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Six Sigma: The role of goals in improvement teams
Kevin Linderman a,*, Roger G. Schroeder a,1, Adrian S. Choo b,2
Operations and Management Science Department, Curtis L. Carlson School of Management, University of Minnesota, 3-150 CarlSMgmt Building, 321-19th Avenue South, Minneapolis, MN 55455, USA b Rensselaer Polytechnic Institute, Troy, NY, USA Received 1 May 2005; received in revised form 1 August 2005; accepted 3 August 2005 Available online 27 December 2005
Abstract The tenets of goal theory have been well established as a motivation mechanism in the management literature. However, some quality-management advocates, such as W. Edwards Deming, often criticize the use of goals. This research investigates the tension between goals and quality management in the Six Sigma context. We ﬁnd empirical support that goals can be effective in Six Sigma improvement teams when teams adhere to the Six Sigma tools and method. However, challenging goals are counterproductive when Six Sigma teams do not use the tools and methods rigorously. This research reconciles the differences between quality management and goal theory by showing that the Six Sigma tools and method interact with goals. # 2005 Elsevier B.V. All rights reserved.
Keywords: Quality management; Six Sigma; Goal theory; Teams; Process improvement
1. Introduction Much has been written about quality management over the last few decades (Ahire et al., 1995; Sousa and Voss, 2002). Most of the research focuses on studying quality-management practices and associated success factors (Kaynak, 2003; Sousa and Voss, 2002). However, research on how motivational factors inﬂuence qualitymanagement outcomes is scant. Motivation is the process that accounts for an individual’s intensity, direction, and persistence toward a goal (Robbins, 2003, p. 155). While goal theory research suggests that speciﬁc, challenging goals lead to higher performance (Locke and Latham, 1990), at least one quality-management authority has expressed a conﬂicting view. For example, Deming
* Corresponding author. Tel.: +1 612 626 8632. E-mail addresses: email@example.com (K. Linderman), firstname.lastname@example.org (R.G. Schroeder), email@example.com (A.S. Choo). 1 Tel.: +1 612 624 9544. 2 Tel.: +1 612 626 9723. 0272-6963/$ – see front matter # 2005 Elsevier B.V. All rights reserved. doi:10.1016/j.jom.2005.08.005
(1986) viewed arbitrary numerical goals as counterproductive. Research in quality management from a goaltheoretic perspective can help resolve these conﬂicting viewpoints. Reviews of the goal-setting literature have consistently demonstrated the effectiveness of individual goal setting on performance (Locke and Latham, 1990; Locke et al., 1981). In fact, Miner (1980) rated goal theory ‘‘high’’ in both criterion validity and usefulness in application. (Criterion validation indicates ‘‘how well scores on a measure correlate with the criterion on interest’’ (Singleton and Straits, 1993, p. 122). This gives an indication of practicality or usefulness of a measure.) Also Pinder (1984) said, ‘‘goal theory has demonstrated more scientiﬁc validity to date than any other approach on motivation . . .. Moreover, the evidence indicates that it probably holds more promise as a motivational tool for managers than any other approach.’’ Research on the effects of goals on group performance, however, is still emerging. O’Leary-Kelly et al. (1994) performed a quantitative meta-analysis of
scholars have been studying goal theory in group settings (Weingart and Weldon... for example. 1991. 1992. The ecological fallacy can occur when erroneous information from one level of aggregation (e. 1990). . Speciﬁc goals are critical to individuals because they establish a minimum acceptable performance level.g. further research needs to be conducted at the group level in goal theory (Weingart and Weldon. These researchers argue that nothing is radically new in Six Sigma but Six Sigma does place a strong emphasis on challenging speciﬁc goals (see also Pande et al. Goal theory also suggests that speciﬁc goals result in higher levels of performance than vague nonquantitative goals such as ‘‘Do best’’ goals (Locke and Latham.’’ Deming systematically rejected the use of goals as a source of motivation (Carson and Carson. 1986).. Locke et al.. . goals are effective because they indicate the level of performance that is acceptable (Locke and Latham. ‘‘Do best’’ goals are goals that are implied by the task or occur when the subject is told to do the best he or she can. these results should also be generalizable to other quality practices. . In this setting. the effect of goals motivating individuals may differ from that of groups. some quality thinkers have been critical of the goal-theoretic perspective. . Carson and Carson (1993) compare and contrast Deming’s views with goal theory and reconcile differences when possible. Locke et al. 2000. the name Six Sigma suggests a goal of 3. and demoralization . 1990). a goal that lies beyond the means of its accomplishment will lead to discouragement. direct attention. p. Weldon et al. Deming (1994. . / Journal of Operations Management 24 (2006) 779–790 goals in the group setting and found a signiﬁcant relationship between group goals and group performance. setting project improvement goals to increase performance by a factor of 10 (10Â). As a result. individuals) is used to draw inferences about another level of aggregation (e. but ambiguous goals either do not make clear the appropriate performance level or indicate to individuals that a range of performance levels is acceptable (Locke and Latham. 1990. O’Leary-Kelly et al. 69). 1994.. For example. Some quality-management movements. 1981. Tubbs. lead to greater individual effort and persistence (Locke and Latham. Because Six Sigma is consistent with quality-management principles. Difﬁcult goals. In general. Our research begins to test the tenets of goal theory in Six Sigma projects. 