Work team performance over time - University of the Western Cape

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Work team performance over time - University of the Western Cape

Journal of Operations Management 20 (2002) 641–657

Work team performance over time: three case studies

of South African manufacturers

Anton W. Grütter a,∗ , Joy M. Field b,1 , Norman H.B. Faull c,2

a Department of Management, University of the Western Cape, P.O. Box X17, 7535 Bellville, Cape Town, South Africa

b Wallace E. Carroll School of Management, Boston College, Chestnut Hill, MA 02467, USA

c Graduate School of Business, University of Cape Town, Private Bag, 7701 Rondebosch, Cape Town, South Africa

Abstract

In this paper, we report on three case studies of South African manufacturing firms that made significant efforts to implement

shopfloor improvement teams. Following Meredith’s [J. Operat. Manage. 16 (1998) 441] suggestion to use case studies as a

basis for theory formulation, insights from the cases were used to extend existing theory by generating hypotheses pertaining

to the timing and sustainability of performance gains following the implementation of performance improvement teams,

focusing, in particular on ongoing performance improvement teams. Because of the richness of the case study data, we delve

deeper than other studies into the actions of teams and management to better understand how and why successful performance

improvement teams evolve as they do. Stated in temporal order, our main hypotheses are: work team engagement is positively

associated with early implementation credibility-building activities; both outcome-orientation and substantive participation

are positively associated with a rapid rate of performance gains; and team institutionalization is positively associated with

sustaining performance gains. The findings of the case studies and the associated hypotheses are summarized in a time-phased

framework for work team implementation. Limitations and directions for further research are discussed.

© 2002 Elsevier Science B.V. All rights reserved.

JEL classification: M11 business administration: production management

Keywords: Work teams; Manufacturing; Case study research

1. Introduction

The realization that constructive involvement

of shopfloor employees is critical to the success

of operations—in particular, operations managed

on the basis of the principles of management approaches

such as world class manufacturing (WCM)

(Schonberger, 1996) or lean production (Womack and

∗ Corresponding author. Tel.: +27-21-959-3682;

fax: +27-21-959-3219.

E-mail addresses: agrutter@uwc.ac.za (A.W. Grütter),

fieldjo@bc.edu (J.M. Field), nfaull@gsb.uct.ac.za (N.H.B. Faull).

1 Tel.: +617-552-0442; fax: +617-552-0433.

2 Tel.: +27-21-406-1433; fax: +27-21-406-1096.

0272-6963/02/$ – see front matter © 2002 Elsevier Science B.V. All rights reserved.

PII: S0272-6963(02)00031-1

Jones, 1996)—has led to a continuing interest in work

teams by practitioners and researchers. This paper

attempts to identify the key characteristics of the successful

implementation of performance improvement

work teams at three manufacturing firms in South

Africa and to distil them into a number of hypotheses

related to their effect on performance over time.

The research arose out of the Best Practice Initiative

(BPI) of the Manufacturing Roundtable, a research

unit at the Graduate School of Business, University of

Cape Town. The objective of the larger project was to

research the adoption of shopfloor improvement teams

and to disseminate the capability to improve shopfloor

work practices by way of training workshops and the


642 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

reporting of research findings (Faull et al., 1996). The

case studies reported on in this paper were researched

as part of the Effectiveness of Shopfloor Improvement

teams (ESIT) project which arose out of the BPI to

specifically investigate the role of shopfloor improvement

teams on operational performance.

One purpose of the ESIT study was to gain insights

into the longitudinal nature of operational

performance following the implementation of performance

improvement teams. With the exception of a

few studies (e.g. Banker et al., 1996; Griffin, 1988),

empirical research on the effect of work teams on

operational performance over time is sparse. Further,

while a number of theoretical frameworks exist that

are either explicitly or implicitly suggestive of the

longitudinal nature of work team implementation

(e.g. Gladstein, 1984; Marks et al., 2001; Mohrman

and Novelli, 1985; Yeatts and Hyten, 1998), the

frameworks do not specifically address ongoing performance

improvement work teams that are found in

most manufacturing environments and, increasingly,

in service environments as well. The ubiquity of ongoing

performance improvement work teams requires

a theoretical framework that, while incorporating the

contributions of previous frameworks, is tailored to

these teams and directly informs the actions of both

the team members and management.

