Organisational diversity, evolution and cladisticclassi®cations

Ian McCarthya,*, Keith Ridgwaya, Michel Leseurea, Nick Fiellerb

aDepartment of Mechanical Engineering, University of She�eld, Mappin Street, She�eld S1 3JD, UKbSchool of Mathematics and Statistics, University of She�eld, Houns®eld Road, She�eld S3 RH, UK

Received 1 December 1996; accepted 1 March 1998

Abstract

This article presents a case for the construction of a formal classi®cation of manufacturing systems usingcladistics, a technique from the biological school of classi®cation. A seven-stage framework for producing a

manufacturing cladogram is presented, along with a pilot case study example. This article describes the role thatclassi®cation plays in the pure and applied sciences, the social sciences and reviews the status of existingmanufacturing classi®cations. If organisational diversity and organisational change processes are governed byevolutionary mechanisms, studies of organisations based on an evolutionary approach such as cladistics could have

potential, because as March [March JG. The evolution of evolution. In: Baum JAC, Singh JV, editors. Evolutionarydynamics of organizations. Oxford University Press, 1994. p. 39±52], page 45, states ``there is natural speculationthat organisations, like species can be engineered by understanding the evolutionary processes well enough to

intervene and produce competitive organisational e�ects''. It is suggested that a cladistic study could provideorganisations with a ``knowledge map'' of the ecosystem in which they exist and by using this phylogenetic andsituational analysis, they could determine coherent and appropriate action for the speci®cation of change. # 2000

Elsevier Science Ltd. All rights reserved.

Keywords: Cladistics; Manufacturing; Management; Evolution; Classi®cation

1. Introduction

Why construct a classi®cation? This question needs

to be addressed in order to understand the bene®tsand applications that any classi®cation could o�er, letalone a cladistic classi®cation. The desire to classifytranscends all disciplinary boundaries whether the enti-

ties under study are biological organisms, chemical el-ements or as in the case of this paper, manufacturing

systems. Carper and Snizek [1, p. 65], in their reviewof organisational classi®cations concluded that ``themost important step in conducting any form of scienti-

®c enquiry involves the ordering, classi®cation, orother grouping of the objects or phenomena under in-vestigation''.In an amusing categorisation of classi®cations,

Good [2], a noted mathematician, provided a listwhich suggested ®ve purposes for performing classi®-cation: (1) for mental clari®cation and communication;

(2) for discovering new ®elds of research; (3) for plan-ning an organisational structure or machine, (4) as acheck list and (5) for fun. Cormack [3] used this categ-

orisation in his lecture to the Royal Statistical Society

Omega 28 (2000) 77±95

0305-0483/00/$ - see front matter # 2000 Elsevier Science Ltd. All rights reserved.

PII: S0305-0483(99 )00030-4

www.elsevier.com/locate/orms

* Corresponding author. Tel. +44-114-222-7745; fax: +44-

114-222-7890.

E-mail address: i.p.mccarthy@she�eld.ac.uk (I. McCarthy)

to illustrate the role and bene®ts that classi®cation

o�ers research. Cormack summarised the bene®ts of ahierarchical classi®cation, stating that ``the informationabout the entities is represented in such a way that it

will suggest fruitful hypotheses which cannot be trueor false, probable or improbable, only pro®table orunpro®table'' [3, p. 346].

Haas, Hall and Johnson [4] discussed four advan-tages of having a realistic classi®cation. Such a classi®-

cation could (1) be strategically helpful for re®ninghypotheses; (2) aid in the investigation of the validityand utility of existing typologies based on logical and

intuitive considerations; (3) serve as a basis for predict-ing organisational decisions or change and (4) permit

the researchers to readily specify the universe fromwhich their samples of organisations could be drawn.McKelvey [5] went further by arguing that the formu-

lation of a classi®cation is a necessary prerequisite forthe maturation of organisation science and that, if aformal and scienti®c classi®cation existed, there would

be no need for contingency theory. Biologists do notneed contingency theory because their classi®cations

make it clear that one does not apply ®ndings aboutreptiles to mammals when working at a speci®c levelof the classi®cation.

The argument for creating a classi®cation is to someextent demonstrated by the large number of typologiesand classi®cations that have been produced by

researchers from the social sciences and appliedsciences and that many academic disciplines teach with

reference to some form of classi®cation. It should benoted that a typology is a description of groups, whosedi�erences are identi®ed solely accordingly to the

research focus of the investigator. Existing schemeswhich embrace the subject of organisations include: or-ganisational strategies [6], voluntary associations [7],

canning ®rms and farmers unions [8], general organis-ational classi®cations [9±11] and manufacturing-based

classi®cations [12±25]. For a review of the above or-ganisational typologies, the reader is referred to Refs.[1,26,27].

The authors of this article sought a classi®cationwhich would facilitate the storage, alignment and

development of structural models of manufacturingsystems. It was intended that this classi®cation ofmodels would provide researchers and consultants with

a generic library of structural solutions for enablingmanufacturing systems to maximise their operatinge�ectiveness. The de®ciencies of existing classi®cations

of manufacturing systems, prohibited the realisation ofthe intended bene®ts of combining a library of ideal

models (solutions) with a workable classi®cation ofmanufacturing systems. This issue was discussed byMcCarthy [27, p. 46], who concluded that ``previous

research into developing manufacturing classi®cationshas been based on a comprehensive understanding of

manufacturing companies, but with no reference to, orapplication of the science of taxonomy. This would

appear to be a major shortcoming, which reduces theusefulness, stability and accuracy of the classi®cations.Lessons should be drawn from biological taxonomy in

an attempt to stimulate further investigations into thisestablished problem based on the disciplines and rulesregularly used by the biological scientist''. Supporting

the need for an organisational classi®cation isRomanelli [28, p. 82], who states ``despite the ease withwhich we may identify meaningful groupings of organ-

isations, no commonly accepted classi®cation schemehas been developed''.With this stimulus, a project funded by the

Engineering Physical Sciences Research Council (Grant

No. GR/K97974) was initiated to investigate the feasi-bility of constructing cladistic classi®cations of manu-facturing systems. The remainder of this paper details

the methodology, ®ndings and conclusions of thatstudy.

