Continuous improvement programs as processes for ...

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André Luiz Fischer, Natacha Bertoia Da Silva

Univ. Empresa, Bogotá (Colombia) 5 (10): 49-72, junio de 2006

Continuous improvementprograms as processes fororganizational learning: a casestudy of a company in the foodproducts industry

André Luiz Fischer,*Natacha Bertoia Da Silva**

Recibido: marzo de 2006 - Aprobado: abril de 2006

ABSTRACTThis article intends to show the relationships between quality practices and the process oforganizational learning. When we look at the literature about programs of continuous im-provement we see that theoreticians consider that the process of organizational learning is asuperior stage in the quality culture adopted by companies. To investigate this possibility, weput together a series of indicators taken from classic authors who have written about organi-zational learning. Adopting a multiple methodology, we applied these indicators to two plantsbelonging to the Nestlé food product company which have introduced continuous improve-ment programs over the last two years.

Key Words: Organizational Learning, Total Quality and Human Resources.

RESUMENEste artículo intenta mostrar la relación entre prácticas de calidad y el proceso de aprendizajeorganizacional. Al revisar la literatura sobe programas de mejoramiento continuo encontra-mos que los teóricos consideran que el proceso de aprendizaje organizacional es una etapaavanzada en la cultura de calidad adoptada por las compañías.

* Professor of the School of Economics, Business and Accounting of the University of SãoPaulo. Address: Avenida Professor Luciano Gualberto, 908 sala E-118 – Cidade Universitária.CEP - 05508-900 – São Paulo – SP – BRASI. e-mail: [email protected].

** Postgraduated in School of Economics, Business and Accounting of the University of SãoPaulo, Address: Avenida Professor Luciano Gualberto,908 sala E-118 – Cidade Universitária.CEP - 05508-900 – São Paulo – SP – BRASIL. e-mail: [email protected]

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Continuous improvement programs as processes for organizational learning


INTRODUCTION

Over the last few years we have wit-nessed the escalating occurrence oftransformations within organizationsthat are trying to prosper in a worldfull of unexpected, profound and con-stant change. The rapid expansionof human knowledge, the revolution-ary pressure of new technologiesand the high level of rivalry, all re-sulting from globalized competition,have provoked a continuous refor-mulation of the competitive environ-ment, both in mature markets indeveloped countries and in emerg-ing markets such as Brazil.

Companies are challenged to faceever-stiffer competition and to servecustomers who are becoming in-creasingly demanding. Success, andeven survival, depends on innova-tive solutions for some of the vitalissues, such as product and servicequality, agility and flexibility whendealing with customers, and com-petitive costs.

Total quality, with its countless con-cepts and tools, has helped the com-pany improve its products and itsresults. By adopting its concepts andpractices, industrial organizations in

particular have been improving theirprocesses, turning the quest for ex-cellence into a philosophy and an in-trinsic element of their organizationalbehavior.

Of the various lines of action involvedin quality management, continuousimprovement programs have beenwidely used. The success of thisstrategy, however, is much morelinked to the degree of involvementand participation of the whole organi-zation in the change process, thansimply to the systematic use of pre-defined methods and procedures.

The participation of people in thesechange processes has been pre-sented by the subject’s theoreticiansas the first step in the organizationallearning process. They show that thedesire of an organization to learngoes beyond the simple adaptationto a previously conceived organiza-tional change. It combines individualand organizational transformation andmanifests itself as a movement forcreating and producing knowledge.

In this study we try to investigate howthe practices involved in a programof continuous improvement becomecharacterized as a process of organi-

Para investigar esta alternativa, hemos combinado indicadores tomados de diversos autoresclásicos quienes han escrito sobre aprendizaje organizacional. Implementando una metodolo-gía ampliada, aplicando estos indicadores a dos plantas de la compañía Nestle, las cuales hangenerado programas de mejoramiento continuo en los dos últimos años.

Palabras clave: Aprendizaje organizacional, calidad total, recursos humanos

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zational learning. By means of a casestudy of a project introduced by Nes-tle, a major food company, it was pos-sible to identify the factors thatinterfere in this transformation proc-ess. We believe that with this we shallbe contributing to the advance of theo-retical production in this area and gen-erating elements for reference forthose who are involved with projectsof this type in organizations.

THEORETICALREFERENCES ONQUALITY ANDORGANIZATIONALLEARNING

Quality, conceptsand evolution inBrazil

Garvin (1992) points out that the con-cept of quality has existed for thou-sands of years, but that only recentlyhas it appeared as a formal manage-ment function. Modern approaches toquality have been appearing little bylittle, through evolution, rather than asa result of remarkable innovations.

The management of quality, or ma-nagement for quality, is in fact thetechnological evolution of the vari-ous and numerous techniques in-volved in corporate administration.This evolutionary process has beengoing on for many years and is basedon different approaches, the main

ones of which were put forward bythree notable contributors: W.Edwards Deming, Joseph Juran andPhilip Crosby, all of whom promotedthe concepts of quality managementin various organizations throughoutthe world. This resulted in three dif-ferent schools of thought, identifiedin literature as: American, Japaneseand European.

Among the countries that introducedquality programs, the United Statesand Japan are the two that stood outand became global benchmarks.

Of the changes that Brazil wentthrough at the beginning of the eight-ies, the ones that stand out are thoseinvolving the new concepts in workorganization that were introduced byindustrial companies, such as work-ing in groups, quality control circles(QCC), kanban, just in time and oth-ers. Quality circles were perhaps theones that spread farthest, creating amovement that was analyzed in aconsiderably controversial manner bythe analysts. Some evaluated QCCsin a positive way, associating themwith greater worker participation andthe adoption of group strategies. Thiswas in clear contrast to the principlesof classic administration. Others un-derstood these practices to be an in-tensification of work exploitation thatwas now trying to encompass thecognitive potential of the worker; inother words, for these analysts, it wasmerely a further consolidation of theTaylorist trends of management.

