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Technical, economic and political factors in advanced manufacturing technology implementation
Journal of Engineering and Technology Management, 7 (1990) 129-144 Elsevier
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Technical, economic and political factors in advanced manufacturing technology implementation James W. Dean, Jr., Gerald I. Susman and Pamela S. Porter* Center for the Management of Technological and Organizational Change, College of Business Administration, the Pennsylvania State University, University Park, PA 16802, U.S.A.
Abstract The process of implementing advanced manufacturing technology (AMT) begins after the decision to commit funds for the new technology has been made. The implementation process consists of making and implementing a series of decisions. Typical decisions include system functions, resource commitments, location of pilot projects, and schedule. Such decisions have three objectives: technical, economic, and political. Our model includes four major factors that influence implementation success: the level of tolerance for acceptable decisions, the level of technical, economic, and political resources available for implementation, the direction of relationships among the three objectives, and the extent to which the objectives are balanced in decision-making. Dynamics by which these four factors interrelate are discussed. Examples from an electronics company are used to illustrate the model, its theoretical contributions are discussed, and suggestions are offered as to how to successfully manage the interaction among the factors in the model. Keywords.
Advanced manufacturing
technology,
Implementation,
Politics.
1. Introduction Technologies have evolved over the last decade that hold the promise of revolutionizing manufacturing. These technologies, collectively known as advanced manufacturing technology (AMT) , include robotics, computer-aided design, engineering, and manufacturing (CAD, CAE, CAM), and manufacturing resources planning (MRP II). Firms are increasingly attempting to integrate these technologies into computer integrated manufacturing (CIM) systems. AMT is of enormous strategic importance, as it can improve the effectiveness of manufacturing in terms of cost, quality, flexibility, and leadtime (Economist, 1987, Gunn, 1987). AMT is being adopted, to varying degrees and in various combinations, by manufacturing firms around the world. One estimate is that the global market for manufacturing automation will grow to $63.3 billion in 1991 (Malone, 1987). Merely deciding to adopt AMT, however, does not guarantee success; effec*Presently
at the University
0923-4748/90/$03.50
of Cincinnati.
0 1990-Elsevier
Science Publishers
B.V.
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tive implementation is also necessary. As Davis (1986) puts it, “Adoption of advanced manufacturing technologies does not ensure their successful implementation. [They] are not turnkey systems” (p. 12). Our own experience, that companies have had mixed success in implementing advanced technologies, dovetails with others’ impressions (e.g. Ettlie, 1986; Majchrzak, 1988). While the business press often focuses on success stories, many firms (even those ultimately successful) experience substantial difficulties in implementation. These problems are seldom technical per se, but more often comprise a blend of technical, economic, and political concerns. The strategic potential of AMT can only be fully exploited if these new technologies are effectively implemented, which in turn depends on the quality of the decisions that constitute the implementation process. We present in this paper a framework to explain how the decisions involved in AMT implementation affect project success. We intend the framework both to help managers avoid the pitfalls and reap the strategic benefits of advanced technology implementation, and to guide future research. We are not concerned in this paper with adoption decisions, whereby a firm decides whether capital will be allocated to a particular AMT project. Such decisions involve a blend of strategic and financial considerations that are different from those discussed here (Dean, 1987). We are focusing rather on the set of decisions involved in implementation, that is, those made after funds have been committed, which bring the new system to fruition. In the sections to follow we outline our framework for AMT implementation, illustrating the model with examples of the implementation process in an electronics company. We conclude with an identification of the theoretical contributions of the model, and some brief recommendations for how managers can use it to enhance AMT implementation effectiveness. 2. AMT implementation as a decision process The implementation of AMT is fundamentally a process of making and carrying out a series of decisions. Mintzberg et al. (1976) point out that any major decision is implemented via a series of smaller decisions. Hetzner et al. (1986) make a similar point with respect to advanced technology: “Implementation [is] a set of decisions made at different times and levels in the organization” (p. 243). Boddy and Buchanan (1986) note the “overriding importance of managerial decisions and organizational choices in determining the effectiveness of new technology” (p. 4). Of course, implementation does not consist only of making decisions. Each implementation decision (e.g., to provide extensive training for operators) must itself be implemented through some sort of action (planning the training). This action will create still more decisions (should be training be modular? ) , which in turn are implemented through action (presenting the modules). Thus, im-
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plementation consists of a series of decisions and actions, in which each decision necessitates actions which involve still more decisions. It is through this web of decision and action that new manufacturing technology gradually evolves from an approved proposal to a functioning system. New technology implementation is generally characterized by decisions concerning system function, equipment, resources, organization, location, and schedule (Boddy and Buchanan, 1986; Pinto and Slevin, 1987). While these decisions may occur in the order above, a variety of sequences are possible, and many projects are characterized by reexamination and revision of earlier decisions (Leonard-Barton, 1988). The first two types of decisions (system function and equipment) involve system design. System function decisions determine what the new system will (and will not ) be expected to do. Equipment decisions concern what type of technology to use, which components of the system will be purchased versus designed in-house, and vendor selection. (While firms make some broad decisions about such issues prior to adoption, there are generally many function and equipment issues left to be resolved during implementation.) The next two types of decisions deal with implementation team design. Resource decisions are primarily concerned with the number of people to be devoted to the project and the proportion of their time to be made available. Organizational decisions are concerned with which functional area will take the lead on the project, which functions or departments will be represented on the implementation team, to whom the team will report, and how much authority it will have. The composition and organization of the implementation team can have a profound effect on the success of AMT (Majchrzak, 1988). The final two types of decisions deal with project execution. Location decisions involve identifying product lines or plants in which to pilot the new system, while scheduling decisions determine the pace of piloting, introduction, and scale-up. 3. Objectives of AMT implementation Managers must consider three types of objectives -technical, economic, and political (TEP) - in making implementation decisions. The technical objective requires that the system be successful in meeting the technical performance requirements associated with the manufacturing process in question. Technical objectives might include cutting speed and precision, scrap and rework minimization, setup time, inventory reduction, and so on. The extent to which such objectives are met is a critical aspect of project success, as technical performance is the sine qua non of effective implementation. The economic objective requires that the firm be in a stronger financial position after AMT is implemented. This can occur by AMT enhancing the flow of revenues, lowering costs, or both. The economic benefits are expressed in
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such terms as payback period, internal rate of return (IRR), and net present value (NPV). Many observers have noted the difficulty of translating the strategic advantages of AMT into dollars and cents, given current cost accounting practices (Kaplan, 1986). Technology involves politics at both the interorganizational (Weiss and Birnbaum, 1989) and intraorganizational (Pettigrew, 1973) levels. Here we are focusing on the latter. Prasad (1986) and Wilkinson (1983) have both noted the high degree of political activity surrounding process innovations. The political objective requires that the new system satisfy its sponsors and users by helping them to achieve their respective goals, and to enhance or at least maintain their organizational status. Sponsors (Schon, 1963; Maidique, 1980; Dean, 1987) that have committed resources to a given project will use its success to make decisions about future AMT projects, as well as the futures of those who championed this project. Users are obviously those who will be involved most closely with the technology. Their support of the new technology will depend on their perception of its political benefits relative to the time and energy required to learn to use the new technology proficiently. We will be summarizing our framework as it emerges with a set of propositions. As is typical of such frameworks, the initial propositions are oriented toward definitions and assumptions. The latter propositions are more oriented toward relationships and predictions. Proposition 1.
AMT implementation will be considered successful by those involved to the extent that it meets technical, economic, and political objectives.
