radical organizational learning, circadian rhythms and the broad structure
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Radical Organizational Learning, Circadian Rhythms and the Broad Structure. Charles M. Weber INFORMS Meeting – San Diego, CA, USA October 11, 2009. Abstract. The theory of punctuated equilibrium associates radical change with the disruption of an organization's deep structure. - PowerPoint PPT PresentationTRANSCRIPT
Radical Organizational Learning, Circadian Rhythms
and the Broad Structure
Charles M. Weber
INFORMS Meeting – San Diego, CA, USAOctober 11, 2009
10/11/2009 1Charles Weber -- INFORMS 2009
ETMETM
Abstract• The theory of punctuated equilibrium associates
radical change with the disruption of an organization's deep structure.
• An empirical study of semiconductor photomask manufacturing
• suggests that radical improvement in organizational performance
• is contingent upon synchronizing circadian rhythms
• across a stable broad structure of organizations • within and outside the firm.
10/11/2009 Slide 2Charles Weber -- INFORMS 2009
Acknowledgements
• The research that underlies this paper was funded in part by National Science Foundation Grant #0822062 (Enabling Timely Revolutions in Organizational Performance).
10/11/2009 Charles Weber -- INFORMS 2009 Slide 3
Outline of Paper– Timely Revolutions in Organizational Performance– Research Questions
• Circadian Rhythms in the Value Network• Pacing Revolutions in Organizational Performance
– Empirical Study of Photomask Manufacturing Industry• Research Methods
– Preliminary Findings• Leading-edge chipmakers entrain value networks.• “Broad Structure” of revolutions in performance
– Implications: Circadian Ecosystems?– Further Research
10/11/2009 Charles Weber -- INFORMS 2009 Slide 4
The High Tech Manufacturing Lifecycle• Urgent economic environment (Gersick, 1988)• Product output rate is performance metric (Terwiesch & Bohn, 2001)• Timely revolutions in organizational performance!
• Market window open• Capacity Constraint (Bohn & Terwiesch, 1999)• Time-to-Volume Pressure (Terwiesch & Bohn, 2001)• Radical improvement in organizational performance
10/11/2009 Charles Weber -- INFORMS 2009 Slide 5
Perf
orm
ance
(Pro
duct
Out
put R
ate)
time
• Market window closed
• Negligible output
• Market constraint • Output saturation
Punctuated Equilibrium: The Classical View (Prigogine & Stengers, 1984; Gersick 1991)
Revolution • Deep structure becomes unglued • Radical, frame-breaking change (Tushman et al., 1986)
10/11/2009 Charles Weber -- INFORMS 2009 Slide 6
Perf
orm
ance
(Pro
duct
Out
put R
ate)
time
Stasis, momentum• Deep structure
of subsystems• Incremental
change
Stasis, momentum
• New deep structure • Incremental change
ProcessQuality Learning (CI)
Surge in OrganizationalPerformance
ProductionVolume Learning (non-CI)
Production Quality Learning (CI)
Delayed Impact
TL(t/tVP)/TLmax
Q(t/tVP)/Qmax (7)
qN(t/tVP) (1)
YP(t/tVP) (6)
YF(t/tVP) (4c)
YL(t/tVP) (4a)
tPR/tVP
Venture Inception
tPD/tVP tCS/tVP
Product Release
PR PD CS VP tVP/tVP
Optimal Output
Radical Learning Without Radical Change!(Weber, 1996-2009)
Slide 7
• Subsystem Learning!
10/11/2009 Charles Weber -- INFORMS 2009
No Strokes of Organizational Genius!(Weber, 1996-2009)
• Radical improvement in organizational performance occurs without radical organizational change.– The deep structure stays intact!– Radical change (of leadership, structure, processes
and practices) always disables revolutions in organizational performance.
• Managers coordinate subsystem-level learning activities to deliver timely revolutions in organizational performance.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 8
Research Questions• Are timely revolutions in organizational
performance just about subsystem learning?• What about external factors?
– Munificence? (e.g., Tushman & Anderson, 1986) – Value networks? (Christensen & Rosenblum, 1995)
• How are timely revolutions paced?– Event-based pacing? (Gersick, 1994)– Temporal pacing? (Brown & Eisenhardt, 1997)– Circadian Rhythms? (Ancona and Chong, 1996)
10/11/2009 Charles Weber -- INFORMS 2009 Slide 9
Circadian Rhythms(Ancona & Chong, 1996)
• Commonly observed in nature – One component of system sets the pace for the rest
of the system.• E.g., the heart sets the pace for the whole human body.