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In Brazil, the issue of quality becamestronger and more prevalent in or-ganizations after the early nineties.In line with the principles of the newindustrial policy introduced by theCollor government, Brazilian compa-nies in this period lived through mo-ments of great competitive pressure,which led them to restructure theirproduction processes and even adoptTQM policies and practices.

The opening up of commerce con-stituted a central element in the in-dustrial policy introduced as from thebeginning of the nineties. This policydiffers from previous ones becauseit shifts the nub of the issue from con-cern with expanding production ca-pacity to the issue of efficiency andcompetitiveness.

One of its greatest impacts on indus-trial culture was to replace the de-mand for government favors andincentives with investments in qualityand productivity. Significant initiativesof this period include the ConsumerProtection Code (law 8,078 of 11th

September 1990) and the BrazilianQuality and Productivity Program(PBQP), which provided for a seriesof activities relating to awareness, in-centives, training and development

According to Fleury (1993), “PBQPwas a mobilizing program, under thesole strategic guidance of agents ofsociety that, organized by differentsectors in the economy, diagnosed andimplemented improvement actions”.

The opening up of the economy andthe desire to maintain recently con-quered market niches led many com-panies to modernize in a significantway, by looking for more advancedprocess and product technologies orby even adopting new managementmethods.

As part of the quality practices, Con-tinuous Improvement Programs sprangup, the majority of which, in order tobe effective, have three important andcomplementary focal points: cultural,behavioral and technical. And so it canbe seen that this type of program iscloser to the reality of the organiza-tional learning process than others,such as the ones that certify environ-mental quality or process control.

2.2. Continuousimprovementprograms and theissue oforganizationallearning

It is well known that the renewal andimprovement of the quality of productsand services delivered to customersis increasingly based on the creationof an innovative corporate environ-ment, the basic values of which rec-ognize and give priority to satisfyingcustomers as the only source of profit,growth and measure of collective suc-cess, on the clear understanding ofthe concepts and factors that add up

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to quality and productivity, and on theeducation of all people in the organi-zation in the methods and techniquesfor solving problems and improvingquality and productivity.

According to Bessant (1994) con-tinuous improvement is becoming anincreasingly important complement toradical forms of innovation. There-fore, besides being a key element inquality management programs, it isalso growing in areas such as flex-ibility, cost reduction, inter-companyrelationships and improvements insupport processes.

Continuous improvement, whichspread throughout the quality move-ment, as a result of the Kaizen con-cept, has been important for providingsignificant results and for being the le-ver, or the basis for conduct, for im-proving the performance of highlysuccessful companies, especially in themanufacturing area. (Shiba et al, 1997).

However, the mere adoption of tech-niques for improving managementprocesses and systems has not guar-anteed the transformation that is nec-essary if companies are to adaptquickly and continuously to change.“Creativity needs to be developed todeal with the new challenges. Thiscapability is associated with the “know-ledge” created and self-produced bythe organization itself” (Oliveira, 1996).

It is understood that Kaizen was oneof the starting points in continuous

improvement; however a more mo-dern vision has been proposed byShiba (1997). The author catego-rizes the process of continuous im-provement into three types: processcontrol, reactive improvement andproactive improvement. The historyof the quality movement is related tothe evolution of these concepts of im-provement. It began with process con-trol in the United States in the thirtiesand in Japan in the fifties. Reactiveimprovement sprang up in the sixtiesand seventies and was followed byproactive improvement which startedto predominate in the eighties.

The process control phase is what iscalled the cycle that controls or main-tains a good process in operation. Itworks on the basis of monitoring as away of guaranteeing that the processis functioning in the intended manner.The process operator is responsible forbringing it back to correct operation ifit goes out of control (specifications).The corrective action must be carriedout in a way that has been predeter-mined and described in the mainte-nance manual and is the only way ofcorrecting the problem presented bythe process. This cycle is known asSDCA (Standard, Do, Check, Act).

The second way proposed by Shibafor achieving continuous improvementis called reactive improvement. Thisphase deals with correction as a re-action to faults, defects, delays andlosses. To achieve this, data must becollected and analyzed, the basic

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causes of the problem must be foundand the appropriate countermeasuresimplemented. The essence of the re-active approach is the standardizationof the process for solving problemsusing, for example, the seven steps orseven tools of quality control: Paretodiagrams, cause and effect diagrams,histograms, control letters, dispersiondiagrams and check-sheets.

Proactive improvement on the otherhand, deals with situations where thereis no clear idea of a specific and nec-essary improvement. This approach isused to find the original criteria onwhich the rest of the improvementwork is based. Therefore it is neces-sary to choose a direction for the com-pany before starting any proactiveimprovement activity. There is no sys-tematic pattern to be used in this typeof approach, since an important aimof proactive methods is to meet thedemands of the customer by adaptingthe processes in such a way as toachieve this objective.

According to Bessant et al (1994),continuous improvement can be de-fined as a focused, continuous andincremental innovation process, in-volving the whole company. Its smallsteps, high frequency and small chan-ge cycles, if taken in isolation, havelittle impact, but their cumulative ef-fect can make a significant contribu-tion to performance.

Bessant emphasizes that despitetheir apparent simplicity continuousimprovement programs are not al-

ways successful and are particularlydifficult to sustain over a long periodof time. Given that continuous im-provement, by its very definition, re-quires a certain period of time beforeits impact is truly felt, this means thatfew benefits emerge from such pro-grams. Therefore their success willdepend on the creation of an enablingcontext within the organization.

