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Pergamon
Omega, Int. J. Mgmt Sci . Vol. 23, No. 6, pp. 607-624, 1995
Copyright 1995 Elsevier Science Ltd
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Conceptualizing Continuous
Improvement: Implications for
Organizational Change
TY CHOI
Bowling Green State University, Bowling Green, Ohio, USA
(Received November 1994; accepted after revision September 1995)
This paper attempts to bridge the gap in the change conceptions of two different genres of literature.
It brings together the literature on continuous improvement in the manufacturing field and the
literature on organization change in the fields of strategic change and organization development. In
the latter literature, studies describe both dramatic and discontinuous changes and disjointed but
logical incremental changes. These changes are considered the territory of the top management. The
continuous improvement concepts emphasize incremental changes that are continuous, concerted, and
accumulative. In this case, workers are considered to play a key role in making changes. The two
genres of literature are brought together to formulate a more comprehensive framework of
organizational change, in which continuous incremental changes and dramatic and discontinuous
changes can coexist and interrelate for more effective change processes in organizations. An example
of the implementation of statistical process control illustrates this point.
Key words--continuous improvement, management, manufacturing, organizational change,
quality
INTRODUCTION
CONTINUOUS IMPROVEMENT (CI) has emerged as
a key concept regarding how compani es should
bot h approach product i on and view quality [51].
Demi ng [27] adopt ed the concept of CI as his
first quality principle by pointing out that
const ancy of purpose is achieved t hrough
endless churning of pl an- do- check - act cycles
[83]. Taguchi ' s cont i nuous quality loss function
[96] addressed CI as a means of quality achieved
by continuously striving to reach a target value,
thereby facilitating the at t ai nment of six sigma.
Imai [51] and Shingo [86] asserted that CI was
the single most i mport ant fact or in J apan' s
manufact uri ng success.
For many compani es that have been operat -
ing under the paradi gm of bureaucracy [104], CI
presents a more dynami c way to view work
[107]. Whereas the bureaucrat i c work structure
promot es predictable and stable routine tasks,
CI teaches that routines and standard operating
practices are not invariants but var i ant s- - t hey
are not here to stay but to be continuously
updated. Workers no longer work in the stale
water of unchanging routines; they now work
in the free-flowing water of changing routines
[90, 95]. Thus, it is i mport ant to ask what type
of organizational change the CI-based changes
constitute.
However, CI has not been fully conceptual-
ized into the genre of the organization change
(OC) literature. There are many perspectives on
organization change in the traditions of
strategic change and organization development,
but the characteristics of change that are
inherent in CI appear underdeveloped. At the
same time, aut hors of the general literature
written on CI appear to base it on operat i onal
OME23~C 607
608 Choi--Conceptualizing Continuous Improvement
implications (e.g. work routines), and they have
paid little attention to the implication it has had
for strategic change (e.g. formulating a new
strategic direction) or organization development
(e.g. planning for change), except to suggest that
these issues should be addressed by top
management [83, 94].
Because management science is a field that
critically addresses organizational change
[31,103], integrating the change concept of CI
into the existing framework of organizational
change is a worthy endeavor, particularly when
one considers that CI has been developed
mainly by practitioners and scholars in this
field. This paper attempts to take a modest step
toward bridging the interdisciplinary and
theoretical gaps that exist between OC literature
and CI literature. It will illustrate how the CI
and OC literatures complement each other by
serving to develop more fully the conception of
organizational change.
Two sets of change typologies will be
developed. The OC typology will be developed
largely based on the strategy and policy
change (e.g. [57,64,99]) and organization
development literature (e.g. [10, 16, 73]), and
the CI change typology will be developed
based on the manufacturing literature (e.g.
[23, 27, 51, 94, 107]). This paper will discuss
how scholars in the two genres of literature may
benefit from each stream to build a more
comprehensive concept of change. The paper is
devoted primarily to the dominant character-
istics of change in the literature. It does not
address the how-to' s of making changes, such as
methods for environmental scanning or
methods of work redesign.
THE ORGANIZATION CHANGE (OC)
LITERATURE
The OC literature is, in a phrase suggested
by one of the anonymous referees, "an eclectic
and heterogeneous body of research". It
ranges both from technological change to
structural change and from psychological
transitioning to organization downsizing.
Therefore, some of the views presented here as
representing the OC literature have been
organized rather loosely. However, by an-
choring on the comment by Miller and Friesen
that "much of the literature on organizational
change deals with strategy or policy change"
[63] (p. 868), I will begin the review with that
segment of literature. In addition, I also draw
from the literature of organization development
that has become a prominent discipline that
addresses the topic of OC [73] since Miller and
Friesen's comment.
In the OC literature, theorists generally
dichotomize changes as major or minor.
According to Greiner' s [41] view, organizations
change through revolutionary and evolutionary
stages. The revolutionary stage represents a
period of substantial turmoil, whereas the
evolutionary stage is a prolonged period of no
major upheaval. Nord and Tucker [68] distin-
guished changes that take place during revolu-
tions and evolutions as radical changes and
routine changes, respectively. Burke [16] echoed
these thoughts by categorizing changes accord-
ing to transformational change and transac-
tional change. Many more theorists differentiate
between major and minor changes. For
example, Miller and Friesen [63] distinguished
between quantum changes and piecemeal
changes, and Anderson and Tushman [4]
distinguished between breakthrough changes
and incremental changes. Therefore, after
noting these two types of changes as a prevalent
theme in the OC literature, I have organized this
section into major and minor changes. Under
each type of change, I discuss the conditions
that trigger the change, the nature and
characteristics of the change, and the perform-
ance implications of such change. The key
Table 1. Change characteristics in organization change literature
Maj or change Minor change
Triggering conditions
Nat ure of organizational change
Performance outcomes
Presence or anticipation of environmental shift
Top management domai n
High level of emotions
Dramat i c and discontinuous changes
High associated risks
High performance gain when done right
Disrupted internal dynamics
Change in a segment of environment
Sensemaking
,,Purposively logical or disjointed incremental
changes
Localized performance gain
Omega, Vol. 23, No. 6 609
concepts, which are placed in the two categories,
are summarized in Table I.
Major changes
Triggering conditions. According to Porras
and Silvers' opening statement, the basic focus
of organization development and change litera-
ture has been the organization' s responsiveness
to "rapidly changing environments ... in order
to survive and prosper" [73] (p. 51). Likewise,
Beer and Walton [10] in an earlier review article
pointed out that OC has been thought of since
the late 1960s as being guided by environmental
changes, beginning with Beckhard [8] and
Bennis [11], who argued for adaptive, flexible
organizations that readily respond to environ-
mental changes. Such theorists believed that as
environments shift, organizations must shift; as
environments change, organizations must
change [89]. Theorists in both the classical
schools of organizational analysis and the
modern managerial school still hold this view.
