Mini Company and Kaizen

Posted on

The current issue and full text archive of this journal is available at http://www. emerald-library. com IJOPM 19,11 Continuous improvement and the mini-company concept Jan de Leede and Jan Kees Looise University of Twente, The Netherlands Keywords Continuous improvement, Teamwork, Organizational design, Case studies, Kaizen Abstract The key issue of continuous improvement (CI) seems to be the problem of combining extensive employee involvement with market orientation and continuation of CI. In this article we review some existing organisational designs for CI on these three essential characteristics of CI.

As an alternative to the shortcomings of current organisational designs for CI we present the mini-company concept, related to the sociotechnical concept of the self-managing team. The minicompany concept incorporates the three key issues: it has a self-propelling capacity for CI, involving everyone on the shop floor. A constant and market-oriented source for improvement is found in the clients and suppliers of the mini-company. Results of an in-depth case-study are presented, showing some strong effects of the mini-company concept. 1188 International Journal of Operations & Production Management, Vol. 19 No. 1, 1999, pp. 1188-1202. # MCB University Press, 0144-3577 Introduction Continuous improvement (CI) is viewed as vital in today’s business environments. CI is one of the core strategies towards manufacturing excellence, as it appears, for example, within the context of “world-class manufacturing” (Schonberger, 1986; Schonberger, 1996) or “total quality management” (Hackman and Wageman, 1995). Furthermore, CI as a concept is nothing difficult to understand or new. Bessant and Caffyn (1997) define the concept as an organisation-wide “ process of focused and sustained incremental innovation Many tools and ”. echniques are developed to support these processes of incremental innovation. However, the difficulty lies within the consistent application of the CI-philosophy and the CI-tools and -techniques. As an organisation-wide process, CI requires the efforts of employees on all levels. Here, the CI-approach can be linked with long established traditions of employee involvement and employee participation. This line of research showed that the involvement of employees is not just a matter of the application of tools and techniques alone (among many others: Cotton (1993)).

Other organisational elements such as organisational frameworks, leadership and management styles, culture, employee needs, values and norms are needed as well. Only an integrated approach will lead to lasting results. The key problem of CI seems to be the issue of employee involvement (Bessant and Caffyn, 1997; Berger, 1997). How to involve the employees of all levels in the process of market-oriented continuous improvement? What motivational aspects have to be taken into account in making CI a lasting routine? It is our statement that existing organisational frameworks do not address this issue to a satisfying extent.

In spite of the recognition of the “people orientation” of kaizen (Imai, 1986) and the “broad participation” and “high involvement” of CI (Bessant and Caffyn, 1997; Berger, 1997), CI still needs thorough elaboration on organisational designs in which these aspects are realised. Especially, the problem is how to direct the CI activities to customer requirements and business strategy, while maintaining true employee involvement. In this article we want to contribute to this issue. We focus on the organisational aspects of employee involvement in CI.

Therefore, the focus of this article is the shop floor. We present a concept that is derived from sociotechnical systems theory but is enriched by principles from Shop Floor Management (Suzaki, 1993). This concept is called “the mini-company”. The most important characteristic of the mini-company concept is the integration of the customer in operations. An interesting example of the mini-company concept is presented in the case of a manufacturing plant. We show its organisational aspects and its effects on the contribution of the operators in improvement activities. This article is structured as follows.

First, we present a framework in order to identify the links of the core principles of CI with market orientation and employee involvement. Second, a brief review is presented of organisational designs of CI. We present another organisational design in the next section: the mini-company concept. This concept entails some strong points in which the reviewed organisational designs are weaker. The case of Philips CMA is an illustration of the mini-company concept and shows some good results with respect to the contribution of operators in product and process improvement.

Finally, some conclusions are drawn from the case discussion. CI, market orientation and employee involvement We view organisations as configurations of at least three domains. Every domain is related to the outside world. Products are related to the market place, processes are related to technology and human capital is related to labour. The three domains are interrelated. Innovation occurs in each of these domains when we look at product innovation, process innovation and social innovation, but are interrelated as well (Looise, 1996). In Figure 1 this framework is presented in a schematic way.