2. Introduction to the biological schools of classi®cation

There are two main principles of classi®cation withinthe biological sciences: the phenetic and the phyloge-

netic principles. From these two underlying principlesemerge three approaches to classi®cation, or schools ofclassi®cation: phenetic, evolutionary and cladistic (refer

to Fig. 1). The three schools of classi®cation are di�er-entiated on the basis of how closely they adhere to apurely phylogenetic principle. That is, the species are

classi®ed according to how recently they share a com-mon ancestor. Phenetic classi®cations are non-evol-utionary and are thus at one end of the evolutionaryfocus scale, whilst cladistics is a purist approach to the

phylogenetic principle. Evolutionary classi®cations area synthesis of the phenetic and phylogenetic principles.Phylogenetic classi®cations have become known as

cladistic classi®cations, because the phylogenetic prin-ciple was defended by the German entomologist WilliHennig [29] and supporters of his ideas called the prin-

ciple phylogenetic systematics, which has now evolvedinto the term cladism (from the Greek `klados' forbranch).The cladistic school's approach to classi®cation

involves studying the evolutionary relationshipsbetween entities with reference to the common ancestryof the group. Constructing a classi®cation using evol-

utionary relationships is considered bene®cial, becausethe classi®cation will be unique and unambiguous.This is because evolution is actual and mankind is cur-

rently unable to change evolutionary history, thus pro-viding the classi®cation with an external referencepoint. With phenetic classi®cations there is no such

I. McCarthy et al. / Omega 28 (2000) 77±9578

reference point and thus in the words of Ridley [29, p.

367], ``Cladism is theoretically the best justi®ed system

of classi®cation. It has a deep philosophic justi®cation

which phenetic and evolutionary classi®cations lack''

Reviews of the three schools of classi®cation [29±31]

assess the schools on their ability to produce natural

and objective classi®cations, rather than arti®cial and

subjective classi®cations. Cladistics satis®es both these

criteria, as the entities within a cladistic classi®cation

will resemble each other in terms of the de®ning char-

acters and the non-de®ning characters (characters not

used to represent the phylogenetic relationships).

Cladistics conforms to the criteria of objectivity

because it represents a real unambiguous and natural

property of the entity (evolutionary relationships) and

thus di�erent rational people, working independently

should be able to agree on a classi®cation. There could

be valid disagreements between independent investi-

gators, but these will be down to assumptions and dis-

agreements on the character data and not the

underlying philosophy. One of the greatest strengths of

the cladistic approach is that the representation of the

classi®cation (the cladogram), illustrates the data,

assumptions and results, making all decisions transpar-

ent. This not the case with existing organisational

classi®cations. Section 5 of this paper presents a dis-

cussion on the confusion which exists between the

types of manufacturing system which are believed to

exist.

In summary, a cladistic classi®cation of manufactur-

ing systems would provide a system for conducting,

documenting and coordinating comparative studies of

manufacturing organisations. Such a system could pro-

vide the consensus for formally approving, validating

and typifying the emergence of new manufacturing sys-tems. This would help clarify the confusion on whetherfractal, virtual and holonic manufacturing systems

actually exist or are simply buzz words. This was anissue raised by the Engineering Physical SciencesResearch Council [32]. A cladistic classi®cation ofmanufacturing systems could provide knowledge and

observations on the patterns of distributed character-istics exhibited by the manufacturing systems overtheir evolutionary development. This knowledge could

lead to pro®table hypotheses about the macro- andmicro-evolutionary mechanisms which in¯uence manu-facturing competitiveness and survival. Finally, many

organisations live their lives looking forward, but tocomprehend themselves they must look backwards.The resultant comprehension cannot be used to extrap-

olate the future, but it does inform them of where theyare and how they got there, and this information isvital for any organisation intending to embark on ajourney of change.

3. Cladistics

The application of cladistics to manufacturing sys-

tems implies certain assumptions about organisationalforms, their existence and diversity. Cladistic classi®-cations are produced according to how recently they

share a common ancestor. This means that two manu-facturing species that share a recent and commonancestor will be placed in the same group and two

manufacturing species sharing a more distant commonancestor might be placed in di�erent groups, but theywould be in the same family. As the common ancestor

Fig. 1. Biological schools of classi®cation.

I. McCarthy et al. / Omega 28 (2000) 77±95 79

of two manufacturing species becomes more and more

distant, they are grouped further and further apart in

the classi®cation. Eventually all organisations could be

placed in a classi®cation possibly known as the `king-

dom of organisations'. For this principle of classi®-

cation to apply to manufacturing organisations and

their systems, investigators must agree that organis-

ations evolve and that as new organisational forms

emerge, it is possible to identify the distinguishing

characteristics from the old organisational forms.

Supporting this assumption are organisational theorists

who have not produced a complete theory of organis-

ational evolution, but have proposed some key con-

cepts which include: organisational ecology [33,34],

organisational systematics [35,36], the evolution of new

organisational forms [28] and the dynamics of organis-

ational speciation [37]. These concepts and the assump-

tions that accompany them attempt to understand the

forces which determine which organisational form is

viable for a certain environment; the mechanisms

which exist to preserve organisational forms and the

mechanisms which are passed from one generation of

organisations to another.

In summary, the assumptions which govern the con-

struction of a manufacturing cladogram are listed

below:

. Manufacturing systems evolve and have ancestors.

This is evident by the way historians portray the

advancement of manufacturing companies from pre-

historic man with his tools, to ancient workshops, to

the guild of craftsman, to the cottage industries and

to factories which eventually became mechanised

and automated.

. Manufacturing systems speciate. The Ford Motor

Company is described today as a lean producer, but

its history demonstrates that it once was a craft

shop which developed into an intensive mass produ-

cer. This suggests that the Ford manufacturing

plants have gone through at least two speciation

events to produce new `breeds of organisation'.

. Manufacturing systems are subject to the theory of

natural selection. This theory consists of four basic

principles: the principle of variation, the principle of

heredity, the principle of natural selection and the

principle of adaptation [29]. The principle of vari-

ation states that there has to be variation within a

population of manufacturing systems. These vari-

ations need to occur and happen at random. The

principle of heredity states that some manufactur-

ing o�spring, on average have to resemble their

parents more than resemble other members of

their species. This is found when new organis-

ations are born within an industry. They are more

similar to organisations within that industry, than

they are to organisations in other industries. This

inheritance is controlled by the organisationalequivalent of genes (knowledge transfer or memes

[38] or competence elements (comps) [36]), whichare passed on to o�spring by chromosomes(people, communication, society) in the same form

as they were inherited from the previous gener-ation [39]. If heredity were perfect, the principle ofvariation would not exist. The principle of natural

selection suggests that manufacturing systems witha superior adaptation generate similar manufactur-ing systems (o�spring) and as long as the o�spring

resemble their parent, the characters of manufac-turing systems that generate more o�spring thanaverage will increase in frequency over time. Thisconcept is supported by Hannan and Freeman [34]

who believe that selection pressures, force organis-ations to imitate the successful organisations, theresult being a reduction in organisational diversity

and a net increase of a particular type of organis-ational form. The fourth principle, the principle ofadaptation, refers to the variations in manufactur-

ing systems which provide an advantage for sur-viving and existing. This is when manufacturingsystems change so as to maintain existence.