4. Factors influencing implementation success The likelihood that implementation decisions will simultaneously satisfy all three objectives depends on four factors: (1) tolerance, (2) resources available to the project, (3) the direction of the relationships among the three objectives, (4) the extent to which implementation decisions achieve balance among all three objectives. Tolerance
Technical, managerial, financial and user personnel each have expectations about the level of success - relative to TEP objectives - the project should attain. The tolerance for an AMT project is a function of these expectations: As expectations increase, the level of tolerance decreases, and vice versa. Tolerance may also be increased by a willingness among concerned parties to be patient, as the technology may take some time to reach its goals, and to understand that temporary setbacks in achieving these goals are an expected part
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of new technology implementation. The impact of tolerance on the effectiveness of implementation is straightforward. Proposition 2.
The higher the level of tolerance, the greater the likelihood of successful AMT implementation.
Resources The amount of technical, economic and political resources available is determined by the project’s organizational context. Technical resources include the abilities of people assigned to work on the project, as well as the capability of existing technology relevant to the project. Economic resources available to the project are a function of the firm’s financial position and the funds authorized for the new technology in the capital appropriations process. Political resources are analogous to the accounting concept of goodwill, an asset related to the optimism of sponsors and users that the project will benefit them and the organization. Their degree of optimism will influence how hard they will work to make the project successful. Technology implementers sometimes are successful in garnering the necessary levels of technical, economic, and political resources before implementation begins, but such resources can rise or fall as the project progresses. Technical resources might be increased by simplifying manufacturing operations so that AMT may be more effectively used, economic resources might be increased by increasing the funding available to the project, and political resources might be increased by generating enthusiasm among users. Proposition 3.
The greater the level of technical, economic and political resources available, the greater the likelihood of successful AMT implementation.
Direction of relationships The direction of relationships between any of the three pairs of objectives (technical and economic, technical and political, economic and political) influences the ease with which decisions can be made that will simultaneously satisfy all three objectives. A positive relationship between any pair of objectives means that achievement of an acceptable level on one objective increases the likelihood that the other objective will achieve an acceptable level as well. A negative relationship between any pair of objectives means that achievement of an acceptable level on one objective decreases the likelihood that the other objective will achieve an acceptable level. Tradeoffs between objectives are necessary when relationships between objectives are negative, as illustrated by the implementation decisions discussed below. Tradeoffs between technical and economic objectives can occur in making equipment decisions. When minimizing costs is the prime economic objective, it can conflict with the objective of maximizing technical performance, thus
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creating a tradeoff between the two. Leonard-Barton (1988) discusses a decision in which managers regretted the use of overly narrow financial criteria, at the cost of foregoing important technical advances. Such a tradeoff characterized the attempts of an electronics company to implement an automated shop floor control system. Management declined to purchase an off-the-shelf, mainframe-based system used successfully in other parts of the corporation, due to it high cost. It was decided instead to design a new system in-house using networked personal computers, with bar-code scanners as input devices. While technical personnel would have preferred a more traditional approach, they admitted to management that they thought they could eventually make a networked PC system work. Tradeoffs between technical and economic objectives can also occur when making location decisions. Often a simple and low-pressure pilot location is desirable from a technical standpoint, to further develop the technology before going on to other locations. Managers under pressure to secure rapid financial gains, however, may prefer to implement the system in a high-volume area. This places technical objectives (systematic development of the technology) in conflict with economic objectives. In the electronics company, the pilot location was selected by management, over the objections of project leaders, for two reasons. First, the product line produced in the area was in financial trouble, and management wanted to do everything possible to improve its performance. Second, a production control manager from this area lobbied for the pilot. Unfortunately, the product made in this area was among the most technically complex in the plant, which made it very difficult to evaluate the results of the pilot. Tradeoffs between economic and political objectives can occur when making resource decisions. Adding more persons to a project team may permit more personal attention to user’s needs (e.g., more and better training and user consultation), but exact an economic toll. Managers will thus be forced to make a tradeoff between inversely varying degrees of economic and political effectiveness in resource decisions. In the electronics company, man-hours allocated to the shop floor control system were very limited, due to management’s concern about overhead. In fact, neither the project manager nor the system analyst (who wrote most of the software) were devoted full-time to the project. Tradeoffs between technical and political objectives can occur when making system function decisions. The new technology may perform activities - either totally or in part - that were previously performed by people. It has been pointed out with increasing frequency over the past few years that technical change without human system change is unlikely to succeed (Adler and Helleloid, 1987; Ettlie, 1988; Hayes et al., 1988; Manufacturing Studies Board, 1986; Schonberger, 1986), and worker resistance to or ambivalence about changes in work procedures is common in the literature (Lawrence, 1969; Pennings, 1987; Zuboff, 1988). Unless plans are made to create new roles for employees
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or to minimize the impact of layoffs, workers will resist the implementation of the new technology. This puts implementers in the position of deciding between unlimited use of technology and satisfaction of user demands. Tradeoffs between technical and political objectives also occur in organization decisions, as team composition can be driven by political intrigue rather than technical expertise. Innovative technologies upset the power distribution in the firm, creating new sources of power while destroying old ones (Pettigrew, 1973). “Defense or extension of their organizational positions is a major motivating force for the actors involved in the decision process” (Child et al., 1987, p. 104). Thus people will strive to be part of the project team (which helps to shape the new power distribution) and to exclude rivals from participating. Such political machinations are independent of or even in opposition to the technical requirements of team membership. Managers may also have to trade off technical and political objectives in scheduling deployment of the new technology. Political pressures from sponsors (eager to impress their superiors) or users (desperate for help) may require faster deployment than is technically justified (Leonard-Barton, 1988). Alternatively, users may attempt to delay the deployment of the new system, so as to retain as long as possible the routines and procedures with which they are comfortable. The schedule for implementing the new system in the electronics firm was calculated with a heavy dose of politics. Very demanding deadlines were set for completing certain stages of implementation, so that the new system could be shown to corporate officials who would be visiting the plant on other business. Preparing for such “shows” drew the attention of project personnel away from pressing technical problems. Finally, tradeoffs between technical and political objectives can occur when making location decisions. Project managers generally wish to locate pilot efforts in settings of low to moderate technical complexity. If such sites are hostile toward the technology, however, while those supportive of the technology are in technically complex areas, managers will be forced to choose between technically and politically appropriate locations. As noted above, this was the situation faced by the electronics company in choosing a pilot location. Proposition 4.
The more positive the relationships (or the fewer the tradeoffs) among technical, economic, and political objectives, the greater the likelihood of successful AMT implementation.
Balance Balance is the extent to which attention is given to all objectives in the deliberations that lead to implementation decisions. Decisions in which all three objectives are given serious consideration are relatively balanced, whereas those
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in which some objectives are emphasized and others ignored are relatively unbalanced. The above examples involve tradeoffs between two objectives; we hypothesize, however, that implementation decisions often involve trade-offs among three objectives. Concentrating on a trade-off between any one pair of objectives and ignoring another pair runs the risk of not achieving at least one important objective, endangering overall project success. Proposition 5.
The more balanced the decisions made during the implementation process, the greater the likelihood of successful AMT implementation.
5. Illustration of the model Figure 1 provides a visual representation of the model. The three objectives of AMT implementation are represented by the three angles of the triangle. Positive or negative relationships between objectives are illustrated by + or -9 respectively. Figure 1 identifies five possible configurations of relationships among the objectives. Figure 1(a) represents the ideal but unusual situation in which all three relationships are positive. In this situation, not only are no tradeoffs between objectives necessary, but all of the objectives reinforce one another. Decision-making in such a setting would not be difficult, as any alternative that facilitated the attainment of any one objective would also facilitate the attainment of the others. Figure 1 (b) represents the situation in which technical and economic objec-
Fig. 1. Patterns of relationships between technical (T), economic (E) and political (P) objectives.