Based on this general framework, one can analyse the strengths and weaknesses of various new production concepts. Some concepts start from the interaction of market and technology, while others are rooted in the interaction between market and labour or technology and labour. For instance classical sociotechnical systems design talked about “the joint optimisation of the social and the technical system” (Trist, 1981). This is exactly the interaction of technology and labour. The modern sociotechnical approach is aimed at reduction of complexity, and tries to create efficient product flows (De Sitter et al. 1997). The concept of the autonomous group is still very important in modern sociotechnical theory. The main contribution of sociotechnical thinking is to design a structural basis for enhancing the quality of the organisation in line with an increase in the quality of working life and the quality of the industrial relations. However, this approach too is one-sided. It is too much of a design approach stressing the technological and the structural aspects of organising, but to some extent neglecting the market perspective and the social-dynamical aspects of organising. On company level a sociotechnical

Mini-company concept 1189 IJOPM 19,11 1190 Figure 1. Organizations as configurations of product, process and personnel (after Looise, 1996) structure intends to enhance the company’s responsiveness to the market, but a closer look at the design principles reveals that on the shop floor level the market or even the customer focus is far away. Let us return to CI and characterise CI using this framework. Following Berger (1997), we distinguish some core principles of CI by using the ideal characteristics of Imai’s kaizen (Imai, 1996). The first principle is processorientation.

Before results can be improved, it is the central tenet of CI that processes must be improved. Good results will follow automatically when processes are both understood and controlled. The orientation is towards the activities and work methods and not towards the outcomes. The second principle is small step improvement of work standards. Imai states it very decisively: “There can be no improvement where there are no standards” (Imai, 1986, p. 74). For all major operations Standard Operating Procedures (SOPs) are formulated and improved in an ongoing process of small improvements.

One requirement of these SOPs is discipline. All employees have to comply with the established standard operating procedures. Adherence to standards is also stressed in a tool for CI called CEDAC (Fukuda, 1989). Another aspect of this principle is the never-ending process of kaizen. It is an ongoing process. This is symbolised in the PDCA problem-solving format for improvement: a wheel. The PDCA-loop itself is a standardisation of the improvement process. The third principle is people-orientation. CI needs the involvement of everyone in the organisation from shop floor workers to top management.

Managementoriented, group-oriented and individual-oriented kaizen have their specific focus within the overall improvement process. In terms of our framework, one can see the primary focus of CI in the interaction of technology and labour. The first and second principle both refer to the process, while the third principle is people oriented. CI has an internal focus and looks for the policy, tools and techniques to integrate processes and personnel in order to improve operational and management processes. So, the market is not in the picture.

However, CI is often integrated in broader management philosophies like total quality management (Hackman and Wageman, 1995). Then, of course the market orientation is included in CI. Organizational designs of CI: a brief review In this article we focus on organisational designs for CI. Which organisational mechanisms exist in literature to enable such an organisation-wide process of focused and sustained incremental innovation? We reviewed some specific CIliterature (Imai, 1986; Fukuda, 1989; Bailey, 1997; Berger, 1997; Bessant and Caffyn, 1997; Lindberg and Berger, 1997), and analysed their descriptions of organisational designs.

Here are the results. The prime source for CI is still the Japanese kaizen approach (Imai, 1986). According to Imai (1986) there are at least three types of kaizen: managementoriented, group-oriented and individual oriented kaizen. The managementoriented type is focused on the improvement of organisational systems, organisational procedures and machinery and equipment. The group-oriented type has its primary focus on the improvement of work methods, routines and procedures. Organisational vehicles to perform these improvements are quality circles and other small-group-activities using various statistical tools to solve problems.