1993. 2000). Linderman et al. Schroeder et al.... Theoretical development Goal-setting theory suggests that challenging goals lead to enhanced performance because they mobilize effort. In response to this phenomenon. A numerical goal accomplishes nothing. The Six Sigma approach to process improvement also employs numerous goals. Empirical testing of goal theory in the quality context can help reduce the confusion between goal theory and quality management. and encourage persistence and strategy development (Locke and Latham. Deming’s ‘‘negative views on quantitative goal setting are at odds with both the historical management prescriptions and contemporary research on goal setting and motivation’’ (Duncan and Van Matre. 1990) because goals tell teams what needs to be done and how much effort to expend. Linderman et al. have argued for setting very high goals. According to goal-setting theory.. 1990).4 parts per million defective. 1990.g. 1997). Setting challenging group goals can promote team effectiveness (Locke and Latham. p. 1994.. groups). None of the studies in their meta-analysis considered the effect of goals on quality-improvement teams.’’ The conﬂicting views of goals in quality management (e. hiring Black Belts on the basis of costsaving goals. Little research in quality management uses goal theory. frustration. Six Sigma provides an ideal context to study the relationship between goal theory and quality management. Durham et al. and selecting improvement projects based on ﬁnancial and strategic goals. because the nature of the work done by quality teams raises some complex issues about how goals and objectives are properly framed. Weingart. 1991). Deming versus Zero Defects) suggest the need for more scholarly investigation. In fact. Katzenbach and Smith. scholars have found a signiﬁcant relationship between group goals and group performance (O’Leary-Kelly et al. ‘‘It is not surprising that there is disagreement among the TQM authorities about goal setting. (2003) provide a deﬁnition of Six Sigma and compare it with other qualitymanagement approaches. 1995. Hackman and Wageman (1995) considered research issues related to quality management and noted... 2.780 K. Knight et al. 1990). (2003) developed a set of propositions about Six Sigma from a goal-theoretic perspective. Quality-improvement teams are central to quality improvement (Scholtes et al. such as the Zero Defects. As a result. 5). However. assuming that the results of goal theory for individuals also apply to groups may be subject to the ecological fallacy (Singleton and Straits. if accepted.. 1993). 2001). 41) said ‘‘. Recently. O’Leary-Kelly et al. p. (1994) found that goal speciﬁcity also applies to group goals. 1991. However. 1993). 1996) because effective teams can perform signiﬁcantly better than a collection of individuals (Mohrman et al.g.
Six Sigma advocates rigorous application of the quality tools in each step of the problem-solving methodology (Schroeder et al. Hypothesis 1.000 for a process. 1985. 2000). especially for challenging projects.. Six Sigma and goals. Hoerl. ‘‘A numerical goal accomplishes nothing. however. but still believable. In fact. 1984. 1984). 1988). Quality management has advocated the use of quality tools and methods in problem solving (Breyfogle. Fig. / Journal of Operations Management 24 (2006) 779–790 781 Six Sigma is known for employing speciﬁc challenging process improvement goals (Pande et al. What counts is the method—by what method?’’ (Deming. Using Six Sigma tools and method provides a mechanism for improvement teams to achieve their goals. Kume. when goals become excessive. If goals are viewed as unattainable. 41). In Six Sigma. the degree to which Six Sigma teams adhere to the tools and method should alter their ability to achieve improvement goals. Fig. Although explicit challenging goals can lead to higher performance. The degree of challenging goals used in a Six Sigma project improvement team is concavely related to project performance. Ishikawa. This perspective is consistent with the views of some quality-management authorities. 1999. 2005). Fig. Sanders and Hild. 1984). 27). 1995. Locke and Latham. According to Deming. Goal theorists have argued that difﬁcult goals on complex tasks may actually prove to be more detrimental to performance than assigning no goals at all because they may create a level of anxiety that interferes with goal accomplishment (Earley et al. 2000). As a result. These proposed effects are explained below. (2000. The ﬁgure indicates a direct effect of challenging and explicit goals and a direct effect of the Six Sigma Tools/ Method on team performance along with a moderating effect or interaction between goals and Six Sigma. 1989). 1994. performance actually declines.. which. 1995. facilitates goal achievement. 2. 1 illustrates the proposed relationship between Six Sigma and goals under investigation in this research. ‘‘A clear goal is the center piece of Six Sigma. p. a drop in performance can occur if goals become too challenging (Erez and Zidon. Using quality improvement tools and methods should reduce the task’s complexity by guiding the search for solutions to complicated problems. Goal level and performance. Fig. . When reviewing the literature goal difﬁculty and performance relationship Locke and Latham noted. 1982). 1985. It is extremely challenging.. Research in goal theory suggests that the ability to achieve goals moderates the relationship between goals and performance (Locke. the improvement goal is to reduce the DPMO by a factor of 10–3000. individuals may exert less effort. 44) indicates. p. excessively challenging goals could risk being viewed as unattainable and thus exhibit a non-linear relationship between goal difﬁculty and performance.. The 10Â rule is one common approach used in Six Sigma to establish improvement goals. In Six Sigma. 