For instance, Pfeffer and Salancik [69] argued
that organizational changes are necessary
because organizations are dependent on the
environment for resources. Therefore, they must
adapt their internal operations appropriately to
environmental conditions (e.g. [17, 55]). When
the external environment is complex, organiz-
ational differentiation must increase to raise the
internal responsiveness of the organization [59],
but in rapidly changing environments, organiz-
ations must become ' organic' to increase their
ability to adapt in a timely manner [17]. The
literature of the 1980s and 1990s also points out
that organizational changes must help to
improve the fit between organizations and their
environments [33]. Stewart [92] reported that the
best corporate candidates for radical, reengi-
neering changes are companies that are facing
big alterations in the environment. Population
ecologists have continued to focus on how
populations of organizations are transformed
by environmental changes through which
organization adaptation is mainly determined
by environmental factors [3].
Hrebiniak and Joyce [49] elaborated that
environments not only constrain organizational
adaptation but also facilitate it. According to
this argument, adaptation is defined by the
interdependence and interaction between stra-
tegic choice and environmental determinism.
Strategic choice anticipates environmental
changes, whereas environmental determinism
selects organizations through environmental
changes. Morgan [65] and Tichy [97] empha-
sized the importance of management' s proactive
stance in making changes. Thus, the organiz-
ational changes come in response to environ-
mental changes, whether the response is made in
reaction to or in anticipation of environmental
change.
A relatively minor voice contends that a
major change may arise endogenously from
within the organization if management per-
ceives a sustained low performance. Tushman
and Romanelli [99] argued that the lack of
consistency among activities in strategy, power,
structure, and controls may lead to a low
organizational performance, which eventually
leads the top management to introduce a major
revamping of the organization. However, a 1994
empirical study by Romanelli and Tushman [82]
did not support this view. Their study, in fact,
offered support for the view that the presence or
anticipation of an environmental shift will lead
to major organizational changes.
Nature of organizational change. What are the
characteristics of these changes within the genre
of OC literature? It appears that authors in
general have depicted these changes as dra-
matic. For instance, Burke [16] posited that
these changes entail a ' fundamental' shift. He
contended that organization development
necessarily pertains to facilitating ' transforma-
tional changes', instilling an entirely new set of
organizational behaviors. Miller and Friesen
[64] argued that such dramatic changes are more
economical for organizations and that the
successful firms change in more dramatic ways
than do unsuccessful firms. Affinity for dramatic
changes among the researchers who study
organization change continues in the work of
Nadler and Tushman [66]. Although they
identified the existence of incremental changes,
Nadler and Tushman focused on ' framebend-
ing' and ' framebreaking' changes, which they
called 'large-scale organizational changes' [66]
(p. 194). They cited the large changes in AT&T,
Chrysler, and Apple that captured public
attention. Hinnings and Greenwood also fo-
cused on "radical strategic changes in organiz-
ation design ... which signal a fundamental shift
in the basic orientation of the organization" [47]
(p. 4).
Rappaport [80] posited that the imminent
threat of takeovers forces corporations to
radically restructure and downsize their organ-
izations. Hammer [44] argued further that
corporations must reengineer their internal
work processes because the current environment
is one of "rapidly changing technologies and
ever-shorter product life-cycles" [44] (p. 104).
He recommended that companies ' obliterate'
their existing work processes and start over.
Daft and Lewin [26] (p. i) further contended,
"Both profit-seeking organizations and non-
profit organizations are reeling from discontinu-
ities created by an interdependent global
economy, heightened volatility, [and] hyper-
competition". Dynamic environmental disconti-
nuities are portrayed as giving birth to
hypercompetition. Tushman and Romanelli
[100] offered a model for the dynamics of how
organizations cope with these environmental
discontinuities. Through such dramatic
changes, the organizational equilibrium be-
comes ' punctuated' and is disrupted. The
organizational members' energy is then spent on
managing this disequilibrium, while they search
for equilibrium. For example, as the pressure of
technological discontinuities strike organiz-
ations, strategic reorientations become necess-
ary [99]. These changes mark a discontinuous
and discrete event, which leaves a clear path
from the old way to the new way [97]. The focus
of change, therefore, is on managing discontinu-
ities of organizational lives, such as revitaliza-
tion, turnaround, innovation, and downsizing
[10].
These dramatic and discontinuous changes
have been perceived as the territory of top
management [99]. As changes in competition,
technology, social and legal conditions of the
environment render prior strategic orientation
no longer effective, top managers initiate
dramatic and discontinuous changes based on
their perception of how the environment has
shifted. Organization development theorists
[6, 8,60, 61,101] have recommend that these
changes be planned changes, which entails
planned intervention, and they have urged top
management to account for the interaction of
changes that subsequently take place in different
parts of the organization. This view is typically
referred to as a syst ems perspect i ve. Accord-
ingly, a change does not occur in isolation, but
it becomes invariably connected with many
other changes within an organization. Beer,
Eisenstat, and Spector [9] further posited that
for dramatic and discontinuous changes to be
effective, top management must create a
corporate context that will support the change.
The organizational members typically overex-
tend themselves in an effort to cope with the
change, so it becomes necessary for top
management to create a supportive intraorgani-
zational context.
As top managers adapt sweeping changes in
response to environmental change, it spells crisis
for the people in that organization. Although
crisis is a necessary condition for dramatic and
discontinuous changes [30], this form of change
is painful for both those who administer it and
those who are affected by it. Byrne [19] reported
the Nynex Corporation' s experience of downsiz-
ing. Managers and consultants who directed this
change confessed that it was "tough, ugly work"
and the stress was "palpable" [19] (p. 62),
because so many changes had to be adminis-
tered during a short time period. Employees
who were affected by the change spoke of a
'living hell', while those who survived the
change spoke of 'anxiety and overwork' .
Another example of such discontinuity was
AT&T' s massive strategic change to adapt to a
new environment after it signed a divestiture
agreement with the Department of Justice,
which opened up the telecommunications
market and, subsequently, gave birth to many
new competitors. This event may be summed up
in the dramatic changing of the symbolic phrase
of ' Ma Bell' to ' Mother doesn' t live here
anymore' [25]: it marked the death of old
nurturing AT&T and the birth of the new
fiercely competitive AT&T.
Because the magnitude of change is high, the
risk associated with such change is also high.
Biggart [12] argued that all organizational
change must involve some destruction of
existing practices and that the change may or
may not accompany the adaptation of the
company. Hannan and Freeman [45, 35] de-
scribed such changes as the "re-setting of the
liability of newness clock", which means that
any change from one state to another involves
the inherent risk of starting over. Furthermore,
Kanter [53] pointed out that with change comes
loss. Because change entails destruction of
existing practices, all organizational change
contains an element of danger. Maj or changes,
therefore, mean high risk. Liker et al. [56]
described the high risk involved in making a
massive technological change 'all at once'.