The individual-oriented type of kaizen is focused on improvements in one’s own work area and resources. Most often, this is organised by traditional individual suggestion systems. Improvement in every type is aimed at cost reduction and the elimination of waste. Although CI and elimination of waste is something like “second nature” in the Japanese work system, CI takes place in parallel structures and is not integrated in normal work. Group-oriented kaizen occurs in small groups that are established to improve work methods or to solve specific problems.

When management approves a solution, it must be implemented and all employees must adhere to the new standard. In sum, employees are performing their routine tasks and at regular times they participate in off-line small groups to improve their daily routines. Berger (1997) presents a typology of organisational designs for CI. The typology is based on two dimensions: basic task design (individual vs group tasks) and improvement task (parallel vs integrated). His typology (see Figure 2) presents five organisational designs: Mini-company concept 191 Figure 2. Berger’s typology of organizational designs for CI IJOPM 19,11 1192 (1) (2) (3) (4) (5) Quality control circles. Wide-focus CI. Organic CI. Expert task-force CI. Individual CI. The two extremes of this typology are “Organic CI” and “Expert task-force”. “Organic CI” means that improvement activities are integrated in the operational multi-functional work groups. Improvements are not left to experts or staff for design and planning and they do not presuppose decision making by other authorities outside the group.

On the other hand, “expert task-force CI” means that staff from outside the operational working group perform the improvement in a temporary parallel team. On the basis of their expertise, it is possible for worker representatives to participate in the parallel team. “Widefocus CI” is partly a combination of “organic CI” and “expert task-force CI”. It combines parallel process improvement teams and CI in (self-managed) permanent work groups. However, it is not experts from higher levels or other functions who are participating in the parallel teams but members of adjacent work groups at the same level.

The parallel CI-teams are covering a complete process. To be complete, “individual CI” is organised in some form of an individual suggestion scheme. “Quality Control Circles” are similar to the Japanese group-oriented kaizen approach: a parallel structure where ideas are generated and tested and where senior management approves good solutions. Another typology of CI organisational designs could be found in Bailey (1997). She found three types of manufacturing team improvement programs in the semi-conductor industry: (1) Continuous improvement team programs. (2) Quality circle programs. 3) Self-directed work team programs. The first two programs are parallel structures with off-line teams. Operators participate on a voluntary basis to solve small problems (1) or on a mandatory basis together with direct supervisors to solve problems within a specific work area adopted by the operational work group (2). Within the third program (SDWT program) the work teams are held responsible for CI. They create temporary teams with other staff or work group members for problems beyond their capacities. We see significant overlaps in these three sources on organisational designs for CI.

The CI team programs and the QC programs of Bailey are similar to the QCC of Berger and group-oriented kaizen of Imai. In addition, individual CI of Berger is similar to the individual-oriented type of Imai. There is one major difference: both Berger and Bailey mention one type of CI (wide-focus CI, organic CI and SDWT programs) in which CI is integrated in normal day-today operations of the shop floor. Imai does not mention this kind of integrated group-oriented CI. The provisional conclusion must be that western literature on CI is providing more alternatives to organisational design for CI than Japanese literature does.

What do we learn from this short review of organisational designs for CI? . Parallel versus integrated. We see a fundamental distinction of CIactivities parallel or integrated with routine tasks. Traditional kaizen activities are performed within parallel structures, like small-group activities, quality control circles, process improvement teams and so on. In Scandinavian countries (Berger, 1997; Lindberg and Berger, 1997) and in North America (Bailey, 1997) on-line CI activities are also in use. Here it seems that CI is seen as a normal, daily activity performed by work groups.

On-line CI is made possible because basic task design ± inspired by sociotechnical systems theory ± is an enabling mechanism for such activities. That means that tasks are broadly defined, members of work groups are more functional and highly educated, work groups are responsible for a complete part of the process and last but not least work groups do have a lot of authorities. . Fragmented work versus team-based work. A second fundamental distinction is between fragmented and individual work design and teambased work design. Again, traditional kaizen activities are performed within highly standardised, fragmented work environments.