1. Mizuno. For example. 2 illustrates that challenging Six Sigma goals lead to higher performance.K. 1998. Gitlow et al. 2003. prescriptive tools are suggested for each step in the improvement methodology (Rath and Strong. Linderman et al. if the current DPMO is 30.’’ Quantitative improvement goals used in Six Sigma included setting target levels for defects per million opportunities (DPMO) and/or Process Sigma. 2000). in turn. OM scholars have also argued for considering bipolar (or non-linear) relationships when applying behavioral theory to operations management phenomena (Bendoly and Hur. Pande et al. Erez and Zidon (1984) found a bipolar relationship between goals and performance. ‘‘in all cases goals are linear except when subjects reach the limits of their ability at high goal difﬁculty levels’’ (1990. p. which would decrease performance (Erez and Zidon. more so when goals are challenging then when they are easy to achieve.
Linderman et al. Measure. At the time of this research. this is consistent with prior research that suggests the degree of implementation of quality practices is positively related to organizational performance (Douglas and Judge.000 employees worldwide. which improves project performance. It has been using Six Sigma for 3 years and is very advanced in its application. Rational decision-making emphasizes a systematic step-by-step approach to problem solving. Handﬁeld et al. tools. They serve on a parttime basis and often have Green Belt training. In MFG. Using multiple informants reduced the common method bias and increased validity compared with a single-informant survey design. This leading manufacturer of electronic components has annual revenue of more than US$ 6 billion. Do. The Black Belt usually reports to the team sponsor. Act). Hypothesis 3. Data collection 3. Analyze. the separation of theoretical constructs into different parts of the survey further reduced the common respondent bias while at the same time reduced the number of questions per survey. In MFG. 3. Six Sigma project improvement teams at MFG employ a structured improvement method and use numerous quality tools. 1999. Team members answered the other part of the survey about goals. Black Belts are highly trained full-time specialists in process improvement who receive more than 4 weeks of training and hands-on project improvement experience. but this savings target does not necessarily apply to all projects. MFG is a Fortune 500 company with more than 60. That is. Some projects may have zero ﬁnancial savings but generate other important strategic beneﬁts that are difﬁcult to quantify in ﬁnancial terms. 2001). Harrison. To the degree that improvement teams follow the Six Sigma tools and method they can make better decisions. Because Black Belts came from different business units in MFG. (1999) found that appropriate use of quality tools can lead to improved performance. cause–effect charts. In each improvement step. The degree of adherence to Six Sigma tools and method is positively related to project performance. Furthermore. which helps establish A questionnaire was developed to collect data from a sample of MFG’s 1500 completed Six Sigma projects. which tended to increase the response rate. resulting in savings of more than US$ 400 million from its Six Sigma efforts. Control). and Statistical Process Control are used. the structured improvement approach is called DMAIC (Deﬁne. the projects selected were fairly random and representative of the population of all completed projects at MFG at the time of survey. The degree that Six Sigma teams adhere to the use of tools and method positively moderates the effect of challenging goals on project performance. MFG had about 200 full-time Black Belt specialists and had completed more than 1500 Six Sigma projects. The Champion provides a holistic view of the organization. and method. These tools include many of the seven classic tools of quality control and the seven new tools for problem formulation and diagnosis (Gitlow et al.. Most recently completed projects by the Black Belts were selected to minimize the measurement error due to recency effect. standard quality tools like failure modes effects analysis (FMEA). Methods 3.2. Improve. each Six Sigma project is assigned a team of employees who have substantial knowledge of the process or product to be improved. 1995). These individuals receive 2 weeks of training and are called Green Belts. To a certain extent. Black Belt and team members from each selected project were invited to participate in this survey.000. 1999). The application of quality tools and methods is grounded in rational decision-making (March. / Journal of Operations Management 24 (2006) 779–790 Hypothesis 2. project buy-in and ensures the availability of resources to the team.782 K. Research environment The primary source of data for this study comes from a high-tech manufacturing ﬁrm using Six Sigma that we refer to as MFG. called a Champion. Each personalized email had a customized link . who is from senior management and is trained in Six Sigma basics. The questionnaire was divided into parts: Black Belts answered one part of the survey that contained questions about performance. Most projects have a target savings of at least US$ 175. MFG is also training most of its employees in Six Sigma basics. The survey was web-based: personalized email invitations to participate in the survey were sent out by the Vice President and Executive Director for Six Sigma to 1233 team members and Black Belts from 324 projects. Check. This approach is patterned after PDCA (Plan.1. the sampling time frame considered only projects completed with in the last 6 months to avoid problems associated with memory loss. A fulltime Black Belt specialist leads each of these teams.