Furthermore, it will not survive with-out fundamental proposals and objec-tives; in other words, its ultimatepurpose needs to be made clear. Theestablishment of well-defined strate-gic objectives and their communica-tion to everyone in the organization isa prerequisite for the success of con-tinuous improvement programs. So, forBessant, managers dealing with con-tinuous improvement programs mustbear in mind that organizations needto know where they are going, and theyneed to be certain that this is efficientlycommunicated to all employees.

The Bessant model (2000) suggeststhat there are different levels of skilldevelopment –or levels of maturity –in Continuous Improvement. The clas-sification of these skills allows com-panies to identify their position inrelation to other companies, and fromthis to develop a plan for expandingtheir skills for continuously improving.The author defines five levels of ma-turity that are associated with the de-velopment of skills and routines forcontinuous improvement. They are:

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Levels of Continuous ImprovementTable (Adapted from Bessant, 2000)As can be seen, the highest level theContinuous Improvement Programcan attain, in any given company, ac-cording to Bessant, is organizationallearning. The course followed by thisparticular author is in line with theaims of this study. It starts from theassumption that to generate im-provements it is necessary thatother knowledge be produced, i.e.,a new interpretation of how workis done. Thus, the more consciousthe organization becomes of con-tinuous improvement practices,thereby broadening and consolidat-ing their use, the more it will be de-veloping a learning environment. Inthe next topic we will analyze theissue of learning by establishing itslinks with continuous improvementpractices.

Consolidating theconcept oforganizationallearning

There are many definitions of organi-zational learning. Despite academicdifferences, the majority focus on theimportance of acquiring, improvingand transferring knowledge, therebyfacilitating individual and collectivelearning and involving and modify-ing the behavior of its members andorganizational practices as a resultof learning.

The majority of studies argue thatorganizational learning is a processthat develops over time and links itto the acquisition of knowledge andperformance improvement. But thereis a disagreement about other impor-tant aspects. Some people believe,

Level of Continuous Improvement Level 1 – Pre-Interest in Continuous Improvement: there is no formal structure for improvement in the organization, with problems being solved at random, always considering only the short-term benefit. In addition, there are no strategies with impact in the human resources area, such as training, development and recognition. Level 2 – Structured Continuous Improvement: there is a formal committee for constructing a system to develop Continuous Improvement in the company; employees are involved in its activities, even if those activities are not integrated with the day to day operations of the organization. Employees are trained to use the basic tools for improvement and a recognition system is introduced. Level 3 – Goal-Oriented Continuous Improvement: there is the formal use of strategic objectives, with continuous improvement activities forming part of general administration activities. Level 4 – Proactive Continuous Improvement: there is a tendency to develop autonomously, and individuals and groups manage and direct their own processes. At this level, responsibility for continuous improvement is devolved to the problem-solving unit. Level 5 – Complete Continuous Improvement Capability: close to the learning organization model, with identification and systematic solution of problems and the sharing of learning.

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for example, that behavioral changeis vital for learning; others insist thatit is enough just to develop new waysof thinking.

According to Garvin (2000), the ba-sic issues that will identify whetheran organization is learning or not, are:

• Does the organization have aclearly defined learning pro-gram? The organization knowsits customers, competitors, mar-kets, technologies and productionprocesses and is actively seekinginformation.

• Does the organization avoidrepeating mistakes? The learn-ing organization reflects upon pastexperience.

• Does the organization losecritical knowledge when a per-son leaves? Organizational learn-ing avoids this problem becauseit does what is necessary to insti-tutionalize knowledge. Wheneverpossible, knowledge is codified inpolicies and procedures that areavailable to large groups of peo-ple, and constructed on the basisof the values, norms and operat-ing practices of the organization.

• Does the organization act to getresults based on what it knows?The learning organization is notsimply based on the replacementof knowledge. New learning andadaptation of its behavior mustcreate competitive advantages forthe company.

For Garvin, “the learning organiza-tion is one that has the skills requiredto create, acquire and transfer know-ledge, its being capable of changingits behavior in order to reflect newknowledge and ideas”.

However, studies on organizationallearning divide the process into threeor four stages. For learning to hap-pen, organizations must first acquireinformation. Then, the organizationinterprets the information and pro-duces views, positions and a refinedunderstanding. Finally, the organiza-tion uses or applies the informationin tasks, activities and new behavior.

When analyzed in detail, the proc-ess of organizational learning has dis-tinct phases: it begins with individuallearning, moves to group learning andfinally characterizes itself as organi-zational learning.

This process is not created from oneday to the next. In the majority oforganizations that have been success-ful, this was the result of attitudes,commitment and management proc-esses that were carefully cultivatedand that built up in a gradual andcontinuous manner over time.

With steps such as how to promotean environment suitable for learning.Training in how to brainstorm, prob-lem solving, evaluation exeperimentsand other basic learning aptitudes arein fact essential. Encouragement toexchange ideas is also highly valuable.

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When the organization does not man-age to create the conditions neces-sary for learning, it suffers fromlearning deficiencies: amnesia (lossof organizational memory), supersti-tion (the biased interpretation of ac-quired experience), paralysis (theinability to act), schizophrenia (lackof coordination of the organizationalcapabilities), useless culture, incom-plete knowledge and “shortsighted-ness” (Dibella, 1999).