Hedberg et al. said it explicitly: "hostilities,
demotivation, wasted energies, ill-founded ra-
tionalities, and foolish risks are costs associated
with drastic changes" [46] (p. 61).
Performance outcomes. However, high risk
regarding change also means there is a chance
for a dramatic performance improvement.
Generally, dramatic and radical changes such as
downsizing or restructuring have the potential
to drastically improve the level of performance
[64]. Although there have been many instances
where failure has occurred when an organiz-
ation succumbs to the high risk of change, a
number of other companies have increased
productivity and efficiency after a major change
[42]. For instance, Borucki and Barnett [14]
reported how Navistar was able to revitalize
itself after a major restructuring event. Through
a major, discontinuous change, this firm
avoided bankruptcy and renewed itself into a
world-class manufacturing company. Hall et al.
[42] posited that in order to succeed in making
this sort of major restructuring and reengineer-
ing effort, company members must consider
both the breadth of the change as well as the
depth of it.
Mi nor changes
Although most OC authors have devoted
their attention to major changes, others have
focused on minor changes. In their literature
review, Miller and Friesen [63] reported a
commonly held view of organizations "adjust-
ing gradually and incrementally, responding
locally to individual crisis as they arise" [63]
(p. 868). This review suggests that rather
than changes occurring in one single,
dramatic swoop, changes can be made itera-
tively and incrementally, over a period of time
[57, 75].
Triggering conditions. Similar to major
organizational changes, minor organizational
changes are thought to be driven primarily by
the organization' s environment. First, when a
major environmental change shakes up the
internal dynamics of organizations, these
organizations undergo minor changes to
overcome the internal problems induced by
the major change [82, 100]. Second, organiz-
ations change in minor ways because the
environment also changes in a segmented way
[57, 58, 75-77]. Therefore, minor changes come
either from the internal problems rising from
the major change or from the organization' s
direct contact with a segment of the environ-
ment.
Managers focus on fragmented aspects of
disrupted internal dynamics. Firms respond and
adjust locally to these individual crises, and they
change gradually and incrementally [88]. Theo-
rists believe that the environment changes
continuously [57], which requires a continuous
scanning from the organization [76]. Managers
look for opportunities for change, and once they
decide to change, they determine the possible
and limited range of strategic change [77, 78].
Thus, changes are made incrementally and
locally to give the organization stability.
Nature of organizational change. Appearing
as the central issue is the limited cognitive
capability of managers and how they make
sense of the situation. Managers perceive the
impact of the environmental change, and,
because of the bounded nature of their cognitive
capabilities, they focus on a limited aspect of the
reality and interpret what such reality means for
the organization. Lindblom [57, 58] argued that
a decision is not made based on careful
deliberation of all possible choices; rather, it is
based on the comparison of a limited set of
options. According to Quinn [76], managers
focus on small-scale changes and continually
test these changes to see how effective they are.
Miller and Friesen [63] viewed incremental
changes as piecemeal, disjointed, and remedial
changes. Starbuck et al. [88] addressed how
firms respond gradually and incrementally and
adjust locally to individual crises as they arise
without a clear, concerted change effort.
Lindblom [57] described this process as mud-
dling through, in which decision making for
change is done using limited information and
making limited analysis. He later called it
'disjointed incrementalism' [58], which entails
making a sequence of trials, errors, and revised
trials and analyzing only a few possible
consequences. The disjointed responses are
fragmented into many different change efforts.
In sum, the organization incrementally muddles
through in making changes. Quinn [77] also
argued for the strategic change process as being
fragmented and evolutionary. He [75, 78] agreed
with Lindblom in that changes need to be made
Table 2. Continuous improvement change characteristics
Triggering conditions Nature of organizational change Performance outcomes
Competitive pressure
Desire to eliminate waste
Process-oriented work culture
Worker creativity
Discipline driven changes
Incremental and continuous changes
Low risk and low cost of change
Low performance gain per change
oChanges accumulating into a large performance gain, when done
right
incrementally because of cognitive and analytic
limitations; however, he emphasized not mud-
dling but logical change processes [77, 78].
Analytical and synoptic approaches are now
used to evaluate the resources required for,
benefits of, and risks associated with change.
Performance outcomes. Managers of subsys-
tems who address a segment of the environment
and logically and incrementally analyze the
situation paint a picture of sensible firms [46].
Scanning a segment the environment improves
managers' decision-making processes [76];
therefore, problems become more manageable
for them. The changes usually are made locally
and gradually, and managers focus on one
problem (goal) at a time [46]. Therefore, the
organization' s performance improvement
would pertain to only the locality of a particular
subsystem.
CONTINUOUS IMPROVEMENT (CI)
LITERATURE
Similar to the OC literature, the CI literature
addresses the topic of organizational change.
Authors from both literatures are concerned
with transforming organizations so these firms
may become more 'fit and agile'. Theorists from
both views believe that organizations are not
static entities but dynamic entities that alter
their own shapes to enhance their chances for
survival and prosperity. However, the CI
literature does promote, in general, the changes
that differ characteristically. In this section I
consider the key characteristics of CI change
and do not make direct references to the OC
literature. The integration of OC and CI
changes are addressed in the following section.
The next paragraph offers a brief introduction
to CI change.
According to Suzaki (as quoted in [70]),
continuous improvement changes are made
through 'ceaseless repetition'. Organizations
that use this process focus on making small,
incremental changes, modifying them, and
eventually creating a large, cumulative effect
[28, 51]. All CI activities must, therefore, be
aligned together to create a large resultant
effect, and the alignment of activities is
facilitated by the direction given through top
management for a corporate mission and vision
[83]. Further, CI activities are predicated on
involving everyone in the organization [51]; it is
like compiling a "collective intelligence" [70] as
organizations strive to "unleash employee
experience and creativity to improve both
products and processes" [84]. People press to
eliminate ' wasteful' practices [81] and, thereby,
to create a ' lean' organization [107]. What
disappears are rework, long transportation
distances, and other non-value-added activities
[95], and what appears are dynamic work
routines and standard operating procedures
that are updated and improved constantly [21].
The key concepts are summarized in Table 2.
Triggering conditions
Many authors have posited that the initial
organizational impetus for CI changes usually
emerges from top management' s strategic vision
[83, 87]. CI changes have appeared in organiz-
ations in which top managers perceived that
their competitors were getting leaner (e.g.
reduced inventory, reduced product lead time).
Therefore, these managers respond by promot-
ing CI changes mainly through worker-involve-
ment programs. This type of response is geared
to internal pressure that will reduce wasteful
practices and, thus, move the organization to
adopt leaner work systems.