3.1. The cladogram

A cladogram is a tree structure capable of represent-

ing the evolutionary history of a group of manufactur-ing systems. The tree structure illustrates therelationships between the di�erent members of the

group under study, according to the acquisition andpolarity of characters.Fig. 2 shows a group of manufacturing species con-

sisting of Ancient craft systems, standardised craft sys-

tems, modern craft systems, neocraft systems and skilledlarge scale producers. This ®gure is a section from themaster cladogram of automotive assembly plants (Fig.

3 and Table 1). This pilot study was undertaken toprovide a worked example which would introduce thereader to cladistics and the various types of cladistic

grouping that exist. The construction of this cladogramis reported in Section 4. It is important to note thatthis was a pioneering study and that many of the typesof manufacturing system proposed in Figs. 2 and 3

will not be known to the reader. This is not becausethey are newly formed types of manufacturing systems,but rather that the automobile industry has not been

studied using the cladistic approach. The labels givento the species shown in Figs. 2 and 3 do not conformto any codes of nomenclature for organisations,

because none exist. Constructing a classi®cation is ataxonomic process and thus by the de®nition of taxon-omy, groups (taxa ) are formed and are then allocated

I. McCarthy et al. / Omega 28 (2000) 77±9580

Fig. 2. Five taxa cladogram.

Fig. 3. Automotive cladogram.

I. McCarthy et al. / Omega 28 (2000) 77±95 81

a name (nomy= naming). Every e�ort has been made

to assign labels which describe the de®ning character-

istics of the system and where possible existing terms

such as craft, mass, agile and lean have been used.

Thus, the labels given to the species are simply for the

purpose of di�erentiation and communication. The in-

Table 1

Automotive cladistic characters

1 Standardisation of parts

2 assembly time standards

3 assembly line layout

4 reduction of craft skills

5 automation (machine paced shops)

6 pull production system

7 reduction of lot size

8 pull procurement planning

9 operator based machine maintenance

10 quality circles

11 employee innovation prizes

12 job rotation

13 large volume production

14 suppliers selected primarily by price.

15 exchange of workers with suppliers

16 socialisation training (master/apprentice learning)

17 proactive training programs

18 product range reduction

19 automation

20 multiple subcontracting

21 quality systems (procedures, tools, ISO 9000)

22 quality philosophy (culture, way of working, TQM)

23 open book policy with suppliers; sharing of cost data and pro®ts

24 ¯exible, multifunctional workforce

25 set-up time reduction

26 Kaizen change management

27 TQM sourcing; suppliers selected on the basis of quality

28 100% inspection/sampling

29 U-shape layout

30 preventive maintenance

31 individual error correction; products are not rerouted to a special ®xing station

32 sequential dependency of workers

33 line balancing

34 team policy (team motivation, pay and autonomy)

35 Toyota veri®cation of assembly line (TVAL)

36 groups vs. teams

37 job enrichment

38 manufacturing cells

39 concurrent engineering

40 ABC costing

41 excess capacity

42 ¯exible automation for product versions

43 agile automation for di�erent products

44 insourcing

45 Immigrant workforce

46 dedicated automation

47 division of labour

48 employees are system tools and simply operate m/c's

49 employees are system developers; if motivated and managed they can solve problems and create value

50 product focus

51 parallel processing (in equipment)

52 dependence on written rules; unwillingness to challenge rules such as the economic order quantity

53 further intensi®cation of labour; employees are consider part of the machine and will be replaced by a machine if possible

I. McCarthy et al. / Omega 28 (2000) 77±9582

formation content provided by the labels is consideredto be a level higher than simply referring to each

species, as species 1, species 2, species 3, etc.The cladograms illustrated in Figs. 2 and 3 are both

clades, as they contain a set of species including the

most recent common ancestor of all the members con-tained within that set. It is important to understandthat Fig. 2 is a portion or segment of Fig. 3 and that

both Figs. are clades, despite the fact that Fig. 2 is asubset of Fig. 3. This is due to research focus (establishevolutionary boundaries) and the information pre-

sented. That is, Fig. 2 in its entirety and in isolation, isby de®nition a clade, despite the fact that Fig. 2 canbe expanded to Fig. 3. If we assume that a manufac-turing researcher is only interested in the clade shown

in Fig. 2 and that his speci®c interest is devising manu-facturing strategies for modern craft systems, neocraftsystems and skilled large scale producers. Then this

group of manufacturing species is known as theingroup (the study group or the group of interest).Observations and hypotheses are made about the

ingroup by comparing it with the various outgroupsand most importantly with the sister group (the out-group that is genealogically the most closely related

group to the ingroup). It should be noted that theancestor of the ingroup is not the sister group, becausethe ancestor by de®nition will always be a member ofthe ingroup.

The numbers shown on the branches of Figs. 2 and3 denote the acquisition of characters. Character `1'(standardisation of parts) has a speci®c location on the

tree that indicates that ancient craft systems do notpossess character `1' and that standardised craft sys-tems, modern craft systems, neocraft systems and skilled

large scale producers do possess character `1'. Thus,ancient craft systems are the ancestor of a new gener-ation of manufacturing systems that are based on theacquisition of character `1'. Similarly, modern craft sys-

tems are a descendant of standardised craft systems asit later acquired character `2' (production time stan-dards) and character `47' (division of labour). The

characters `13', `48' and `50' resulted in the formationof neocraft systems, whilst the characters `3', `16' and`32' result in the emergence of skilled large scale produ-

cers.

4. Building a manufacturing cladogram

The proposed framework for constructing a cladisticclassi®cation of manufacturing systems has been ident-i®ed and adapted from classic biological approaches to

cladism [40±43]. The seven stages are listed below:

1. Select the manufacturing clade.2. Determine the characters.

3. Code characters.4. Establish character polarity.

5. Construct conceptual cladogram.6. Construct factual cladogram.7. Taxa nomenclature.

In order to demonstrate how a cladogram is pro-duced, the cladogram in Fig. 3 is referred to. The cla-dogram is a classi®cation of automotive assembly

plants. It was produced to the conceptual level andwas compiled using data from several studies of theautomotive industry. These studies include the evol-

ution, population density and mortality in the automo-tive industry; [44±48]; historical accounts of theindustry, sometimes focusing on speci®c geographic

regions; [49,50], to speci®c studies which examined thechange in manufacturing techniques used within theindustry [51±53]. Technical, business and ®nancialreports produced by the automobile industry were also

obtained. These documents detailed events and issueswhich were in¯uencing how the industry was evolving.The most signi®cant of these documents are listed as

references [54±78].

