petter Øgland presentation of thesis oslo, november 27th 2013
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Mechanism Design for Total Quality Management: Using the Bootstrap Algorithm for Changing the Control Game. Petter Øgland Presentation of thesis Oslo, November 27th 2013. Plan for presentation. Motivation (7 minutes) Problem: Critical systems are getting too complex to be controllable - PowerPoint PPT PresentationTRANSCRIPT
Mechanism Design for Total Quality Management: Using the Bootstrap Algorithm for Changing the
Control Game
Petter ØglandPresentation of thesis
Oslo, November 27th 2013
Plan for presentation• Motivation (7 minutes)
– Problem: Critical systems are getting too complex to be controllable– Possible solution: Bootstrap Algorithm (BA), if it works as claimed
• Theoretical model and hypotheses (7 minutes)– A game theoretical perspective on total quality management (TQM)– Interpreting the BA through Monopoly and Genetic Algorithms (GA)– Testable BA hypothesis: The BA is efficient, stable and optimal
• Research method and results (7 minutes)– 20 years of action research, three cycles; DNMI + NTAX + NTAX/UiO– BA hypothesis supported
• Contributions to theory and implications for practice (7 minutes)– Use of Monopoly, GA and game theory to strengthen BA theory– The BA is useful for implementing TQM in complex environments
Tightly coupled complex systems in crisis: Climate, finance, technology
President’s Commission, October 1979: Inadequate quality assurance
Perrow (1984): Tightly coupled complex systems should be avoided
Three Mile Island accident, Pennsylvania, March 1979
...but can we?
Control crisis is followed by control revolution: Information society evolves
Are they implementing Total Quality Management (TQM), or are they pretending to do so?
How do people handle control crisis in highly complex environments?
80% TQM implementation failure
Explanation: ”FAKE TQM”The TQM standards industry (ISO 9000, CMM, etc)creates a global network of organised hypocrisy
What is needed: ”REAL TQM”The Bootstrap Algorithm (BA) is a way of developing information infrastructure (quality control infrastructure) by cultivation and spreading
But are we sure the BA actually works?
• Nonfalsifiable theory (ideological)– It gives the impression of being normative (algorithm), but is
descriptive (Hanseth & Lyytinen, 2004), meaning that it is more like a metaheuristic than an algorithm (Talbi, 2009; Luke, 2011)
• Anecdotal empirical evidence– It is based insights from information infrastructure development case
studies (Hanseth & Aanestad, 2003)• Cannot be tested according to normal scientific procedures like
”comparison of treatment” laboratory studies– It is used as a guideline for doing ”networks of action” research on
international health information systems (Braa et al, 2004)– It has so far not been critically investigated from a practitioner’s point
of view (i.e. action research on the BA itself)
Theoretical model and hypotheses
”REAL TQM” & critical theoryThe organisation must break loose of ’false consciousness’ and liberate itself from the oppression of the hypocrisy
Critical theory and game theoryTragedy of the commons (Hardin, 1968), political activism and social theory in general can be formulated through game theory (Binmore, 2009; Elster, 1981; Gintis, 2009).
Three levels of TQM game play
Matching Pennies – zero sum quality control game based on having “real TQM” management commitment
Stag Hunt – trust game of doing “real TQM” or “fake TQM” depends on culture
Monopoly – mechanism design game
Controlling process improvement projects
Controlling the survival of the TQM programme
Controlling cultural change
Cultivating information infrastructure on a mission to “conquer the world”
The Health Information System Programme (HISP) controls and expands itself as a network of research and development across the world
In the Monopoly game the players control and expand their assets as a network of real estate trades and developments across the game board
Thinking about the Bootstrap Algorithm (BA) as a Monopoly strategy
Start with simple, cheap, flexible solution small network of users that may benefit
significantly from improved communication with each other only
simple practices non-critical practices motivated users knowledgeable users1. Repeat as long as possible: Enrol more users2. Find and implement more innovative use; go
to 13. Use solution in more critical cases; go to 14. Use solution in more complex cases; go to 15. Improve the solution so new tasks can be
supported; go to 1
Hanseth & Aanestad (2003)
Thinking about the Bootstrap Algorithm (BA) as a Genetic Algorithm
Genetic Algorithm (GA) (Holland, 1995)
Frayn (2005) uses the GA as a Monopoly strategy when studying the game by computer simulation
RH: The BA is an optimal mechanism design for implementing TQM
Real WorldTQM installed base(“real TQM”)
ModelMonopoly game
Model conclusionsBootstrap Algorithm
Real world conclusionsTQM information infrastructure(“real TQM”)
Formulate
Deduce
Interpret
RH1: The BA is stable
RH: The BA is an optimal mechanism design for implementing TQM
RH3: The BA is optimal
RH2: The BA is efficient
Canonical Action Research (CAR)
