The next level of collaboration:
Continuous Improvement in
Contract Management
A case study on buyer-contractor relationships
M.R. (Maarten) de Groot – S2212382 Master Thesis, Supply Chain Management
e-mail: maartenrdegroot@gmail.com University of Groningen Faculty of Economics and Business
Supervisors University of Groningen: dr. H. Broekhuis & drs. ing. H.L. Faber Co-assessor: prof. dr. ir. C.T.B. Ahaus
The aim of this research is to investigate how Continuous Improvement (CI) Capabilities at both buyer and service contractors relate to the level of Collaborative Improvement (CoI) as has been agreed upon in the contract. An in-depth multiple case study was performed to obtain information from a multinational firm in the process industry and two of its contractors with whom agreements were made to collaboratively improve in their service contract. The findings show that training in CI increases the CI capabilities, which also influences the level of CoI. Furthermore, this study is the first to show the importance of other external factors than trust that need to be in place first between buyer and contractor before they will have success in CoI together, being: the role assigned to CoI in the contract, physical and mental accessibility of the partner and taking time to work on improvements.
Keywords: Buyer-contractor relationships, Collaborative Improvement, Continuous Improvement,
Continuous Improvement Capabilities, Contract Management.
TABLE OF CONTENTS
1. INTRODUCTION ... 4
2. THEORETICALBACKGROUND ... 6
2.1 Continuous Improvement basics ... 6
2.2 How higher CI capabilities lead to a higher level of CI ... 6
Table 2.1: Continuous improvement capabilities ... 8
2.3 How CI capabilities relate to the level of CoI ... 9
2.4 CI in the in the inter-organizational context ... 10
2.5 The role of contracts in CoI ... 11
3. METHODOLOGY ... 12
3.1 Research design and case selection ... 12
3.2 Setting ... 13
3.3 Data collection ... 13
3.3 Ensuring quality criteria ... 14
3.4 Data analysis ... 15
Figure 3.1: Coding scheme... 16
4. RESULTS ... 17
4.1 How do CI capabilities influence CoI: a within case analysis ... 17
Table 4.1: Description of within case analysis ... 18
4.2 Within case analysis - Case A: Buyer and Contractor X ... 19
4.3 Within case analysis - Case B: Buyer and Contractor Y ... 21
4.4 Cross case analysis: explanation of similarities and differences for Case A and Case B ... 24
4.5 The role of CI capabilities in the success of CoI ... 25
Figure 4.1: Collaborative Improvement Model ... 27
5. DISCUSSION... 28
6. CONCLUSION ... 30
7. REFERENCES ... 32
8. APPENDICES ... 39
Appendix 1: Interview Protocol ... 39
Appendix 2: List of codes and examples of quotes ... 43
Appendix 3: Definitions of codes ... 48
PREFACE
1. INTRODUCTION
Continuous improvement (CI) has been defined as a process aiming at innovating organization-wide processes (Bessant & Francis, 1999) and for firms it can considerably improve performance (see e.g. Bond, 1999). Nevertheless, the concept of CI itself is mainly focused on stand-alone companies (Cagliano, Caniato, Corso & Spina, 2005), while it is expected that future competition is between supply chains rather than between firms (Duclos, Vokurka & Lummus, 2003; Rice and Hoppe, 2001). Therefore, it is in the best interest of firms to take CI to the inter-organizational level when they are faced with a supply chain-to-supply chain competition, which has been labelled Collaborative Improvement (CoI) (Kaltoft et al., 2004; Cagliano et al., 2005; Middel, Boer & Fisscher, 2006). CoI is about the deliberate inter-company process focusing on continuous incremental innovation to enhance overall performance (Middel et al., 2006). CoI is a step-by-step process between two separate firms aimed at optimizing products, processes and services.
CoI can benefit the relationship between partners as CI at the inter-firm level results in innovations and learning at a higher speed (Sako, 1998). However, the extent to which firms are able to excel at CI highly depends on the learning capabilities internal to firms (Anand, Ward, Tatikonda & Schilling, 2009). Learning becomes more complex in CoI as this revolves around the learning capabilities of more than one firm, so it should also take into account the interests of both firms. Middel et al. (2006) argued in their research that if improvements are successful, the capability to collaboratively improve should increase over time. Based on this these authors proposed that future research should aim at researching whether having more experience in CI positively influences performance in CoI. Experience in CI capabilities and progression of these capabilities leads to both the developing of routines and learning new ones (Bessant, Caffyn & Gallagher, 2001).
To substantiate CoI, firms may decide to put agreements in contracts. Planning of this can already be accounted for in the contracting phase, though, actual execution is part of discussion during the contract management phase because this phase aims at making sure that the other party fulfills the requirements, expectations and terms and conditions (Trent, 2007: p. 135). Hence, this also includes managing the progress of CoI when it has been denoted in the contract. When the contract revolves around services, implementing CoI will likely become more complex due to higher complexity of defining services (Ellram & Tate, 2015; Smeltzer & Ogden, 2002). In addition, factors such as evaluating the performance (Smeltzer & Ogden, 2002) and seeing services as a non-strategic function (Van der Valk & Rozemeijer, 2009) increase difficulties in implementing CI in service contracts.
by identifying dimensions of CI capabilities at both the side of buyer and service contractor and investigates how these relate to the level of CoI. The research has the prerequisite that buyers and contractors have agreed to include a Continuous Improvement paragraph in the service contract, and so intend to invest in CoI. Henceforth, the following research question has been composed: How do
continuous improvement capabilities of both buyer and service contractor influence the level of collaborative improvement as agreed upon in their contract?
Managers will after having read this paper have more knowledge about what factors are important when they are planning CoI activities with their main partners. By using the CI capabilities framework and applying that to the own firm and partner, one can identify which capabilities need improvement to increase the potential of CoI activities. From a theoretical perspective, this paper presents an extensive list of dimensions of CI capabilities and shows how these relate to CoI. This provides both more insight and potential for future research by means of researching the different dimensions separately.
A multiple case study will be used to obtain in-depth information from both the buyer and its service contractors. By doing so, information on how the CI capabilities relate to the level of CoI can be gathered. This will contribute to theory and practice in the following important ways. Firstly, it will be shown that CI capabilities fall under the umbrella of ‘CI Training’, indicating that to increase capabilities, people should receive training. Secondly, being more trained in CI will not only enhance CI capabilities but also influences the level of CoI because of having more awareness about the benefits and higher knowledge about CI tools and techniques. Thirdly, this research sheds light on the importance of having a mutual understanding about what has been agreed upon in the contract about CoI, i.e. different interpretations might lead to discrepancies in execution. Lastly, this research reveals important external factors which serve as a prerequisite and should be put in place first before considering starting CoI activities.