Senge (1990), one of the great theo-reticians of organizational learning,presents five fundamental “disci-plines” that organizations must de-velop for the innovation and learningprocess to occur:

• Personal control: through self-knowledge, people learn to clarifyand deepen their personal objec-tives, to concentrate their effortsand to see reality in an objectiveway;

• Mental models: they are thedeep-rooted ideas, generalizationsand even images that influencethe way with which people seethe world, and their attitudes;

• Shared visions: when an objec-tive is seen as concrete and legiti-mate, people dedicate themselvesand learn not as an obligation butbecause they want to. They cre-ate shared visions;

• Group learning: in groups in whichthe collective skills are greater thanthe individual ones, the capacity forcoordinated action is developed;

• Systemic thought: this is the fifthdiscipline and the one that bringstogether the rest in a coherent setof practice and theory, avoidingthat each one be seen in an iso-lated manner.

According to this author, the settingup of learning organizations beginswith commitment between the peoplein an organization to review the veryway in which they look at the world.A learning organization must be com-mitted to examine its structures in asystemic way. It must also defend theuse of the systemic thinking tool, tocreate a healthy community in whichthe members are free to explore newways of working and thinking.

The stage in the process called indi-vidual mental models is called sobecause it represents much morethan the traditional concept ofmemory. Memory has the connota-tion of a deposit of very static know-ledge, while mental models involvethe active production of new know-ledge. Mental models represent thepersonal vision of the world, cover-ing explicit and implicit perceptions.They also provide the correct con-text within which to see and inter-pret new material and they determinehow the information that is stored willbe used in a particular situation.

On the other hand, Peter Senge ar-gues that the transfer from individuallearning to organizational learning iseffective to the extent that the mem-

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bers of the organization manage tomake their mental models explicit andtransferable. For an active manage-ment of the learning process, it is ab-solutely essential to understand thatthe discipline of mental models rep-resents the basis of the theory of thetransfer of individual learning to or-ganizational learning (Senge, 1990).The question of transfer is well ex-plored in the model of the knowledge-creating company, as described byNonaka and Takeuchi (1997).

For Nonaka and Takeuchi (1997), thecreation of knowledge involves theinteraction between single loop learn-ing and double loop learning (Argyrise Schon, 1978), which forms a typeof dynamic spiral.

The conversion of individual know-ledge into a resource available forother people is the central activityof the knowledge-creating com-pany. The process of transforma-tion occurs constantly at all levelsin the organization. What can benoted is that organizational learningis characterized as being a processthat happens over time, while know-ledge is the actual result of this proc-ess. Therefore, when Nonaka andTakeuchi present the process forcreating knowledge, they are refer-ring to the actual learning process.Knowledge and its product as de-fined by Nonaka and Takeuchi:knowledge is defined as being a “realand justified belief”.

The organization cannot createknowledge without individuals. Theorganization supports creative indi-viduals or provides them with thecontext within which to create know-ledge. The creation of organizationalknowledge must be understood as aprocess that spreads the knowledgecreated by individuals “organization-wide”, refining it as part of the or-ganization’s knowledge network.

The vision of Nonaka and Takeuchiis that tacit and explicit knowledgeare not totally separate entities, butmutually complementary and perma-nently interacting.

Explicit knowledge is formal and sys-tematic. Therefore it is easily com-municated and spread by means ofproduct specifications, scientific for-mulas or computer programs.

Tacit knowledge is highly personal.It might be difficult to formalize andits transfer to others is also hard.Tacit knowledge consists in part oftechnical skills – a type of informaland hard-to-define ingenuity, alliedto know-how. Tacit knowledge hasan important cognitive dimension. Itconsists of mental models, beliefsand views that are so deep-rootedas to be held as something certainand not subject to easy expression.It is precisely for this reason thatthese implicit models have a pro-found influence on the way in whichwe see the world around us.

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The dynamic knowledge-creatingmodel is anchored in the critical sup-position that human knowledge iscreated and expanded by means ofthe social interaction between tacitknowledge and explicit knowledge,called knowledge conversion by thetheoreticians. In this way, Nonakaand Takeuchi (1997) identified thatthere are four different models ofknowledge conversion in any organi-zation:

• Socialization: from tacit knowledgeto tacit knowledge. This is the con-version that arises from the inter-action of tacit knowledge betweenindividuals, principally by means ofobservation, imitation and practiceand the key for acquiring know-ledge in this way is shared experi-ence.

• Externalization: from tacit know-ledge to explicit knowledge. Thisis a process for creating perfectknowledge, to the extent that tacitknowledge becomes explicit andexpressed in the form of meta-phors, analogies, concepts, hy-potheses or models. Dialogue andcollective reflection are examplesof situations that provoke the ex-ternalization process.

• Combination: from explicit know-ledge to explicit knowledge. Thisis the process of systemization ofconcepts into a knowledge sys-tem. The exchange mechanismcould be meetings, telephone con-versations and computer systemsand it enables the reshaping of

existing information, leading tonew knowledge.

• Internalization: from explicit know-ledge to tacit knowledge. Whenthey are internalized in the tacitknowledge bases of individuals inthe form of mental models orshared technical know-how,socialization, externalization andcombination experiences becomevaluable assets. In order for ex-plicit knowledge to become tacit,verbalization and diagram schema-tization of knowledge in the formof documents, manuals or oral sto-ries are necessary. This way ofconverting knowledge is whatcomes the closest to the processof organizational learning.

The creation of knowledge is a con-tinual and dynamic interaction bet-ween tacit knowledge and explicitknowledge. From these knowledge-creating processes, the knowledgespiral is formed. The knowledge spi-ral begins with the socialization proc-ess, followed by externalization,combination and finally internaliza-tion, which starts the cycle all overagain. It is a spiral process because itbegins at the individual level and rises,broadening communities of interac-tion that cross the frontiers betweensections, departments, divisions andorganizations.

