Exploring the microfoundations of analytical and synthetic processes - The key to balancing the productivity dilemma?

Abstract

This master s thesis seeks to develop a novel suggestion for how to balance the productivity dilemma within firms having implemented a process improvement method. The productivity dilemma represents the constant tension between a firm s efforts of exploiting existing resources and exploring new resources. Firms need to focus on both exploration and exploitation to remain competitive in the long run. This becomes a particularly relevant topic for firms that have chosen to implement process improvement methods, as it is a commonly held view that process improvement methods induce a one-sided focus on exploitation and incremental innovation, and thus inhibit exploration and radical innovation.

The thesis sheds light on the productivity dilemma by describing and discovering microfoundations of both analytical and synthetic project processes. By microfoundations we understand the team level characteristics and antecedents of the project processes. Analytical processes are linked to exploitation, whereas synthetic processes are linked to exploration. By looking at their microfoundations, we seek to understand how to facilitate both analytical and synthetic processes, and in turn how to balance the productivity dilemma. We also strive to strengthen the belief that incremental and radical innovations indeed are related to analytical and synthetic processes, respectively. This would reinforce the theory on which we build our suggestion for how to balance the productivity dilemma.

Through a qualitative multiple-case study, we empirically investigate four cases with different innovative output in a firm having implemented a process improvement method. In order to identify, discuss and analyze the microfoundations of the project processes, we develop propositions for microfoundations of synthetic and analytical processes, based on our understanding of the relevant theory. We use these propositions as a framework for analyzing the four cases.

The findings of the thesis indicate that there is a link between radical and incremental innovation and synthetic and analytical processes, respectively. The findings also point at several microfoundations that characterize analytical and synthetic project processes. From these findings, we develop a conceptual model for how to balance the productivity dilemma by enhancing the relevant microfoundations of analytical and synthetic processes to facilitate either exploitation or exploration, respectively.

The thesis propose that it is possible to balance the productivity dilemma within firms having implemented a process improvement method by developing decision rules for when to facilitate exploration and exploitation. The thesis advocate that for ill-structured projects, firms should enhance the microfoundations that characterize synthetic processes and exploration. Similarly, for projects that are simple, firms should enhance the microfoundations that characterize analytical processes and exploitation.