2. THEORETICAL BACKGROUND
2.1 Continuous Improvement basics
Continuous improvement strategies are not novel to the literature of business strategies. Many frameworks have been presented on how to successfully integrate CI practices. Among these frameworks are lean strategies (Liker & Choi, 2004; Shah & Ward, 2007; Voss, 1995; Voss, 2005), Six Sigma (Voss, 2005) and Total Quality Management (Shah & Ward, 2003; Voss, 1995). CI has been defined as the process of incrementally innovating in organization-wide processes (Bessant & Francis, 1999) aimed at developing and putting into place new products, market approaches, processes, technologies and competencies, and organizational and management systems (Martini, Gastaldi & Corso, 2013). More recently, the view of CI is that it is “a systematic effort to seek out and apply new
ways of doing work i.e. actively and repeatedly making process innovations” (Anand et al., 2009: p.
444). Thus, CI is essentially aiming at making gradual innovations and it needs to be rooted within the firm to maximize the benefits of CI. Successful implementation of CI leads to increased communication, satisfaction, cross-functional cooperation and higher motivation to work on future CI projects through learning activities and problem solving (Jørgensen, Boer & Gertsen, 2003). As a result of these improvements, firms will improve their performance (Bhuiyan & Baghel, 2005). Excelling in making these improvements can even result in a competitive advantage (Savolainen, 1999). Nevertheless, it is not a simple matter of implementation (Savolainen, 1999). Firms need to have understanding of the process of CI and need to enable certain types of routines and develop capabilities to make CI work (Bessant, Caffyn, Gilbert, Harding & Webb, 1994; Bessant, Caffyn & Gilbert, 1995; Kerrin, 1999).
2.2 How higher CI capabilities lead to a higher level of CI
The capability to continuously improve has been defined as extending involvement in innovation to the majority of the firm, hence gaining a strategic advantage (Caffyn, 1999). Anand et al. (2009: p. 445) referred to CI as a dynamic capability, i.e., “the ability to consistently improve current processes and
learn new ones is termed continuous improvement capability (Ittner and Larcker, 1997)”. However, the
above definition lacks emphasis on how CI is implemented. For example, proactivity is defined as
“taking initiative in improving current circumstances or creating new ones; it involves challenging the status quo rather than passively adapting to present conditions” (Crant, 2000: p. 436). Reactive
organizations, on the other hand wait for opportunities and information to come to them. Additionally, proactive workers aim at bringing change within the organization and within oneself (Bindl & Parker, 2010), while the extent to which firms are able to continuously improve depend on some key behaviors that employees are showing (Caffyn, 1999). Therefore, in organizations where employees show proactive behavior it is more likely that CI succeeds because of a higher willingness to create and learn from change. Hence, this study defines continuous improvement capabilities as “the ability of
Having attained CI capabilities leads to a higher level of CI due to the fact that there is a link between having experience in a subject and the creation of knowledge (Argote and Miron-Spektor, 2011). However, the ability to implement CI as a capability is a major challenge because knowledge creation is a learning process (Savolainen, 1999; Choo, Linderman & Schroeder, 2007). In addition, being able to excel at CI as dynamic capability involves a higher degree of organizational learning that allows firms to make rapid changes in processes and to improve performance (Anand et al., 2009). Making these capabilities work might be difficult due to criticism from the outside about the made improvements (Bessant et al., 1999) or implementing solutions that mainly focus on the short-term and are rather randomly instead of structural (Bessant et al., 2001). Implementing CI capabilities in an inter-organizational framework might show to be more complex. This is due to the fact that in a collaborative environment where companies strive to co-operatively implement CI, it is necessary to be motivated to work simultaneously on the goals of the own as well as of another firm (Middel et al., 2006),. Furthermore, in order to successfully implement CI capabilities, it is essential to effectively coordinate the program across the firm (Bessant et al., 1994; Julian, 2008).
Table 2.1: Continuous improvement capabilities Level of CI Dimensions of CI capabilities Characteristics L ow C I capabi lit ies Learning activities No learning activities Problem solving skills
Problems are solved randomly (Bessant & Francis, 1999) Accepting the status quo
Improvement horizon
Short-term improvement focus (Bessant & Francis, 1999) Top-down decisions on strategy (Martin, 2007)
Improvement visions not well embedded at blue-collar workers resulting in a lack of commitment from employees (Coetsee, 1999; Herscovitch & Meyer, 2002)
Training in CI No training and motivating employees for participation in CI Improvement
Monitoring
None to minimal reviews on projects: no measurement and comparison (Anand et al., 2009) No pre-analysis on the gains of the actual improvement plan (just do it mentality)
Inter-functional collaboration
No cross-functional work
Functional pools in which people are grouped together with similar skills (Arnold, 1999; Lidegaard et al., 2015) Me diu m C I c apab ili ties Learning activities
Single-loop learning activities (Scribner, Cockrell, Cockrell & Valentine, 1999)
Showing signs of actionable learning (Angehrn, Maxwell, Luccini & Rajola, 2009; Nevis, DiBella & Gould, 1995)
Problem solving skills
Problems are solved rather internal to the department
Ad-hoc improvement projects using popular tools and techniques (Anand et al., 2009) Conventional (best options available) thinking (Martin, 2007)
Critically reflecting the status quo, however, lacking appropriate actions Improvement
horizon
Attempts to combine long-term and short-term focus
Training in CI Training in the basic CI tools (Bessant & Francis, 1999) Improvement
Monitoring
Selecting and reviewing projects on an ad-hoc base (Anand et al., 2009) Little use of pre-analysis before the actual implemenation
Inter-functional collaboration
Ad-hoc cross-functional work (Bessant & Francis, 1999)
H igh C I c apab ili ties Learning activities
Double-loop learning activities (Anand et al., 2009; Bessant & Francis, 1999; Bond, 1999; Cagliano et al., 2005; Linderman, Schroeder, Zaheer, Liedtke & Choo, 2004)
High degree of actionable learning (Angehrn, Maxwell, Luccini & Rajola, 2009; Nevis, DiBella & Gould, 1995)
Problem solving skills
Embedding lessons learned from projects (Anand et al., 2009) High levels of experimentation (Bessant & Francis, 1999) Integrative (innovative outcomes) thinking (Martin, 2007)
Consistently challenging the status quo (Crant, 2000; Ohly & Fritz, 2010) Improvement
horizon
Balancing short-term and long-term improvement activities (Middel et al., 2006)
“Facilitate mid- and lower-level managers’ participation in strategy formulation and implementation” (Anand et al., 2009: p. 450)
Combining incremental and radical improvements (Bessant & Francis, 1999)
Wide-spread vision on benefits of CI on firm performance through high commitment (Coetsee, 1999; Herscovitch & Meyer, 2002)
Training in CI Training and motivating employees for participation in CI (Anand et al., 2009) Improvement
Monitoring
Systematically selecting and reviewing projects (Anand et al., 2009; Bessant & Francis, 1999) Using feedforward (Pavlov & Bourne, 2011), though not intervening with experimenting on new ways of working
Inter-functional collaboration
Using cross-functional teams to solve problems
Involving everyone in the improvement process (Bessant & Francis, 1999)
2.3 How CI capabilities relate to the level of CoI
In previous sections, dimensions of CI capabilities have been defined that influence the level of CI in firms (Bessant & Francis, 1999). Furthermore, there is extant and sufficient literature providing evidence for the fact that CI in the inter-organizational context is not something which is easy to implement (Middel et al., 2006). However, the question remains how CI capabilities might increase levels of CoI.