Competitive pressure. Poirier and Houser
stated that "business has become a global
matter, and the competitors who are winning
are doing so because they have made improve-
ment their defining character" [71] (p. 11). One
way is to steadily reduce product design and
production lead time, thereby improving the
overall product lead time. Consequently, as
organizations gain more flexibility and agility
through CI, these firms develop a capacity to be
more responsive to market changes. That is,
organizations are now expected to do more with
less.
Dertouzos et al. [28] pointed out that
American companies began to make CI changes
when they realized that competitors abroad
were making improvements both in the quality
of their products and the reliability of their
processes at a faster rate. Fearing being driven
' out of the marketplace' , top management at
many companies understood the need to
overcome ' the status quo' and began to
implement CI changes [32] (p. 35).
Desire to eliminate waste. When top managers
are successful at translating the competitive
pressure to internal pressure in order to make
CI changes, members of such organizations
subsequently desire to eliminate waste.
Chaparral Steel, a company that wanted to
withstand competitive pressures, created in-
ternal pressure to eliminate wasteful practices. It
implemented new ideas and improved "pro-
ductivity by making myriad of small changes on
a continuing basis" [28] (p. 86). Suzaki [95]
suggested quite plainly that the basic motivation
for continuous improvement is eliminating
waste. Any work activity that does not add
value to the product is considered waste.
Therefore, the most direct driving force for
CI change is the organization' s desire to
eliminate waste and become lean. In such a case,
a company' s focus becomes doing jobs better
than they were done before, whereby improve-
ment is not measured against an established
standard developed at some industry or
corporate level but against internal measure-
ments [91]. Doing better than the organization
previously did is at the core of CI improve-
ments; this is in contrast to doing better than or
as well as others.
Specific ideas for improvement typically
emerge from the workers through employee
suggestion programs. Although ideas for im-
provement can be shared across plants and
industries through benchmarking, change ac-
tivities tend to be organization specific. For
example, managers observe workers on the shop
floor looking for a simple tool for several hours
and see the need for eliminating this wasteful
practice. The idea of tool organization is not
new to those who work in manufacturing, but
the implementation process of this particular
idea varies across plants. Some plants may take
the more decentralized approach of dedicated
tools for each work station, whereas others may
take the centralized approach of lockouts.
Nat ure o f organizational change
What are some necessary organizational
contexts for making CI changes? Poirier and
Houser [71] posited that implementing CI
changes requires managers to examine their
present work culture. The existing values and
strategic purposes need be conducive to making
incremental and continuous changes. The work
culture must include norms for changes and
creativity rather than for stability and rigid
conformance [83,87]. The process requires
discipline from the workforce [29] to continu-
ously chip away the fatty tissues of present work
routines. Experimentation with new ideas is
more easily allowed because the risk associated
with incremental changes is comparatively low
[15].
Process-oriented culture. Many authors from
the quality literature (e.g. [27, 51]) described a
culture that is conducive to making CI changes
as a process-oriented culture and not a
results-oriented culture. Members of a process-
oriented culture nurture the view that quality is
inherent to a good work process, whereas
members of a results-oriented culture stress that
quality is a trait found in the final output.
According to Gabor [36], Deming argued that
the desire for improvement in the process may
lead to a quality product, but the desire for
improvement in the product may not lead to a
quality process. He offered zero defect as a case
in point [27]. He said a company that strives to
improve process can achieve zero defects as a
natural consequence of good process, but a
company that strives to achieve zero defects
without improving process would achieve this
goal at a heavy cost of rejected parts and dismal
productivity.
Imai [51] also dichotomized work values into
process and results orientations, and he
attributed the success of Japanese companies in
making CI changes to their process-oriented
values. He stated that a process-oriented culture
supports the effort for CI and is more effective
in achieving lean production, compared to
a results-oriented culture that focuses more
on controlling and restricting the activities
of workers. Many more authors promote
the importance of a process-oriented culture
(especially regarding CI and worker involve-
ment). For example, Robinson [81] celebrated
the manufacturing-driven work culture that
focuses on value-added activities performed by
the workers, compared to the profit-driven
management that focuses on the quantifiable
results of the work process. Abernathy et al. [2]
spoke in favor of a process-oriented view, in
which labor is considered an integral part of the
work system, over a results-oriented view, in
which labor is considered as a commodity and
management would ' buy or sell' it based on the
predefined company performance criteria.
Workers' creativity. Therefore, in such a case,
the workers are valued for their intellectual
abilities which go beyond their physical abilities
to do manual work [65]. The ideas for change
most appropriately and naturally arise from
workers who are most familiar with the
operation and who are going to stay at the job
[84]. Cameron [20] called CI the creative quality
culture. The motivation for change emerges
from within people, and success depends on the
creativity of those involved. He categorized four
stages of the quality culture profile. He
described the quality culture of the most
primitive level as the culture of no change and
status quo; the next level as the culture of error
detection and problem solving; and the third
level as the culture of error prevention and
process focus. He called the last and ultimate
level of quality culture the CI and creative
culture. According to other scholars, the type of
creativity that is inherent in CI activities comes
from the human unconscious state as generated
through internal social processes [60] or from
the introspection of each person in the
organization [18].
To work, CI relies on the knowledge and
ideas of people in the organization
[48, 62, 94, 98]. According to Suzaki [94], the
process of CI should involve everybody so that
it will tap into the 'collective intelligence'. He
captured the essence of his assertion in the
clauses, "Nobody is as smart as all of us" and
"there is no I in the word ' team' " [94] (p. 114).
As the workers interact to make CI changes,
"they continually trade intelligence" with one
another and "their individual wisdom fuses into
a group intelligence working powerfully as one"
[70] (p. 80). Therefore, it becomes necessary for
workers to be "continually trained and devel-
oped, particularly in techniques of methods
improvement" that will facilitate the formu-
lation of new ideas for improvement [84] (p. 76).
The managers should look beyond the econom-
ies of scale and control, and they should
decentralize decision making to empower
workers to exercise their creativity [95].
Discipline-driven changes. Deming [27] spoke
of the Shewhart cycle as a critical model of CI
change. Accordingly, incremental changes occur
through endless churning of plan-do--check-act
(PDCA) cycles. Workers plan a small-scale
change and carry out the plan. They then
observe the effects of the change and evaluate
the results. Depending on the result of small
change, workers adjust the plan for the next
small change. As the Shewhart cycle continues,
members collect data on how the change
processes are unfolding, evaluate the data, and
gain knowledge. These cyclical steps are driven
by data: They underscore a logical process as
changes are carried out incrementally and
logically [87, 107].