Looking at it from another point ofview, Garvin (1993) believes thatorganizations can use five different

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organizational learning buildingblocks:

• Solution of problems in a system-atic way: based on the qualitymovement methods and in linewith scientific methods, the useof data for taking decisions andthe use of simple statistical toolsfor organizing data and drawingconclusions.

• Experimentation: the systematicsearch for and test of new know-ledge using the scientific method.However, unlike solving problems,experimentation aspires to takingadvantage of opportunities andbroadening horizons and not todealing with current difficulties.Experimentation comes in twobasic forms: continuous projectsand demonstration projects of dif-ferent types.

• Personal experience: companiesmust analyze their successes andfailures, evaluate them in a sys-tematic way, and register whathas been learned in a way thatis open and accessible to em-ployees.

• Learning from others: benchmark-ing is a continuous experience ininvestigation and learning that en-courages the identification, analy-sis, adoption and implementationof best practice in the sector.

• Knowledge transfer: knowledgeneeds to be spread quickly andefficiently throughout the wholeorganization.

Synthesis andstructure of theanalysis

In the previous chapters, we havepresented some of the definitions ofquality, continuous improvement andorganizational learning, emphasizingthe way in which various academicshave considered that the processtakes place. For the present study,the objective of which is to analyzethe continuous improvement programfrom the point of view of organiza-tional learning, some considerationsare more relevant than others.

What we can see is that the theore-ticians have researched and pro-duced a great deal on organizationallearning, principally from the concep-tual (theoretical models) and corpo-rate strategy viewpoint. And so theresearchers, when they do theirstudies on organizational learning,choose a theoretical model and fromthis they develop their research.

It can also be seen that when theystudied organizational learning, thetheoreticians focused on organiza-tions and not specific programs-in this case the continuous im-provement program. Therefore, wetook as a basis the proposal of theauthors mentioned in the theoreti-cal framework of the various aca-demics who have written on thissubject and carried out an interpre-tation and analysis. From this weidentified six dimensions, each one

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defined operationally, and pre-sented some specific variables that

allowed us to put together the re-search tools.

Dimensions of the Analysis

Group Learning: transformation of collective reasoning and communication skills. Dialogue is fundamental. (Senge, Garvin)

B – Building the Organizational Memory: the process of storing information relative to the PMC, which can be easily recovered, as well as being available to everyone. (Argyris, Garvin)

C – Personal Control: this is the expansion of personal capability, so that individuals know how to clarify and consolidate their professional and personal objectives (Senge).

D – Knowledge Spiral: this is characterized by four types of knowledge conversion (socialization, combination, internalization and externalization), managed in an articulate and cyclical way, beginning at the individual level, moving through the group level and reaching the organizational level. (Nonaka, 1994)

E – Transformation of Mental Models and questioning their assumptions (double loop): the program encourages the notion that ideas that are deep-rooted, generalizations and images that influence the way in which people see the world and their attitudes should be permanently questioned (Senge). Training processes and the posture of continuous improvement only encourage the correction of errors or the discussion of assumptions as to how they occur (Argyris)

F – Agents of Organizational Action: Do individuals feel that what they do is part of an organizational action that is greater than the one they are involved in? Does this feeling lead them to think about how the action of correcting errors contributes to organizational strategy? These individuals can discover sources of errors, and can create new strategies based on new assumptions (Garvin, 1993).

TABLE 1: Dimensions of the Analysis (as proposed by the authors)

We believe there are four genericpossibilities for conclusions to this re-search: everything stayed the sameafter the introduction of the Continu-ous Improvement Program; throu-ghout the process there was onlyindividual learning on the part ofthose involved; there was individuallearning and favorable results whenthe project was introduced or therewas individual learning, favorableresults and organizational learning.The latter is the hypothesis of thisresearch.

METHODOLOGY

According to Yin (2001), case stud-ies “investigate a contemporary phe-nomenon within its real life context,specially when the limits between thephenomenon and the context are notclearly defined”.

Yin also points out that, as it becomesdifficult to distinguish between thephenomenon and the context, othertechnical characteristics are impor-tant for defining case studies. Case

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studies are a research strategy thatcovers planning logic, provides evi-dence of the collection and analysisof data, and is characterized as a glo-bal process and not only as a tacticfor collecting data.

Yin emphasizes that the developmentof the theory as part of the projectphase is essential, mainly when theintention behind the case study is todetermine or test the theory.

For Hartley (1994), case study re-search consists of a detailed investi-gation, by means of the collection ofdata during a period of time, fromone or more organizations or groupsof organizations, with the objectiveof proving an analysis of the contextand the processes involved in thephenomenon being studied.

Therefore, by means of a multiplecase study, we sought to analyze ifthe practices of a program for con-tinuous improvement can be char-acterized or not as a process oforganizational learning.

The universe of this research ismade up of two food product plantsbelonging to Nestle, located in the in-ner state area of the State of SaoPaulo, Brazil, and which introduceda Continuous Improvement Programin August 2001.

Therefore, to collect the data, weused a multiple methodology, known

as triangulation, which according toTrivinos (1987) allows for in-depthinvestigation into the topic, therebydetecting both the obvious dimen-sions of any given social phenomenonas well as the less obvious ones.

To collect the data we used threedifferent, but at the same time, in-ter-connected techniques: documen-tary analysis, personal interviews andquestionnaires.

From the documentary analysis wetried to discover the story behind thequality project, and more particularlyNestle’s continuous improvementprogram, as well as evidence of theorganizational learning process fromthe records of what was done, manu-als with directives for introducing theprogram, reports and hand-outs.