First of all, it seems relevant that the vision on CI of two separate firms need to be translated into the ability to transfer the CI behaviors from the single firm to a partnership, i.e. collaborative improvement. According to Middel et al. (2006) CoI comes down to five principles. Firstly, there needs to be shared values on the improvement and collaboration values. Besides, in the road from transferring CI capabilities to CoI, a shared vision is essential as this will make sure that the individual actions actually contribute to learning benefitting the organization (Kim, 1993). In the inter-organizational context this would be a shared vision between firms, i.e. between buyer and contractor. Secondly, with the aid of long-term goals, improvement activities need focus and prioritization. Thirdly, people and firms need to proactively participate in incremental improvements, while learning is captured and deployed. Fourthly, improvement projects need to be implemented and facilitated crossing the inter-company operations. Lastly, improvement projects needs to be constantly monitored and evaluated to activate the learning and improvement capabilities. Even though, the five principles are linked to CI and CoI, the extent to which implementation will be successful largely depends on the awareness among employees (Singh & Singh, 2012). The philosophy of why CI is important to the firm needs to be shared with employees, and moreover, why CoI can even be more beneficial in a supply chain-to-supply chain competition. Essentially, the transferred knowledge needs to be integrated in the culture and strategy of the firm to improve the learning effect (Jerez-Gomez, Céspedes-Lorente & Valle-Cabrera, 2005). Therefore, the own organization has a significant role in the creation of CI capabilities as Bessant et al. (2001) argued that experience in CI is linked to attaining CI capabilities. Hence, it can be posited that the more trained firms become in CI and the more active it is in CI projects, the higher the capabilities will be. Furthermore, Middel et al. (2006) suggested that future research should aim at identifying whether higher experience in CI leads improved CoI. Therefore, it is of particular interest whether similarities and differences in CI capabilities have influence on how good CoI is implemented and executed between firms. Based on this, figure 2.1 describes the conceptual model of this research.
2.4 CI in the in the inter-organizational context
In the global competitive environment it is getting increasingly important for firms to be able to compete on improving processes on a continuous base (Teece, 2007). Hence, in competition that is between supply chains rather than between firms (Duclos et al., 2003; Rezapour et al., 2014; Rice and Hoppe, 2001), there is an increasing need to coordinate activities (Choo et al., 2007) with other firms to be successful. It has been stressed in prior research that in inter-organizational cooperation, transferring knowledge is important to increase the simultaneous capabilities of both firms (see e.g. Easterby-Smit, Lyles & Tsang, 2008; Goh, 2002). Firms such as Toyota have successfully managed to create such collaborations through intensive knowledge-sharing activities with its main partners resulting in competitive advantages (Dyer, 1997; Dyer & Nobeoka, 2000). Dyer & Nobeoka (2000) further stress that it has been recognized by multiple scholars that in order to be competitive, inter-organizational learning is critical. Within the inter-organizational context, learning and improving is an ongoing process focusing on continuous incremental innovation to enhance overall performance (Cagliano et al., 2005: p. 347), and has gained attention in the ‘extended manufacturing enterprise’ context (please see Cagliano et al., 2005; Kaltoft et al., 2004; Middel et al., 2006 for examples).
To make CoI work it is important to have a positive attitude towards collaborative improvements. As a result, it is expected to have better improvements in terms of scope and effectiveness (Cagliano et al., 2005; Cagliano & Spina, 2002). Next to having the right attitude, companies should share the problems they are experiencing with each other and solve it together (Kerrin, 2002). Prado-Prado (2009) showed this with the aid of real-life cases in which solutions to problems were found through a participatory approach. This can for example be done with the implementation of inter-organizational improvement teams (Prado-Prado, 2009). Nevertheless, a highly integrative relationship with a partner in the supply chain might also show to be difficult due to a higher degree of technological integration and knowledge needs to be embedded at people from both firms (Corso & Pellegrini, 2007). Succeeding to overcome these issues, however, delivers substantial benefits as CI at the inter-firm level can be of great potential for future innovations and learning at a higher speed (Sako, 1998).
Based on the first sections in the theoretical background, answers to the following sub-questions should give more insight into the relationship between CI capabilities and the level of CoI. The first question focuses on how CI capabilities are organized at the own firm and how these influence CoI initiatives or deployments. The second question bridges between CI and CoI by looking at whether there needs alignment between CI capabilities to make CoI work:
1. How are the CI capabilities at the own firm related to collaborative improvement deployments? 2. How are deviating and similar CI capabilities between buyer and contractor related to the level
2.5 The role of contracts in CoI
Trent (2007: p. 135) stressed that contract management aims at meeting the obligations as agreed upon in the contract (requirements, expectations and terms and conditions) and the necessity to manage and control contracts stems from the fact that contracts are never complete. Bounded rationality is the cause for the impossibility to cover every future contingency in a contract and this leaves room for opportunistic behavior from one of the partners (Dekker, 2004; Liu, Luo & Liu, 2009; Williamson, 1979; Williamson, 1985). Therefore, to define the relationships and to specify agreements, contracts serve to hedge against the risk of the other party to not meet the obligations (Tate, Ellram & Brown, 2009). However, this research proposes that there is more than control and the economic exchange as agreed upon in a contract. Firms may decide that the contract serves the goal of collaboratively improving each other’s business as higher levels of collaboration can create win-win situations (Soosay & Hyland, 2015).
In fact, CI and CoI can already have a significant contribution before the contract is even signed. For example during the feasibility assessment. According to Brown & Potoski (2003) this assessment describes whether a particular service should be contracted and whether it is possible to find an appropriate contractor to do the job. It is also a make-or-buy decision in the sense that the decision could be made to the job internally. Thus, the feasibility assessment is essentially laying the foundations for the decision which partner to look for. Hence, in the initial stage it can already be accounted for when a buyer wants to work on CoI by specifically looking for a partner that has similar intentions. Moreover, in selecting the partner, previous mistakes can be accounted for when a firm excels at CI because these firms are likely to have documented and learned from past mistakes. Thus the feasibility assessment could actually be improved for every contract. The implementation phase (Brown & Potoski, 2003) is consistent with the more traditional purchasing job as it includes “targeting, selecting, negotiating with,
contracting and ordering from suppliers.” (Lidegaard, Boer & Møller, 2015). Therefore, during contract
negotiations and periodic meetings, specific terms and agreements can be discussed and put into contracts aiming at putting into place and enhancing CoI. Finally, the evaluation phase is about assessing and judging the performance of the contractor (Brown & Potoski, 2003). After the contract has been signed, the contract management phase comes into play (Trent, 2007) and the decision whom to contract already has been made and the contract is in effect. Hence, whether it is satisfactory or not, the contractor has to be dealt with. As CI aims at making incremental innovations (Martini et al., 2013), monitoring (Anand et al., 2009; Bessant & Francis, 1999) the success of CoI is important to measure whether the intentions that both parties had agreed upon are actually performed.