4.1. Select the manufacturing clade

The starting point is to de®ne the clade to be stu-

died. Such a step requires a decision which in itself is aform of classi®cation, as the investigator must select agroup of manufacturing systems which satisfy certain

research objectives or interests. For example, a manu-facturing clade could be di�erentiated on the basis ofthe market industry into which it was born to survive,

e.g. the automotive industry, electronic componentmanufacturers, cutting tool manufacturers, etc.Classi®cations based on industry di�erentiation arewidely used and accepted and are di�cult to ignore. In

the United Kingdom, the basic framework for analys-ing industrial activities is the standard industrial classi-®cation (SIC) [79]. The SIC is described by Price and

Mueller [80] as an empirical classi®cation which is notderived in any way from theoretical ideas on how ac-tivities should be grouped. However, it does group

together organisational entities that are involved inresource exchange and transformation of a similarnature. This description of organisational activityequates to the de®nition of an organisational ecosys-

tem as proposed by Baum and Singh [81]. A clade byde®nition can be equivalent to di�erent levels in thehierarchy. This is illustrated by Fig. 4, which shows

how the ecological and systematic hierarchies of organ-isational evolution relate to each other (this ®gure hasbeen adapted from [81] to include the clade level).

For the purposes of this study, the automobileassembly industry (the clade) was selected, because itexists as a population of manufacturing organisations

I. McCarthy et al. / Omega 28 (2000) 77±95 83

(species) that make and sell a closely related set of well

de®ned products. It is an industry which is widely

known and studied and this provides bene®ts in terms

of communicating, disseminating and validating the

research. It is also a relatively young industry which

has been extensively documented and this makes the

investigation into phylogenetic relationships relatively

easy, when compared to an industry such as the hand

tool manufacturing industry, which can be traced back

to prehistoric man. This is an important point, because

there were no existing cladistic classi®cations of organ-

isations which could be used as a reference or starting

point, so it was important to select a study group

which would satisfy and assist the research objectives

in terms of information collection and results dissemi-

nation. Also, the decision to study the automobile

assembly industry would enable both the dissemination

and exploitation of any bene®ts to be related to the

standard industrial classi®cation (SIC).

Identifying the ancestor of a clade is a process of

historical investigation where evidence is accumulated

to determine the origins of a certain manufacturing

type. For example, the origins of car manufacturing

stem back to Karl Benz and his three-wheel auto-

mobile. In terms of manufacturing systems, this would

be regarded as a craft system which evolved into an

early factory system and then into a mass type organis-

ation. The process of identifying an ancestor is initially

ambiguous and di�cult, both for biologists and manu-

facturing researchers, but the process of constructing

the cladogram con®rms or refutes this initial assump-

tion.

4.2. Determine the characters

Once the clade has been selected, a number of di�er-ent types of manufacturing system would appear to bea member of that clade (mass, lean, agile, craft, job,

etc.). The complete membership of this particular cladeis not yet known, because no formal or validatedclades for manufacturing systems exist. It is common

practice to work on existing clades within the biologi-cal sciences, because the majority of the taxonomicbased research, is concerned with validating, enhancing

and expanding the knowledge contained within existingcladograms. As this was a new study, a primary objec-tive of the research was to examine the evolutionarydevelopment of the entity and to identify the members

of the clade. This is a process of `mining for species'and during this historical excavation, evidence issought which will suggest the possible existence of a

particular type of manufacturing system. This evidencetends to be in the form of published material orarchives, which detail the existence of the manufactur-

ing system, along with a description of its operationsand de®ning characteristics, the location where itexists/existed and a date/period when it was ®rst dis-

covered or developed.This mining process uncovers the characters which

will be used to build the cladogram. Whilst undertak-ing this exploration there are a number of steps which

can be followed to help identify the ®nal set of charac-ters which will be used to construct the cladogram.The process of determining the characters for the auto-

motive cladogram consisted of two steps: charactersearch and character selection. Character search is thetask of building the initial set of characters, by simply

listing known attributes possessed by automotiveassembly plants. Determining which characters fromthis initial set should be used to construct a classi®-cation is the task of character selection.

4.2.1. Character search

When searching for the manufacturing systems thatconstitute the clade and the characters that distinguishthe species phylogenetically, it is helpful to know what

to look for and what to avoid. Whereas, an attribute isa descriptive property or feature, a taxonomic charac-ter is a feature which is used in a classi®cation. It isalso important to di�erentiate between the character

(the actual feature) and the character states which area condition that this feature exhibits. For example, thecharacter `plant layout' has numerous character states:

job shop, ¯ow line, functional layout, manufacturingcells, etc.The school of classi®cation used will contain theories

which determine what is an acceptable taxonomic char-acter. For instance, in cladistics, a taxonomic characterhas to point to a homology between two organisations,

Fig. 4. Hierarchies of organisational evolution, adapted from

[81].

I. McCarthy et al. / Omega 28 (2000) 77±9584

whereas in phenetic classi®cations, a taxonomic charac-

ter contributes to the mathematical tightness of a clus-

ter.

To avoid searching for and selecting characters

which are inappropriate Sneath and Sokal [43] describe

certain kinds of characters which should be clearly dis-

quali®ed from a taxonomic study. These are listed as

inadmissible characters and include:

. Meaningless characters. A character must re¯ect the

internal nature of the entity, therefore, the name of

a manufacturing company would not be included as

a character to represent the activities of a manufac-

turing system.

. Logically correlated characters. Those characters

which are a logical consequence of another, should

be excluded. For example, if we assume that cell-

based team working, requires a cellular layout, then

there is a logical correlation between these two char-

acters, i.e. if one character state exists, another will

automatically.

. Partially logical correlation's. The degree of indepen-

dence is the subject of this kind of character, as a

greater number of cases exist where the dependence

of one character upon another is only partial. For

instance the size of a workforce will be to a degree,

relate to the number of machines that a manufactur-

ing company has. After further investigation it could

be found that the degree of dependency is small,

because other factors, such as the type of technologyand the type of product also in¯uence this character.

Therefore, very few partially logical correlations are

regarded as inadmissible. Hull [82] provides an

empirical correlation to estimate the degree of inde-

pendence between two characters.

. Invariant characters. If a character which is normally

variable, is invariable for the sample of entities

under study, then it should be removed from the

analysis. Such characters o�er no bene®ts in terms

of assessing similarity. An example is the absence or

presence of manufacturing technology. When con-

sidering all forms of organisation, this character

would vary from organisation to organisation.