The incremental progression of changes is
governed by the knowledge gained from
each previous change cycle [50] as the data
gained from one change is fed into the next
change. Black [13] asserted that for an
organization to undergo continuing evolution
toward high quality, it must accurately track
its improvements, and this process means
collecting data. Only when such data are
analyzed and the analysis is converted into
action, will the organization begin to reap the
benefits of CI [67]. Each past improvement
offers workers information about new improve-
ments. For each additional change, accumu-
lated knowledge or data are used to make other
improvements as the company takes a small step
forward.
Thus, what drives continuous incremental
changes is discipline [29] rather than a sense of
urgency. This is unlike dramatic and discontinu-
ous changes that are made with high emotions
under an immediate threat of environmental
change. Crosby [23] pointed out that emotional
momentum for change is often unrelated to the
quality of an improvement program. The
success of CI depends on a well-trained,
well-disciplined workforce that is willing to
undertake incremental yet incessant changes,
rather than through an emotionally charged
workforce that soon grows tired of change and
becomes disillusioned.
Incremental and continuous changes. CI
changes are incremental [51], and those people
who institute them focus on making small-step
changes rather than an instantaneous, large-
scale change. In such a case, workers focus on
solving more easily identifiable, small problems
through small-group discussions and suggestion
programs [52, 62, 98]. Imai [51] posited that CI
changes, which occur gradually but constantly,
are less dramatic than abrupt and volatile
changes, but their effects are long term and long
lasting. The key advantage of such changes is
that they readily become part of work routines.
Inherent in each improvement cycle for a single
incremental change is the incrementally im-
proved work routines [50, 91].
In this case, the focus is on the accumulation
of incremental changes rather than on the
interjection of an immediate, large change.
Hodgets [48] suggested that CI changes are
incremental and additive rather than explosive
and earth shattering. They are characterized
more by continual ' inching' or small wins than
by dramatic, revolutionary progress. Brocka
and Brocka [15] illustrated this point by using a
body-building analogy. Lifting 50 pounds 10
times has a more positive effect on body
building than lifting 500 pounds once. Although
the net results are the same (i.e. lifting 500
pounds of weight), the effects are different (i.e.
gradual and more frequent lifting builds up the
body, and the impact is long lasting).
Low risk and low cost of change. Because it
inherently deals with incremental changes, CI
changes mean low risk and low cost to the
company [15]. For managers, CI-focused
changes can offer a competitive advantage
without a large, up-front investment [32]. Two
examples of such CI changes are the organiz-
ation of work areas and the posting of
information on wails to make it more visual
[21]. The time it takes for a worker to search for
a necessary tool can be reduced by organizing
tool boxes, and barren wails, which are
underutilized resources, can be used to post and
share information.
Schroeder and Robinson [84] explained that
this characteristic of CI is what the Japanese
companies have taken advantage of since the
end of World War II. After the war, Japanese
manufacturing companies had extremely limited
resources and were struggling to ' catch up' with
the rest of the industrialized world. They simply
did not have the money and time to run their
companies in the typical American way, i.e. by
the use of mass-production systems that are
laden with wasteful practices. Japanese compa-
nies chose to diligently improve work processes
while eliminating wasteful practices [84, 107]:
for them, there was no other choice.
Performance outcomes
Because CI changes fundamentally entail
incremental changes, the performance increase
per change is typically small. Consider, for
example, the case of quick die setup. Color
coding the dies to help find a new die or setting
up the dies with locating pins to help mount a
new die may result in saving a fraction of the
total setup time. Further, discovering some
setup procedures that can be conducted
simultaneously also may save some time. These
are examples of incremental changes to improve
the die setup. Alone, such changes may not
amount to much time, but added together they
can lead to a considerable time saving.
In other words, when an effort is made to
reduce time in all facets of die change (e.g. die
organization, transportation, and standardiz-
ation of shut heights), the result can equal a time
saving of hours or even days [95]. As previously
discussed, these changes require that workers be
creative when they apply the concepts to their
current situations; it also requires discipline to
consistently maintain these improvements.
What is important is that the incremental
changes are added to one another in a
continuous manner. Thus, small changes may
eventually accumulate and equal a large gain in
the end.
BRIDGING THE GAP: BRINGING OC AND CI
TOGETHER
I have discussed the characteristics of both
the OC and the CI literatures. It is now time to
bridge the interdisciplinary and conceptual gaps
that have existed between the two genres of
literature. Dixon and colleagues conceded that
"there is little in the literature that describes the
way [continuous improvement and major
changes such as reengineering] coexist and
interrelate" [30] (p. 96). The goal of this section
is to suggest ways to integrate the change
characteristics presented by OC and CI,
thereby conceptualizing a framework in which
continuous incremental changes and dramatic
and discontinuous changes can coexist and
interrelate to bring about more effective change
processes in organizations.
Overview of OC literature
The OC literature offers a rather complete
treatment of major changes. It has addressed
how organizations respond reactively and
proactively to environmental shifts and the
implications such responses hold for organiz-
ational performance. It also has addressed
how organizations change incrementally and
discussed the reasons behind such changes.
Because incremental changes are localized to
a subsystem of an organization, performance
improvement also is localized to a subsystem.
Theory of punctuated equilibrium: a synthesis
of major and minor changes. In sum, the
organization change model offered by the
OC literature focuses on the impact that
environmental change has on organizations
over time. Organizations undergo major
changes when there is a large shift in the
environment (e.g. a major technology or
product innovation [1,4]). Between major
changes, there are prolonged periods of
incremental changes. Organizations focus on
minor changes incrementally adjusting locally
to the effects of the major changes. The theory
of punctuated equilibrium [82, 100] offers a
useful framework that brings these descriptions
of change into one perspective.
The punctuated equilibrium theorists
[37, 82, 100] have argued that there are conver-
gent periods punctuated by major changes.
Convergent periods are marked by incremental
changes, and they can be identified by their
length and stability. The goals of organizations
during this period are to adapt to change and to
gain stability. Reorientational changes take
place when major changes in competition,
technology, and the social and legal conditions
of the environment render prior strategic
orientation no longer effective. These changes
are dramatic, discontinuous, and laden with
high levels of emotion. What follows for the
organization is a rather long period of
convergence, whereby the firm searches for the
equilibrium that was lost due to the reorienta-
tional change. It is a time of adjustment, in
which the organization undergoes many incre-
mental changes and searches for stability.
What OC offers. A traditional definition of
organization development offered by Beckhard
[8] called for a planned change that is
organization wide and managed from the top.
This definition has been echoed by Burke [16]
who emphasized top-management-driven fun-
damental changes of organization development.
What these scholars offer in the context of
major change is the systems perspective.