It was decided to undertake the research in two

phases. In the first phase, we used case studies to

document the experience at firms where significant

efforts had been made to implement performance

improvement teams. The objective of this phase was

to extend current theory by generating hypotheses of

what makes for effective teams over time. Thereafter,

the second phase of research is intended to test the

hypotheses generated in the first phase by way of

further case studies complemented with quantitative

data. This paper does not report on the second phase

of research.

The word “shopfloor” refers to teams that work

mostly in direct production, and therefore, excludes

strategic management and other teams at higher organizational

levels. “Improvement” is any change of the

production process or work practices to improve an

operational performance parameter, whether in terms

of productivity, quality, time-based, or other kind of

performance outcome. “Teams” can exist for a few

days or many years. However, for the purpose of this

phase of the investigation, rigorous qualifying criteria

(Katzenbach and Smith, 1993) for work teams were

not applied. In two of the cases, the teams were permanent

shift-based teams that met at the beginning or

during their shifts. In the third case, the teams were

non-permanent teams that undertook process or work

practice improvement assignments as part of a permanent

program of process improvement by these teams.

In all cases, the objective of the teams was to improve

operational performance.

Comparing the three cases provides a basis for

developing hypotheses associated with performance

improvement teams. The first and third cases are characterized

by team “continuity” in terms of their membership

and long-term orientation. While the second

case lacks these types of continuity, the performance

improvement mandate underlying the formation of

the non-permanent teams is, in fact, a permanent feature

of the environment. Thus, the three cases provide

an opportunity to better understand implementation

differences between ongoing and project-oriented improvement

teams. Other differences among the cases

include varying managerial tactics of implementation,

implementation environments, and work team composition.

Yet, all cases have been judged as successful

examples of work team implementation. In this study,

we aim to understand, despite the differences among

these teams, which common characteristics can help

explain this.

2. Literature review

A review of existing frameworks relating work

teams to operational performance can be found in

Yeatts and Hyten (1998). Most of the theoretical models

reviewed by them have an input–process–output

(I–P–O) structure in which the constructs and relationships

are represented in varying degrees of

complexity. These frameworks are suggestive of the

importance of a common understanding of the role

and goals of the teams between the teams themselves

and the organization in which they operate. Researchers

have found that inputs to the teams, such as

role and goal clarity, rewards and (dis)incentives, resource

availability, and organizational support, should

be in alignment with the organizational goals in order

to achieve the desired outputs (Gladstein, 1984;


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 643

Hackman, 1987; Klein and Sorra, 1996; Yeatts and

Hyten, 1998).

Focusing, in particular, on the introduction and

early implementation of changes, Nutt (1986) delineates

four general categories of implementation

“tactics” (i.e. inputs) used by managers, including implementation

by intervention (key executives justify

the need for change), participation (stakeholder representatives

determine change features), persuasion

(experts attempt to sell a change they devise), and

edict (sponsors issue directives requiring adoption).

Measuring success as the adoption of the change,

Nutt finds the highest success rate for the intervention

tactic, with mixed results for the other tactics.

While the I–P–O structure points to a longitudinal

process, these frameworks do not address the cyclical

nature of ongoing performance improvement teams

that move from project to project as previous projects

are completed. Further, they do not address the changing

nature of the inputs, process, and outputs as the

team matures.

One recent framework that incorporates the cyclical

nature of ongoing performance improvement teams is

the recurring phase model of team processes (Marks

et al., 2001). The framework is based on the idea

that teams perform in goal-directed I–P–O cycles or

“episodes” where episodes are defined as “distinguishable

periods of time over which performance accrues

and feedback is available” (Marks et al., 2001, p. 359).

Outputs from earlier cycles can serve as inputs to subsequent

cycles after transition periods in which the

team evaluates the outcomes of the previous action (i.e.

taskwork) cycle. For example, learning from a previous

action cycle can serve as an input into the next

action cycle, thereby most likely improving its performance

outcome. In terms of the cumulative performance

over time, this framework is consistent with the

performance improvement “S-curve” (Banker et al.,

1996), in which teams get better at making performance

improvements as they mature.

In their work, on quality circles, Mohrman and

Novelli (1985) propose two general models of the

causal relationship between work team processes

and performance outcomes. In the first model, implementation

of improvement ideas is the precursor

to productivity improvement. In the second

model, job satisfaction and worker motivation are

presumed to lead to improved productivity. Most

empirical evidence tends to support the first model

(e.g. Anderson et al., 1995; Latham and Steele, 1983;

Tanskanen et al., 1998).

