Unanticipated side effects of successful quality programs: exploring a paradox of organizational improvement

Article Abstract:

Analog Devices Inc.'s financial performance slumped despite the success of its Total Quality Management program. The program had led to improved yield, reduced cycle time and significantly lesser product defects. Analog's case strengthens recent evidence that the connection between quality improvement and financial results is weak. Analog's experience is paradoxical since financial results did not improve after the TQM program had been considered a success. Data from a detailed simulation model of Analog showed that improvements programs such as TQM can pose a tradeoff between short and long run effects. Although TQM can boost productivity, quality and cost effectiveness in the long run, it may also interact with accounting systems and organizational operations to create excess capacity, financial stress and pressure for layoffs.

Analysis, Semiconductor industry, Evaluation, Profits, Quality management, Analog Devices Inc., ADI, Total quality management, Corporate profits

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System dynamics modeling: tools for learning in a complex world

Article Abstract:

System dynamics modeling to combat policy resistance is discussed.

United States, Management-Problem Solving, Econometrics & Model Building, Models, Management, Human resource management, Econometrics, Crisis management, Problem solving, Business models

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