The systems perspective reveals the anatomy
of major changes in organizations by disclosing
the connectivity and relatedness among subsys-
tems and among changes. For example, its
proponents argue that a major change will affect
all parts of the organization, and subsequent
changes in different parts of organization may
render changes in other parts of the company
obsolete [60]. In fact, the rippling of changes
may progress unanticipatedly in myriad ways
[101]. In this case, the focus is on changes and
in connection with other changes at different
levels of organization and not in isolation. For
example, Frame et al. [34] reported a successful
case of organizational development intervention
in one of the Chicago Tribune's printing
facilities. It focused on operationalizing the
corporate vision to specific areas such as human
resource development and use of capital and
resources, thereby establishing a connection
between the vision of the top-level managers
and the operational targets at the workers' level.
Those who adopt a CI change concept can
benefit from this organization-wide systems
perspective. Much of the CI literature alludes to
the systems perspective (e.g. [51, 83]), but the
locus of change almost invariably is at the
operational level (e.g. standardizing a work
process or updating visual information). How
corporate strategy is formed, how it will be
translated to the operational level, and how CI
changes at different subsystems are interrelated
are largely left alone as a ' black box,' except
when researchers recognize that these activities
must be handled by management.
What OC lacks. However, authors of the OC
literature generally stay away from operational
implications of change. The previous example of
successful change at the newspaper plants is
more of an exception than a rule, as Frame et al.
[34] conceded that this transformation effort
was not a typical organizational development
change. Further, even in this successful case,
the concern for operations stopped at the
translation of corporate vision to smaller sub-
systems. Organization members did not address
how these changes would be sustained at the
operational level subsequent to the intervention.
Although they promote a systems perspective,
OC researchers are more concerned with
organizational implications of how managers
formulate strategies, implement changes, and
make sense of the situation. For instance, when
firms restructure, top management leads the
change and focuses on an overall organizational
redesign (e.g. centralization or decentralization
of organization structure). Even during the
period of incremental changes, the emphasis is
on how managers make sense and respond to
environmental changes. What eventually un-
folds at the operational level due to these
changes is left largely undiscussed. Burke [16]
went so far as to say that ' transactional' or
operational changes that address changing work
procedures or routines lie outside the realm of
organization development, primarily because
they do not entail fundamental changes in
organization. In fact, some organization devel-
opment scholars have argued that members in
their field must address the sustained changes
that unfold at the operational level [72].
Further, the OC theorists do not seem to
speak in one voice in their treatment of
incremental changes. Lindblom [57, 58] and
Miller and Friesen [63] described incremental
changes as piecemeal, remedial, and disjointed,
whereas Quinn [75, 76, 77] promoted incremen-
tal changes as deliberate and purposefully
logical. According to Lindblom, because hu-
mankind' s cognitive capability is bounded,
people focus only on small pieces of change at
a time and in a disjointed way. These changes
are admittedly flawed, because people make
change without considering all possible choices
[58]. Members of organizations, therefore, learn
from their mistakes, and because these changes
are incremental (i.e. organizations have not
moved far), they can try to remedy the negative
impact of the flawed changes. However, Quinn
argued against this type of muddling-through
incrementalism. He argued that although
people' s cognitions are bounded and they are
forced to work only in an incremental fashion,
the processes of strategic change should not be
remedial and disjointed, but it should be
anticipated and logical. He asserted that being
incremental does not mean piecemeal.
It appears then that the dynamics of
incremental change are still not well understood
in the OC literature. It is unclear whether the
incremental changes during the prolonged
period of relatively calm environment follow the
muddling-through or logical process. As one
evidence, although they present two divergent
views on incremental changes, many authors
merely cite Lindblom and Quinn as sources that
represent incremental changes without differen-
tiating their underlying differences (e.g. [40, 82]).
Therefore, because the dynamics of incremental
changes in the OC literature still require further
development, the concept of CI change, which
inherently focuses on incremental changes, may
be useful by offering additional insights.
The role of CI in OC framework
A common description of organization
change appears between the OC literature and
the CI literature, particularly according to
Imai' s description of CI [51]. Both address the
impact of major changes in organizations. Imai
talked of major, discontinuous, innovative
changes, and the OC literature has addressed
dramatic, discontinuous changes. Also, in both
literatures, incremental changes are reviewed as
the predominant form of organizational change
that happens between major changes. However,
whereas the OC literature, as presented by the
theorists of punctuated equilibrium, is largely
silent on the implication of connectedness or
concertedness of incremental changes, Imai
addressed this point head on.
Incremental changes without concertedness.
Imai also added an extra dimension in his
interpretation of what happens in the in-be-
tween periods, i.e. what Tushman and Ro-
manelli called the convergence period. He first
assumed that organizations make major
changes to improve performance. For example,
when the oil crisis jolted the auto industry in the
1970s, American automakers underwent a
reorientational change. These organizations
scurried to produce more fuel-efficient engines
through restructuring efforts (e.g. new car lines)
and thus changed corporate strategies (e.g.
targeting the small-engine market). Imai as-
serted that unless these major, discontinuous
changes are accompanied by continually im-
proving incremental changes, their effect on
organization performance will gradually dissi-
pate and eventually disappear. In other words,
t he impact on performance induced by the
major change will become inconsequential if the
subsequent era of convergence is not kept
focused on CI changes. Many cars introduced
by American automakers as part of a strategic
change in response to the oil crisis were
subsequently discontinued (e.g. the GM Vega).
Imai and other authors who wrote about CI
changes ([22, 23, 38, 51] etc.) have pointed out
that continuous incremental changes are the
domain of workers, who are in direct contact
with the technical core of organization (e.g.
engineers and line workers). Imai, in particular,
argued that major changes may have a large
impact on internal performance at the onset of
change, but, if it is not accompanied by CI
changes, such changes would slowly erode over
time. He called this type of change dynamics
'the saw-tooth change.' The rate of erosion
would depend on organizational factors such as
how committed the workers were to CI.
Concerted incremental changes. In order to
take full advantage of major changes, these
changes must be accompanied by subsequent CI
changes. During the period of incremental
changes, organizations must continuously and
proactively seek ways to improve the newly
heightened level of internal performance in-
duced by the major change, until the next major
change happens. During this period, the
motivation for change should arise endogen-
ously through the desire to eliminate waste, as
internal products, technologies, and systems are
continuously and incrementally changed and
updated.
Each major change may take the organiz-
ational performance to a new height, and the
subsequent time period should be marked by
persistent CI changes to maintain and incremen-
tally improve organizational performance [24].
In this process, the organization is operated for
the most part by subdued emotions and a
disciplined workforce. The focus should be on
operationalizing the vision of the top manage-
ment at the work-floor level, thereby having
incremental changes occurring at all depart-
ments that are directed toward the same goal
and offering an additive effect.