However, as the presence of manufacturing technol-

ogy is a conforming de®nition for a manufacturing

system, this character would not change for a popu-

lation containing only manufacturing systems.

The search for automotive assembly characters con-

sisted of investigating the historical development of the

car making industry by analysing the work and data

of the studies cited in Section 3. The characters ident-

i®ed, although well known, were treated as arbitrary

or capricious characters, as their identi®cation for cla-

distic purposes must be con®rmed. Taxonomists dis-

cover characters whilst studying the entity and

constructing the classi®cation, thus many characters

are found as they come to complement the information

content of the classi®cation. This last point applies

speci®cally to cladistics, because cladists tend to

quickly eliminate characters which have no evolution-

ary signi®cance in their data sets and therefore produce

classi®cations objectively and e�ciently.

In addition to searching for characters by studying

the entity, the use of reference characters was con-

sidered. That is, does an exhaustive list of manufactur-

ing or organisational characteristics exist and would

this list help the search and selection process. To build

such a list has been a common objective for many tax-

onomists, but there are several problems associated

with the management and use of such a list. The cost

of building an exhaustive list would be high and there

is no evidence that building such a list is feasible.

There are many issues to manage: duplication of data,

partial redundancy between characters, correlation and

dependency patterns between characters. Even if such

a list was available, using it might not be cost-e�cient,

because the cost of selecting characters from all poss-

ible characters could be prohibitive.

The primary bene®t of a reference list of characters,

is that it provides a feel good factor and a con®dent

starting point for researchers producing a classi®-

cation. However, total reliance on a so-called exhaus-

tive reference list, would be foolish and misguided,

because all classi®cations are undertaken in situations

where the complete character set is not known. To

assist the search for automotive characters and to

understand the signi®cance of the characters with

regards to the entity and its evolution, several categor-

isations of characters were identi®ed and referred to:

[4,36,83±85]. It is important that the categories do not

dictate, but suggest, because the ultimate decision gov-

erning character selection within a cladistic study is the

existence of a synapomorphy which results in an hom-

ology. Synapomorphies are characters which have a

derived state and are shared by two or more taxa and

thus indicate common ancestry for the manufacturing

systems within this group.

The distinction between homology and analogy is a

fundamental concept of cladistics. A homology rep-

resents `true similarity', whilst analogy is considered

super®cial similarity which generates noise or mislead-

ing observations. An analogy is a structural grouping

where a character is shared by a set of species and is

derived from a common ancestor. Thus, choosing a

character which is an analogy should be avoided. The

relationship between analogy and homology is clearly

demonstrated in Fig. 5 [29]. It is important to note the

three groupings, as only monophyletic groups are

included in a cladistic classi®cation. The monophyletic

groups are the groups which result in an unambiguous

hierarchic arrangement, because the group contains a

I. McCarthy et al. / Omega 28 (2000) 77±95 85

common ancestor and all its descendants and there is

no con¯icting character data.

Consider Fig. 3, and the characters `8' (pull procure-

ment planning) and `20' (multiple subcontracting).

Character `8' appears in the Toyota production system

family, which includes: lean producers and agile produ-

cers, whereas character `20' appears in the mass produ-

cers family, which includes: pseudo lean producers,

modern mass producers, European mass producers and

intensive mass producers. If characters `8' and `20' are

replaced with one character, say character `Z' (procure-

ment policy), the structure of the cladogram would

change. This is because homologies have been created

between taxa which are in fact evolutionarily remote.

Thus, character `Z' is an example of an analogous

character because pull procurement is constrained by

character `6' (pull production) and would not naturally

emerge in mass producers. Similarly, it is postulated

that character `20' is associated or dependent with

some or maybe all of the characters on the same line-

age to the extent that it would not emerge in species

which do not already exhibit character `14' (mass sub-contracting by price bidding).

4.2.2. Character selectionThis is a screening process and in the case of cladis-

tics, a character is validated if it is a synapomorphy.

Thus, the selection phase in cladistics is equivalent to atest of homology. Two methods were used on theautomotive study to screen characters: (1) direct test ofhomologies and (2) resolving character con¯icts. It

should be noted that prior to building a cladogram theorganisational systematist may only have a generalknowledge of the ancestral links between species.

Therefore, it is not obvious that a character is an ana-logous character at the beginning of the analysis, it isonly con®rmed during the construction and analysis of

the cladogram.The direct test method is based on the argument

that homologies and analogies tend to exist on a conti-

Fig. 5. Homologies and analogies.

I. McCarthy et al. / Omega 28 (2000) 77±9586

nuum of resemblance, where the homologies are at the

high extreme resemblance end, whilst the analogiestend to exhibit only moderate resemblance [43]. Thus,even if a complete and valid historical account (`fossil

record') for automotive manufacturing systems existed,the investigator would still be dependent on resem-blance based similarity. From a purist point of view,

cladists argue that resemblance is not a de®nitive testof homology, but there is a strong case to suggest that

it is a good indicator, because there are external, com-positional and structural measures which relate pheneticsimilarity with homology. Thus, the direct test consists

of the external method, compositional method and thestructural method.

The external method can be applied without study-ing or knowing the internal structure of the feature.Any external characteristic of the feature is used to

identify the existence of some fundamental diversitywithin the feature. For example, the procurement sys-tems that typically exist in lean manufacturing produ-

cers tend to have subcontractors/suppliers which arelocated within a short distance of the assembly plant.

It was common for subcontractors/suppliers inWestern manufacturers to be located almost anywhereon the planet. Thus, from an external perspective only,

there is a signi®cant di�erence and the location of sub-contractors relative to the main assembly plant, could

be a potential character, because no evidence of ana-logy has yet materialised. The compositional methodrequires the investigator to list the parts which consti-

tute the considered character. This internal breakdownis then used in a comparison with other organisationalspecies. For example, a reduction in the number of tier

levels in a supply chain might be evident in service or-ganisations and retail organisations and this circum-

stantial evidence could be used to guide the selectionof characters for manufacturing systems. With thestructural method, the focus is on how the di�erent el-

ements of the character interact with each other and ifthere is a case for splitting a potential character intotwo or more characters. This decision is made purely

on the basis of how the elements exist and their depen-dence with one another.