Despite the contributions these models make to

understanding the processes by which work teams

achieve performance gains, they do not address longitudinal

issues such as the timing and sustainability of

performance gains (i.e. the performance “trajectory”).

However, in light of Lawler and Mohrman’s (1989)

report that initiatives to introduce quality circles

tend to fade after an initial “honeymoon” period of

18–24 months, it is necessary to address these issues.

This need is further highlighted by the results of a

meta-analysis study by Locke and Schweiger (1979),

which found that while job satisfaction increased in

most of the studies of employee participation that

they analyzed, they found improved job performance

in only a minority of the studies.

While the study by Mohrman and Novelli (1985)

and subsequent empirical research support the critical

role of work teams for implementing improvement

ideas for achieving performance gains, the issues

of timing and sustainability of performance gains

require a more detailed understanding of the work

team environment, team characteristics, and actions

of the team and management—all of which, as suggested

by Marks et al. (2001), are changing over

time. One study that specifically addresses the timing

of performance gains following work team implementation

and the moderating effects of work team

environment and team characteristics over time is

Banker et al. (1996). They proposed that the introduction

of work teams could be viewed as a “soft”

technology. As such, performance outcomes would

be subject to the same S-curve phenomenon associated

with performance gains over time experienced

with the introduction of “hard” technologies. As with

the other empirical studies cited earlier, they found

that performance gains stemmed directly from the

implementation of improvement ideas (i.e. Mohrman

and Novelli’s first model). However, the work team

environment, team characteristics, and actions of the

team and management all impact the timing of the

performance trajectory. In a follow-up study exploring

the sustainability of performance gains, Banker

et al. (2001) suggest environmental and team

characteristics that promote sustainable performance

gains include mandated team membership,


644 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

decision-making authority, and management involvement

and support.

The intent of this study is to delve still deeper into

the actions of the team and management to better understand

how and why successful performance improvement

teams evolve as they do. For this purpose,

we examine the cases of three South African manufacturers

that implemented performance improvement

teams.

A number of researchers suggest a case study approach

when, as in this case, theory development is

the primary objective (Glaser and Strauss, 1967). For

example, Meredith (1998) contrasts rationalist and

case research and characterizes the two approaches

as objective versus interpretative. Rationalist research

focuses on explaining what happens and how, and

proceeds primarily by means of methodologies based

on quantitative analysis. Case study and field research

aim at understanding why phenomena happen and use

both quantitative and qualitative methods of analysis.

Meredith suggests that case study and field research

are better suited to generating or extending theory

because these research methods help the researcher to

understand the principles underpinning the events and

mechanisms identified by rationalist research. By contrast,

the strength of rationalist research is to test theory

by confirming or disproving the predictions made on

the basis of theory. Further, case studies may actually

be the best way to examine highly varied implementation

situations, such as those found with shopfloor improvement

teams (McCutcheon and Meredith, 1993).

The paper is organized as follows. First, a brief discussion

of the South African national context and firm

specific circumstances is presented. Second, the case

studies are reported. Third, case study based hypotheses

are delineated. Finally, conclusions, contributions

to the literature, limitations, and future research directions

are offered.

3. The South African and firm context

Developments in South African industry generally

reflect the socio-political context of the time. Prior to

the political emancipation of the country, the previous

government followed a policy of inward industrialization

with the purpose of becoming self-sufficient

in most of its industrial needs. Also, the country was

subject to international sanctions. Among many other

consequences, this led to the isolation of the South

African manufacturing industry. As a consequence, local

companies were late in the adoption of contemporary

operations management approaches such as world

class manufacturing (WCM) and lean production.

Since the early 1990s, a policy of export orientation

has been adopted and was reflected in South Africa becoming

a signatory to the World Trade Organization’s

regime of tariff reductions. Increased competition and

the influence of multinational firms led to an increase

in the adoption of contemporary operations management

approaches. However, tariff reductions have also

led to stiff competition from overseas firms, and employment

in the manufacturing sector has fallen badly

behind the growth in new entrants to the job market

(Bhorat and Hodge, 1999).