The last question deals with the relationship between CoI and contracts, or in other words what role contracts have in the performance of CoI.
3. METHODOLOGY
3.1 Research design and case selection
A multiple case study has been employed at a Dutch firm that had the pre-requisite that firms (a) have included in their contracts with service contractors agreements to continuously improve, and (b) have experienced variety in how collaborative improvement activities were executed. These prerequisites ensure that both buyer and service contractor have expressed a general willingness to work on CoI, and variety in the cases in terms of CoI ensures that inferences can be made because too similar cases will be less likely to reveal differences. A multiple case study will have the benefit that in-depth information from both the buyer and its contractors can be gathered on their continuous improvement capabilities and how these are employed in their CI activities. Due to the fact that the research question is of a rather explorative nature, a case study will provide a rich dataset, which is particularly important for new fields of research. The unit of analysis in this study is the partnership between the buyer and service contractor rather than the firm since the research is at the inter-firm level of CoI (Middel et al., 2006).
Purposeful sampling was used to aid the process of selecting cases that either have a high level of CoI, or a low level of CoI. By ensuring variety in the level of CoI, it can be investigated whether there is a relationship between the CI capabilities of buyer and contractor and the level of CoI. High level of CoI implies that the agreements made in the contract about CoI are currently executed satisfactory for the buyer. So for example, attending periodic meetings to discuss improvements and submitting cohesive requests and suggestions to the partner that includes benefits and risks that are involved with an improvement plan. On the other hand, a low level of CoI implies the opposite situation in which the ‘CI Paragraph’ is not met or to a lesser extent complied with. Thus, not or less attending meetings and having issues in submitting improvement requests.
Prior to the data collection, it had to be decided which service contractors are perceived to be ‘high’ in level of CoI and which are ‘low’ in terms of CoI. The Manager Maintenance & Support of the buyer gathers most of the information in relation to CoI suggestions from the contractor. Therefore, he was interviewed to gather information on how contracts were performing on CoI. Table 3.1 describes the case selection criteria and data that was collected about the contractors which might potentially influence the phenomenon I am investigating:
Table 3.1 Case selection criteria and descriptives
Case A Case B
Firms Buyer & Contractor X Buyer & Contractor Y
Level of CoI High Low
Amount of sales (for contractor per year) Around 10 Million Euros Around 500.000 Euros
3.2 Setting
The research was conducted at a Dutch multinational that met the requirements as formulated in the research design. This firm hires contractors to perform services such as cleaning, isolation or putting in place scaffoldings. According to the annual report of 2015, it operates in over 80 countries worldwide, has around 15 million euros in revenues and employs over 45.000 people. For its chemical engineering service contracts it has included a ‘continuous improvement paragraph’ with the contractors that are included in the research.
3.3 Data collection
To ensure data triangulation, the data was gathered from multiple sources. Firstly, the contracts that are part of the cases of this study were analyzed to see how CI activities were addressed in the contract. During interviews, questions were asked related to these agreements to get more insight about whether these agreements were met. Furthermore, observations from CI-meetings between the buyer and its contractors were used to assess their role during such meetings. As the main source of data, nine semi-structured interviews were planned and conducted between April 2016 and May 2016. It was of particular interest whether the CI-paragraph which had been included by the senior buyer and contract owners of the buyer and contractors was also appropriately embedded at subsequent levels of both firms. Therefore, it was decided to plan interviews with employees that work at different levels throughout the firm, some of them having more strategic, others more operational tasks. Table 3.2 shows the description of the interviewees and the amount of interviews that has been collected. Unfortunately, after multiple cancellations of the executor of Contractor Y due to other priorities of the contractor, it had been decided to cancel the interview.
Table 3.2 Interviewees
Role Task Interviews at
which firms
Interviews from role
Contract Owner
Responsible for defining the terms and agreements to be put into the contract. Furthermore, responsible for directing the people how the contract should be implemented and interpreted.
Buyer & Contractor X and Y. 3 Contract User
Responsible for preparing the agenda of work to be done by the work floor, thus, more or less creates the work for the executor and subsequent levels.
Buyer & Contractor X and Y.
3
Executor Supervisor of the people active on the work floor, hence, the first and most direct contact of the labor force.
Buyer & Contractor X.
2
Senior Buyer
Responsible for defining the terms and agreements to be put in the contract with contractors.
Buyer 1
An interview protocol (see appendix 1) was developed which aids comparability between answers, while also increasing the reliability of the research (Yin, 2009). It contained broadly defined topics referring to the dimensions of CI capabilities as defined in table 2.1. Furthermore, questions regarding trust and the way CoI is being executed at the moment were asked. Trust is included in the semi-structured interviews because it is the main difference between CI and CoI and trust serves as “a
prerequisite for and enabler of collaborative improvement processes” (Middel et al., 2006: p. 341).
Hence, trust between buyer and the contractors needs to be tested to put CI capabilities into perspective. The same definition of Middel et al. (2006) has been used throughout this paper: “the
belief of a firm that its partner in a relationship will act in the firm’s best interest in circumstances where that partner could take advantage or act opportunistically to gain at the firm’s expense
(McCutcheon and Stuart, 2000).” Open-ended questions and probing techniques were used to ensure a
good level of quality in the research and get detailed answers. The interviews were held in Dutch, collected with an audio recorder, transcribed afterwards and translated to English. After the interviews had been transcribed and analyzed accordingly, a focus group was organized aiming at gathering people from the different firms inherent to this research. Contents of the focus group were derived from the outcomes of the interviews focusing at clarifying, broadening and deepening similarities and/or differences. Furthermore, questions that were not sufficiently answered during the interviews were asked again. The benefit of organizing a focus group is that it aids the exploration of a certain topic from different perspectives when a diverse group of people is brought together and comments of a group member can be related to experiences of other members (Kitzinger, 1995). Six people attended the focus group meeting, including the contract owner of the buyer and the contract user and executor of both the buyer and contractor X. Additionally, someone specialized in Continuous Improvement activities from the buyer attended the focus group. The contract owner of Contractor X and the contractor owner, contract user and executor of Contractor Y declined the invitation.
3.3 Ensuring quality criteria
was performed at a firm operating in the process industry, there was no reason to assume that the relationship between CI and CoI is context specific and since interviews were held at multiple contractors, results are generalizable. Lastly, this research was reliable in the sense that information was gathered using a voice recorder, giving the researcher the chance to be more an observer during research and transcribe the information in a later stage. Since there was one researcher involved in the interviews, results are also more reliable because there were no interpretation problems between researchers, which is inherent to the use of different interviewers.