On the other hand, we carried outstructured interviews with the cor-porate project manager and with thelocal manager in each plant. Use ofthe structured interview allowed usto obtain an overview of the continu-ous improvement program, as wellas of the interface with the processof organizational learning, therebycharacterizing the peculiarities of theunit being looked at.

At the same time as the interviewswere held, we collected data fromthe main continuous improvementprogram agents in the plants:facilitators, leaders, coordinators andmembers of the continuous improve-

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ment teams. Because of the largenumber of people involved, we choseto use simple and structured ques-tionnaires in this phase of the re-search. By using questionnaires, weintended to analyze mainly the indi-vidual and group learning process,and the transition of these to organi-zational learning as awhole, as wellas gathering perceptions of the Con-tinuous Improvement Program fromthe employees involved in it.

DESCRIPTION OF THECASE STUDY

The Company

Nestle is a Swiss multinational foodcompany that has been active in Bra-zil for more than 80 years and is themarket leader in various areas, suchas cookies, chocolate, yogurt and vari-ous others. In 2001, the year in whichthe food market practically stagnatedin Brazil, the company had sales ofUS$2.5 billion. Its profit stood atUS$79.6 million, its profitability grewby 20.1% over 2000 and its produc-tion reached 1,014,000 tons, 5.2%above the previous year’s figure.

Currently, Nestle has 114 brands andmore than 1,000 items on supermar-ket shelves. It is considered to be thecompany with the greatest numberof products for sale in Brazil, oper-ating in 12 market segments: milk,coffee, cooking products, chocolatedrinks, cereals, cookies, nutrition,

chocolates, frozen foods, ice-cream,food services and pet care.

The company manufactures its pro-ducts in 23 plants spread throughoutBrazil, and has as well an excellentlogistics structure: there are 14 salesoffices, 3 distribution centers and 4warehouses. This geographical dis-tribution of the operating units, ascoordinated by the corporate head-quarters (city of Sao Paulo), guar-antees that 12,000 sales outlets aredirectly serviced by Nestle and230,000, indirectly.

In these operating units and in thecentral administration office, Nestlein Brazil has 15,000 direct employ-ees and 220,000 indirect ones.

Faced with an increase in the numberof Brazilian and multinational com-petitors as well as competition fromsupermarket house brand products,and trying to improve its industrialcompetitiveness, in 1997 Nestle de-fined some organizational strategieswith a view to meeting the expecta-tions and needs they had identifiedamong their customer base.

The company has diversified itschannels of distribution, extendeddistribution of its products to includeconvenience stores, and concerneditself a great deal with the issue oflogistics, to ensure that its productsare distributed to approximately5,500 Brazilian towns. In an attemptto further strengthen its relation-

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ships with its customers, in 2001 and2002 Nestle invested R$250 millionand R$ 360 million, respectively, inmarketing.

Nestle felt the need to analyze itsinternal environment, in other words,to look for opportunities for improve-ments in their plants distributed all overthe country. To achieve their strate-gic objectives, a quality program wasinitiated on six different fronts, oneof them being the continuous im-provement program.

Proposal andstructure of thecontinuousimprovementprogram

As the objective of the program forthe organization Nestle proposed “theintroduction of a culture of continu-ous improvement in Nestle plants, bymeans of a dynamic process wherebythe employees make individual effortsand as members of teams, identify,prioritize and implement opportunitiesfor improvements (challenges)”.(taken from the Continuous Improve-ment Program official document).

As a result of the introduction of thisprogram, the company hopes for thefollowing: improvements in proc-esses, systems and products, as wellas the professional growth of its em-ployees. Empowerment, renewal/in-

novation and teamwork are consid-ered the basic principles for achiev-ing these results.

For the company, the Continuous Im-provement (CI) process is so namedbecame it reflects continuity; in otherwords a particular way of working,following pre-established and taughtrules, so that all employees develop acritical vision as far as their work ac-tivities are concerned, bearing in mindthat “there is always a better wayof doing a job”.

The person responsible for the projectis the plant manager, while the con-tinuous improvement manager is thehuman resources manager. Eachteam is made up of a maximum often employees, two of whom act asleaders, having been chosen by theteam before the beginning of theiractivities. To help in the analysis ofnew opportunities, team facilitatorsand coordinators validate the pre-sented improvement project.

Continuous improvement programfacilitators are employees chosenand indicated by the organization andthey operate at the same time in vari-ous teams as a technical support,mainly as far as the use of qualitytools and problem solving are con-cerned. Besides this, they help theteams to develop and follow the ac-tivities timetable. They also take partin the local committee meetings tovalidate projects.

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The main responsibilities of the coor-dinator, a position generally held by adepartment head, are: to make timeavailable for team meetings, to takepart in the improvement validationprocess, to provide training when nec-essary and to manage the evolutionand development of the project fromthe documents produced by theteams.

The process forintroducing theprogram in theplants

Before starting activities in the plants,an awareness-raising exercise wascarried out with everyone involved,in which expectations regarding thecontinuous improvement process inthe plant were raised, using internalnewspapers, notice boards, posters,banners and other means.

During the awareness-raising pe-riod, which lasts on average 16days, a competition is organized tochoose the plant’s continuous im-provement mascot. All employeesmay create a mascot that symbol-izes the program in the plant, withthe winning entry being perfectedby a professional artist from theNestle Headquarters and used dur-ing the program.

At the same time as the awareness-raising campaign is going on, the co-ordinators (heads of departments)

have behavioral training, which lasts16 hours and which looks at the roleof mangers, the importance of teamsand the relationship between employ-ees and heads of department.