Identifying and resolving character con¯icts occurscontinually during stages 2±6 of the cladogram frame-work, but the ®nal validation is a postcladogram con-

struction exercise (stages 5 and 6). Once a preliminarycladogram has been constructed, it usually exhibits cer-

tain character con¯icts. These con¯icts can be naturaloccurrences, such as parallelism or coevolution. Theycan also result from analogous characters, or improper

coding of characters. Improper coding can be theresult of analogous or imprecise de®nition of charac-ters states, or using the wrong polarity (i.e. confusing

the derived and the primitive state), or using characterswhich are too general. The advantage of validating

homologies after a preliminary cladogram has beenconstructed is that the validity of a character is ques-

tioned only if it generates a con¯ict with the otherscharacters which are consistent and congruent witheach other. Most classi®cations will have a consistent

core, which can be identi®ed in cladistics by running aclique analysis [86]. Any character which does notbelong to the clique set should go through a thorough

test of homology. It should be stressed that it is oftenat this stage that many characters are usually discov-ered and re®ned, as the phylogeny of the clade is

gradually revealed and understood by the taxonomist.

4.3. Code characters

Once a set of characters has been identi®ed, alongwith the set of automobile assembly species which area consequence of these characters, the relationshipbetween the characters and the species are examined in

order to allow the construction of the cladogram. Acladogram can be constructed from the character data,because a cladistic character has three properties:

direction, order and polarity [87]. The coding of acharacter facilitates the processing of the character set.Ordering is that property of a character which refers

to the possible character change sequences that canoccur. The character property, direction, refers to thetransition between the character states. When an inves-

tigator determines the actual direction of transform-ation the character is said have a `polarised' state.

4.4. Establish character polarity

To assess character polarity, an outgroup comparisonis undertaken. This is based on the recognition thatonce the characteristics of the closest relative have

been discovered, the information for determiningwhich characters are primitive and which are derived isrevealed. Hence, this comparison is based on the rule

that for a given character with two or more stateswithin a group, the state occurring in related groups isassumed to be primitive [88]. Any character state

found only in the ingroup is considered to be derived[30]. Decisions governing the character polarity foundat the outgroup node can be either decisive, with thenode labelled as primitive (0) or derived (1), or equiv-

ocal, with the node labelled primitive/derived (0, 1).If this method is applied to the cladogram shown in

Fig. 3, the outcome would be inconclusive, because

this tree has already been resolved and there are noinconsistencies in the character data. Therefore, inorder to demonstrate this method, a cladogram con-

sisting of taxa and characters from the automobilestudy is used, but the data and structure of the treehave not been resolved. This unresolved data (Table 2)

I. McCarthy et al. / Omega 28 (2000) 77±95 87

is used to demonstrate the process of determining char-

acter polarity (Figs. 6±10).

Fig. 6 is a possible cladogram structure for the data

contained in Table 2. The nodes are labelled 1±6,

whilst the species are labelled using letters (AC, SC,

MC, NC, SLS, LS and M). Beginning with the charac-

ter 1 from Table 2, each branch end of the cladogram

is labelled with the corresponding character state (Fig.

7). Next, starting from the furthest branches (branches

AC and SC) a polarity decision for node 2 is made.

The nodes of the cladogram are labelled `0' if the

lower node and adjacent branch are both `0', or `0'

and `0, 1'. The nodes will be labelled `1' if the lower

node and adjacent branch are both `1' or `1' and `0,1'.

If the branches/nodes have di�erent labels, one `0' and

the other `1', then the node is labelled `0, 1'. The root

node (node 1) is not considered, because in order to

analyse this branch another outgroup is needed. Thus,

node 2 is labelled `0, 1', because the ®rst branch (AC)

is `1' and the second branch (SC) is `0'.

The next stage is to identify what is termed the near-

est branching structure, which occurs at node 6 (Fig.

7). The nodes of the branching structure are labelled

using the same process, but by beginning at the lowest

node on the branching structure (node 4). Thus, node

4 is labelled `1', because NC is `1' and SLS is `1' (Fig.

8). Continuing towards the ingroup (M) the remaining

nodes (nodes 3 and 5) are labelled, until only the out-

group node (node 6) remains. Node 5 is labelled `0/1'

because LS is `0' and node 4 is `1' and node 3 is

labelled `0', because MC is `0' and node 2 is `0/1' (Fig.

9). The analysis for character 1 is complete when node

6 is labelled. Node 6 is found to be decisive (`0'),

Table 2

Data matrix for Figs. 6±9

Character 1 Character 2 Character 3 Character 4

Ancient craft (AC) 1 1 0 0

Standardised craft (SC) 0 1 1 0/1

Modern craft (MC) 0 0 1 0

Neo craft (NC) 1 1 1 1

Skilled large scale (SLS) 1 1 1 1

Large scale (LS) 0 0 0 0

Mass (M) 0/1 0/1 0/1 0/1

Fig. 6. Determining the character polarity for mass producers

and its corresponding outgroups.

Fig. 7. First polarity decision using character data 1.

Fig. 8. Second polarity decision using character data 1.

I. McCarthy et al. / Omega 28 (2000) 77±9588

because node 3 is `0' and node 5 is `0/1' (Fig. 10).

Thus, by using the outgroup comparison a best esti-

mate of the polarity was made and `0' was found to be

primitive and `1' is derived for character 1.

This process of assessing character polarity is made

for each character. It should be noted that although

this procedure plays a signi®cant role in identifyingcharacter polarity and resolving any con¯icts that may

exist in the cladogram, the ®nal validation of character

states is subject to the rule of parsimony (Section 4.5).

In summary, two rules of analysis are used to con-

duct an outgroup comparison: the doublet rule and the

alternating sister group rule [88]. With the doublet

rule, if the sister group and the ®rst two consecutiveoutgroups have the same character state, then that

character state is decisive for the outgroup node. Any

two consecutive outgroups with the same character

state are called a doublet. With the alternating sister

group rule, if the character states are alternating down

the cladogram, and if the last outgroup has the same

character state as the sister group, then the character

state will be decisive for the outgroup node. If the lastoutgroup has a di�erent character state, then the char-

acter state decision will be equivocal.

4.5. Construct conceptual cladogram

Various tools exist to construct cladograms whichprovide a `best estimate' of the evolutionary relation-ships contained within the data matrix. These tools

have one of two approaches:

1. Construct the best cladogram using a speci®c algor-ithm.

2. Apply a criterion for choosing between alternativecladograms.

The ®rst approach is faster, but does not rank thetrees which are considered suboptimal. The second

approach provides ranking for all the trees under com-parison, but it is not able to generate exact results formatrices with more than 12 taxa, owing to compu-

tational di�culties [12].From these two approaches four methods for estimat-

ing phylogeny have developed: (1) methods based on

pairwise data, (2) parsimony methods, (3) Lake'smethod of invariants and (4) maximum likelihood phy-logenies. The parsimony method selects the shortest

tree, i.e. the tree requiring the least evolutionary charac-ter changes. This method is the most popular because ithas a simple rule of application which is; the longer thetree length, the worse the ®t; the shorter the tree length

the better the ®t. The other methods vary between parsi-monious and phenetic, but were developed to comparenucleotide specimens, DNA and molecular sequences.