3.4 Data analysis
Figure 3.1: Coding scheme
Based on figure 3,1, findings of this research were depicted. In addition, appendix 4 provides more insight in what quotes have been assigned to which first-order codes. In the results first a within analysis is performed, which is highly important as Eisenhardt (1989: p. 540) noted: “The volume of data is all
the more daunting because the re-search problem is often open-ended. Within- case analysis can help investigators cope with this deluge of data.” It was performed by comparing the buyer and contractor
inherent to a specific case. This analysis was performed based on the coding scheme, which further resulted in a classification indicating how well the buyer or contractor performed on a specific second order theme. Not all themes are identifiable in terms of either high, medium or low. Rather, these look at whether a certain factor is present at the own firm, or how one firm perceives the other firm to perform inherent to a case. The within analysis, it simplifies the next step, the cross case analysis as it is also aimed at finding patterns in the data by looking for similarities and differences between different cases (Eisenhardt, 1989). This juxtaposition will aid to answer the research question as this aims at looking for differences in CI capabilities in the cases and how this leads to a higher or lower level of CoI.
4. RESULTS
To guide the reader through the results, firstly, the within case analysis will show how the patterns as presented in the coding scheme work in practice for Case A and B separately. This will indicate how well the buyer and service contractors perform based on their CI capabilities and whether the prerequisites are in place for CoI. Second, a cross case analysis was performed that focuses on understanding why for Case A, CoI is executed more satisfactory at the moment compared to Case B, and how CI capabilities relate to this phenomenon. In the Coding Scheme this yet has not been made clear, however, will be explained in the cross case analysis as this emphasizes how all related concepts as discussed in the within analysis influence the level of CoI. Lastly, a causal model is presented to show what role CI capabilities play in the determination of the level of CoI and how the relation is between the Capabilities and CoI.
4.1 How do CI capabilities influence CoI: a within case analysis
well as being able to work interdepartmental, i.e. in working groups aimed at enhancing CI. The aggregation of the CI capabilities into ‘problem solving practice’ and ‘likelihood that CI will become common practice’ is also observable from comparing the characteristics of CI capabilities in table 2.1 with the first-order codes in figure 3.1 as similar wordings and terms are used. The ‘drivers for CoI describe the external factors which are not CI capabilities but factors in the relationship between the buyer and contractor that play a major role in determining the level of CoI. Note that for these last four themes it is denoted what the perception is about the other firm belonging to the case. So for example, in Case B, the buyer says that Contractor Y scores low on ‘Physical and Mental accessibility’.
Table 4.1: Description of within case analysis
Case A Case B
Buyer Contractor X Buyer Contractor Y Problem solving practice
Ad-hoc problem solution Low High Low High
Structural problem solution High Low High Low
High priority problems Similar priorities Similar priorities Similar priorities Similar priorities
Likelihood that CI will become common practice
Motivation to participate in CI High Medium High Medium
Drivers for achieving a higher degree of cooperation internally
Medium Medium Medium Low
Conditions to participate in CI Highly present Highly present Highly present Barely present
Drivers for success of CoI
Level of trust in partner Highly present Highly present Moderately present Moderately present
Physical and mental accessibility of partner
High High Low Medium
Role that CoI plays in the contract
Intentional role Intentional role Intentional role Operational role
Taking time to work on improvements with partner
High High Low to medium Low to medium
COI LEVEL High, resulting in long-term, strategic improvement projects/objectives.
4.2 Within case analysis - Case A: Buyer and Contractor X
Case A had been defined as the case in which CoI is currently executed satisfactorily. Throughout this section table 4.1 for Case A will be outlined and explanations about similarities and differences will be provided between buyer and Contractor X. Lastly, the paragraph that is included in the contract about CoI will shortly be outlined and related to the current satisfaction about execution.
Problem solving practice
Within Contractor X there is more focus on ad-hoc problem solving, rather than structural problem solving. This mainly stems from the fact that there is no formal process by which improvements are monitored. The contract owner of Contractor X stated “Well, this is not done very adequately I have to
admit. Even though it should be done to see whether the solution is found as it was suggested in the first place.” On the other hand, at the buyer the way of problem solving is more sophisticated as expressed
by the contract user of the buyer “There is a complete process. So if you wish to do a suggestion it needs
to be assessed, technically and in terms of contents. When it gets accepted it gets a certain priority…”
This is also showed by how improvement projects are prioritized through separating between urgent improvement projects and projects that do not need direct attention, and a higher degree of double loop learning for the buyer. Moreover, during multiple interviews with the buyer it was stated that whenever problems occur that they usually aim at finding the root cause with the aid of a lean-six sigma structure. Something which has not been implemented at Contractor X. Both firms showed to have the most similarities when it comes to seeing a problem as one with a high priority. For example, both the contract users of the buyer and contractor X stated: “It is most important that safety is not at stake” and “When
there is a training about safety, often my entire group of employees is involved.” Overall, in terms of
problem solving practice one might say that Contractor X has the desire to take it to the next step, which means more structural problem solutions, however, it still lacks essential components such as a process that monitors improvement suggestions and because problem are solved rather ad-hoc, learning is also more single-loop focused.
Likelihood that CI will become common practice
experienced in their job and know the ins and outs at the company. They are also given time to think about improvements and to make suggestions to their direct supervisors. This also became clear through active participation in working groups by people from both the buyer and Contractor X. Multifunctional positions are used, however, are not common practice and are mostly used in an ad-hoc manner. Contractor X stated: “You have to make people multifunctional, so also train them in doing different
work. As a result they can be used more throughout the company. I think we already have that to some extent.”
Drivers for success of CoI
Looking at the drivers for success of CoI, it became evident that the buyer and Contractor X show to meet many of the prerequisites to have a good cooperation. Firstly, there is a high degree of trust because they are already working together for a relatively long time and many employees of Contractor X have worked at the buyer because the work they are performing used to be done internally by the buyer. Moreover, the contract user of the buyer stated “When I walk through the city center with my wife and
approach someone that works at Contractor X, I tell my wife that it is a colleague while it is actually not.” Comparable statements were made by other interviewees stating that there is a high degree of trust.
The fact that Contractor X actually has its office on the same terrain as the buyer further increases the physical accessibility. Mental accessibility was also sufficient since both firms had the feeling that they were understood by each other which became very apparent during the focus group were it was labeled in the Dutch saying: “Ouwe Jongens Krentenbrood”, implying the high level of collegiality between the firms. Something which has been referred to as a very positive factor by the Continuous Improvement Specialist of the buyer during the focus group.
Contract related drivers for success of CoI
In the contract of Case A, a paragraph was found that clearly describes intentions between buyer and contractor to continuously improve each other’s quality of services. Furthermore, in the contract it was described that there were two specific improvement goals: the timely commissioning of jobs to improve planning, and, timely delivery and freezing of scope, especially in larger projects. To aid cooperation between both firms, they have planned formal meetings to discuss about certain topics. (see table 4.2).