Fig. 2. Model for diagnosing implementation success.
conditions
for
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tives are mutually reinforcing, but achieving these objectives would incur a political cost. This could typify, for example, a system function decision in which assigning a greater proportion of tasks to a new system (as opposed to operators) would result in both technical and economic advantages. The operators, however, are unhappy with the proposal to substantially automate their jobs, and would resist such a decision. In Figure 1 (c ) , the economic and political goals are aligned, but the technical goal conflicts with both. Such a situation could occur in an equipment decision if the sponsoring managers will not support purchase of any equipment that cannot be shown to exceed the firm’s hurdle rate. But the technical personnel charged with purchasing the system are primarily concerned with technical performance, and are convinced that the necessary level of technical performance cannot be achieved using equipment that provides the required payback. Management’s assessment of the situation is that the technical personnel have been seduced by the potential of the technology, and do not feel that the level of technical performance desired by technical personnel is necessary or even desirable, given its cost. Figure 1 (d) could represent a resource decision in which devoting a number of technical experts to the team would result in both better technical performance and greater ownership of the outcome by the experts. Thus the technical and political goals are consistent. Staffing the team at this level, however, would be very costly, so these goals are inconsistent with the economic goals of the project. The pattern of Fig. 1 (d) could also characterize a scheduling decision, in which a slow pace would facilitate the technical success and political acceptance of the new system, but delay its economic benefits. Figure l(e) shows a variant of Fig. l(d) in which the user consituency is divided into professionals and workers, the latter being threatened by improved technical performance. In this case, attention might be given to reducing the threat that workers perceive from improved technical performance, perhaps by providing retraining opportunities and guaranteeing no loss in jobs or pay. The degree of balance in decision-making can be represented in the model by locating a given decision within the triangle. A perfectly balanced decision would be in the center of the triangle. One which attended only to a trade-off between political and economic objectives or political and technical objectives would be located off-center, closer to the side of the triangle with the satisfied objectives. The domain of successful implementation decisions is represented by the smaller, inner triangles depicted in Figs 2 (a) and 2 (b ). Decisions which fall inside this inner triangle have a higher likelihood of successful implementation than do those that fall outside the inner triangle. An increase in the level of either tolerance or resources for any of the three objectives will increase the size of the inner triangle, For example, Fig. 2(b) has a larger inner triangle than Fig. 2 (a), indicating a higher level of tolerance
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and resources. This illustrates Propositions 1 and 2, that the likelihood of successful implementation will be increased by higher degrees of tolerance and resources. In other words, a project with demanding non-negotiable goals and few resources is unlikely to be successful. It also can be readily deduced from the illustration that a balanced decision is more likely than an imbalanced decision to fall within the inner triangle - whatever its size - thus increasing the likelihood of successful implementation (Proposition 5). An additional observation identified by the model is that balanced decisionmaking becomes more important as the project context (tolerance, resources, and tradeoffs) worsens. In a situation marked by high levels of tolerance and resources, and mutually supportive objectives, almost any decision will be successful. On the other hand, in the perhaps more typical situation of low tolerance and resources, and tradeoffs to be made among objectives, exercising balance in decision-making will be crucial to success. Proposition
6. Intrinsic
6.
The lower the tolerance, the fewer the resources, and the greater the tradeoffs among the technical, economic, and political objectives, the greater will be the impact of balance on AMT implementation success.
dynamics
of the model
The TEP model has been presented thus far in static terms. However, the model has systematic properties that make it intrinsically dynamic. In addition, the conditions under which the model operates can be changed through management interventions. This section will focus on the intrinsic dynamics of the model, while the following section will focus on managerial interventions that can increase the likelihood of successful implementation decisions. The outcome of a decision at any given point during implementation will affect the context for subsequent decisions. A successful decision may lead to increased capital investment (economic resources), increased optimism on the part of supporters and users (political resources), and so on. Tolerance could decrease because of a rise in levels of aspiration following success (Atkinson and Feather, 1966). In general, however, success tends to breed further success, whereas an unsuccessful decision may reduce optimism, lead to decreased capital investment, and so on. An unsuccessful decision may change the direction of relationships among objectives, leading to shifts in the balance of decisions, especially if political concerns become more salient to supporters and users. Tolerance may decrease if supporters and users want stronger evidence that the implementation is a success. In general, failure tends to breed further failure. Suppose, as is often the case, that economic objectives receive more emphasis in making equipment and resource decisions than do technical objectives. Since technical objectives are underemphasized in equipment decisions, the
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system doesn’t work as well as promised, a situation which is exacerbated by the insufficient number of people devoted to the project. The result is that the decision falls outside of the inner triangle; in this case, it might be balanced between P and E, but fall on the PE side of the triangle, far from T (see Fig. 2 (c ) ). This decision then decreases the level of political tolerance, as users begin to lose faith in the system, as well as political resources, as users begin to put less effort into making it work. This decrease in political tolerance and resources makes it difficult to make acceptable location and scheduling decisions, as the inner triangle begins to shrink. Weakened by this passive sabotage, the technical performance of the system declines further, thus unleashing another downward spiral of changes. Such a sequence of events took place in the electronics company. As noted above, the equipment, resource, and location decisions were dominated by economic and political objectives. The scheduling and system function decisions were also made with little regard for technical objectives. As a result, the technical effectiveness of the new system was seriously compromised, and serious problems - both technical and political - began to surface. The system started to crash repeatedly, and it looked as if the architecture would need to be changed to create more memory. Many small problems that made the system extremely aggravating for the users stemmed from the complexity of the product in the pilot area, and these problems intermingled with the usual “bugs” in the system to make matters worse. Other users might have been more tolerant, but managers in this area were known as the least flexible in the plant. Furthermore, they were under intense production pressure, due to the difficulties their product had encountered. (This was why project leadership had resisted piloting the system in this area.) The systems analyst was told about the problems, but as his first priority was the systemlevel problems, and his time was scarce, user pleas went unanswered. Each new system failure brought another welter of complaints to the systems analyst, who could not begin to address them. As the pressure on this individual continued to build, he began wondering aloud whether the system would ever work as expected. Word of this doubt spread quickly throughout the plant. When the users heard that even the project leadership had doubts about the system, their motivation to make it work reached an all-time low. These problems eroded the already-low level of political tolerance in the pilot user group. Thus when the almost purely technically-oriented decision was made to ignore user demands and concentrate on system-level problems, in order to rescue the system, it stood little chance of political effectiveness, which eroded political tolerance even more. The system was eventually shut down for a period of time to get the bugs out, a mainframe computer was added to the system architecture, and more personnel were devoted to the project. This cycle of technical and political decline ultimately undermined the economic success of the project, which was the very goal that the decision makers
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originally emphasized. This is the inherent irony of implementation decisions captured by our model: unbalanced decisions in an intolerant environment may eventually undermine effectiveness on the very objective that is emphasized in decision-making. Thus the costs of making unbalanced decisions can go far beyond the immediately apparent tradeoffs, and constrain the effectiveness of implementation decisions for some time afterward. Proposition 7.
Unbalanced decision may lead to decreases in tolerance and resources, thus reducing the likelihood of success for subsequent decisions.