Summary. As far as major innovative changes
taking the organization to new heights of
performance and incremental changes that
occur over a long period of time, the views of
CI and OC coincide. According to both
literatures there is value in making both major
and minor changes. However, the description of
the role of minor changes varies. Authors of the
OC literature view incremental changes as
beneficial because such changes are more
manageable and can help organizations to gain
stability; however, authors of the CI literature
take this perspective one step further and argue
that these incremental changes must be con-
nected or built on one another in order for them
to accumulate to the point of a large gain.
The OC literature has been focused on
changes driven by management, whereas the CI
literature has been focused on changes driven by
workers. The OC literature addresses disjointed
but logical incremental changes, whereas the CI
literature addresses concerted incremental
changes. These contrasting characteristics are
necessary for managers to understand so they
can avoid the saw-tooth changes and achieve
the long-term effectiveness of change.
An example of statistical process control
implementation as a change process
The implementation of statistical process
control (SPC) can be used as an example. In
1992, I was involved in a research project that
reviewed the shop floor management of US auto
parts suppliers. The primary method was the
case study approach based on interviews and
documentation. One aspect of this project was
to review the process of SPC implementation.
This section is written mainly based on my
experience at that project. I will focus, in
particular, on the companies that showed
evidence for initial success directly after the SPC
implementation, but this initial gain eventually
dissipated without the sustained CI effort. All
these companies implemented SPC in the mid
1980s and showed a ' low' to 'minimal' level of
implementation at the time of the research.
The early 1980s marked a major shift in the
way members of the manufacturing industry in
the United States viewed quality control. For
example, prior to this point, major automakers
used the hands-off supplier management ap-
proach. They were not concerned much with the
work processes at their suppliers as long as they
received acceptable parts. However, the major
automakers began to shift toward closer
relationships with their suppliers, and they
started to show more interest in the suppliers'
Omega, Vol. 23, No. 6
619
production processes. One of the first things
they focused on was the quality control process.
They requested that their suppliers implement
SPC.
This sort of demand came as a major
environmental shock to the suppliers, who were,
at the time, quite entrenched in quality control
via final inspection. The demand was imposed
on suppliers unilaterally. The suppliers were
notified by the major automakers that they
either had to implement SPC or they would
risk losing their 'preferred' status. Conse-
quently, the suppliers quickly conformed to
these requests.
The result was a dramatic and discontinuous
change. Managers spoke of rescheduling pro-
duction and sending workers to SPC training
courses. In addition, some companies installe
a computer system to collect SPC data.
Workers, who had virtually no previous
statistical background and had hardly ever used
a computer before, were told about sampling
distributions and asked to use computers.
Because these changes happened in this
dramatic and discontinuous way, it appeared
that management at the supplier finns typically
did not consider carefully how this change
would or should affect other aspects of their
operation (e.g. maintenance or customer re-
lations), and they lacked a systematic approach
to the implementation of SPC.
After some changes were made, workers tried
to cope by adjusting the production process
slowly and incrementally. Workers spoke of
gradually becoming familiar with sampling
parts and computer screens. Many tried to
apply the knowledge they learned from SPC
training courses by looking for trends and
patterns in the progression of the data points.
However, as they searched for stability after
the change, as suggested by Tushman and
Romanelli [82, 100], the workers often found
that they were comfortable with the state of
the production process before the change, or
their previous equilibrium. Incrementally,
sampling parts and charting data became
less intellectual and more mechanical. Workers
in many companies simply collected data
and looked for the out-of-bounds data points,
or they merely replaced visual inspections
with computer sampling in a mechanistic
way. When they saw problems, then they
dealt with them in a disjointed and haphazard
way; i.e. they either called their supervisors
or quality control personnel, whoever was
available.
This sort of change activity, in fact, can be
dubbed as a classic case of the saw-tooth
improvement. As workers began to work with
SPC, the quality level increased initially. They
were self-conscious and tried hard to apply what
they learned. However, it did not take long until
workers began to do the minimum amount of
work regarding SPC: the effect of major change
was eroded and the organization went back to
its previous state. What little gain they
accomplished by implementing SPC was soon
lost, Because this was a management-driven
change, workers began to believe that collecting
SPC data was a pro forma responsibility rather
than an opportunity for improvement. SPC was
never used to make CI changes [93] " ring the
work process, and it was not used to reduce
variability inherent within the work process.
The characteristics of CI shown in Table 2 were
absent in the SPC activities. Missing were the
process-oriented work culture that is used to
nurture the continuous searching for new ways
to improve the production processes and the
worker creativity and discipline that drive this
CI process. Many articles and books on SPC
(e.g. [83]) pointed out how the implementation
of SPC led to no discernible return on
investment.
What the study of CI offers is an explanation
for ineffective change efforts. In this case of
SPC, researchers may understand why workers
merely compile SPC data in a ceremonious way
and do not use them to solve problems or make
continuous improvements. It may be because
their focus is finding stability; they regress back
to the previous state of equilibrium rather than
working to find the elevated state of equi-
librium. In sum, it appears that missing in the
description of change by the authors of OC
literature is the operational-level, endogenous
effort to incrementally bring the organization' s
equilibrium to a new state.
DISCUSSION
This paper has attempted to reduce the gap
between OC grounded in the strategic change
and organization development literatures and
the mainly manufacturing-based CI literature.
Although they come from different genres,
authors in both areas address the topic of
organization change.
One key lesson is the importance of
concertedness in making changes. This point
was emphasized in both the systems approaches
to change and the continuity among incremental
changes. The coordination of change activities
among different parts or at different level of
organization is important, mainly because the
changes have interacting effects, and no change
can be isolated. Further, incremental changes
should occur concertedly, and by building on
one another they accumulate into a large
resultant effect. Another key lesson is that
successful organizations should make both
major and minor changes well, despite Miller
and Friesen' s [63] argument that successful firms
change in more dramatic way. When Miller and
Friesen conducted their research, their defi-
nition of incremental change was remedial, and
they spoke of disjointed changes. Had their
definition included CI change characteristics,
their results may have been different. In fact,
other scholars such as Quinn [79] and Tichy [97]
have suggested that a paradoxical characteristic
of self-renewing organizations is that firms
make both large and small changes.