Table 4.2: Formal meetings for Case A
When Topic What
Yearly Contract assessment Setting norms for next period.
Quarterly Quarterly review Safety issues, KPI’s, disputes, business developments,
complaints processing & long-term planning.
Monthly Operational meetings Safety issues, improvement actions, KPI’s, operational achievements & quotes and invoices.
Throughout the different levels at both buyer and Contractor X there is no real consensus about what role CoI should play in the contract. Some of the interviewees stated that it should not be very concretely defined; it was mentioned by some interviewees that it does not need to be in the contract because it would be in the system of the people anyhow. On the other hand, at higher levels of the firms it was stated that putting it in the contract had its effects as to formally denote the intentions between each other. Furthermore, due to the fact that lower level managers are not very aware of concrete contract definitions, they might not see the benefits of putting it in the contract, simply because of not knowing what is actually in it. Most issues about CoI were said to be part of the quarterly meetings were mostly the KPI’s are discussed and adapted where necessary. Furthermore, it was mentioned by Contractor X that the timely commissioning still was an issue that needs to be solved, though it is something that is part of discussion at the moment. In general, the CI paragraph is something which is more intentional rather than a concrete performance measure, which was also mentioned during the focus group by both buyer and Contractor X.
Level of COI
All-in-all, both parties show high levels of trust and a willingness to invest each other, this is perfectly outlined by the following quote of the contract owner of the buyer: “We were not satisfied about the
services of Contractor X considering the greasing. We did not want to do it ourselves so we offered to support them to create a system to do it for all factories. This to ensure to have good reports and to make sure that Contractor X has sufficient workload to keep track of everything.” The statement can be
considered as a structural problem solution between both the buyer and Contractor X because it involves a solution suiting both interests aiming at multiple factories. The fact that the buyer and Contractor X showed to be highly motivated to participate in CI projects together with a high degree of trust result in such strategic projects. Knowledge about CI tools and techniques by either buyer or Contractor X further increases the effectiveness by which solutions are implemented.
4.3 Within case analysis - Case B: Buyer and Contractor Y
Case B had been defined as the case in which CoI is currently not executed satisfactorily. Throughout this section table 4.1 for Case B will be outlined and explanations about similarities and differences will be provided between the buyer and Contractor Y. Lastly, the paragraph that is included in the contract about CoI will shortly be outlined and related to the current satisfaction about execution.
Problem solving practice
when we make improvement suggestions. These are things that are being solved directly.” Note that
working instructions are being used for a single project. Therefore, there is no clear structure on how to implement solutions in a broader scope. Since the buyer had shown that there is a formal process and that it is aiming at structural problem solutions, both firms can be said to be very different in terms of their problem solving practice. When it comes to seeing a problem as one with the high priority, interviewees of both firms stated similar subjects, mainly about safety.
Likelihood that CI will become common practice
Furthermore, for Contractor Y it will be far less likely that CI will become a common practice. This is mainly because the use of trainings in CI is not seen as confirmed by the contract user of Contractor Y: “No I do not think training is necessary. The guys have that much experience, so they will see in practice
when something has to be changed and then they will call me and we will start a process.” Also the
conditions to participate in CI did not seem to be fully present due to a lack of time to work on improvements which also has to do with the fact that the profit margin was perceived to be very low according to the contract owner of Contractor Y. Hence, working on improvements that benefit the buyer would be time consuming and even further limit the profits. Overall, it was hard to grasp to what extent people of Contractor Y can actually contribute to CI practices because higher management showed not to be fully aware of the daily operations of the department that is working on the premises of the buyer. The contract owner stated that usually he would only pay a visit once every two months to the office closest to the buyer and without consideration rejected to participate in the focus group which could also have been seen as a chance to improve the inter-firm practices.
Drivers for success of CoI
“Well, it is not working out with this firm. We have had lots of conversations at different levels but professionally they disappoint us enormously. We do not see a lot of improvement potential.”, a quote
the moment: “I do not think it has influence. Contractor Y often has practical issues. Sometimes I think
it is not the level I am looking for because it is of such an operational level that it can be delivered tomorrow.” Nevertheless, when the contract user of Contractor Y was asked whether the agreements
that were made about CoI were executed properly, he answered: “I think so yes. I cannot be everywhere
so I assume that when we agree something that the employees perform the job. Regarding the KPI’s that we have handed in at the moment, all improvement suggestions have been accepted, except one.” So on
the side of the contractor there may be the perception that they are actually performing well because they are handing in improvement suggestions, which is rather operational. An intriguing fact is that on the one hand the contractor has stated that profit margins are very low and that they would like to earn a higher profit but on the other hand they referred to CoI as being very important, i.e. to make improvement suggestions to benefit the buyer: “You always have to do it. Then the customer would only
say, perfect, good thinking. That is only good for the relationship.” (contract owner, Contractor Y). It is
essential is to align the vision on CoI to be able to collaboratively improve satisfactorily, however, as the relationship is at the moment it does not seem to improve on the short-term. For example, the contract user of Contractor Y is active in a working group with the buyer focused on CI, however, during one meeting he did not show up without cancelling the appointment, which happened again when the focus group was held. Hence, it seems that Contractor Y currently does not have great willingness to participate in CI activities with the buyer.
Contract related drivers for success of CoI
Level of COI
All-in-all, due to the fact that improvement suggestions by Contractor Y are rather operational and the fact that there is a lack of trust to fully exploit the potential of CoI, suggestions are of a low level. Furthermore, Contractor Y did not show to have full motivation to participate in CI and did not see the benefits of training employees in CI. Therefore, there is a constant mismatch in communication at higher levels between both buyer and Contractor Y. While Contractor Y seems not very aware of their perceived low level of improvement suggestions, the buyer does not seem to be able to address it accordingly.
4.4 Cross case analysis: explanation of similarities and differences for Case A and Case B
Taking the story back to where it all started, CI capabilities have been defined in table 2.1 of this research and an in-depth multiple case study delivered a picture on how the different firms perform on CoI and how their CI capabilities influence their CoI activities. First, it was confirmed that Case A scores better on CoI, which also became clear from table 4.1, where Contractor X scored better on the drivers for CoI. Second, from the interviews, focus group and other working groups which were observed, it became clear that on most CI capabilities, both cases score fairly similar. In terms of problem solving practice, the buyer is much more looking for structural solutions. This also has its influence on other CI capabilities such as learning activities that show a higher degree of double loop learning, a longer-term improvement horizon and better monitoring of improvements to see whether it actually has effect. The reason that there is such a big difference in capabilities between the contractors and the buyer lies in the CI capability, ‘Training in CI’. Due to the fact that pretty much all employees of the buyer have been trained in the basic tools of Six Sigma, and that they even created an extra-organizational Lean-Six Sigma structure shows that the buyer tries to take CI to a next level. Third, from table 4.1 it already became clear that for Contractor Y it will be far less likely that CI will become a common practice. ‘Training in CI’ is mostly part of this aggregated dimension and because no one was actually trained in CI at Contractor Y, some at Contractor X and almost all at the buyer this has a relationship with the level of CoI due to the creation of integral knowledge about improving. The only CI capability where a minor difference was found was in terms of inter-functional collaboration because all firms showed to mostly use people cross-functional when needed, so more in a reactive manner when there was for example a chance that work was not being done in time.