Leaders and facilitators also takepart in the 16-hour behavioral train-ing program, the aims of which are:to present and discuss the conceptof the continuous improvement proc-ess, to discuss new concepts andparadigms and to help in identifyingand developing appropriate attitudesand behavior for the efficient per-formance of their role as leader andfacilitator of a continuous improve-ment team.

Furthermore, the coordinators,facilitators and leaders are providedwith technical training so that theyunderstand the Nestle entrepre-neurial cycle (methodology for ana-lyzing and solving problems), whichwill be discussed in more detail later,and the quality tools. This traininglasts 16 hours for coordinators and24 hours for facilitators and leaders,given that the latter need to go intothe concepts in greater detail.

To achieve the proposed objectivesand generate improvements in theplants the project suggests that thecontinuous improvement teamsshould use a work methodology forthe analysis and solution of problems,which in Nestle is called the Entre-preneurial Cycle. They are alsohelped by the use of quality tools.

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The Entrepreneurial Cycle is a logi-cal sequence of steps and sub-stepsto achieve a particular objective, inother words to go from the current(real) situation to the desired situation,as defined by the team itself. Thequality tools are resources used in thesteps to reduce or eliminate the realcauses of the problem and by doingso, avoid having it happen again.

The two units we looked at, locatedin the State of Sao Paulo, began theprocess of continuous improvementpractically at the same time. Plant Ihas approximately 420 employeesand produces yogurts, desserts and

fermented milk, while Plant II has760 employees and makes a verybroad range of products: cookingproducts (soups, sauces and season-ings), cereals, a line for children andinstant pasta and aromas.

In our field research we interviewedthe project managers in the plantsusing a previously prepared script.In order to acquire a better percep-tion from those involved in the pro-gram and, more precisely, from thosein the continuous improvementteams, we used questionnaires formembers of the two teams in eachunit, as shown in the table below:

TABLE 2: Those who replied to the questionnaire in plants I and II

ANALYSIS

What the managers told us, arisingout of the interviews, as well as theinformation provided by the partici-pants through the questionnaires, al-lowed us to identify some importantpoints in the program. With a viewto obtaining a more in-depth analy-sis of Nestle’s continuous improve-ment program, and more precisely

in the two units we studied, we triedto individually analyze each dimen-sion suggested by the authors andtheir respective variables.

Group learning

We perceived that in the two plants,the continuous improvement programallows for the sharing of ideas and

Role in the PMC PLANT I PLANT II

Coordinators 1 0

Team Members 10 10

Leaders 4 2

Facilitators 2 1

Total 17 13

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experiences between employees prin-cipally because they are in team struc-tures where there is constant dialogue,and because of the weekly meetings,where the focus of discussion is onthe improvements for each unit.

One must point out that Garvin (2000)stated that a large number of con-tributors is a facilitating factor at thestage when knowledge is being ac-quired and can be optimized by hold-ing brainstorming forums, where newideas are generated and creativethinking is encouraged.

At the beginning of the process wesaw that there was individual resist-ance in both teams to the sharing ofideas outside meetings. However asthe program evolved there was achange of behavior on the part of theparticipants, who began to talk withother employees in the plant in vari-ous environments outside the weeklymeetings: canteens, corridors, rec-reation rooms and other places.

The interviews with the managers andwhat the participants told us were evi-dence that before the introduction ofthe continuous improvement programthere was no time in the plants for dis-cussion or suggestions involving allemployees. This implies a culture chan-ge, allowing for those at the lowestlevels in the company to also activelytake part in organizational dynamics.

It has to be pointed out that eachmember acts in such a way as to

complement the actions of othergroup members, always with a viewto achieving a single objective. Aninteresting fact in Plant I is that someparticipants said that being with em-ployees with different lengths ofservice helps when it comes to thedevelopment of group work, besidesallowing for individual growth.

Learning goes beyond the geo-graphical limits of the teams. Thefield research showed that in theunits the relationship between teamsis intense, which adds more valueto the concept that continuous im-provement work has to flow harmo-niously. All the teams need to beintegrated so that the ideas of oneteam do not prevail and that one teamdoes not end up working on the sameidea as another.

It is interesting to note that this in-teraction between different teammembers happens voluntarily; therebeing no pre-conceived system forsuch a process.

And so we can see that the Nestlecontinuous improvement programcommends, promotes and providesgroup learning. The theoreticianSenge considers this to be one of thefive fundamental disciplines that or-ganizations must develop for the in-novation and learning process tooccur, where the collective skills aregreater than the individual ones,thereby developing the capability ofacting in a coordinated fashion.

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Building the Organizational Memory:In the two units, the document fold-ers of each team appear as one ofthe essential mechanisms for build-ing the program memory. These fold-ers contain all the information abouteach meeting and the developmentand evolution of the work of the team.All of this is examined at the end ofeach step by the facilitator and co-ordinator. Those taking part are con-scious of the importance of recordsfor developing each project andtherefore they prepare the meetingminutes and agendas, as well as fillin all the forms for carrying out theprogram.

We saw also that in all plants wherethere is a program running, there isa data base where the training ana-lysts store the main points involvedin the development of the teamprojects. However, no technologywas used for storing the ideas andknowledge, so that it could be con-sulted in the future by those takingpart; only the program coordinatoraccompanies the phase in whicheach team finds itself.

Thus, we can see that while the know-ledge generated is codified and keptin the team folders, there is no inter-action system that makes what hasbeen prepared easily available to allindividuals involved in the continuousimprovement program.

Personal control

With the introduction of the continu-ous improvement program all thosetaking part realized that they had theopportunity for learning and personaldevelopment. They believed they hadthe possibility of transferring what theylearned to their personal life, besidesgetting to know other sectors in theplant and talking with employees withwhom it was not necessary to talkpreviously, such as the heads of de-partment, for example.