7. Managerial interventions for successful implementation Our model can help managers systematically diagnose the organizational context they face and identify areas of high and low risk for implementation success. This could lead to actions to strengthen a particular setting in preparation for implementation. Actions can be taken to increase tolerance or resources, depending on what the diagnosis indicates. Illustrations of actions are presented below. Simplifying the technical system is the equivalent of increasing technical resources. The technical system comprises the production technology and product designs that surround AMT. One way of rationing technical resources is to carefully select areas for piloting the new technology. Implementers often overlook the complexity of the product being made in a given area, but complex products present substantial problems for a fledgling automated system. Better to pilot a new system in a simpler area, moving to more complex areas as problems with the technology are resolved. Of course, in the ideal case all areas should be simplified before automating (Schonberger, 1986). Technical resources also can be increased by designing products for ease of manufacturability. Managers are becoming increasingly aware of the need to design products to facilitate automated production (Dean and Susman, 1989; Hampton, 1988). Increased manufacturability will greatly increase the level of technical tolerance in an organization, as reduced product complexity renders AMT implementation much easier technically. If AMT is the future of manufacturing, manufacturability will be an essential aspect of product design. Economic tolerance can be increased by using long-term economic and strategic goals to justify investment in AMT. AMT provides strategic advantages in quality, flexibility, and lead-time. Yet many firms justify investment in AMT using traditional criteria, particularly labor cost reduction. It is common for managers who have implemented AMT to observe that the areas of greatest benefit were unanticipated, and thus not even included in the economic justification (Huber, 1985 ) . If managers were more alert to the revenue-enhancing
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capabilities of AMT (e.g. quality, flexibility), they would be less demanding (i.e. more tolerant) where cost reduction objectives are concerned. Longer term strategic goals also may increase the economic resources that senior managers make available for implementation. The intangible benefits of AMT are often overwhelmed by the very tangible dollar outlays necessary to achieve them. Thus AMT implementers are forced to understaff projects in order to achieve the expected level of return, a level based most likely on an underestimation of AMT’s benefits. The costs of understaffing projects and using marginally acceptable technology are also seldom calculated, but may result in significant losses. If insufficient manpower delays a system for six months, half a year’s ROI is foregone. The training and down-time costs of unreliable technology may not be calculated, but are quite real. Perhaps the most important intangible cost is the loss of credibility that the technical community suffers in the eyes of users. Political tolerance can be enhanced by increasing the willingness of organizational constituencies to suspend judgment concerning AMT success. This involves working to make the system a success, being supportive of AMT implementers, and being flexible about adjusting routines to fit the new technology. The most well-known method of increasing tolerance is user involvement in system design (Boddy and Buchanan, 1986; Majchrzak, 1988). Individuals who have participated in the creation of a system are more persistent when problems arise. Some firms bring user personnel into the lab to assist in debugging. This makes users aware that some debugging is a natural and necessary part of implementation, and creates advocates for the system when it is put into operation. Political tolerance can also be increased by choosing early automation projects that have a high probability of success, rather than a high return. Being successful even with small projects will build credibility among users, and lead to greater tolerance when problems are encountered with more challenging projects. Many firms start with a “big splash”, and spend several years trying to live down their initial failure to make it work. A final way to boost political tolerance is to develop consensus around the vision driving AMT. Most projects are motivated by a dream for the future, and there is no shortage of inspired visionaries who have the persistence necessary to see AMT projects through to completion. What is often lacking is the communication of this vision to the many people whose commitment is needed to make it a reality (Majchrzak, 1988). Unable to see the big picture, the trials they encounter convince these individuals that AMT is more trouble than it is worth. If the vision that inspires AMT champions can be communicated to and endorsed by those who have the power to make it happen, AMT projects stand a much better chance of technical, political, and economic success.
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8. Theoretical
contributions
The TEP model makes a number of theoretical contributions to the study of AMT implementation and technological change in general. First, it provides a framework for conceptualizing technology implementation as a decision-makingprocess, an orientation that has been suggested by several researchers (e.g., Hetzner et al., 1986) but not heretofore realized. Our framework brings into the implementation literature the concept of a decision stream - an interrelated series of decisions - and identifies ways in which earlier decisions in the stream affect later ones. Second, the model underscores the importance of the organizational context for success in AMT implementation. Adler and Helleloid (1987) noted that “the context of the CAD/CAM integration effort should...determine the final outcome... to a greater extent than the quality of the technology or of project management itself’ (p. 104). Our model is consistent with this premise insofar as tolerance and resources are major determinants of organizational context. The TEP model builds on this perspective by postulating an interactive relationship among the organizational context, project decision-making, and implementation success. Thus, not only does the organizational context influence the process and outcome of implementation, but implementation in turn changes the organizational context, and in some cases may even be said to create new contexts. Of course, those implementing AMT may take steps prior to implementation to improve conditions in the organizational context, thus providing more fertile ground in which to work. A third theoretical contribution of our model is the systematic treatment of politics. Anyone who has implemented AMT or observed new technology implementation is aware of the importance of politics. Yet models of project management generally do not take politics into account, and managers encountering political resistance generally attribute it to uncontrollable sources such as personality, and deal with it on an ad hoc basis. Our model starts from the premise that politics is an integral component of implementation, and explains how the political tolerance of sponsors and users systematically interacts with other forces to determine implementation effectiveness. The model also suggests that balance in decision-making can in many cases make political tolerance a positive force in new technology implementation. In summary, the TEP model makes three contributions to the study of new technology implementation: (1) the conceptualization of the implementation process as a stream of interrelated decisions; (2) the identification of interdependent relationships among context, decision-making, and outcome; and (3) the systematic inclusion of politics as integral to AMT implementation. Each of these contributions can deepen our appreciation of the implementation process, and provide a firmer foundation upon which subsequent research can build.
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References Adler, P.S. and Helleloid, D.A., 1987. Effective implementation of integrated CAD/CAM A model. IEEE Trans. Eng. Manage., EM-34(2): 101-107. Atkinson, J.W. and Feather, N., 1966. A Theory of Achievement Motivation. Wiley, New York. Boddy, D. and Buchanan, D.A., 1986. Managing New Technology. Basil Blackwell, Oxford, U.K. Child, J., Garner, H. and Kieser, A., 1987. Technological innovation and organizational conserv atism. In: J.M. Pennings and A. Buitendam (Eds.), New Technology as Organizational Innovation. Ballinger, Cambridge, MA. Davis, D.D., 1986. Technological innovation and organizational change. In: D.D. Davis (Ed.), Managing Technological Innovation. Jossey-Bass, San Francisco, CA, pp. l-22. Dean, J.W., Jr., 1987. Deciding to Innovate: How Firms Justify Advanced Technology. Ballinger, Cambridge, MA. Dean, J.W., Jr. and Susman, G.I., 1989. Organizing for manufacturable design. Harv. Bus. Rev., (January-February): 28-36. The Economist, 1987. Factory of the future. May 30: 3-18. Ettlie, J.E., 1986. Implementing manufacturing technologies: Lessons from experience. In: D.D. Davis (Ed.), Managing Technological Innovation. Jossey-Bass, San Francisco, CA, pp. 72-104. Ettlie, J.E., 1988. Taking Charge of Manufacturing. Jossey-Bass, San Francisco, CA. Gunn, T.G., 1987. Manufacturing for Competitive Advantage. Ballinger, Cambridge, MA. Hampton, W.J., 1988. Can steel-collar workers build better cars? Bus. Week, 3069 (September 12 ): 73. Hayes, R.H., Wheelwright, SC. and Clark, K.B., 1988. Dynamic Manufacturing: Creating the Learning Organization. The Free Press, New York. Hetzner, W.A., Eveland, J.D. and Tornatzky, L.G., 1986. Fostering innovation: Economic, technical, and organizational issues. In: D.D. Davis (Ed.), Managing Technological Innovation. Jossey-Bass, San Francisco, CA, pp. 239-255. Huber, R.F., 1985. Justification: barrier to competitive manufacturing. Production, (September): 46-51. Kaplan, R.S., 1986. Must CIM be justified by faith alone? Harv. Bus. Rev., (March/April): 8795. Lawrence, P.R., 1969. How to deal with resistance to change. Harv. Bus. Rev., (January-Febmary): 4-13. Leonard-Barton, D., 1988. Implementation as mutual adaptation of technology and organization. Res. Policy, 17: 251-267. Maidique, M.A., 1980. Entrepreneurs, champions, and technological innovation. Sloan Manage. Rev., 21(2): 59-76. Majchrzak, A., 1988. The Human Side of Factory Automation. Jossey-Bass, San Francisco, CA. Malone, R., 1987. Global smart factory market. Managing Automation, (December): 24-26. Manufacturing Studies Board, National Academy of Sciences, 1986. Human Resource Practices for Implementing Advanced Manufacturing Technology. National Academy Press, Washington, DC. Mintzberg, H., Raisinghani, D. and Theoret, A., 1976. The structure of “unstructured” decision processes. Admin. Sci. Q., 21(2): 246-275. Pennings, J.M., 1987. Technological innovations in manufacturing. In: J.M. Pennings and A. Buitendam (Eds.), New Technology as Organizational Innovation. Ballinger, Cambridge, MA. Pettigrew, A.M., 1975. The Politics of Organizational Decision-Making. Tavistock, London. Pinto, J.K. and Slevin, D.P., 1987. Critical factors in successful project implementation. IEEE Trans. Eng. Manage., 34( 1): (February):22-27.
