Capability Traps and Self-Confirming Attribution Errors in the Dynamics of Process Improvement

Nelson P. Repenning1

John D. Sterman2

Sloan School of Management Massachusetts Institute of Technology

Cambridge, MA USA 02142


Forthcoming in

Administrative Science Quarterly


Work reported here was supported by the MIT Center for Innovation in Product Development under NSF Cooperative Agreement Number EEC-9529140 and the company described in this paper.  Many thanks to Bill Colwell, Laura Cranmer, Dave Lazor, Vic Leo, Frank Murdock, Roger Saillant, Ron Smith and Tim Tiernan for their generous assistance.  We thank Lotte Bailyn, John Carroll, Bob Cole, Lee Fleming, Steve Graves, Rebecca Henderson, Drew Jones, Liz Keating, Tom Malone, Jim March, Rogelio Oliva, Wanda Orlikowski, Scott Rockart, Julio Rotemberg, Jenny Rudolph, Ed Schein, Dick Scott, Peter Senge, seminar participants at MIT, three anonymous referees and the editor for their careful reviews and constructive suggestions.


For more information on the research program that generated this paper, visit


1. MIT Sloan School of Management, E53-335, Cambridge, MA USA 02142. Phone 617-258-6889; Fax: 617-258-7579;

2. MIT Sloan School of Management, E53-351, Cambridge, MA USA 02142. Phone 617-253-1951; Fax: 617-258-7579;




To better understand the factors that support or inhibit internally-focused change, we report the results of an inductive study of one firmĺ─˘s attempt to improve two of its core business processes.  Our data suggest that the critical determinants of success in efforts to learn and improve are the interactions between managersĺ─˘ attributions regarding the cause of poor organizational performance and the physical structure of the workplace, particularly delays between investing in improvement and recognizing the rewards.  Building on this observation, we propose a dynamic model capturing the mutual evolution of those attributions, managersĺ─˘ and workersĺ─˘ actions, and the production technology.  We use the model to show how managersĺ─˘ beliefs about those that work for them, workersĺ─˘ beliefs about those who manage them, and the physical structure of the environment can coevolve to yield an organization characterized by conflict, mistrust, and control structures that prevent useful change of any type.


You can download the two case studies on which this research is based by clicking on the links below:

Manufacturing Cycle Time (MCT) Case Study

Product Development Process (PDP) Case Study