Employees have to improve their own small task and related procedures. Unlike in team-based structures it is the team that is responsible for both operations and improvement of the team tasks. A good example of this basic distinction is the discussion on fragmented versus holistic learning in Volvo Uddevalla and NUMMI Fremont (Adler and Cole, 1993; Berggren, 1994). This can be traced exactly to the difference in “basic task design”. . Many options. Within these two fundamental dichotomies, we encounter in the reviewed literature and in practice (De Leede, 1997) many options and combinations.

Combinations of parallel CI-structures and CI integrated in normal daily activities are possible, for instance for CIactivities with different focus. That is, integrated CI for problems within the scope of the work group, and parallel CI for problems beyond the group’s scope. Individual CI can be used in combination with grouporiented parallel or integrated CI. In short, every context requires its own CI design. In addition, it is also a matter of management choice: how do we want to involve our employees in CI? . Source of improvement: management, staff or workers.

Three sources of improvement are derived from literature. Problems are generated either by management, by staff or by workers themselves. These problem generators have to be constantly active to generate new problems or goals. We did not find a problem generator built into the organisational design to ensure a constant flow of issues to improve. This is a serious weakness in these organisational designs. Mini-company concept 1193 IJOPM 19,11 1194 In the remainder of this article we present a relatively new organisational design for CI: the mini-company concept (Suzaki, 1993; De Leede, 1997; Verkerk et al. , 1997).

The mini-company concept builds upon several elements of the reviewed organisational designs. It is developed to address the major shortcoming of the existing designs in generating a continuous source for improvement. That is the special feature of this concept: its self-propelling capacity. A dynamic and constant source for improvement is found in the clients and suppliers of the work groups. The mini-company concept It was Suzaki (1993) who coined the term “mini-company” for work groups who are responsible for their supplier-client relationships. Each work group within the company has its own process.

The next process is viewed as the customer and the previous process is viewed as the supplier of every unit. Involving the chain of processes is potentially powerful in cases where improvement and innovation is needed, since it is known that diverse contacts outside one’s own group enhance innovation ideas generation (Pelz and Andrews, 1966). In fact, it is an external criterion that stimulates improvement and innovation. For our purposes, here we adapt this insight from Suzaki and transform it into a European concept of team-based work: sociotechnical systems design (Trist, 1981; De Sitter et al. 1997; De Leede, 1997). We use the term “minicompany” as a metaphor in thinking on the organisation of the factory (Verkerk et al. , 1997). The word mini-company provides us with ideas like ownership, commitment, entrepreneurship, client-supplier relationships. The structural basis of the mini-company is similar to the sociotechnical view on the semi-autonomous group, albeit complemented by the concept of client and supplier relationships. The mini-company has four characteristics, distinct from sociotechnical semi-autonomous groups: (1) The mini-company has a name and a mission statement.

Both are formulated by the mini-company itself. (2) The mini-company identifies its clients and suppliers and is responsible for managing its relationships. While external clients and suppliers are not always appropriate for having direct contacts with the mini-company, the internal client-supplier relationships are in most cases suitable. (3) The mini-company is responsible for its own improvement programme. Based on its contacts with clients, suppliers and management, the minicompany is able to identify its weak points, which are due for improvement. 4) The mini-company presents its name, mission, members, customers, suppliers, improvement programme and results on display walls. This has been called “glass wall management” (Suzaki, 1993). Everyone, including a stranger, must be able to see and understand the process and the actual state. The mini-company process is the dynamic side of the mini-company concept. It represents a cycle in which in every period the name and mission are under discussion, and in which in every period the relevant clients and suppliers are identified and visited. These visits are oriented at overall assessments of the mini-company.

In realising the cycle of the mini-company process every time the requirements of (internal or external) customers and suppliers are made visible for the mini-company by itself. These requirements are the inputs for the improvement programme. At the end of each cycle, the results are reported to management. Since every cycle in the end is restarted in fact this is a regular evaluation of the functioning of the mini-company on the basis of market requirements. Case study design The question now remains how this concept performs in practice. What is the contribution of mini-companies to improvement?