144 Prasad, L., 1986. Organizational politics during the industrial innovation process. Unpublished Doctoral Dissertation, Northwestern University, Evanston, IL. Schon, D.A., 1963. Champions for radical new inventions. Harv. Bus. Rev., 41(2) (March/April): 77-86. Schonberger, R.J., 1986. World Class Manufacturing. Free Press, New York. Schultz, R.L. and Slevin, D.P., 1979. Introduction: the implementation problem. In: R. Doktor, R.L. Schultz and D.P. Slevin (Eds.), The Implementation of Management Science. NorthHolland, New York. Weiss, A.R. and Birnbaum, P.H., 1989. Technological infrastructure and the implementation of technological strategies. Manage. Sci., (August): 1014-1026. Wilkinson, B., 1983. The Shopfloor Politics of New Technology. Heinemann Educational Books, London. Zuboff, Z., 1988. In the Age of the Smart Machine. Basic Books, New York.
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Technical, economic and political factors in advanced manufacturing technology implementation James W. Dean, Jr., Gerald I. Susman and Pamela S. Porter* Center for the Management of Technological and Organizational Change, College of Business Administration, the Pennsylvania State University, University Park, PA 16802, U.S.A.
Abstract The process of implementing advanced manufacturing technology (AMT) begins after the decision to commit funds for the new technology has been made. The implementation process consists of making and implementing a series of decisions. Typical decisions include system functions, resource commitments, location of pilot projects, and schedule. Such decisions have three objectives: technical, economic, and political. Our model includes four major factors that influence implementation success: the level of tolerance for acceptable decisions, the level of technical, economic, and political resources available for implementation, the direction of relationships among the three objectives, and the extent to which the objectives are balanced in decision-making. Dynamics by which these four factors interrelate are discussed. Examples from an electronics company are used to illustrate the model, its theoretical contributions are discussed, and suggestions are offered as to how to successfully manage the interaction among the factors in the model. Keywords.
Advanced manufacturing
technology,
Implementation,
Politics.
1. Introduction Technologies have evolved over the last decade that hold the promise of revolutionizing manufacturing. These technologies, collectively known as advanced manufacturing technology (AMT) , include robotics, computer-aided design, engineering, and manufacturing (CAD, CAE, CAM), and manufacturing resources planning (MRP II). Firms are increasingly attempting to integrate these technologies into computer integrated manufacturing (CIM) systems. AMT is of enormous strategic importance, as it can improve the effectiveness of manufacturing in terms of cost, quality, flexibility, and leadtime (Economist, 1987, Gunn, 1987). AMT is being adopted, to varying degrees and in various combinations, by manufacturing firms around the world. One estimate is that the global market for manufacturing automation will grow to $63.3 billion in 1991 (Malone, 1987). Merely deciding to adopt AMT, however, does not guarantee success; effec*Presently
at the University
0923-4748/90/$03.50
of Cincinnati.
0 1990-Elsevier
Science Publishers
B.V.
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tive implementation is also necessary. As Davis (1986) puts it, “Adoption of advanced manufacturing technologies does not ensure their successful implementation. [They] are not turnkey systems” (p. 12). Our own experience, that companies have had mixed success in implementing advanced technologies, dovetails with others’ impressions (e.g. Ettlie, 1986; Majchrzak, 1988). While the business press often focuses on success stories, many firms (even those ultimately successful) experience substantial difficulties in implementation. These problems are seldom technical per se, but more often comprise a blend of technical, economic, and political concerns. The strategic potential of AMT can only be fully exploited if these new technologies are effectively implemented, which in turn depends on the quality of the decisions that constitute the implementation process. We present in this paper a framework to explain how the decisions involved in AMT implementation affect project success. We intend the framework both to help managers avoid the pitfalls and reap the strategic benefits of advanced technology implementation, and to guide future research. We are not concerned in this paper with adoption decisions, whereby a firm decides whether capital will be allocated to a particular AMT project. Such decisions involve a blend of strategic and financial considerations that are different from those discussed here (Dean, 1987). We are focusing rather on the set of decisions involved in implementation, that is, those made after funds have been committed, which bring the new system to fruition. In the sections to follow we outline our framework for AMT implementation, illustrating the model with examples of the implementation process in an electronics company. We conclude with an identification of the theoretical contributions of the model, and some brief recommendations for how managers can use it to enhance AMT implementation effectiveness. 2. AMT implementation as a decision process The implementation of AMT is fundamentally a process of making and carrying out a series of decisions. Mintzberg et al. (1976) point out that any major decision is implemented via a series of smaller decisions. Hetzner et al. (1986) make a similar point with respect to advanced technology: “Implementation [is] a set of decisions made at different times and levels in the organization” (p. 243). Boddy and Buchanan (1986) note the “overriding importance of managerial decisions and organizational choices in determining the effectiveness of new technology” (p. 4). Of course, implementation does not consist only of making decisions. Each implementation decision (e.g., to provide extensive training for operators) must itself be implemented through some sort of action (planning the training). This action will create still more decisions (should be training be modular? ) , which in turn are implemented through action (presenting the modules). Thus, im-
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plementation consists of a series of decisions and actions, in which each decision necessitates actions which involve still more decisions. It is through this web of decision and action that new manufacturing technology gradually evolves from an approved proposal to a functioning system. New technology implementation is generally characterized by decisions concerning system function, equipment, resources, organization, location, and schedule (Boddy and Buchanan, 1986; Pinto and Slevin, 1987). While these decisions may occur in the order above, a variety of sequences are possible, and many projects are characterized by reexamination and revision of earlier decisions (Leonard-Barton, 1988). The first two types of decisions (system function and equipment) involve system design. System function decisions determine what the new system will (and will not ) be expected to do. Equipment decisions concern what type of technology to use, which components of the system will be purchased versus designed in-house, and vendor selection. (While firms make some broad decisions about such issues prior to adoption, there are generally many function and equipment issues left to be resolved during implementation.) The next two types of decisions deal with implementation team design. Resource decisions are primarily concerned with the number of people to be devoted to the project and the proportion of their time to be made available. Organizational decisions are concerned with which functional area will take the lead on the project, which functions or departments will be represented on the implementation team, to whom the team will report, and how much authority it will have. The composition and organization of the implementation team can have a profound effect on the success of AMT (Majchrzak, 1988). The final two types of decisions deal with project execution. Location decisions involve identifying product lines or plants in which to pilot the new system, while scheduling decisions determine the pace of piloting, introduction, and scale-up. 3. Objectives of AMT implementation Managers must consider three types of objectives -technical, economic, and political (TEP) - in making implementation decisions. The technical objective requires that the system be successful in meeting the technical performance requirements associated with the manufacturing process in question. Technical objectives might include cutting speed and precision, scrap and rework minimization, setup time, inventory reduction, and so on. The extent to which such objectives are met is a critical aspect of project success, as technical performance is the sine qua non of effective implementation. The economic objective requires that the firm be in a stronger financial position after AMT is implemented. This can occur by AMT enhancing the flow of revenues, lowering costs, or both. The economic benefits are expressed in
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such terms as payback period, internal rate of return (IRR), and net present value (NPV). Many observers have noted the difficulty of translating the strategic advantages of AMT into dollars and cents, given current cost accounting practices (Kaplan, 1986). Technology involves politics at both the interorganizational (Weiss and Birnbaum, 1989) and intraorganizational (Pettigrew, 1973) levels. Here we are focusing on the latter. Prasad (1986) and Wilkinson (1983) have both noted the high degree of political activity surrounding process innovations. The political objective requires that the new system satisfy its sponsors and users by helping them to achieve their respective goals, and to enhance or at least maintain their organizational status. Sponsors (Schon, 1963; Maidique, 1980; Dean, 1987) that have committed resources to a given project will use its success to make decisions about future AMT projects, as well as the futures of those who championed this project. Users are obviously those who will be involved most closely with the technology. Their support of the new technology will depend on their perception of its political benefits relative to the time and energy required to learn to use the new technology proficiently. We will be summarizing our framework as it emerges with a set of propositions. As is typical of such frameworks, the initial propositions are oriented toward definitions and assumptions. The latter propositions are more oriented toward relationships and predictions. Proposition 1.