• The research process was not originally designed as CAR, but CAR is useful for explaining how things were done
• Twenty years of TQM implementation by trying to bootstrap the information infrastructure
• Three cycles (DNMI + NTAX + NTAX/UiO)
First cycle 1992-99: Det Norske Meteorologiske Institutt (DNMI)
• Diagnosis: Complexity made project management based on water-fall model unsuccessful in developing Climate Database (KLIBAS)
• Treatment: Complex adaptive systems (CAS) was used to define a BA that proved successful for developing and improving KLIBAS in the context of TQM implementation
• Outcome: Formulation of BA and experience from using it
Second cycle 1999-2005: Skatteetaten (NTAX)
• Diagnosis: Strong elements of “fake TQM” in a world of bureaucracy, politics and complexity
• Treatment: The BA approach developed at DNMI was able to change “fake TQM” into “real TQM” but ultimately failed
• Outcome: Need to investigate why the “what gets measured gets done” idea, as used in the BA design, did not give expected results
Third cycle 2006-2011: Collaborating with UiO for creating change at NTAX
• Diagnosis: The “what gets measured gets done” idea did not work among COBOL programmers at NTAX as there was lack of management commitment to TQM
• Treatment: Improve the audit process by being more specific in the formulation of the audit game, which helped, but in the end the process failed
• Outcome: The importance of having game theoretic representations of the social theories used when studying BA through action research
BA stability hypothesis (RH1)
0
5
10
15
20
Improvement projects Process centreUpper Control Limit Lower Control Limit
THIRD CYCLEFIRST CYCLE SECOND CYCLESize of population (improv. projects)
Outcome of hypothesis test (RH1)
Real WorldTQM installed base(“real TQM”)
ModelMonopoly game
Model conclusionsBootstrap Algorithm
Real world conclusionsTQM information infrastructure(“real TQM”)
Formulate
Deduce
Interpret
RH1: The BA is stable
RH: The BA is an optimal mechanism design for implementing TQM
RH3: The BA is optimal
RH2: The BA works
BA impact hypothesis (RH2)
1. Opening: Get involved in as much and as diverse TQM work as possible (random)
2. Property trading: Hamlet game, Pac-Man game, “what gets measured gets done” game, self-protection game
3. Property development: Deconstruction game
4. Endgame: Auto-pilot
Outcome of hypothesis test(RH1 + RH2)
Real WorldTQM installed base(“real TQM”)
ModelMonopoly game
Model conclusionsBootstrap Algorithm
Real world conclusionsTQM information infrastructure(“real TQM”)
Formulate
Deduce
Interpret
RH1: The BA is stable
RH: The BA is an optimal mechanism design for implementing TQM
RH3: The BA is optimal
RH2: The BA works
BA optimality hypothesis (RH3)
• Usually 3-5 years to implement TQM, following the CSF (Hendricks & Singhal, 2001)
• When using the BA to compensate for not being able to meet CSF, this study suggests 25 years to implement TQM
• At Toyota it took 50 years (Liker, 2004)
By following optimal strategy it should takeabout 25 years to implement TQM at NTAX?
0100200300400500600700800900
1000
19
90
19
94
19
98
20
02
20
06
20
10
20
14
20
18
20
22
EFQM scoreLogistic regression curve
Outcome of hypothesis test(RH = RH1 + RH2 + RH3)
Real WorldTQM installed base(“real TQM”)
ModelMonopoly game
Model conclusionsBootstrap Algorithm
Real world conclusionsTQM information infrastructure(“real TQM”)
Formulate
Deduce
Interpret
RH1: The BA is stable
RH: The BA is an optimal mechanism design for implementing TQM
RH3: The BA is optimal
RH2: The BA works
Contribution to knowledge 1:Monopoly as a model of II dynamics
Old knowledge
New knowledge
Kernel theory
Kernel theory
Contribution to knowledge 2:The BA as a Genetic Algorithm (GA)
Old knowledge
New knowledge
Kernel theory
Design theory
Design theory
Contribution to knowledge 3:Use of game theory in action research
1. Diagnosis:Phenomenological attitude
3. Testing of treatment : Positivist attitude
2. Finding a treatment : Mathematical analysis of the game model
Implications for practice
Matching Pennies – zero sum quality control game based on having “real TQM” management commitment
Stag Hunt – trust game of doing “real TQM” or “fake TQM” depends on culture
Monopoly – mechanism design game
Controlling process improvement projects
Controlling the survival of the TQM programme
Controlling cultural change
FAKE TQM
REAL TQM
Self-oppression through capitalist consumerism
Emancipation by academic idealism
Summary of presentation• Motivation
– Problem: Critical systems are getting too complex to be controllable– Possible solution: Bootstrap Algorithm (BA), if it works as claimed
• Theoretical model and hypotheses– A game theoretical perspective on total quality management (TQM)– Interpreting the BA through Monopoly and Genetic Algorithms (GA)– Testable BA hypothesis: The BA is efficient, stable and optimal
• Research method and results– 20 years of action research, three cycles; DNMI + NTAX + NTAX/UiO– BA hypothesis supported
• Contributions to theory and implications for practice– Use of Monopoly, GA and game theory to strengthen BA theory– The BA is useful for implementing TQM in complex environments