Thus, a parsimonious approach is adopted as it aims toselect a best tree on an evolutionary basis rather than aphenetic basis. Also, the method is based on the tree

structure rather than elements of the entity (DNA,nucleotides, molecular distances, etc.) and thus therewould appear to be no limitations when applying it to a

manufacturing cladogram. For a detailed account ofparsimony methods, see [89].The testing of a cladogram is essentially based on its

ability to explain the phylogeny of the clade. With this

aim there are two sets of problems:

1. The proposed relationships are not acceptable ornot historically coherent.

2. Several con¯icting cladograms of the same lengthare obtained.

Refusing a cladogram because it does not ®t with

historical evidence is a dangerous exercise as there areno general rules linking the number of charactersacquired by a species and its period of existence. Very

evolved species might become un®t in a later period.Once a cladogram has been produced, the ®rst step

is to map the character changes onto the tree in order

Fig. 9. Third and fourth polarity decision using character

data 1.

Fig. 10. Polarity decision for node 6 (outgroup node) using

character data 1.

I. McCarthy et al. / Omega 28 (2000) 77±95 89

to have a global view of the proposed phylogeny. It iscommon practice to shape test the cladogram by add-

ing additional species and characters. It is importantto note that adding characters and species at this stageof the framework is easier and more reliable than at

the clade building stage.When examining the top section of the cladogram,

the investigator should question if the acquisition

could have led to a speciation, or if it is just a case ofanagenesis. If a character could have potentially cre-ated a viable species, and if historical evidence of the

existence of this species can be gathered, then thespecies should be added.The automotive cladogram was constructed using

MacClade Version 3 [90]. MacClade provides an inter-

action environment for exploring phylogeny and resol-ving character con¯icts. MacClade allows the user tomanipulate cladogram structures and character data

and to visualise the characters on each branch. Finally,MacClade provides tools for moving branches, rerout-ing clades and automatically searching for the most

parsimonious tree.

4.6. Construct factual cladogram

This stage involves studying real and existing manu-facturing organisations in order to observe the manu-

facturing systems which they operate. This typicallyconsists of plant inspections, discussions with employ-ees, assessment of planning and control procedures

and assessment of documentation (annual reports,business plans and surveys, etc.). The study aims tovalidate the existence of the characters identi®ed

during the previous stages. It will test the validity ofany proposed tree structure by ensuring that the char-acter data matrix is complete (i.e. no important histori-cal events which relate to characters have been

omitted) and that the assigned polarity is correct. Thisstage is to an extent, validation by dissemination,because the factual data will be used to verify the con-

ceptual data. The validity of any proposed tree struc-ture will also be tested by allocating existingorganisations a position on the cladogram.

The factual stage is undertaken because characterreversal (the dropping of a character) is a possible pro-cess with manufacturing systems. This paper suggeststhat two forms of character reversal could occur within

organisations: phylogenetic reversal and reactive rever-sal. Phylogenetic reversal is illustrated in Fig. 2(a) bycharacter `(20±)' where by the character has been

reversed naturally by the circumstances of evolutionand thus is illustrated on the cladogram. Reactivecharacter reversal occurs, because organisations realise

that their current position is at the end of an inap-propriate evolutionary path and take the decision toacquire a new organisational form. This change pro-

cess results in the organisation acquiring and reversingthe necessary character states which will lead to the

new organisational form. This reversal is similar toSagasti's model of adaptive behaviour [91], whichoccurs due to selective pressures. Reactive reversals are

not part of the phylogeny of a clade, they are ameasure of a systems' lack of strategic focus.Biological organisms tend to evolve according to the

rule of parsimony (smallest number of evolutionarychanges), but organisations which to some extent in¯u-ence evolutionary destiny, do not always take the most

parsimonious route.

4.7. Taxa nomenclature

The name given to a taxa of manufacturing systemsis more than a word which simply acts as a means ofreference. The name given to a taxa must act as a ve-

hicle for communication, be unambiguous and univer-sal. It should also indicate its position within theclassi®cation hierarchy. Je�rey [40] describes the codes

of nomenclature used for plants (International Code ofBotanical Nomenclature), for bacteria (InternationalCode of Nomenclature of Bacteria) and for animals

(International Code of Zoological Nomenclature).Each code di�ers in detail but certain basic featuresare common. For a summary of the relevant codes,discussed in an organisational context, the reader is

referred to [92].

5. Applications

This article began by discussing the reasons forundertaking a classi®cation study using cladistics.Although many of the reasons presented might appearto be common sense, this does not dilute their import-

ance and contribution to any serious and scienti®c in-vestigation into organisations. The followingdiscussion presents possible academic and practical ap-

plications of cladistics.

5.1. Understanding organisational diversity

(organisational systematics)

There is common agreement on the de®nition of theattributes of a just-in-time manufacturing system, see

for instance [93, 94], but these de®nitions are su�-ciently vague to cause confusion with the terms ¯exiblemanufacturing systems, agile manufacturing systems,

world class manufacturing systems and lean manufac-turing systems. This problem has been identi®ed bymany researchers and is summarised by the following

quote: ``( . . .) the diversity involved in the manufactur-ing industry is such that it is unlikely that all industrytypes should be aiming for the same procedures, pol-

I. McCarthy et al. / Omega 28 (2000) 77±9590

icies and culture. Yet there has been very little researchwhich tries to identify what the term world class (WC)

means for certain industry types. This leaves the cur-rent apparently poor performers with inadequate infor-mation to decide whether they are really not of WC

standard, and, if not, insu�cient appropriate guidanceto determine how to achieve the WC goals to whichmost would agree to aspire''. [95, p. 43].

Despite the need for knowledge on the evolution ofnew organisational forms, as described in Section 1 ofthis paper, no theoretical consensus exists for organis-

ing and supporting the vast number of empirical stu-dies which examine industrial and organisationaldiversity. Using a systematic and comparative methodsuch as cladistics, permits an assessment of the general-

ity of the attributes of complex systems [96]. Cladisticclassi®cations and the desire to develop a theory of or-ganisational di�erences could play a signi®cant role in

explaining the processes by which the practices andstructures of organisations and organisational formspersist and exist over time.

