Abstract

Process improvement has become an imperative for businesses seeking competitive advantage. However, firms often experience difficulties in both gaining acceptance for improvement programs and sustaining them, particularly in product development. We describe a theory to explain the initiation and sustainability of process improvement teams in product development. The theory integrates the structural elements of the firm with the dynamics of commitment and the improvement process. Since improvement activity takes time away from design work, the short-run effect of improvement effort is an increase in work pressure and a drop in organizational performance. This worse before better dynamic combined with the organizational and technical complexity of product development creates unanticipated feedbacks which can lead to the failure of improvement programs, even when the teams are highly motivated. The paper integrates theories from product development, teams, performance, motivation, and process improvement literatures and is grounded in an in-depth study of a successful product development improvement initiative undertaken by a global telecommunications equipment manufacturer. Implications for theory and practice are considered.

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