Table 4.3 Formal meetings for Case B
When Topic What
Yearly Evaluation meetings Evaluating the performance of service provider and planning
of next period.
Two-monthly
Tactical meetings KPI’s, accomplished quality and service levels, and adapt these where necessary.
Nevertheless, other factors than CI capabilities showed to be of greater influence in determining the level of CoI: trust showed to be of great influence in determining the level of CoI that can be reached between a buyer and supplier. All interviewees stressed trust to be very important during the interviews. More surprising was that there are more external factors which are critical in the success of CoI. It became clear that sometimes nobody is physically near or easily reachable making it rather difficult to talk about issues or potential improvements. This was stressed by the buyer where the Contract User stated “Within Contractor Y I have about 12 to 13 people that I can approach on different levels to have
a one-on-one conversation, for Contractor Y this is one.” Furthermore, especially from the buyer’s side,
there sometimes was the perception that the people from Contractor Y were mentally not able to talk about the same issues due to knowledge or capability problems. With Contractor Y, the buyer had some negative experiences about contract interpretations, which were mostly financially based. During multiple interviews from Buyer and Contractor X this was stressed. Lastly, when profit margins are low for a certain company, they might perceive doing suggestions for improvements as a waste of time because this will only be time-consuming, hence, increasing the possibility to not earn a profit. It actually seems from the interviews that these external factors are of greater influence on whether companies can cooperate in the first place. Logically, not being able to cooperate due to a lack of trust, misconceptions or contractual disputes will certainly not lead to Collaborative Improvement. Therefore, the external factors can be seen as prerequisites of what needs to be in place before firms can even desire to obtain high levels of CoI. This can also be seen as the main difference between Case A and Case B.
4.5 The role of CI capabilities in the success of CoI
Table 4.4: Explanation of the ‘Collaborative Improvement Model’
Factor: Leads to
factor:
Explanation:
Level of trust Role of CoI
in contract
When there is a high level of trust between buyer and contractor, CoI needs less concrete specification in the contract because it is expected that both firms handle in both interests. This also applies vice-versa in the sense that with putting intentions to work on CoI in a contract shows that there is at least ‘some’ degree of trust.
Physical and mental accessibility
Taking time to work on improvements
When people easily get in touch with people from the other firm and are talking the ‘same language’ there will be more mutual understanding about why it is important to think about improvements. This relationship could also work the other way around that when people take time to improve with the other firm, they have less of a struggle finding each other.
External Factors (prerequisites)
Level of CoI All aforementioned factors: level of trust, role of CoI in contract, physical and mental accessibility and taking time to work on improvements form the prerequisites to even think about starting CoI activities. Even though CI capabilities might be very similar and high, having no trust, or not being able to speak to each other will never result in CoI. Degree of formal
training in CI
Internal CI capabilities
When firms invest in trainings in CI, people are enriched with methods and tools to work on CI, so they will approach problems differently, learn from it and they know the importance of monitoring the improvements. Furthermore, these people will be able to participate in cross-functional teams. Therefore, training can be seen as the umbrella of other CI capabilities.
Internal CI capabilities (degree of formal training in CI)
Level of CoI When people of both firms are given training in CI they know what the benefits are of continuously improving processes/systems/circumstances. As a result of this they know how to put in practice specific tools and methods and with the awareness of the pros of CI through the training people will show higher levels of CoI.
External Factors & Internal CI capabilities
5. DISCUSSION
This study showed that CI capabilities of both buyer and service contractor influence the level of CoI as agreed upon to a certain extent. Moreover, this study suggests that enhancing this capabilities is in general part of training in CI as this aims at developing CI capabilities. This is in line with what current literature has found about the separate CI capabilities. For example in learning quality concepts (Kaye & Anderson, 1999), double loop learning (Bond, 1999), problem solving techniques (Marler, 1998) and monitoring new processes (Ehie & Sheu, 2005). It was evident that the one firm that organized trainings in CI for all its employees learned how to apply basic tools and this was reflected in the CI capabilities employees had acquired. This is also confirmed by what literature states about having received such trainings, because people are enriched with tools and techniques to solve problems (Bessant et al., 2001), learn about whether implementation of a solution should be aimed at the short-term or long-term (Bessant et al., 2001), they are aware of how to monitor the process of the suggestion (Bessant et al., 2001; Ehie & Sheu, 2005) and training in CI also shows to benefit people to work in multifunctional teams (Bhuiyan & Baghel, 2005). Therefore, the more people are trained in CI the more they know the benefits of working on improvements on a continuous base. As a result, it will certainly be easier to be successful in CoI because of a higher awareness of the benefits. Based on these arguments, this study proposes:
P1: Training in Continuous Improvement is the source of enabling CI capabilities which positively influences the level of CoI.
CI capabilities did not seem to specifically relate to CoI deployments, mainly because there were such big differences between the CI capabilities in both cases between the buyer and the contractor. However, when the likelihood that CI will become a common practice is high, which according to this research also stems from whether motivation is present, problem solutions seemed to be more long-term and structurally oriented compared to when firms are less motivated to work on CI. This is in line with what Middel et al. (2006) stated that a firm should be interested in working on both firm’s goals. Next, it endorses what Bessant & Francis (1999) had found that motivation is key in obtaining high levels of CI. Less motivation will in all probability lead to more operational deployments due to the fact that firms are sloppier in implementing improvements. Based on these arguments I propose:
P2: When people show to be highly motivated, higher CI capabilities lead to more strategic CoI deployments.
more knowledge will be generated. Thus, the more and longer both firms cooperate and work on improving CoI, the better the performance will be because they have more experience and knowledge due to past projects and activities. Sharing this knowledge has also been linked to efficiency and mutual understanding (Postrel, 2002). Therefore, it can be posited that the more knowledge of CI both buyer and contractor have, the more likely it is that improvement activities between both firms will succeed. Therefore, mutual understanding is key in the relationship between buyer and contractor and this is enhanced through having similar skills and motivation to work on the same goals. Based on this it is proposed that:
P3: Buyer and contractor that have similar and highly developed CI capabilities and speak the same ‘improvement’ language will experience higher levels of CoI.
