Process management and technological innovation: a longitudinal study of the photography and paint industries

Administrative Science Quarterly,  Dec, 2002  by Mary J. Benner,  Michael Tushman

• E-mail
• Print
• Link

The use of process management also provides an enabling structure that allows for more efficient horizontal coordination of activities toward a common organizational goal (e.g., Adler and Borys, 1996). Tighter coupling occurs with the application of process management activities to intentionally streamline the system of organizational routines against the dual objectives of efficiency and quality. More specifically, tighter linkages emerge as efforts to improve downstream processes spur incremental changes in the outputs or handoffs from upstream, supplying processes. For example, focused efforts to improve manufacturing processes result in tweaking new product developments to better leverage downstream processes and spur continued measurable improvements in manufacturing efficiency and internal customer satisfaction. Such changes in the product development processes and outputs are themselves likely to be incremental, while, at the same time, the handoffs between the product development and manufacturing processes become more efficient and streamlined.

Increasing stability and reliability as it applies to systems of routines is an intended outcome of process management practices (e.g., Harry and Schroeder, 2000), and it emerges both as processes are repeated in best practices and as process management activities are used to coordinate linkages between organization-spanning routines. Efforts toward tighter horizontal coordination create greater interdependencies and interactions (Levinthal, 1997b; Siggelkow, 2001). Increasing congruence among organizational routines creates systemwide benefits of continued incremental change, leading to further stability and focus on incremental change. Such tightening of internal linkages and communication patterns also increasingly affects the types of technological innovations that can be produced (cf. Henderson and Clark, 1990).

Thus, while process management activities involve an explicit focus on continuous innovation and change, particularly at the outset (e.g., Winter, 1994; Hackman and Wageman, 1995), these practices trigger searches for solutions increasingly in the neighborhood of existing skills and knowledge and are likely to spur innovations that utilize existing or familiar knowledge. The ongoing repetition of sets of established best practices further promotes incremental innovation and change through experiential learning processes (Levitt and March, 1988). The behavioral consistency and reliability in the concerted efforts inherent in process management activities echo a strong culture focused on incremental innovation for existing customers (Miller, 1993; Sorensen, 2002). Stated formally, we predict:

Hypothesis 1: The greater the extent of process management activities in a firm, the larger the number of exploitative innovations.

Process management's influence on exploration. The first-order learning and tighter coordination associated with process management activities also actively prevents non-incremental innovation and change (e.g., Hannan and Freeman, 1984; Tushman and Romanelli, 1985; Sull, Tedlow, and Rosenbloom, 1997; Levinthal, 1997b). Activities associated with increased variation and uncertainty, such as improvisation (Miner, Bassoff, and Moorman, 2001) or brainstorming (Sutton and Hargadon, 1996) may be inconsistent with a focus on adherence to established routines and measures of increased efficiency and are therefore likely to be driven out in a process management context. Further, over and above variance-reducing pressures, process management's influence on exploratory innovations works through a second powerful mechanism: the use of process management activities in firms affects innovation selection by increasing the salience of innovation efficiency and effectiveness measures and the perceived payoffs of competing innovation projects.