Therefore, we next present a case-study of the application of the mini-company concept in a Philips business unit. The case-study design consisted of the following methods: document analysis (notes and company reports), observation techniques (one of the authors took part in the action team program and did a two-week internship on the shop floor) and interviews (a total of 30 interviews with all-level managers and operators). In addition, two surveys have been carried out on some socialdynamic aspects on teamwork and on the effects of the mini-companies.

The first survey (N=102) was answered by 80 per cent of the (first) operators. The second survey was answered (N=23) by 50 per cent of indirect staff. The time span of the case-study was from early 1995 until mid 1996. Case Philips CMA Market and product In 1992 Philips Components decided to start a new business unit. The new business unit was to be held responsible for the development, production and marketing of Ceramic Multilayer Actuators. It was located at Roermond, The Netherlands, because there was available both an industrial infrastructure and a development laboratory for ceramic and multilayer technology.

The market perspectives were promising from the start. The demand for the main product (CMA) was rapidly increasing. However, the market for ceramic multilayer actuators is very dynamic. The product is an important device for ink-jet printers. In fact, Philips CMA is a sub-contractor for a company operating in the turbulent market for ink-jet printers. Short time-to-market, high flexibility and very tough competition are typical for this market, and these are part of the market situation of Philips CMA. The dynamic situation caused by the market is even increased by the complexity of the product.

CMA is a new product, applied in a new technology. The product itself was not completely ready for production. Further development was needed in co-operation with the (Japanese) customer. Co-development ± both in co-operation with the customer Mini-company concept 1195 IJOPM 19,11 1196 and some suppliers ± was needed. Only then could some technological problems be tackled. These characteristics of the market and the product do imply high demands on the organisation. At Philips the solution has been sought in concurrent engineering ± that is, development and production at overlapping stages.

The product is in production, though not fully developed. Test series are made in the shop floor, not in the laboratory. This implies a very strict co-operation between production and development. In addition to the concept of concurrent engineering, continuous improvement is needed to ensure higher yields, better quality and timely delivery. To cope with the growing demand for the product, it is necessary to enhance the production capacity. Design and implementation of mini-companies at CMA The mini-company concept was introduced in 1994, after two years of operation.

In fact it was no more than an intensive continuation and formalisation of former management policies. In the years 1992±1994 the business unit was growing from 25 to 125 people. The quality and the yield of the production had to be enhanced dramatically. The general approach was characterised by a focus on process control and step by step improvement. No breakthrough by one big innovation, only many small improvements were attained by an interdisciplinary approach: many joint efforts of development, factory engineering, repair and maintenance, quality department and purchasing.

In addition to this, operator involvement was arranged by teamwork. Many so-called Process Inventory Teams dealt with problems for one specific part of the process. Members of the teams were one developer, one factory engineer, at least one first-operator and, depending on the problem, other indirect people. The results of these teams were very promising. Quality and yield increased, and products could be delivered to the customers. In 1994 the specifications of the customers were set even more tightly. Again, the organisation faced a challenge. Then, factory management introduced the minicompany concept.

The structural basis of the mini-company is the unit structure, already designed on sociotechnical principles. The units are responsible for a complete part of the process, which is well identified. The boundaries of the units are carefully chosen, based on the principle that the number of internal relationships exceeds the number of external relationships. The mini-company is designed to be the unit. It is not their own shift, it is not the entire factory, but it is the unit with which they should identify themselves. In five shifts the operators make one discernible product, which is a distinct phase in the process.

The production structure consists of five units: “foil casting”, “screen printing and pressing”, “furnace processes”, “dicing”, “visual inspection and packing”. The hierarchy within Philips CMA includes four layers: general manager, factory manager, unit leader and operator. Every shift has one first operator and several other operators. Operators are working in a five-shift schedule. There are three unit leaders, who have a span-of-control varying from 16 to 55. See Figure 3 for the organisation chart. The units, i. e. all operators including the unit leader, form a mini-company. They have followed a training programme.