In the three companies studied, employee involvement

was seen as particularly important, primarily

because operational performance improvement was

expected from involving shopfloor employees in process

improvement initiatives. However, in two of the

three cases, most shopfloor employees were black,

and these initiatives were also seen as a form of social

empowerment. The involvement of black shopfloor

employees was a major challenge, given the historical

under-investment in the education of black people,

and poor industrial relations. Other than these challenges,

the three companies studied operated in much

the same way as conventional first world corporations.

All the firms where the case studies were conducted

were well-established manufacturers with large complements

of shopfloor employees. DrinksCo was one

of the packaging plants of a manufacturer of beverages.

CarCo was a vehicle assembler. BoxCo fabricated

and assembled jet engine gearboxes. All the

plants were unionized. While the introduction of teams

formed part of larger organizational restructuring initiatives

at DrinksCo and BoxCo, there were no other

initiatives such as the introduction of new technology,

that significantly affected the performance outcomes.

The three operations chosen for the case studies

represented different process types to extend the

scope of the investigation. At DrinksCo, we studied

the introduction of a team-based work organization

on a high-volume bottling line that runs continuously.

The case study at CarCo focused on its program

of team-based workshops aimed at making process


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 645

improvements on an assembly line. At BoxCo, we

documented the implementation of teams responsible

for machining the components of aircraft gearboxes.

The cases are based on fieldwork by one of the authors

who visited the three firms several times over

a period of 2 years to collect data. The primary data

consisted of handwritten notes of open-ended interviews

with the managers most directly involved in the

initiatives, support staff (such as human resource managers

and training staff), and union representatives.

Team meetings were observed, and the team leader and

members were interviewed in their work environment.

Company documents and performance data were also

collected and studied. The final draft of each of the

cases was sent to the senior manager responsible for

the area in which the research was conducted to check

factual accuracy and authorize release of the case.

4. The case studies

Summaries of the three case studies are presented

later. The full case studies are available from the corresponding

author.

4.1. DrinksCo

DrinksCo held the dominant market share in the

country. It was known as a progressive company with

a reputation for seeing projects through and was held

in high regard by analysts. The introduction of a new

work organization on the high-speed filling line of

the DrinksCo plant was one of the final phases of an

unfolding strategic plan by the company that started

several years earlier with the formulation of a manufacturing

strategy for the company’s operations. This

led to a production upgrade initiative, which initially

focused on quality and later evolved to a WCM initiative

encompassing the documentation of best operating

practices (BOP). An integrated management

process, which incorporated an annual planning cycle,

improved communication with employees. At the

same time, a performance management system was

implemented. Benchmarking against plants overseas

led to the conclusion that a similar or better level of

performance could only be achieved with people with

higher skill levels and a team-based work organization.

The union at the plant, with a total of approximately

600 employees, was consulted before the process to

change the work organization commenced. A representative

steering committee was formed where all

obstacles to the implementation of the initiative were

dealt with. The company management emphasized

from the outset that the initiative was considered essential

to the future of the business. Therefore, its implementation

was driven hard, although a lot of effort

was made to involve employees early in the process.

For instance, during the planning phase a study group

consisting of management and employee representatives

went on a study tour to overseas plants and the

International Labor Organization. The company also

agreed to pay for consultants to advise the union on

how to respond to the restructuring proposals.

Prior to the changes, all employees of the company

were given basic education and work skills training

where necessary to address the poor skill level of

the workforce. A talent audit throughout the company

(which included a component on propensity for

teamwork) identified high potential individuals from

the shopfloor. The company made a big investment

in the individuals who were assigned to pilot the

new team-based form of work organization on one of

the filling lines before all the other lines were also

re-organized into teams. They were taken off normal

production for several months and given extensive

training in machine operation, process quality and

performance maintenance, interpersonal skills, and

the principles of world class manufacturing. These

employees requested, and received, pay at the highest

grading in lieu of their shift-work bonus while they

were being trained.

When they returned to the line, the new team-based

work organization was introduced. The 60 employees

on the pilot line were divided into four shift-based

teams to run the line on a 24/7 schedule. At the same

time, the number of people on a shift was reduced by

28%, although wage costs increased due to the higher

job grades in the new structure. Maintenance and

quality staff were incorporated into the shift teams,

and problem-solving as well as shift hand-over meetings

were introduced. Team members were certified

to run all the machines according to the BOP, as well

as to perform basic quality and maintenance checks

in their section. The teams themselves determined

their work allocation.