3. The researchers developed the scales based on a literature review and revised the scales through a pilot study at MFG.e. We assessed the inter rater reliability (IRR) (James et al.056 and explains 51. The pilot study assessed three main characteristics of the survey—clarity (i. The Performance construct had multiple responses from Black Belts and at least one team member for all projects. the resultant eigenvalue associated with this scale is 1. and the average time taken to answer the questionnaire. While quality-management measurement scales existed in prior research (e.919. Using principle component analysis. all above the acceptable lower bound of 0.0. 1978).3. Extra efforts were made to ensure conﬁdentiality and avoid the negative effects of Social Desirability Bias (Nunnally and Bernstein. All items loaded into a single factor and the factor loadings for each item ranged from 0.631 to 0. within-project variance and between-project variance for the various constructs.784 to 0. 1994). This scale had an alpha of 0. none was useful for this research. above the minimum acceptable level of 1. 1989). which represents a 63.6.e.1.2.87 for all constructs with multiple responses. Variables and measures Although we had multiple informants for all projects. 1951). IRR < . 3. Six Sigma Tools/Method Six Sigma Tools/Method consisted of four items. All items loaded into a single factor and the factor loadings for each item ranged from 0.9% of the variation. Appendix A provides a summary of the scales. and explains 54. The data for each project are based on responses from the Black Belt and at least two team members. / Journal of Operations Management 24 (2006) 779–790 783 that brought the respondent directly to the survey for a speciﬁc project. We aggregated multiple responses by taking averages for the respective item scores in each project to arrive at a sample of 188 projects.3. does the question make sense and is it appropriate?). At the project-level. Saraph et al. Linderman et al.4 (Carmines and Zeller.g.3. >1) and low agreement (i. using a one-way ANOVA. All multi-item measures in this study use 7-point Likert scales that ranges from 1-strongly disagree to 7strongly agree. 3.4% of the variation. Responses collected via the Internet were stored in a protected Microsoft Access database. the resultant eigenvalue associated with this scale was 3.e. F-statistics indicated signiﬁcant differences for between-project variances. Then we removed all projects designated as a Design For Six Sigma (DFSS) because these projects require a methodology different from the DMAIC that traditional Six Sigma projects use. while other constructs had multiple responses from only a third of the projects. Using principle component analysis (PCA).. 1951).633 to 0. Follow-up reminders and thank-you emails were sent every week for 3 weeks before we concluded the data collection with a satisfactory number of responses. we collected data for 206 projects. is the question clear and easy to answer?). We also compared.659 and explained 73. 3.. New scales often result in lower alphas making this scale minimally acceptable for further use (Carmines and Zeller.2% of the variation. Team project goals Team project goals consisted of three items. This scale had an alpha of 0. All items loaded into a single factor and the factor loadings for the items ranged from 0. Five university researchers also knowledgeable in Six Sigma pre-tested the instrument. we removed all projects that involved ‘‘soft’’ dollar-savings and considered only ‘‘hard’’ dollar-saving projects. IRR 0.K. which required scales for project improvement goals. Soft dollar-savings projects are often tied to the ﬁrm’s long-term strategy. project performance.3.791. The remaining 188 projects had an average IRR greater than 0. which often makes assessing performance difﬁcult. not all theoretical constructs had multiple responses. All of the scales were evaluated using principle components analysis.3.e. Some 951 persons completed the survey for about a 77% response rate.5% response rate. 1951). This process resulted in a total of 128 projects. The scales were pre-tested through a pilot study at MFG by six Black Belts and eight team members. ‘‘Conceptually the factor score represents the degree to which each individual scores high on the group of items that have .90 (Cronbach. Using principle component analysis. which is considered acceptable. 1978). the resultant eigenvalue associated with this scale is 2.68 (Cronbach.59 (Cronbach. Team performance Team performance consisted of ﬁve items. content (i. Finally.10).814. For each scale factor scores were created using the regression method. the results of the two tests showed sufﬁcient evidence that the data were consistent at the project-level and that it was appropriate to aggregate the item scores for theoretical constructs with multiple responses. 1984) and deleted 18 projects with inconsistent responses (i. Although we did not have multiple responses for all constructs. and adherence to Six Sigma tools and method. This scale had an alpha of 0.