– External ‘zeitgebers’ from the environment entrain the human body.
• E.g., 24-hour diurnal cycle determines sleep patterns and body temperature.
• Circadian rhythms in organizations– Subsystems and organizations are entrained by other
subsystems, organizations and the environment.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 10
Innovating Like Clockwork: The CMOS Process Technology Supply Chain
http://www.itrs.net
10/11/2009 Charles Weber -- INFORMS 2009 Slide 11
65 nm
CoreTM “Nehalem”“Sandy Bridge”
45 nm 32 nm 22 nm 16 nm
“Haswell”
Comp. μAValueChain
CM
OS
Proc
ess
Supp
ly C
hain
present
2005 2006 2007 2008 2009 2010 2011 2012 20142013CY
Chip-Makers
CMOS process architecture follows Moore’s Law
2nd OrderSup-pliers
1st
OrderSup-pliers
Lithography and process tools, photomasks, wafers, photo-chemicals are developed on the Moore’s Law schedule.
Lenses, components, materials, software, chemicals are developed on the Moore’s Law schedule.
Pacing Revolutions in Organizational Performance
• Do the circadian rhythms of suppliers determine the timing and durations of timely revolutions by manufacturers?
• Do timely revolutions by manufacturers force their tool suppliers to undergo timely revolutions as well?
• How about the suppliers of subsystems that go into the tools?
10/11/2009 Charles Weber -- INFORMS 2009 Slide 12
Perf
orm
ance
(Pro
duct
Out
put R
ate)
time
Tool Supplier
ToolSubsystemSupplier
Manufacturer
Empirical Study of Photomask Manufacturing– Ideal industry to study timing in high tech industries. – Photomasks are within semiconductor value network.
• Photomask generations align with semiconductor process generations.
– Photomasks contain the patterns that are printed onto microchips.
• They must be ready and available before chips are printed. • They are very difficult and expensive to make.
– They must be written onto quartz – This requires sophisticated e-beam writing tools and inspection tools.
• Tools and quartz plates must be ready for manufacturing before photomasks can be produced in volume.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 13
Research Methods– Initial survey determines needs and practices of
photomask manufacturers. (Berglund, Weber, Gabella, 2009)
– Case study research (Eisenhardt, 1989; Yin, 1994)• 8 cases; 25 case interviews to date.• Semiconductor process generation constitutes case.
– Composite sequence analysis (Miles & Huberman, 1985)• Determines sequence of events that is required to enable
timely revolutions in organizational performance
– Lots of Secondary sources including … • SIA International Technology Roadmap for Semiconductors• http://en.wikipedia.org/wiki/Intel_Tick-Tock • http://www.intel.com/technology/tick-tock/index.htm
10/11/2009 Charles Weber -- INFORMS 2009 Slide 14
Preliminary Findings– Leading-edge chipmakers entrain mask makers (as they
do tool makers).• Most leading-edge chipmakers have internal mask shops for
leading-edge masks. (Williamson, 1985)– Tool makers and mask makers entrain followers among
chipmakers. • Followers among chipmakers do not have internal mask shops
have for leading-edge masks. • Mask makers (and tool makers) enable timely revolutions in
chipmakers when masks and tools become available– “Broad Structure” in the semiconductor value network
• enhances mutual munificence of participants.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 15
Pacing in the Photomask Value Network
• Mask tool subsystems ready for mask tool• Mask tool ready for mask making• Masks ready for chip production
10/11/2009 Charles Weber -- INFORMS 2009 Slide 16
ProcessResearchSpike
PilotDevelopmentSpike
Entrained Timely Revolution
Zeitgeber:Leading-edge chipmaker
The Broad Structure of Photomask Manufacturing
• Mask tool makers also make semiconductor tools.• The photomask market is not very large (~$3B/year).• Mask tool/material makers respond to large, leading-edge chipmakers.• Followers are indirectly entrained by leaders.• Performance surge delayed -- competitive advantage for leaders.10/11/2009 Charles Weber -- INFORMS
2009 Slide 17
Mask Shop for Leading-edge
Masks
Mask Shop for General Purpose
Masks
Leading -edgeSemiconductorManufacturer
FollowingSemiconductorManufacturer
Mask Tool or Material
MakerMask Tool or Material
MakerMask Tool or Material
MakerMask Tool or Material
Maker
Within Same Company
supplies entrains
Ticks and Tocks at Intel http://en.wikipedia.org/wiki/Intel_Tick-Tock
http://www.intel.com/technology/tick-tock/index.htm
10/11/2009 Charles Weber -- INFORMS 2009 Slide 18
“old” process;new product
Product ShrinkPlatform ExtensionMeyer Utterback (1997)
CMOS Architectural Innovation Henderson Clark (1990)
Platform RenewalMeyer Utterback (1997)
Product?? Radical Innovation?
present
2005 2006 2007 2008 2009 2010 2011 2012 20142013CY
65 nm
CoreTM “Nehalem”“Sandy Bridge”
45 nm 32 nm 22 nm 16 nm
“Haswell”
CMOSProcessArchitecture
ComputerMicro-Architecture
Moore’s Law
?