AMT implementation will be considered successful by those involved to the extent that it meets technical, economic, and political objectives.
4. Factors influencing implementation success The likelihood that implementation decisions will simultaneously satisfy all three objectives depends on four factors: (1) tolerance, (2) resources available to the project, (3) the direction of the relationships among the three objectives, (4) the extent to which implementation decisions achieve balance among all three objectives. Tolerance
Technical, managerial, financial and user personnel each have expectations about the level of success - relative to TEP objectives - the project should attain. The tolerance for an AMT project is a function of these expectations: As expectations increase, the level of tolerance decreases, and vice versa. Tolerance may also be increased by a willingness among concerned parties to be patient, as the technology may take some time to reach its goals, and to understand that temporary setbacks in achieving these goals are an expected part
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of new technology implementation. The impact of tolerance on the effectiveness of implementation is straightforward. Proposition 2.
The higher the level of tolerance, the greater the likelihood of successful AMT implementation.
Resources The amount of technical, economic and political resources available is determined by the project’s organizational context. Technical resources include the abilities of people assigned to work on the project, as well as the capability of existing technology relevant to the project. Economic resources available to the project are a function of the firm’s financial position and the funds authorized for the new technology in the capital appropriations process. Political resources are analogous to the accounting concept of goodwill, an asset related to the optimism of sponsors and users that the project will benefit them and the organization. Their degree of optimism will influence how hard they will work to make the project successful. Technology implementers sometimes are successful in garnering the necessary levels of technical, economic, and political resources before implementation begins, but such resources can rise or fall as the project progresses. Technical resources might be increased by simplifying manufacturing operations so that AMT may be more effectively used, economic resources might be increased by increasing the funding available to the project, and political resources might be increased by generating enthusiasm among users. Proposition 3.
The greater the level of technical, economic and political resources available, the greater the likelihood of successful AMT implementation.
Direction of relationships The direction of relationships between any of the three pairs of objectives (technical and economic, technical and political, economic and political) influences the ease with which decisions can be made that will simultaneously satisfy all three objectives. A positive relationship between any pair of objectives means that achievement of an acceptable level on one objective increases the likelihood that the other objective will achieve an acceptable level as well. A negative relationship between any pair of objectives means that achievement of an acceptable level on one objective decreases the likelihood that the other objective will achieve an acceptable level. Tradeoffs between objectives are necessary when relationships between objectives are negative, as illustrated by the implementation decisions discussed below. Tradeoffs between technical and economic objectives can occur in making equipment decisions. When minimizing costs is the prime economic objective, it can conflict with the objective of maximizing technical performance, thus
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creating a tradeoff between the two. Leonard-Barton (1988) discusses a decision in which managers regretted the use of overly narrow financial criteria, at the cost of foregoing important technical advances. Such a tradeoff characterized the attempts of an electronics company to implement an automated shop floor control system. Management declined to purchase an off-the-shelf, mainframe-based system used successfully in other parts of the corporation, due to it high cost. It was decided instead to design a new system in-house using networked personal computers, with bar-code scanners as input devices. While technical personnel would have preferred a more traditional approach, they admitted to management that they thought they could eventually make a networked PC system work. Tradeoffs between technical and economic objectives can also occur when making location decisions. Often a simple and low-pressure pilot location is desirable from a technical standpoint, to further develop the technology before going on to other locations. Managers under pressure to secure rapid financial gains, however, may prefer to implement the system in a high-volume area. This places technical objectives (systematic development of the technology) in conflict with economic objectives. In the electronics company, the pilot location was selected by management, over the objections of project leaders, for two reasons. First, the product line produced in the area was in financial trouble, and management wanted to do everything possible to improve its performance. Second, a production control manager from this area lobbied for the pilot. Unfortunately, the product made in this area was among the most technically complex in the plant, which made it very difficult to evaluate the results of the pilot. Tradeoffs between economic and political objectives can occur when making resource decisions. Adding more persons to a project team may permit more personal attention to user’s needs (e.g., more and better training and user consultation), but exact an economic toll. Managers will thus be forced to make a tradeoff between inversely varying degrees of economic and political effectiveness in resource decisions. In the electronics company, man-hours allocated to the shop floor control system were very limited, due to management’s concern about overhead. In fact, neither the project manager nor the system analyst (who wrote most of the software) were devoted full-time to the project. Tradeoffs between technical and political objectives can occur when making system function decisions. The new technology may perform activities - either totally or in part - that were previously performed by people. It has been pointed out with increasing frequency over the past few years that technical change without human system change is unlikely to succeed (Adler and Helleloid, 1987; Ettlie, 1988; Hayes et al., 1988; Manufacturing Studies Board, 1986; Schonberger, 1986), and worker resistance to or ambivalence about changes in work procedures is common in the literature (Lawrence, 1969; Pennings, 1987; Zuboff, 1988). Unless plans are made to create new roles for employees
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or to minimize the impact of layoffs, workers will resist the implementation of the new technology. This puts implementers in the position of deciding between unlimited use of technology and satisfaction of user demands. Tradeoffs between technical and political objectives also occur in organization decisions, as team composition can be driven by political intrigue rather than technical expertise. Innovative technologies upset the power distribution in the firm, creating new sources of power while destroying old ones (Pettigrew, 1973). “Defense or extension of their organizational positions is a major motivating force for the actors involved in the decision process” (Child et al., 1987, p. 104). Thus people will strive to be part of the project team (which helps to shape the new power distribution) and to exclude rivals from participating. Such political machinations are independent of or even in opposition to the technical requirements of team membership. Managers may also have to trade off technical and political objectives in scheduling deployment of the new technology. Political pressures from sponsors (eager to impress their superiors) or users (desperate for help) may require faster deployment than is technically justified (Leonard-Barton, 1988). Alternatively, users may attempt to delay the deployment of the new system, so as to retain as long as possible the routines and procedures with which they are comfortable. The schedule for implementing the new system in the electronics firm was calculated with a heavy dose of politics. Very demanding deadlines were set for completing certain stages of implementation, so that the new system could be shown to corporate officials who would be visiting the plant on other business. Preparing for such “shows” drew the attention of project personnel away from pressing technical problems. Finally, tradeoffs between technical and political objectives can occur when making location decisions. Project managers generally wish to locate pilot efforts in settings of low to moderate technical complexity. If such sites are hostile toward the technology, however, while those supportive of the technology are in technically complex areas, managers will be forced to choose between technically and politically appropriate locations. As noted above, this was the situation faced by the electronics company in choosing a pilot location. Proposition 4.