034 0.001) along with all the predictor variables.032** À0.38* 2 3 4 Project Performance Domestic Goals Six Sigma 1.541. 2000).711 À2.1. Model 4 in Table 2 drops the non-signiﬁcant predictor variables (Goals2. The model is signiﬁcant (F = 7. Model 3 adds in the interaction terms between Goals and Six Sigma Tools/Method.11 15. Mean 4. 308). / Journal of Operations Management 24 (2006) 779–790 Table 1 Correlations Variable 1 2 3 4 * high loadings on a factor.798*** 0. Scholars have noted the importance of considering the international context when studying operations management (Prasad and Babber.D. 119). Regression diagnostics indicate no problems with outliers.05.736. P < 0. Model 4 suggest that performance of domestic projects is signiﬁcant and results in lower performance than international projects (t = À3. We removed the nonsigniﬁcant terms because they can alter the interpretation of the model (Neter et al.149 4.275 11. We ﬁnd that the R2 of 0.355 b À0.830 À0. people at the domestic sites tended to be more skeptical.669.41 1 1.355 0. then transferred to international sites. Six Sigma Tools/Method Â Goals2) from the regression equation.001). P < 0. or homoscedasticity. Also.09 0.07 S.784 K. but the Goals2 term is not signiﬁcant.942 *** Model 3 t À3.56 0.00 Correlations signiﬁcant at level P < 0. P < 0. P < 0. Results Mean. These results are consistent with our expectations that Table 2 Regression analysis for Six Sigma goals and performance Variable Model 1 b Domestic Goals Goals 2 Six Sigma Tools/Method Six Sigma Tools/Method Â Goals Six Sigma Tools/Method Â Goals 2 R2 F DR2 * ** *** Model 2 t À3. higher values on the variables with high loadings on a factor will result in a higher factor score’’ (Hair et al.669*** t À3.141*** P < 0. P < 0. normality.797 À0.004 0.298*** 0.08 À0.081 *** b À0.00 À0.13 1.. The factor scores provide the basis for subsequent analysis.602 3.155 0.347 0. 3. Linderman et al.001).164 À0.166** 0. .33* À0. Model 2 adds in the main effects of Six Sigma Tools/Method and Goals. 0.042** 4. 1996.13 1.001) and suggests the main effects inﬂuence Project Performance.180 À0. Table 2 provides the results of the regression analysis.4.3.160 0.298.00 À0. p.007** À0. Subsequent analyses are conducted on Model 4.798. Model 1 gives the regression of the control variable on the Project Performance variable.138 0. standard deviation. Thus.279 7. the R2 improves by 0. Control variable Discussion with MFG executives indicated that there might be a difference in performance of Six Sigma projects between domestic and international sites.251 10.278** À0. which suggests the need to control for domestic versus international location.275 is acceptable given the limited number of variables used to predict performance.001) and the R2 improves by 0.546*** 2.028. P < 0.891 0.00 0.54*** 0.41 0.001.007 0. P < 0. All other models (Models 1–3) give similar conclusions.37 0.736*** À2.470*** *** Model 4 t À3.683*** 2. A signiﬁcant correlation exists between Team Performance and Six Sigma and between Team Performance and Domestic Projects.028* b À0.672 À2.16 2..11 in Model 2.01 3. which is signiﬁcant (F = 15. Domestic sites were more involved in R&D efforts and production was often initiated domestically. 4.11 0. The collinearity diagnostics (including Variation Inﬂation Factors) indicate that multicollinearity is not a problem. 1998.796 À0. p. This model is also signiﬁcant (F = 11. MFG also observed a lot of enthusiasm for Six Sigma from the international sites. this also gives a signiﬁcant model (F = 10.01. and correlations of the variables under consideration are displayed in Table 1.