When production problems occurred, they were

dealt with on the spot where possible. If the problem


646 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

could not be resolved at that time, it would be taken

up at the team meetings. Improvement recommendations

were logged and followed-up until implemented

or escalated up to a multi-disciplinary team at the

next higher level of management for resolution. Initially,

the line manager facilitated team meetings, but

he soon scaled down his involvement.

As this was the pilot line for the new form of work

organization in the company, all the related policies

and job-grading systems had not yet been decided

by the time teamwork was being implemented. To

make provision for negotiating these issues, the steering

committee addressed them at the same time as the

new work organization was being implemented.

Getting the line performance to improve was not

easy or quick. The new work relations took time to establish,

and there were a number of disagreements—

even heated exchanges—among team members until

the new work order settled down. Relations between

the team members and the rest of the work force

at the plant were not easy either. The team members

were perceived to have become part of an elite

group with better job prospects, whereas a strong

collective bargaining ethic still prevailed among the

rest of the workforce. It took time for skilled employees

who previously setup machines to share

responsibilities. For instance, a suggestion was made

to make special setting tools permanently available

at the machine, where it was required. However,

the technician responsible delayed acting (but eventually

did act) on the recommendation, because he

Fig. 1. Operating efficiency at DrinksCo.

was concerned that the machine would be set incorrectly.

In spite of the above-mentioned difficulties, the

team members took to the new responsibilities devolved

to them. Regular team meetings took place in

paid time where discussion centered on performance

review and process improvement. The team identified

performance “gaps” and proposed solutions or

the need for more information. The responsibility for

resolving each gap was assigned to team members,

with the status discussed at further meetings until it

was resolved. They were involved in their suggestions

being acted on, and it was said by one of the team

members that he appreciated the management support.

Even the motives of the technician who delayed

making the setting tools available were accepted as

well-intentioned after being discussed in the team

meeting.

The context in which the teams operated also

changed. Human resource development and industrial

relations policies were changed and re-negotiated to

accommodate team-based work organization requirements.

For example, pay grades were re-negotiated;

job specifications and titles were changed (e.g. from

“shift supervisor” to “team leader”); performance

assessment for shopfloor employees was introduced;

and shift schedules were changed. Shift hand-over

meetings between team leaders were instituted to

facilitate communication between teams.

Despite the initial problems, after a year of working

in the new way, Figs. 1 and 2 show that indicators


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 647

such as factory efficiency and cullet (broken glass)

waste had improved substantially. Subsequent to the

period for which data was collected, it was reported

that operating efficiencies above the target level were

consistently being achieved.

4.2. CarCo

The plant at which the work team initiative took

place was a local subsidiary of a multi-national car

manufacturer. At the time of the initiative, it employed

about 6000 employees and was producing

about 60,000 vehicles per year on five platforms (i.e.

vehicles built on the same basic chassis). This made

it a medium-sized plant with a high variety of models

compared to the industry standard.

Several years ago, a team-based method of workshops

aimed at production process improvement was

developed at the company headquarters. Annual targets

for a certain number of improvement workshops

to take place in the plant were decided, and line managers

were assessed on whether they met the target.

The line manager chose the problem or the area in

which the workshop was to be conducted. The relevant

staff and production employees (on average

12 employees per workshop) were then assigned to

the workshop. They met intensively for 3–5 days

to investigate, analyze and decide (by using continuous

improvement tools such as Pareto analysis

and cause-and-effect diagrams) what actions to take.

Thereafter, they met as necessary to monitor implementation,

as the originating team had the authority to

get their suggestions implemented. Upon completion,

they disbanded after giving a short presentation to

Fig. 2. Cullet waste at DrinksCo.

an audience which also included senior management

representation.

An example of a workshop project was addressing

the problem of a supplier of pressed fender/bonnet/etc.

body parts who was delivering parts that did not fit

properly with other parts on the line. The team determined

that the source of the problem was poor maintenance

of the dies for the parts at the vender. The team’s

solution was to arrange to bring back the maintenance

of the dies to the maintenance shop at the assembly

plant. The implementation of this solution resulted in

significantly improved quality of these parts.

The plant adopted the improvement program on instructions

from the parent company, as did all of its

plants around the world. However, it was readily accepted

and was high on the list of the local company’s

strategic objectives. Although there was no employee

representative committee dedicated to the program, its

implementation was negotiated with the union and an

agreement had to be made that employees who became

redundant as result of the improvement workshops

would be re-deployed elsewhere in the plant,

rather than be retrenched.