5.2. Understanding organisational ecology

Where as the ®rst application was concerned withcreating a systematic system of organisational diver-sity, this discussion suggests that cladistic classi®-

cations could provide the comparative index whichmight assist the creation of theories which focus on or-ganisational processes (e.g. replication, mutation,

recombination, learning, entrepreneurship, competitionand natural selection) and organisational events (e.g.birth, death, transformation, speciation and extinc-

tion). Cladistics could be coupled with functional stu-dies which seek to ascertain an overall measure forcomplexity, stress resistance, mortality index etc. in anecosystem. A functional study of organisations would

aim to forecast environmental/market changes (therate of new product introduction, service mechanisms,supply relationships, etc.) and forecasts on which man-

ufacturing species will dominate, compete and survivesuch market and economic conditions. Functional stu-dies and cladistics are viewed as complementary disci-

plines by many biologists and philosophers [97], sincetheir results describe di�erent properties of species (re-spectively, their identity and their strategy for survi-val). The goal of functionalists is to develop a

catalogue of knowledge, related to a classi®cation, foridentifying strategies for survival. An example of sucha classi®cation is the CSR model of Philip Grime from

the NERC unit of the University of She�eld [98]. TheCSR model, models the environment along two dimen-sions: stress and disturbance. Stress is a limitation put

on the resources necessary for the organisations to sur-vive. In biological terms, stress is the lack of nutrients,the lack of light, cold temperatures, etc. In manufac-

turing terms, examples of stress are unreliable sourcingmechanisms, lack of skilled labour, lack of ®nance,

machine breakdowns, etc. Disturbance is a serious en-vironmental event which happens occasionally.Examples of disturbances in biology are ®re, frost,

earthquakes, etc. In manufacturing, disturbances arestrikes, ®re, the loss of a market. If several organis-ations exist in a perfect environment with no stress

and no disturbance, they tend to be competitors (C).Competitors are merciless and compete to be the tal-lest, biggest, etc. If stress appears in the environment,

stress tolerators (S) tend to take the lead over competi-tors, whose strategy for survival is not appropriate. Ifdisturbance is high, ruderals (R) are better adaptedand dominate the environment. Competition is the

dominate functional type studied and documented inbusiness studies and in manufacturing management,but it would be interesting and possibly bene®cial to

develop policies for creating manufacturing systemswhich are tolerators or ruderals.

5.3. Understanding and achieving organisational change

( . . . ) an attempt was made to identify a general im-

plementation sequence. However, similar to the ob-servation made by Im and Lee [99], a generalimplementation pattern for the JIT practices couldnot be established [94, p. 8].

The ®rst two applications were academic in nature,

but the deliverables from such applications could pro-vide organisations with new tools and knowledgewhich could help them to be proactive in the manipu-lation of their evolution. Since cladistics is a classi®-

cation method which ties its de®nition of similarity tonaturally occurring change processes, the result is thatthe information contained within a cladogram is useful

for identifying standard change sequences. A clado-gram could also provide a framework or index forpositioning and benchmarking studies [100].

The analysis of a cladogram goes further than asimple speci®cation of a change sequence. It indicates:the sequence of steps required to transform an organis-ation to a certain state, along with the characteristics

which must be dropped (the `unlearning' steps). Ifthere is agreement that the cladogram has been con-structed according to the rules of parsimony, the physi-

cal and ®nancial cost of the identi®ed change routewould be minimised.The tree-like nature of a cladogram could be com-

pared to a map, which once constructed provides or-ganisations with an unambiguous and precisede®nition of the starting point of the change journey.

I. McCarthy et al. / Omega 28 (2000) 77±95 91

If the journey is a mimetic process then it will alsoprovide a de®nition of the destination.

5.4. Strategy

Despite the popularity of ¯exible manufacturingsystems, managers su�er from inadequate frame-works to help incorporate ¯exibility into their stra-tegic planning [101, p. 7].

A cladogram provides a snapshot of the evolution-ary history of a company. Thus, it can be used by

managers to check that their vision for the future isconsistent with their understanding of the past.Cladistics also provides an interesting measure of stra-tegic excellence, through the principle of parsimony.

Strategic management is a discipline which was underclose scrutiny in the eighties and many researchersquestioned if a correlation could be found between the

practice of strategic management and organisationalperformance, usually de®ned as pro®tability. Althoughsome researchers con®rmed the existence of such a cor-

relation [102±104], many others found no correlationswhatsoever, [105±109]. Strategic management is con-cerned with the long term sustainability of pro®ts and

thus strategic excellence can be di�cult to de®ne,because assessments may need to view a decade of®nancial loss before capturing the bene®ts of a well-articulated strategy.

If there is agreement with the statements that ``( . . . )successful ®rms have followed more than one route tosuccessful redesign.'', ``Too often, ( . . .), pieces are

missing from the strategies and structures ®rms createin the process of redesign'' [110, p. 129], then the prin-ciple of parsimony could o�er a legitimate de®nition of

strategic excellence. Researchers can easily question, aposterior, how parsimonious the strategy of a ®rm was.The Toyota Motor Company demonstrates a remark-able record of excellent strategic practices, with the

highly focused introduction of the Toyota productionsystem [111] and its subsequent evolution toward leanproduction. Cladistics could be used to develop a set

of performance measures which would govern the stra-tegic decision making process within companies.

6. Summary

Although classi®cation is an habitual process whichall humans do, the use of classi®cations in organis-

ational science has not reached the same status as theclassi®cations which exist in physics, chemistry and bi-ology. This paper has sought to describe and justify

the bene®ts of organisational classi®cations and in par-ticular cladistic classi®cations of manufacturing sys-tems.

Cladistics, as with all classi®cations, is a method forsystematically organising knowledge about a popu-

lation of entities. It is a process for studying diversityand attempting to identify and understand laws and re-lationships which explain the evolution and existence

of the variety groups. Its intellectual and practicalvalue is derived from this ability to explain.This article suggests that cladistics is a novel and

appropriate approach for producing an organisationalclassi®cation, because unlike the best phenetic classi®-cations and the multitude of subjective classi®cations,

cladistics has an underlying philosophy (evolution) andaccompanying rules and procedures. Cladistics usesevolutionary relationships to identify and form groups,because evolution is the process which accompanies

the changes which materialise to produce di�erent or-ganisational forms. The resulting classi®cation and theknowledge contained within, provide insights into or-

ganisational diversity. These insights include: observingthe patterns and events which accompany the organis-ational change and observing the most parsimonious

route between di�erent organisational forms.This fundamental, but important insight could result

in organisational cladograms being used as a tool

within a change framework, for achieving successfulorganisational design and change. Thus, regardless ofthe industrial sector, organisations could use clado-grams as an evolutionary analysis technique for deter-

mining `where they have been and where they arenow''. This evolutionary analysis could be used to for-mulate coherent and appropriate action for managers

who are organisational architects and planners.

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