Differentiating piecemeal and disjointed in-
cremental changes and concerted and cumulat-
ing incremental changes appears crucial. CI
changes require that one incremental change be
built on previous incremental changes on a
continual basis. This means that when an author
speaks of incremental change with no reference
to CI change, he or she does not necessarily
refer to continuously accumulating incremental
change. This observation offers one explanation
for why researchers found support for hypoth-
eses that predicted the insignificant impact of
incremental changes. Romanelli and Tushman
[82] found support for small changes not
accumulating to a fundamental transformation,
and Anderson and Tushman [4] found support
for the majority of improvements occurring
outside of the era of incremental change. One
possible explanation for their results is to say
that they studied incremental changes but not
CI changes. Notice that both studies used
mostly pre-1980 data. Romanelli and Tushman
used data from 1957 to 1981, and Anderson and
Tushman used data from 1903 to 1985. The
early 1980s marked the time when the US
corporations became more aware of the
importance of continuous improvement
through the emerging movement of total quality
management (TQM), through which advocates
espouse CI as key approach to organization
change. The last segment of the data in
Anderson and Tushman' s [4] study came from
the era of 1980 to 1985. Interestingly, this
segment offered the only time period where the
era of incremental changes generated a statisti-
cally comparable number of new designs. In
other words, more recent data (post-1980)
shows more impact from incremental changes. I
would posit that if these studies were repeated
using the more recent data (i.e. data since 1980),
researchers may derive a different result.
Both steadily accumulating CI changes and
major changes (when necessary) are important
for an organization' s survival. At times, the
accumulation of CI changes may not offer
enough performance improvements to fend off
a drastic environmental shift. When there is a
drastic shift in the environment, organizations
must be able to adapt to it quickly. For
example, recently DirecTV, Inc., a unit of
Hughes Aircraft Co., invented a small 18-in.
satellite dish. This sent a shock wave through
both the cable TV and satellite dish industries,
and it caused some major realignments of
partnerships. Further, most Japanese automak-
ers have been heralded for having faithfully
made many CI changes in their work processes
and products. However, as the strength of the
yen has been growing steadily over the past few
years, the ability of this industry to sell its
products overseas has diminished. This type of
environmental shift will require some drastic
changes on the part of Japanese automakers.
Already, at least one Nissan plant has been
scheduled to shut down in 1995, and more
layoffs and restructuring are anticipated for this
industry.
Successful companies make good major
internal changes [64]. Instituting major changes
well when called for is critical to a company' s
success. However, as discussed previously, the
risk associated with making major changes is
high. Many people have argued that transfor-
mational changes constitute a dangerous en-
deavor for organizations, increasing their risk
for failure. These changes shake up the
fundamental culture of organizations, and there
is no guarantee that such change will bring
about positive results. Therefore, companies
Omega, Vol.
first must make good major changes. Once they
have done that, they must focus on CI changes,
lest the positive gain acquired through the major
change erode over time [51]. The periods
between major changes should be characterized
by CI-type changes. In sum, there is a time for
major changes, and there is a time for minor
changes. The synthesized model of organization
change describes how these two times should
bring about different types of changes, thus
offering a more complete concept of organiz-
ation change.
I MPLI CATI ONS FOR FUTURE RESEARCH
An underlying assumption of this paper is
that the severity of the environmental jolt on
organizations varies with time. During the time
of revolutionary changes, organizations must
react quickly and adaptively, but during the
prolonged period of a relatively calm
environment, they should focus on continuous
incremental improvements. However, this per-
spective of change must be aligned with the
concept of the ' permanent white water' pro-
posed by Vaill [101]. His model of change
emphasizes the characteristics of change that are
dramatic but not discontinuous, and it requires
a high level of emotions and discipline at all
levels. It conjures up an image of muddling
through rather than concerted and accumulat-
ing changes. Therefore, a middle-ground model
of change that shows the selectively combined
characteristics of OC and CI literature as
presented in this paper may be necessary. This
new model of change may be built by taking the
results of this paper and incorporate the
concepts of the so-called new science literature
(e.g. [105]), on which Vaill's work is based. In
such cases, changes are unstable yet bounded;
and aperiodic and unpredictable yet limited
within a finite range of motion [43, 54].
Another aspect of this paper that requires
further consideration is the assumption of a
clear boundaries between the environment and
the organization. Here, I differentiate between
environmental change and organizational
change and imply that there is a rather clear line
between the environment and an organization.
However, with the emergence of TQM, which
has exposed many organizations' technical cores
to the outside entities through customer
satisfaction and supplier management pro-
23, No. 6 621
grams, the organizational boundaries have
become 'fuzzy,' and the differentiation between
the environment and the organization is less
clear. Therefore, another model of change that
could be developed regarding the model of
change in the networked forms of organization.
Powell [74] suggested that changes in networked
forms show different dynamics than changes
among organizations whose boundaries are
assumed to be distinctive, as in the case of
transaction cost economics [106].
Researchers in the area of organization
change types, most notably alpha and gamma
changes [7, 39, 102], could further benefit from
the study of CI. Alpha change involves an
incremental variation within an established
framework, whereas gamma change involves a
major variation that reconceptualizes the
existing framework. CI concepts can shed a
unique light onto these types of changes. At first
glance, CI changes appear to be of the alpha
type, wherein changes occur "within a relatively
fixed system" [39] (p. 135), or what Bartunek
and Moch [7] later called 'first-order' change.
It is interesting to observe that the accumu-
lation of CI changes can bring about a huge
impact on the organization. Stalk [88] docu-
mented how Mitsubishi developed an air
conditioner through incremental and steady
improvements that eventually led the company
to claim global leadership. Potentially, then, CI
represents a way of making a major change in
organizations without the gamma change,
which abruptly disrupts the ways of conceptual-
izing salient dimensions of reality [39]. When an
organization is successfully practicing CI, a
major impact on organizational effectiveness
can be made without its having to resort to a
gamma change, which requires a quantum shift
in an organization' s "organizing frameworks
for understanding events or schemata" [7] (p.
483).
The idea that an accumulation of CI changes
also leads to a gamma change must be studied
further. Does the accumulation of CI changes
represent a shift in the organizational schemata?
If so, this realization poses an interesting
question for theorists, because CI then rep-
resents a gamma change that does not disrupt
the entire organization. This idea appears
conceptually possible because each incremental
change feeds recent information into the new
cycle of changes and, thus, the organizational
schemata shifts incrementally. There have been
studies that demonstrate how CI-type changes
can lead to improved organizational perform-
ance. For example, some models of the learning
organization emphasize the fifth discipline [85]
or double-loop learning [5], which advocates
concertedness and continuity among changes.
Even so, theorists are still not clear about how
the incremental changes that build on previous
changes affect the schemata. As shown through-
out this paper, CI offers a rich field of endeavor
for future research.
ACKNOWLEDGEMENTS
I express my gratitude to Chan Hahn who patiently helped
me through different versions of this paper. I thank my
colleagues in the Department of Management--Orlando
Behling, Janet Hartley, James McFillen, and Glenn
Varney--for commenting on an earlier version of this paper.
Thanks also to two anonymous reviewers for their detailed
and thoughtful comments. This paper was first conceptual-
ized in my Ph.D. dissertation under the instruction of Jeffrey
Liker. The dissertation work was funded by the Rackham
Graduate School at the University of Michigan.
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ADDRESS FOR CORRESPONDENCE: Professor Thomas Y Choi,
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