The more positive the relationships (or the fewer the tradeoffs) among technical, economic, and political objectives, the greater the likelihood of successful AMT implementation.
Balance Balance is the extent to which attention is given to all objectives in the deliberations that lead to implementation decisions. Decisions in which all three objectives are given serious consideration are relatively balanced, whereas those
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in which some objectives are emphasized and others ignored are relatively unbalanced. The above examples involve tradeoffs between two objectives; we hypothesize, however, that implementation decisions often involve trade-offs among three objectives. Concentrating on a trade-off between any one pair of objectives and ignoring another pair runs the risk of not achieving at least one important objective, endangering overall project success. Proposition 5.
The more balanced the decisions made during the implementation process, the greater the likelihood of successful AMT implementation.
5. Illustration of the model Figure 1 provides a visual representation of the model. The three objectives of AMT implementation are represented by the three angles of the triangle. Positive or negative relationships between objectives are illustrated by + or -9 respectively. Figure 1 identifies five possible configurations of relationships among the objectives. Figure 1(a) represents the ideal but unusual situation in which all three relationships are positive. In this situation, not only are no tradeoffs between objectives necessary, but all of the objectives reinforce one another. Decision-making in such a setting would not be difficult, as any alternative that facilitated the attainment of any one objective would also facilitate the attainment of the others. Figure 1 (b) represents the situation in which technical and economic objec-
Fig. 1. Patterns of relationships between technical (T), economic (E) and political (P) objectives.
Fig. 2. Model for diagnosing implementation success.
conditions
for
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tives are mutually reinforcing, but achieving these objectives would incur a political cost. This could typify, for example, a system function decision in which assigning a greater proportion of tasks to a new system (as opposed to operators) would result in both technical and economic advantages. The operators, however, are unhappy with the proposal to substantially automate their jobs, and would resist such a decision. In Figure 1 (c ) , the economic and political goals are aligned, but the technical goal conflicts with both. Such a situation could occur in an equipment decision if the sponsoring managers will not support purchase of any equipment that cannot be shown to exceed the firm’s hurdle rate. But the technical personnel charged with purchasing the system are primarily concerned with technical performance, and are convinced that the necessary level of technical performance cannot be achieved using equipment that provides the required payback. Management’s assessment of the situation is that the technical personnel have been seduced by the potential of the technology, and do not feel that the level of technical performance desired by technical personnel is necessary or even desirable, given its cost. Figure 1 (d) could represent a resource decision in which devoting a number of technical experts to the team would result in both better technical performance and greater ownership of the outcome by the experts. Thus the technical and political goals are consistent. Staffing the team at this level, however, would be very costly, so these goals are inconsistent with the economic goals of the project. The pattern of Fig. 1 (d) could also characterize a scheduling decision, in which a slow pace would facilitate the technical success and political acceptance of the new system, but delay its economic benefits. Figure l(e) shows a variant of Fig. l(d) in which the user consituency is divided into professionals and workers, the latter being threatened by improved technical performance. In this case, attention might be given to reducing the threat that workers perceive from improved technical performance, perhaps by providing retraining opportunities and guaranteeing no loss in jobs or pay. The degree of balance in decision-making can be represented in the model by locating a given decision within the triangle. A perfectly balanced decision would be in the center of the triangle. One which attended only to a trade-off between political and economic objectives or political and technical objectives would be located off-center, closer to the side of the triangle with the satisfied objectives. The domain of successful implementation decisions is represented by the smaller, inner triangles depicted in Figs 2 (a) and 2 (b ). Decisions which fall inside this inner triangle have a higher likelihood of successful implementation than do those that fall outside the inner triangle. An increase in the level of either tolerance or resources for any of the three objectives will increase the size of the inner triangle, For example, Fig. 2(b) has a larger inner triangle than Fig. 2 (a), indicating a higher level of tolerance
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and resources. This illustrates Propositions 1 and 2, that the likelihood of successful implementation will be increased by higher degrees of tolerance and resources. In other words, a project with demanding non-negotiable goals and few resources is unlikely to be successful. It also can be readily deduced from the illustration that a balanced decision is more likely than an imbalanced decision to fall within the inner triangle - whatever its size - thus increasing the likelihood of successful implementation (Proposition 5). An additional observation identified by the model is that balanced decisionmaking becomes more important as the project context (tolerance, resources, and tradeoffs) worsens. In a situation marked by high levels of tolerance and resources, and mutually supportive objectives, almost any decision will be successful. On the other hand, in the perhaps more typical situation of low tolerance and resources, and tradeoffs to be made among objectives, exercising balance in decision-making will be crucial to success. Proposition
6. Intrinsic
6.
The lower the tolerance, the fewer the resources, and the greater the tradeoffs among the technical, economic, and political objectives, the greater will be the impact of balance on AMT implementation success.
dynamics
of the model
The TEP model has been presented thus far in static terms. However, the model has systematic properties that make it intrinsically dynamic. In addition, the conditions under which the model operates can be changed through management interventions. This section will focus on the intrinsic dynamics of the model, while the following section will focus on managerial interventions that can increase the likelihood of successful implementation decisions. The outcome of a decision at any given point during implementation will affect the context for subsequent decisions. A successful decision may lead to increased capital investment (economic resources), increased optimism on the part of supporters and users (political resources), and so on. Tolerance could decrease because of a rise in levels of aspiration following success (Atkinson and Feather, 1966). In general, however, success tends to breed further success, whereas an unsuccessful decision may reduce optimism, lead to decreased capital investment, and so on. An unsuccessful decision may change the direction of relationships among objectives, leading to shifts in the balance of decisions, especially if political concerns become more salient to supporters and users. Tolerance may decrease if supporters and users want stronger evidence that the implementation is a success. In general, failure tends to breed further failure. Suppose, as is often the case, that economic objectives receive more emphasis in making equipment and resource decisions than do technical objectives. Since technical objectives are underemphasized in equipment decisions, the
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system doesn’t work as well as promised, a situation which is exacerbated by the insufficient number of people devoted to the project. The result is that the decision falls outside of the inner triangle; in this case, it might be balanced between P and E, but fall on the PE side of the triangle, far from T (see Fig. 2 (c ) ). This decision then decreases the level of political tolerance, as users begin to lose faith in the system, as well as political resources, as users begin to put less effort into making it work. This decrease in political tolerance and resources makes it difficult to make acceptable location and scheduling decisions, as the inner triangle begins to shrink. Weakened by this passive sabotage, the technical performance of the system declines further, thus unleashing another downward spiral of changes. Such a sequence of events took place in the electronics company. As noted above, the equipment, resource, and location decisions were dominated by economic and political objectives. The scheduling and system function decisions were also made with little regard for technical objectives. As a result, the technical effectiveness of the new system was seriously compromised, and serious problems - both technical and political - began to surface. The system started to crash repeatedly, and it looked as if the architecture would need to be changed to create more memory. Many small problems that made the system extremely aggravating for the users stemmed from the complexity of the product in the pilot area, and these problems intermingled with the usual “bugs” in the system to make matters worse. Other users might have been more tolerant, but managers in this area were known as the least flexible in the plant. Furthermore, they were under intense production pressure, due to the difficulties their product had encountered. (This was why project leadership had resisted piloting the system in this area.) The systems analyst was told about the problems, but as his first priority was the systemlevel problems, and his time was scarce, user pleas went unanswered. Each new system failure brought another welter of complaints to the systems analyst, who could not begin to address them. As the pressure on this individual continued to build, he began wondering aloud whether the system would ever work as expected. Word of this doubt spread quickly throughout the plant. When the users heard that even the project leadership had doubts about the system, their motivation to make it work reached an all-time low. These problems eroded the already-low level of political tolerance in the pilot user group. Thus when the almost purely technically-oriented decision was made to ignore user demands and concentrate on system-level problems, in order to rescue the system, it stood little chance of political effectiveness, which eroded political tolerance even more. The system was eventually shut down for a period of time to get the bugs out, a mainframe computer was added to the system architecture, and more personnel were devoted to the project. This cycle of technical and political decline ultimately undermined the economic success of the project, which was the very goal that the decision makers
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originally emphasized. This is the inherent irony of implementation decisions captured by our model: unbalanced decisions in an intolerant environment may eventually undermine effectiveness on the very objective that is emphasized in decision-making. Thus the costs of making unbalanced decisions can go far beyond the immediately apparent tradeoffs, and constrain the effectiveness of implementation decisions for some time afterward. Proposition 7.
