. Existing organizations will be able to use these frameworks as the guiding light in the creation and implementation of various continuous improvement strategies.
These frameworks will facilitate the implementation and integration of theoretical knowledge with organizations’ realities and manufacturing operations. They will help organizations to enhance the efficiency of their quality improvement endeavors. Consequentially, manufacturing companies will be able to improve the quality of their products and processes on a continuous basis, without considerable losses.