We are unable to fully support Hypotheses 1 and 3 as stated. empirical evidence indicates that Six Sigma Tools/Method positively moderates the effect of challenging goals on project performance. p. 3 gives the conditional effects plot for E [Project Performance] as a function of Goals conditioned on Six Sigma Tools/ Method. However. which in turn could have reduced motivation and lowered performance outcomes. 50th... 311) effect on goals. Increasing goals linearly improves performance when teams make extensive use of Six Sigma Tools/Method. Without interactions. when Six Sigma Tools/Method is high. 4 provides the conditional effects plot for E [Project Performance] as a function of Six Sigma Tools/Method conditioned on Goals. 3 indicates partial support for Hypothesis 1.K. Goal difﬁculty conditioned on Six Sigma. Interpreting the other coefﬁcients of the regression model is more difﬁcult.032. we found no support for the quadratic relationship between goals and performance as suggested in Fig. 1996. In general. the coefﬁcients of the regression equation indicate the change in mean response with a unit increase in the predictor variable. with a unit increase in Six Sigma Tools/ Method and Goals held constant is given by the following: E½Pro ject Per formance ¼ 0:355 þ 0:138ðGoalsÞ The conditional effects plot (Neter et al. In this setting. However. 3 and 4) and the statistical signiﬁcance of the interaction term in Table 2 support Hypothesis 2. The use of Six Sigma Tools/ Fig. 4 also gives support to Hypothesis 3. 2. 3. the conditional effects plot indicates that when Six Sigma Tools/Method is low. Fig. the mean response. Similarly. 308). 50th. since there is a signiﬁcant interaction term in model 4 that makes it difﬁcult to interpret the main effects. conditioned on the 1st. The conditional effects plot in Fig. The conditional effects plot in Fig. . 1996. However. Model 4 indicates a signiﬁcant interaction between Goals and Six Sigma Tools/Method (t = 2. 1996. and 99th percentile ranking of Six Sigma Tools/Method. The conditional effects plots (Figs. p. P < 0. the effect of goals is conditioned on the level of Six Sigma Tools/Method and visa versa. The plot considers values between the 1st and 99th percentile ranking for goals. An equivalent story emerges where increasing Six Sigma Tools/ Method results in lower performance when goal difﬁculty is low. This is because the main effects are conditioned by their interaction with another variable. However. challenging goals result in lower performance. and 99th percentile ranking of goals. As a result. Fig. E [Project Performance]. p.. That is. Possibly all Six Sigma projects sampled in this survey did not have goals that were viewed unrealistic and unattainable. Linderman et al. Six Sigma Tools/Method has a reinforcement or synergistic (Neter et al. conditioned on the 1st. increasing Six Sigma Tools/Method results in higher performance. / Journal of Operations Management 24 (2006) 779–790 785 international Six Sigma projects had a higher level of performance than domestic projects at MFG. the meaning of the coefﬁcients is not the same in the presence of interaction terms (Neter et al. The plot considers values between the 1st and 99th percentile ranking for Six Sigma Tools/Method. challenging goals result in higher performance. 310) provides a way to interpret the regression equation in the presence of an interaction effect. when goal difﬁculty is high. with a unit increase in Goals when Six Sigma Tools/ Method is held constant and given by the following: E ½Pro ject Per formance ¼ À0:16 þ 0:138 ðSix Sigma Tools=MethodÞ Similarly. That is.001).
‘‘. Discussions and conclusions 5. There could be an explanation for this outcome. p. Possibly projects that have low goals should have been Do-It projects rather than Six Sigma projects. analysis shows a positive interaction effect between Goals and Six Sigma Tools/Method with performance. This consultant advocates the use of a Do-It project when the solution is obvious and the focus is on implementation. a surprising fact given that goal theory is a well-established management theory (Locke and Latham. As Deming (1994. (A Do-It project means take action immediately. though. One reviewer noted the anomaly that extensive use of Six Sigma Tools/Method actually resulted in lower performance when goals are low. . . In discussions with Six Sigma consultants. Goals can have a positive effect on performance when used with Six Sigma Tools/ Method. everything looks like a nail. However.) This consultant argues that a Six Sigma project should only be used when the solution is not clear (that is. To the extent that Six Sigma reﬂects quality-management practices in general. 2003). We found empirical support that goals do in fact affect project performance. . there is no need for a root cause analysis. As suggested by one consultant. Six Sigma conditioned on goal difﬁculty. demoralization.786 K. is somewhat different. Recently operations management scholars have recognized that ‘‘incorporating human behavior into OM models will yield more realistic insights’’ (Boudreau et al. A numerical goal accomplishes nothing. In this setting. Theoretical implications This study addresses the role of goals in Six Sigma project improvement teams. The truth. Method results in higher performance except when goals are low. 5... the solution method should ﬁt the problem. This supports the perspective advocated by some quality-management authorities. root cause analysis is required).’’ This research provides empirical support that Deming and goal theory can be reconciled. which would be consistent with the results in Fig. Linderman et al. 1984. 1980). that is.’’ Teams can waste valuable time and effort rigorously applying Six Sigma Tools/Method when the solution is obvious. frustration. 41) said. As the adage goes ‘‘if you have a hammer.1. Pinder. Little empirical research has been done using goal theory in operations management and quality management in particular (Linderman et al. operations management should not be understood as a purely technical problem but must be considered simultaneously with behavioral underpinnings. ‘‘Deming and traditional theorists are often arrayed on opposing sides. they note that sometimes organization inappropriately apply the Six Sigma Tools/Method. Incorporating theories from organizational behavior can help inform the practical consequences of implementing operations management practices. 1990. 4. 2003). the use of technical tools and motivational factors must be managed jointly rather than in isolation. Miner. More broadly. / Journal of Operations Management 24 (2006) 779–790 Fig. What counts is the method—by what method?’’ The results of this research are consistent with Deming’s perspective. In this situation. a goal that lies beyond the means of its accomplishment will lead to discouragement. 4. this research should be generalizable to other quality-management approaches. As Carson and Carson (1993) note. Some scholars have begun to examine the behavioral implications of technical tools in operations management (Doerr et al. we ﬁnd that behavioral theories interact with technical tools and method in interesting ways.. 1996. the excessive use of Six Sigma Tools/Method can actually reduce performance.