Unbalanced decision may lead to decreases in tolerance and resources, thus reducing the likelihood of success for subsequent decisions.
7. Managerial interventions for successful implementation Our model can help managers systematically diagnose the organizational context they face and identify areas of high and low risk for implementation success. This could lead to actions to strengthen a particular setting in preparation for implementation. Actions can be taken to increase tolerance or resources, depending on what the diagnosis indicates. Illustrations of actions are presented below. Simplifying the technical system is the equivalent of increasing technical resources. The technical system comprises the production technology and product designs that surround AMT. One way of rationing technical resources is to carefully select areas for piloting the new technology. Implementers often overlook the complexity of the product being made in a given area, but complex products present substantial problems for a fledgling automated system. Better to pilot a new system in a simpler area, moving to more complex areas as problems with the technology are resolved. Of course, in the ideal case all areas should be simplified before automating (Schonberger, 1986). Technical resources also can be increased by designing products for ease of manufacturability. Managers are becoming increasingly aware of the need to design products to facilitate automated production (Dean and Susman, 1989; Hampton, 1988). Increased manufacturability will greatly increase the level of technical tolerance in an organization, as reduced product complexity renders AMT implementation much easier technically. If AMT is the future of manufacturing, manufacturability will be an essential aspect of product design. Economic tolerance can be increased by using long-term economic and strategic goals to justify investment in AMT. AMT provides strategic advantages in quality, flexibility, and lead-time. Yet many firms justify investment in AMT using traditional criteria, particularly labor cost reduction. It is common for managers who have implemented AMT to observe that the areas of greatest benefit were unanticipated, and thus not even included in the economic justification (Huber, 1985 ) . If managers were more alert to the revenue-enhancing
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capabilities of AMT (e.g. quality, flexibility), they would be less demanding (i.e. more tolerant) where cost reduction objectives are concerned. Longer term strategic goals also may increase the economic resources that senior managers make available for implementation. The intangible benefits of AMT are often overwhelmed by the very tangible dollar outlays necessary to achieve them. Thus AMT implementers are forced to understaff projects in order to achieve the expected level of return, a level based most likely on an underestimation of AMT’s benefits. The costs of understaffing projects and using marginally acceptable technology are also seldom calculated, but may result in significant losses. If insufficient manpower delays a system for six months, half a year’s ROI is foregone. The training and down-time costs of unreliable technology may not be calculated, but are quite real. Perhaps the most important intangible cost is the loss of credibility that the technical community suffers in the eyes of users. Political tolerance can be enhanced by increasing the willingness of organizational constituencies to suspend judgment concerning AMT success. This involves working to make the system a success, being supportive of AMT implementers, and being flexible about adjusting routines to fit the new technology. The most well-known method of increasing tolerance is user involvement in system design (Boddy and Buchanan, 1986; Majchrzak, 1988). Individuals who have participated in the creation of a system are more persistent when problems arise. Some firms bring user personnel into the lab to assist in debugging. This makes users aware that some debugging is a natural and necessary part of implementation, and creates advocates for the system when it is put into operation. Political tolerance can also be increased by choosing early automation projects that have a high probability of success, rather than a high return. Being successful even with small projects will build credibility among users, and lead to greater tolerance when problems are encountered with more challenging projects. Many firms start with a “big splash”, and spend several years trying to live down their initial failure to make it work. A final way to boost political tolerance is to develop consensus around the vision driving AMT. Most projects are motivated by a dream for the future, and there is no shortage of inspired visionaries who have the persistence necessary to see AMT projects through to completion. What is often lacking is the communication of this vision to the many people whose commitment is needed to make it a reality (Majchrzak, 1988). Unable to see the big picture, the trials they encounter convince these individuals that AMT is more trouble than it is worth. If the vision that inspires AMT champions can be communicated to and endorsed by those who have the power to make it happen, AMT projects stand a much better chance of technical, political, and economic success.
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8. Theoretical
contributions
The TEP model makes a number of theoretical contributions to the study of AMT implementation and technological change in general. First, it provides a framework for conceptualizing technology implementation as a decision-makingprocess, an orientation that has been suggested by several researchers (e.g., Hetzner et al., 1986) but not heretofore realized. Our framework brings into the implementation literature the concept of a decision stream - an interrelated series of decisions - and identifies ways in which earlier decisions in the stream affect later ones. Second, the model underscores the importance of the organizational context for success in AMT implementation. Adler and Helleloid (1987) noted that “the context of the CAD/CAM integration effort should...determine the final outcome... to a greater extent than the quality of the technology or of project management itself’ (p. 104). Our model is consistent with this premise insofar as tolerance and resources are major determinants of organizational context. The TEP model builds on this perspective by postulating an interactive relationship among the organizational context, project decision-making, and implementation success. Thus, not only does the organizational context influence the process and outcome of implementation, but implementation in turn changes the organizational context, and in some cases may even be said to create new contexts. Of course, those implementing AMT may take steps prior to implementation to improve conditions in the organizational context, thus providing more fertile ground in which to work. A third theoretical contribution of our model is the systematic treatment of politics. Anyone who has implemented AMT or observed new technology implementation is aware of the importance of politics. Yet models of project management generally do not take politics into account, and managers encountering political resistance generally attribute it to uncontrollable sources such as personality, and deal with it on an ad hoc basis. Our model starts from the premise that politics is an integral component of implementation, and explains how the political tolerance of sponsors and users systematically interacts with other forces to determine implementation effectiveness. The model also suggests that balance in decision-making can in many cases make political tolerance a positive force in new technology implementation. In summary, the TEP model makes three contributions to the study of new technology implementation: (1) the conceptualization of the implementation process as a stream of interrelated decisions; (2) the identification of interdependent relationships among context, decision-making, and outcome; and (3) the systematic inclusion of politics as integral to AMT implementation. Each of these contributions can deepen our appreciation of the implementation process, and provide a firmer foundation upon which subsequent research can build.
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