Facilitators and leaders took part inbehavioral training about working inteams, where they were able to re-view the values in their life, besidesimproving their oral communicationskills, relationships with people andleadership skills. To conduct the workin teams they were trained in themethodology used in the continuousimprovement program as well as inquality tools.

Knowledge Spiral

The field research revealed that theknowledge generated in the continu-ous improvement program is spreadto all individuals, mainly by team lead-ers and facilitators in the weekly meet-ings. Therefore we can clearly see thecombination process suggested byNonaka and Takeuchi (1997).

The existence of the continuous im-provement program notice board,

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located at a strategic point in theplant, allows everyone to learn aboutthe challenges faced by each team,as well as who the team membersare and the stage at which theprojects stands.

Within the program proposal, recog-nition of highly successful work isachieved by means of a prize. Teamsthat complete their projects andpresent results that are economicallyinteresting for the company receivea financial reward. The award of aprize happens periodically and serves,according to the managers, as a le-ver for the continuous improvementprogram in the plant, by motivatingthose taking part, and teams that arein difficulties.

Transformation ofMental Models andQuestioning theirSuppositions (doubleloop)

With the introduction of the continu-ous improvement program, the vastmajority of those taking part in theresearch perceive changes in theirviews of the plant and review theirown ways of looking at the realityaround them.

However, the project managers be-lieve that this does not happen in auniform way for all employees, giventhat there are people who are notinvolved with the policy and with the

plant programs and who are satis-fied merely with their daily activitiesand their pay check at the end of themonth.

Some say that they became more criti-cal and analytical after the continu-ous improvement program: “when anew product is going to be launched,everybody begins to analyze if the boxcan really hold the amount of productstipulated, if the shape of the pot orthe material used could be different,if the production order of the linescould be altered, etc.”

The majority consider that they havethe freedom to look for new waysof working and thinking because thecompany allows this to happen andcontinuous improvement has consoli-dated this behavior among the em-ployees.

Agents ofOrganizationalAction

To achieve the objectives raised andgenerate the improvements in theplants, the teams use a work meth-odology for analyzing and solvingproblems called, in Nestle, the En-trepreneurial Cycle. The problemsolving techniques involve the Entre-preneurial Cycle and quality tools.This problem solving system is em-phasized by Garvin as being one ofthe strategies for building organiza-tional learning. Bessant also recog-

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nizes that the use of scientific tech-niques is extremely important, butneeds the involvement of everyoneto guarantee its success.

Before the continuous improvementprogram, there was no concern onthe part of the employees as far asproblems in the plant were con-cerned. At present, however, theprojects that have been developedallow for, and must be analyzed in aglobal way, given that much of thework has an impact on other sec-tors, and is not always beneficial.

Despite the positive behavioralchanges as from the time the con-tinuous improvement program wasintroduced, people in the two plantsin this first stage only manage to seetheir own place of work, but themangers believe that in the nextstages they will start having a moreall-embracing vision of the plant.

FINALCONSIDERATIONS

From looking at the analysis dimen-sions we saw that much of what theauthors extol as being organizationallearning is, in fact, contemplated inthe Nestle continuous improvementprogram.

However, when we analyze the re-sults of the project, we see that wecannot conclude that it achieves allthe requirements needed, as defined

by the variables we chose, to iden-tify a learning environment. Thecharacteristics of the continuous im-provement project that most contrib-uted to this were: make-up of theworking teams involving all employ-ees in the unit, the active participa-tion of everyone in meetings and inidentifying improvements, the com-mitment of the management andheads of department, the possibilityfor people to put forth their ideas andshare their experiences, the use of asystem for identifying and correct-ing mistakes or proposals for im-provement, and others.

One of the factors of the project thatmade the learning environment dif-ficult has to do with the dissemina-tion of the ideas and knowledgegenerated during the program. Weobserved that in spite of the exist-ence of a system for recording allthe knowledge produced, therebybuilding an organizational memory,its transfer and dissemination did nothappen quickly or in any dynamicway.

Therefore we can see that there is asubstantial trend towards and ap-proximation to organizational learn-ing, due to the system used forintroducing the program in the plantand mainly the active participationand commitment of the managementas far as the project is concerned,given that it has been characterizedas a corporate strategy.

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At present, the profile of the headsof departments in Nestlé – innova-tive, flexible, proactive and open tonew ideas coming from employees–contributes and becomes a strongpoint for the success of the continu-ous improvement program, as seenfrom the point of view of recogniz-ing the value of it and promoting allindividuals in the organization.

Therefore, this research allowed usto verify that companies can intro-duce continuous improvement prac-tices or other programs in the qualityarea, but they will only be success-ful if they believe in the potential oftheir employees and give them theopportunity to develop and contrib-ute to the organization as a whole.

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Aargyris, C. and Schon, D. Organi-zational Learning: A Theory ofAction Perspective. HarvardUniversity, 1978.

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Bessant, J. Rediscovering ContinuousImprovement. Technovation, v.14,n.1, p. 17-29, 1994.

DiBella, A. and Nevis, E. Como asOrganizações Aprendem: umaestratégia integrada voltadapara a Construção da Capaci-dade de Aprendizagem. SãoPaulo: Educador, 1999.

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Garvin, David. Gerenciando a qua-lidade: a visão estratégica ecompetitiva. Rio de Janeiro:Qualitymark, 1992.

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balho no Brasil. Maria TerezaLeme Fleury and Rosa MariaFischer, coordinators. 2ª ed. SãoPaulo: Atlas, 1987.

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