Without knowledge. As a result. 1992. it is still developing for groups (Locke and Latham. Our research helps advance this effort. leaders need to be cognizant of the importance of training and supporting the use of problem-solving tools and methods. Organizational leaders pursuing quality practices often take a rational approach to improvement of the organizational system (Kast and Rosenzweig. tools. they have not been tested (O’Leary-Kelly et al. Recently. We also consider the inﬂuence of using problem-solving tools and method on goals. Weingart. But then they do not provide their people with the knowledge. 1995. and means to meet such ambitious goals’’ (Sherman. If managers do not ensure teams are trained and use the appropriate problem-solving tools. from a goal theory perspective. 5. 231). These contextual variables could inﬂuence a team’s ability to achieve goals. 1994). Although goal theory is well established for individuals. improvement goals motivate teams to engage in intentional learning activities that create knowledge (Linderman et al. This research also contributes to goal theory. it lacks external validity.. which other goal theory studies have not considered. 1998). organizations often use heuristics when setting goals for project improvement teams. Organizational leaders need to make sure that quality-improvement teams are. 1994). challenging improvement goals could demoralize employees involved in Six Sigma projects. / Journal of Operations Management 24 (2006) 779–790 787 Rungtusanatham. problem-solving teams are formed to solve a problem and then disbanded upon completion of the project. However. For example. the creation of knowledge occurs through intentional or explicit learning that employs formal improvement methods. noted ‘‘Most organizations do not have a clue about how to manage stretch goals. 1990. 1972). Limitations and conclusions Despite the interesting results of this study. this is the ﬁrst study to consider problemsolving groups (Six Sigma teams) and goals.K. p. Steve Kerr. 1996). In the quality context.. Linderman et al. setting challenging goals without fully utilizing the tools and method can lead to sub-optimal results. Otherwise. The Project Evaluation System helps make sure that improvement teams use the tools and methods in the prescribed fashion. in fact. It is popular today for companies to ask their people to double sales or increase speed to market threefold. First. challenging goals might actually lead to lower performance. Schultz et al. To our knowledge. Thus. O’Leary-Kelly et al. Most studies consider work-teams where group membership is stable and employees work together on a daily basis. Intentional learning requires regulation of actions taken by organizational members. 2003). using the tools and method espoused by quality theorists and practitioners. Kerr further suggested that giving employees challenging goals without a means to achieve them is immoral (Sherman. Using these deployment techniques not only ensures proper use of tools and method but also facilitates achievement of project improvement team goals.. Goals serve as regulators of human action by motivating project improvement teams. improvement only occurs by chance events that are rarely understood. As research on goal theory in a group setting matures. we should better understand contextual variables in teams that inﬂuence goal achievement.and post-project review of the improvement projects to assess the appropriate use of the tools and method. Chief Knowledge Ofﬁcer at General Electric. 1991. Improvement of rational systems (Scott. 1998).2. Based on this research. 1991. Little goal theory research has considered different types of groups (O’Leary-Kelly et al. factors such as group cohesion (Levine and Moreland. Further replications of this study are required to fully test the theory. such heuristics may not be effective. Although this does help control for confounding factors like organizational culture. Managerial implications Quality-management practices can often become the latest management fad (Abrahamson.. In this setting.. Weingart and Weldon. 2000). 1995). several limitations need to be emphasized. however to date. organizational leaders that make effective use of goals can regulate how much organizational knowledge is created through Six Sigma. This research supports the belief that challenging goals must be supplemented with tools and method to solve difﬁcult problems. . 1990) and social loaﬁng (Price. the study considered data from a single ﬁrm. Weldon et al. 1987) were not considered. which can also create distortions between the rhetoric and reality of what is practiced (Zbaracki.. In Six Sigma. Second. 1994).3. Also. 1987) is governed by both knowledge and motivation. Managers may set high goals when deploying quality but may not follow through on fully implementing the prescribed techniques. 5. One common heuristic used in Six Sigma is the 10Â rule. 2001. which sets an improvement goal of reducing defects by a factor of 10 (Harry and Schroeder. MFG developed a Project Evaluation System that performs a pre.
