Doctoral Dissertations

Date of Award

12-1994

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Economics

Major Professor

William E. Cole

Abstract

This study examines the conventional approach to incorporating technology within the theory of the firm in light of recent organizational forms observed in Japanese Continuous Improvement Firms (CIFs). The conventional linear model of technological change in economics is depicted in this work as a sequentially organized and functionally segmented process in which the role of the directly productive operations of the firm is restricted to rote learning and minor technology modification. This work attributes the assumed limits to firm improvement without investment in externally developed technology to the restricted role given to directly productive operations in theory and practice. This work explores new organizational forms introduced by CIFs and their implications for conventional models of technological development. Two technology development systems within the GIF, kaizen (continuous improvement) and concurrent design, are examined. As an outcome of this analysis, a concurrent model of technological change is suggested, characterized by the functional integration and concurrent temporal involvement of a broad span of participants. Several analytic tools are introduced in this study for examining the affects of a firm's approach to technology on performance. The productivity changes described in economics as firm learning are treated in this analysis as a performance gap between the productive capability of a technology and the performance a firm is able to achieve with its use. The concept of firm learning as introduced by Arrow (1962) is described here as on-line learning, where a firm develops technological competence on actual output in real time. Off-line learning, in contrast, is described as those factors within a firm's control that can improve performance with a new technology, including selection of appropriate technology, preparation for technology changeover, and applicable employee training and experience. These factors are enhanced by a concurrent, rather than a sequential, approach to technological change. It also is observed that, in the case of the GIF, performance improvement does not follow a set learning function, as depicted in the sequential model of technological change, and that the GIF creates technology within its directly productive activities, rather than depending solely on externally developed technology.

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