In this programme, the minicompany philosophy and the mini-company process was explained. Also the improvement techniques were trained. The mini-company process The mini-company process incorporates two separate cycles, a nine-step-cycle and a seven-step-cycle. The nine-step-cycle is a long-term cycle lasting one year. This cycle is a modification of the cycle mentioned in Suzaki (1993). The most important activities of every cycle are the formulation of the mission statement, the identification and interviewing of suppliers and customers, and the design and implementation of an improvement programme.

Based on the interview results with suppliers, customers and management, the minicompany itself sets the priorities of the needed improvement activities. Management has to affirm the improvement programme, and demands thorough arguments; however, it never happened that the programme of the mini-company was changed by management. In this way, management values the contribution of the mini-companies on the basis of solid arguments. The improvement programme is realised by improvement teams, so-called action teams.

These teams carry out the seven-step cycle, a short-term cycle, which is in fact an extended version of the plan-do-check-action circle. The planning stage consists of four phases. The action teams consist of one operator of every shift in the mini-company and ± depending on the problem ± several indirect people from quality, factory engineering, development, etc. The chairman of this action team is in most cases the unit leader. Some examples of improvements realised by the mini-companies are the following. Several mini-companies improved their shift change procedures.

One mini-company changed the layout of their process. Another mini-company tried successfully to reduce the frequency of some maintenance activities. Also Mini-company concept 1197 Figure 3. Organization chart Philips CMA IJOPM 19,11 the registration procedures to the computer-aided-manufacturing system were reduced. Another action team focused on a specific quality problem and identified the hidden process parameter causing the problem. Effects What are the results of this application of the mini-company concept? We only resent four effects: (1) the contribution of the mini-companies to improvement; (2) the number of contacts with internal and external clients, suppliers and experts; (3) the power relations within the business unit CMA; (4) the trust relations within the business unit CMA. The results presented in this section are based on the two surveys, respectively among the (first) operators (N=102) and the indirect employees (N=23). The results are supported by the interviews and documents. First, we give an indication of the kind of contribution the mini-companies deliver ± three different types of innovation.

We distinguish between small improvements, rather big improvements and big innovations. Improvements are changes within the existing process, while innovations are changes resulting in radical new processes. In Figure 4 the results are presented, based on the survey among the (first) operators. A similar picture arose from the survey among the indirect employees, with one exception. The indirect employees indicated that the operators usually delivered valuable observations and experiences also in the case of big innovations. According to them, this is a prerequisite for a smooth innovation process.

They view the operators as “the eyes, ears and hands of the developers on the shop floor”. The conclusion is that the mini-companies in most cases deliver a contribution towards improvements, and they play a relatively small, though valuable, role in innovations. Their role is in the co-operation with developers in Failure Mode and Effect Analyses in the assessment of ergonomic aspects of new equipment, in the design of the lay-out of new workplaces, in the support of new tests and samples, and so on. Another effect in this area is that the number of improvement actions increased so much, that the department of 198 Figure 4. Contribution of minicompanies to improvements/ innovations (percentage of (first)operators (N=102); 0=no contribution, 1=contribution) technical maintenance was not able to respond to all requests for assistance. This seems to be an indication of the self-propelling characteristic of CI in a mini-company process. A second effect of working in mini-companies is the number of contacts with internal and external customers and suppliers. Figure 5 shows the results of the survey, indicating the percentages of (first) operators who have regular direct contacts with the relevant outside world.

Included are also the contacts with internal and external experts. It is obvious that most operators have regular contact with internal clients and suppliers and internal experts (developers, factory engineers, technicians). External contacts are not usual. The third effect of the mini-company concept is the change in the power relations. We have measured the power relations with the control graph, an instrument developed by Tannenbaum (1968). In Figure 6 the control graph of this case is presented. This control graph is based on the survey among the (first) operators (N=102).