3D device?
Circadian Ecosystems
10/11/2009 Charles Weber -- INFORMS 2009 Slide 19
65 nm
CoreTM “Nehalem”“Sandy Bridge”
45 nm 32 nm 22 nm 16 nm
“Haswell”
CMOSProcessArchitecture
ComputerMicro-Architecture
present
2005 2006 2007 2008 2009 2010 2011 2012 20142013CY
Moore’s Law
MSVista
ComplementorInnovation(Gawer, Cusumano)
SupplierInnovation
• Is Intel the keystone of an ecosystem? (Iansiti, Levien, 2004)• Does Intel’s tick-tock clock set the pace for a significant portion
of the global economy?
Further Research• Coming up next year:
– Qualitative analysis – of sequences of events – that enable timely revolutions – in organizational performance – within the semiconductor value network.
• Anticipated Theoretical Contribution– Advance towards a theory of organizational
learning for value networks.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 20
List of References• Ancona, D., and Chong, C.-L. 1996. Entrainment: Pace cycle, and rhythm in organizational
behavior. In B. M. Staw and L. L. Cummings (eds.), Research in Organizational Behavior, 18: 251-284. Greenwich, CT: JAI Press.
• Berglund, C. N., Weber, C. M., and Gabella, P. 2009. Benchmarking the productivity of photomask manufacturers. IEEE Transactions on Semiconductor Manufacturing (in press).
• Bohn, R. E. 1995. Noise and Learning in Semiconductor Manufacturing. Management Science 41(1), 31-42.
• Bohn, R. E., and Terwiesch, C. 1999. The economics of yield-driven processes. Journal of Operations Management 18(1), 41-59.
• Christensen, C. M. and Rosenbloom, R. S. 1995. Explaining the Attacker’s Advantage: Technological Paradigms, Organizational Dynamics and the Value Network. Research Policy 24, 233-257.
• Eisenhardt, K. M. 1989. Building theories from case study research. Academy of Management Review 16, 620-627.
• Gawer, A. and Cusumano, M. 2002. Platform Leadership: How Intel, Microsoft and Cisco drive industry innovation. Harvard Business School Press, Cambridge, MA.
• Gersick, C. J. G. 1988. Time and transition in work teams: Toward a new model of group development. Academy of Management Journal 31(1), 9-41.
• Gersick, C. J. G. 1991. Revolutionary Change Theories: A multilevel Exploration of the Punctuated Equilibrium Paradigm. Academy of Management Review 16(1), 10-36.
• Gersick, C. J. G. 1994. Pacing strategic change: The case of a new venture. Academy of Management Journal 37(1), 9-45.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 21
List of References (continued)
• Henderson, R. and Clark, K. 1990. Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly, 35, 9-30.
• Iansiti, M. and Levien, R. 2004. Strategy as ecology. Harvard Business Review (March), 68-78.• Meyer, M. , Tertzakian, P. and Utterback, J. 1997. Metrics for managing research and
development in the context of the product family. Management Science 43(1), 88-111.• Miles, M. B., and Huberman, A. M. 1984. Qualitative data analysis. Sage, Beverly Hills, CA. • Terwiesch, C., and Bohn, R. E. 2001. Learning and process improvement during production
ramp-up. International Journal of Production Economics 70(1), 1-19.• Tushman, M. and Anderson, P. 1986 . Technological Discontinuities and Organizational
Environments. Administrative Science Quarterly, 31, 439-465.• Tushman, M. L., Newman, W. H. and Romanelli, E. 1986. Convergence and upheaval:
Managing the unsteady pace of organizational evolution. California Management Review 29(1), 29-44.
• Williamson, O. 1985. The Economic Institutions of Capitalism, New York: Free Press, chapters 2-4, 43-102.
• Yin, R. K. 1994. Case Study Research, Sage Publishing, Newbury Park, CA.
10/11/2009 Charles Weber -- INFORMS 2009 Slide 22