Future research could investigate how changes in these variables inﬂuence performance. Production and Operations Management 4 (3).P. they had a 2-year rotation system for Black Belts. the role of national culture is not considered. R.. Zeller. Linderman et al.. As a result.. 1999. Working Paper Emory University. very little research in operations management has considered goal theory (Boudreau et al. . or project group size could also affect performance. 1990). Breyfogle III. J. Golhar. In addition. P. W. 227–307. John Wiley & Sons. Possibly the type of improvement project employed could effect the relationship between goals and performance. Or. Carson. 1996. it helps to clarify the controversial relationship that goal theory has had with quality-management authorities. other types of improvement projects beyond Six Sigma were not considered. Implementing Six Sigma: Smarter Solutions Using Statistical Methods. Other improvement approaches such as Lean were also not considered.C. Organizational behavior theories might serve to enhance future research in operations management.. this research has demonstrated the usefulness of organizational behavior theories for future operations management inquiries. this study makes several important contributions. S. Management fashion. project size and duration. Future research in operations management should consider theories from organizational behavior. / Journal of Operations Management 24 (2006) 779–790 Third. E..O. Carmines.. Manufacturing and Service Operations Management 5 (3). One reviewer noted that this relationship could be investigated by examining the interaction effects of the Domestic variable with all other variables in the model. Academy of Management Review 21 (1). NY.. 2003). D.. For example.. 2005. Notably. Landeros.A. 2003). Reliability and Validity Assessment. Bendoly. Possibly using alternative improvement tools/methods has a different effect on relationship between goals and performance. Ahire. Hopp. different national cultures affect how goals and Six Sigma Tools/Method affect performance. which meant that Black Belts had a 2-year assignment in Six Sigma and then were re-integrated back into the regular organization. L. R. This is surprising given that goal theory is well established in the management literature (Locke and Latham. However. In addition.. 2003.788 K. Hur. McClain. Future research can study the effect of national culture on these relationships in more depth.W. J. 1995.. Finally. Bipolarity in the constraint-performance relationship: Amalgamating interdisciplinary lessons.. D. Measurement scales All responses range from 1-strongly disagree to 7strongly agree Team project goals 1 We found it very difﬁcult to achieve the project goals 2 It was relatively easy to achieve the project goals (reverse scaled) 3 The project goals were challenging to us Six Sigma Tools/Method 1 The project strictly followed the sequence of DMAIC steps 2 Each step in DMAIC was faithfully completed 3 There was an emphasis on applying various analysis tools wherever applicable in this project 4 This team frequently used Six Sigma tools to analyze data and information Team performance 1 We met or exceeded customers’ expectations in this project 2 This team had superb results on this project 3 This team did not meet the project goals (reverse scaled) 4 The cost savings or strategic impact of the project were signiﬁcant 5 The project was effective in improving the process or product References Abrahamson. Possibly. This is particularly important for Six Sigma. E. prior group project experience. Beverley Hills. and each project had typically four to six team members. On the interface between operations and human resources management.. 179– 202. Boudreau. CA. these variables were somewhat ﬁxed at MFG. which has a strong goal orientation toward improvement (Linderman et al. This would control somewhat for prior experience with respect to Black Belts. Total quality management: a review and an agenda for future research. Acknowledgement This research was supported in part by a National Science Foundation Grant NSF/SES-0080318 Appendix A. This research helps illustrate that operations management is not just a technical problem but also requires behavioral consideration.D. F. Carson. the Do-It project discussed earlier could have a different effect on the relationship between goals and performance. 1978. this created signiﬁcant multicollinearity problems that made interpretation of the coefﬁcients impossible. It shows that goals can be effective when used with quality tools and method... 1993. E.J. 79–84. Sage. Despite the limitations.. 254–285. Variation of these variables at MFG were somewhat limited since they typically scoped projects to last between 4 months and half a year.. K. Fourth. Thomas. New York. Deming versus traditional management theorist on goal setting: can both be right? Business Horizons (September–October).
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