This control graph shows high levels of influence among all hierarchical levels, as perceived by (first) operators. In the words of Tannenbaum (1968), this indicates a large total amount of control, which is an indicator of effectiveness. The fourth effect is on trust relations. When we view the relationships between hierarchical levels, it is not only power that comes in. It is also a matter of trust. In this case 85 per cent of the (first) that they had operators stated to have trust in the management, which is quite high. Both observation and Mini-company concept 1199 Figure 5.

Internal and external contacts of the minicompanies (N=102) Figure 6. Control graph (N=102; 1=very little influence, 6=very much influence) IJOPM 19,11 interviews confirmed this result. These high trust relations are in line with the successful implementation of the mini-company concept and in the real changes in management style the operators report. Discussion and conclusion We interpret these case results as a good illustration of the mini-company concept. In the case, this concept proved to be implemented carefully, with a balanced attention to both structural and social-dynamic matters.

This appears to be crucial: it is not only the structural features of the mini-company concept that are important, but also the social-dynamic factors like power and trust of the mini-company process. The control graph of the Philips case illustrated this. Some authors (Van Haren, 1984; Van Oostrum, 1989) have elaborated on the reasons for the relation between total amount of control and effectiveness. They view the relationships between the hierarchical levels as exchange relations in which power plays an important role.

The higher the total amount of control, the higher the intensity of the exchange relationships between the levels. It is necessary to have information exchange and joint decision making to increase this intensity. This joint decision making, and at least the information exchange, is a prerequisite for effectiveness in many situations. They specify also some situations in which it is not effective to have a high amount of control. In short, in standard situations this is not appropriate, but where uncertainty plays a role, it is wise to incorporate in decision making processes as much knowledge and as many stakeholders as possible.

In cases of improvement and innovation, uncertainty by definition plays a role. Therefore it is important to create a structure fostering intense exchange relationships between the different hierarchical levels and between the different groups in production, development and support. The mini-company concept is an attempt to provide such a structure. How can we characterise the mini-company concept in the light of our theoretical review of organisational designs for CI? First, the mini-company concept embodies parallel CI-activities as well as integrated CI-activities.

Integrated activities include the job consultation mechanisms with all minicompany members and the awareness of all employees in the need for improvement and client orientation. The parallel CI-activities strengthened this awareness by circulating the progress of the action teams by shift representatives. In addition, the glass wall is the medium for information sharing. Second, the mini-company concept is based on a team-based work design. The sociotechnical analysis created the boundaries of the minicompanies, indicating a “natural” group-orientation of the involved employees.

The combination of these two characteristics implies the hybrid nature of the mini-company concept in terms of Berger: the most dominant type is “widefocus CI”, but for some activities this is combined with “expert task-force CI” and “organic CI”. Third, the factory management of this case strongly advocates a true involvement of employees in improvement activities. This is illustrated in the positive power and trust relations. Also, the co-operative 1200 working styles of operators, factory engineers and developers are illustrations of this consistent approach of operator involvement.

Fourth, the mini-company concept incorporates the self-propelling capacity for improvement: from clients, suppliers and management a constant stream of ideas for improvement is regenerated in every cycle. Particularly at this point, the mini-company concept seems to be powerful, compared to other organisational designs for CI. This is in line with old findings like Pelz and Andrews (1966). Our final question is this one: Is the mini-company concept as an organisational design for CI the promising bridge between day-to-day operations and improvement activities, with a strong market orientation and with true and sufficient employee involvement?

The answer is yes and no. On the one hand, the concept offers promising elements in the integration of market and client relations. The mini-company process ensures a constant connection with clients and suppliers, which starts a continuous source of improvement possibilities. When it is managed well, the concept enhances the decision latitude of the employees including CI activities. On the other hand, this is precisely the Achilles’ heel of this concept: the management. True employee involvement ± which is a prerequisite for successful and lasting CI ± depends on the way management is willing to share power and to build trust.