Due to the fact that CoI is aiming at making gradual improvements that benefit both the buyer and contractor, it is of paramount importance to consider CoI when new contracts are negotiated. In this research I found that intentions should be put into contracts because buyer and contractors will be more aware of the fact that they have to work on CoI, however concreteness should be up to buyer and contractor depending on the goals that they wish to achieve. Important to take into account is that adding such a paragraph should not make contracts more complex (Ellram & Tate, 2015) as this will lead to increased costs (Mooi & Ghosh, 2010) rather than making improvements. What particularly was shown by this research is that too concrete contract definitions could lead to improvement suggestions that are of a too operational level rather than strategic. Based on this I propose that:
P4a: Putting CoI into a contract increases the awareness of both buyer and contractor to work on CoI. P4b: Too concrete contract definitions lead to an operational CoI level rather than a strategic level.
considered in contracting, quality and timeliness are not taken into account (Gransberg & Ellicott, 1997). As a result, there will be less or no time available to work on improvements. Furthermore, too specific contracts generally increase costs to buyer and contractor (Mooi & Ghosh, 2010). Therefore, buyer and contractor need to be very clear about what can be expected in terms of CoI from each other because as has been shown by this research, very concrete definitions will rather lead to highly operational improvement suggestions. Based on this I propose the following about prerequisites for CoI.
P5: External factors need to be in place first between buyer and contractor which are a prerequisite to activate the benefits of CoI. These external factors are:
1. Trust between buyer and contractor
2. Physical and mental accessibility of the partner
3. Clarity about which role should be attributed in the contract about CoI 4. Taking time to work on improvements with the partner
6. CONCLUSION
This paper is the first to link CI capabilities to the level of CoI. It was found that CI capabilities enhance the level of CoI, mainly through CI trainings. CI trainings were found to be the umbrella to learn and improve the CI capabilities. However, prerequisites in the relationship need to be in place first before a buyer and contractor should engage in CoI. These are named ‘External Factors’ and include: trust, physical and mental accessibility of the partner, clarity about which role should be attributed to CoI in the contract, and time should be taken to work on improvements. Therefore, from this research it can be concluded that having very high CI capabilities do aid the process of achieving higher CoI levels because such firms will have more understanding about which tools and techniques to use, improving efficiency. Most of all, firms that are highly trained know the added-value of CI, hence, are more likely to collaboratively work on both short-term and long-term goals with a partner. As a result, this study proposed a causal model showing which prerequisites and CI capabilities play an essential role to obtain high CoI levels and how they relate to each other.
Managerial Implications
levels of CoI with another firm because the prerequisites should be dealt with first in the relationship with the other firm. Lastly, this research has presented a clear framework on how exactly high levels of CoI can be achieved, or at least what needs to be in place in what sequence. Hence, managers can use this to make a clear roadmap with clear steps indicating what should be worked on first and what should be the follow-up. Thus, working on External Factors first before CoI projects are started. Though, this does not implicate that the single firm cannot work simultaneously on improving the own CI capabilities.
Limitations and research implications
Even though I have tried to clearly grasp how individual CI capabilities influence the level of CoI, it is not possible from this research to show how the individual capabilities relate to the level of CoI because both cases showed similar patterns with one firm to have high capabilities, whereas the other had rather low capabilities. Furthermore, this is the first research that looks into the influence of CI capabilities on the level of CoI, which also delivered insights about multiple prerequisites. Hence, more research is necessary in this subject to assess whether there are more factors that determine the level of CoI than has been found in this research. This could for example be a research on the prerequisites to work on CoI with a partner as it seemed that this mainly determines whether CoI will work in the first place. Moreover, the firm that showed low levels of CoI before the research did participate to a lesser extent in the study, for example by not participating in the focus group and cancelling an interview. Therefore, in Case A more interviews were conducted which can possibly influence the results of this study.
7. REFERENCES
Anand, G., Ward, P. T., Tatikonda, M. V., & Schilling, D. A. (2009). Dynamic capabilities through continuous improvement infrastructure,.Journal of Operations Management, 27(6), 444-461.
Angehrn, A. A., Maxwell, K., Luccini, A. M., & Rajola, F. (2009). Designing effective collaboration, learning and innovation systems for education professionals. International Journal of Knowledge and
Learning. 5(3-4), 193-206.
Argote, L., & Miron-Spektor, E. (2011). Organizational learning: From experience to knowledge. Organization science, 22(5), 1123-1137.
Arnold, U. (1999). Organization of global sourcing: ways towards an optimal degree of centralization,
European Journal of Purchasing & Supply Management, 5(3), 167-174.
Bessant, J., Caffyn, S., Gilbert, J., Harding, R., & Webb, S. (1994). Rediscovering continuous improvement. Technovation, 14(1), 17-29.
Bessant, J., Caffyn, S., & Gilbert, J. (1995). Continuous improvement: the European dimension. In Management and new production systems, Proceedings of the 2nd international conference of the
European Operations Management Association, Enschede, University of Twente, 31-40.
Bessant, J., & Francis, D. (1999). Developing strategic continuous improvement capability. International Journal of Operations & Production Management, 19(11), 1106-1119.
Bessant, J., Caffyn, S., & Gallagher, M. (2001). An evolutionary model of continuous improvement behaviour. Technovation, 21(2), 67-77.
Bhuiyan, N., & Baghel, A. (2005). An overview of continuous improvement: from the past to the present. Management Decision, 43(5), 761-771.
Bindl, U., & Parker, S. K. (2010). Proactive work behavior: Forward-thinking and change-oriented
action in organizations. Washington, DC: American Psychological Association, 2, 567-598.
Bond, T. C. (1999). The role of performance measurement in continuous improvement. International
Brown, T. L., & Potoski, M. (2003). Contract–management capacity in municipal and county governments. Public Administration Review, 63(2), 153-164.
Caffyn, S. (1999). Development of a continuous improvement self-assessment tool. International
Journal of Operations & Production Management, 19(11), 1138-1153.
Cagliano, R., & Spina, G. (2002). A comparison of practice-performance models between small manufacturers and subcontractors. International Journal of Operations & Production Management, 22(12), 1367-1388.
Cagliano, R., Caniato, F., Corso, M., & Spina, G. (2005). Collaborative improvement in the extended manufacturing enterprise: lessons from an action research process. Production Planning & Control, 16(4), 345-355.
Chapman, R. L., & Corso, M. (2005). From continuous improvement to collaborative innovation: the next challenge in supply chain management. Production Planning & Control, 16(4), 339-344.
Choo, A. S., Linderman, K. W., & Schroeder, R. G. (2007). Method and context perspectives on learning and knowledge creation in quality management. Journal of Operations Management, 25(4), 918-931.
Clark, R. E., Feldon, D., van Merriënboer, J. J., Yates, K., & Early, S. (2008). Cognitive task analysis. Handbook of research on educational communications and technology, 3, 577-593.
Coetsee, L. (1999). From resistance to commitment. Public Administration Quarterly, 204-222.
Corso, M., & Pellegrini, L. (2007). Continuous and discontinuous innovation: Overcoming the innovator dilemma. Creativity and Innovation Management,16(4), 333-347.
Crant, J. M. (2000). Proactive behavior in organizations. Journal of management, 26(3), 435-462.
Davenport, T. H. (1993). Need radical innovation and continuous improvement? Integrate process reengineering and TQM. Planning Review, 21(3), 6-12.