In the Philips case, we demonstrated the success of this application of the minicompany concept, but highlighted also the relatively flat power relations and high trust relations. We think power sharing and high trust both are essential in managing an effective CI programme. References Adler, P. and Cole, R. E. (1993), “Designed for learning: a tale of two autoplants”, Sloan Management Review, Spring, pp. 85-94. Bailey, D. E. (1997), “Manufacturing improvement team programs in the semiconductor industry”, IEEE Transactions on semiconductor manufacturing, Vol. 10 No. 1, pp. 1-10. Berger, A. 1997), “Continuous improvement and kaizen: standardization and organizational designs”, Integrated Manufacturing Systems, Vol. 8 No. 2, pp. 110-17. Berggren, C. (1994), “NUMMI vs. Uddevalla”, Sloan Management Review, Winter, pp. 37-45. Bessant, J. and Caffyn, S. (1997), “High-involvement innovation through continuous improvement”, Int. J. Technology Management, Vol. 14 No. 1, pp. 7-28. Cotton, J. L. (1993), Employee Involvement. Methods For Improving Performance and Work Attitudes, Sage Publications, Newbury Park, CA. Fukuda, R. (1989), CEDAC. A Tool for Continuous Systematic Improvement, Productivity Press, Cambridge, MA.

Hackman, J. R. and Wageman, R. (1995), “Total quality management: empirical, conceptual, and practical issues”, Administrative Science Quarterly, Vol. 40, June, pp. 309-42. Haren, T. H. C. van (1984), Power in Organisations, PhD thesis, University of Utrecht, Utrecht (in Dutch). Imai, M. (1986), Kaizen. The Key to Japan’s Competitive Success, Random House, New York, NY. Leede, J. de (1997), Bottom-up Innovation; on the Contribution of Semi-autonomous Groups in Product and Process Innovation, PhD thesis University of Twente, Kluwer Bedrijfsinformatie, Deventer (in Dutch). Mini-company concept 1201 IJOPM 19,11 202 Lindberg, P. and Berger, A. (1997), “Continuous improvement: design, organization and management”, International Journal of Technology Management, Vol. 14 No. 1, pp. 86-101. Looise, J. C. (1996), Social Innovation is a Must, but How? , oration University of Twente, Enschede (in Dutch). Oostrum, J. G. M. P. van (1989), Power and Control in Organisations in an Uncertainty-reduction Perspective: an Experimental Approach, PhD thesis University of Utrecht (in Dutch). Pelz, D. C. and Andrews, F. M. (1966), Scientists in Organizations; Productive Climates for Research and Development, Wiley, New York, NY.

Schonberger, R. J. (1986), World Class Manufacturing: The Lessons of Simplicity Applied, The Free Press, New York, NY. Schonberger, R. J. (1996), World Class Manufacturing: The Next Decade: Building Power, Strength, and Value, The Free Press, New York, NY. Sitter, L. U. de, Hertog, J. F. den, and Dankbaar, B. (1997), “From complex organizations with simple jobs to simple organizations with complex jobs”, Human Relations, Vol. 50 No. 5, pp. 497-534. Suzaki, K. (1993), The New Shop Floor Management; Empowering People for Continuous Improvement, The Free Press, New York, NY.

Tannenbaum, A. S. (1968), Control in Organizations, McGraw-Hill, New York, NY. Trist, E. L. (1981), “The sociotechnical perspective; the evolution of sociotechnical systems as a conceptual framework and as an action research program”, in Ven, A. H. van de, and Joyce, W. F. , Perspectives on Organization Design and Behavior, John Wiley & Sons, New York, NY, pp. 19-75. Verkerk, M. J. , Leede, J. de, and Tas, H. J. van der (1997), Market-oriented Production Management; from Semi-autonomous Group to Mini-company, Kluwer Bedrijfsinformatie, Deventer (in Dutch).