Three staff members of the local plant went to the

company headquarters for 3 weeks to learn the workshop

methodology, and how to report the results of

the workshops to the parent company. The local plant

then established an office with one full-time industrial

engineer and an assistant to administer the program.

Three years after the program started, 80 part-time facilitators

had been trained to conduct the workshops.

After initially training full-time facilitators, it was

found that part-time facilitators with knowledge of the

production process in the area where the workshops


648 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

took place were more effective. The facilitator training

consisted of participation in a workshop, 3.5 h of

classroom training, and shadowing another facilitator

during a workshop.

The improvement workshops took place on paid

time and included line operators as well as team

leaders and technicians. Participants were given a

brief introduction that lasted less than 1 h. The workshop

started with an explanation of the competitive

environment that the plant faced and why continuous

improvement was necessary. Then the workshop

methodology (an 11-step problem-solving and implementation

process) was explained. It was emphasized

that the steps should be followed closely and that the

workshop should focus on a limited number of improvements

that could be rapidly implemented with

little expenditure. They then left the training room

and started their investigation on the shopfloor.

The outcomes of the workshops were two-fold.

Every single person interviewed at the factory spoke

highly of the program, and process improvements

were valued at several million Rand per annum (at

the time 1 US$ was about 6 Rand). Numerous photographs

on display at the program office and at the

entrances to the plant showed smiling participants

exhibiting their improvements.

At a team presentation following the completion of

a workshop one participant made the following statement:

“I am an operator, but what I learnt from this workshop,

working with the industrial engineer and the

production foreman, now makes me understand

why industrial engineering are taking people out of

the line and why the production foreman is always

pushing for total production.

I learnt that teamwork really works. If you go in

with a positive attitude you will get positive results.

Table 1

Summary workshop statistics at CarCo

Now I am going to apply the principles of the

methodology in the rest of my own life.”

An industrial engineer, who was also a part-time facilitator,

reported that she was initially skeptical about

whether the workshops would work, given the long

history of difficult industrial relations at the plant.

However, her view had clearly changed, and she spoke

with great pride and enthusiasm of the results achieved

in some of the workshops she had facilitated. She said

the improvement workshops had gained a lot of credibility

because of the heavy emphasis and company

support for getting team suggestions implemented.

Table 1 summarizes the recorded process improvements

of the workshops over the first 5 years of the

program. These figures need to be interpreted with

caution, as the baseline for the calculation of the percentage

improvement was an estimate. Nevertheless,

given the consistency of the direction of the results reported,

there can be little doubt of the positive nature

of the improvements.

Part of the workshop reporting requirements was

to make an estimate of the first year’s savings as a

result of the improvements implemented. These estimates

are signed-off by an internal accountant and

amounted to several million Rand each year. The savings

claimed were conservative estimates given that

the benefits from the improvements would last longer

than 1 year.

The improvements were recorded for each workshop

in a global database maintained by the head

office. This not only served the purpose of sharing

experiences among the other plants in the group, but

also served as a monitoring mechanism. If the local

plant did not regularly make inputs into the database,

they could expect a call from the parent to inquire

about progress. To ensure that the workshops were

prioritized, it was included as an assessment item

in the annual performance review of line managers.

Year 1 Year 2 Year 3 Year 4 Year 5

Number of workshops 6 182 71 136 103

Quality (defect reduction) (%) −35.7 −49.8 −58.2 −42.8 −44.4

Productivity (improvement) (%) 20.0 32.3 41.7 37.1 21.1

Work in progress (reduction) (%) −40.6 −26.4 −23.7 −18.2 −21.0

Throughput time (reduction) (%) −50.2 −36.4 −32.8 −29.5 −21.0


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 649

At the time of doing the fieldwork, the program office

was extending its promotion of the improvement

workshops not only into the indirect service and

administration departments of the plant, but also to

suppliers and even the dealer network of the company.

4.3. BoxCo

BoxCo was a division of an arms manufacturing

conglomerate that had undergone extensive restructuring

before the implementation of work teams in the

division. Previously, the company was wholly owned

by the state and operated as an extension of the military

complex in South Africa. Not only was the Department

of Defense its sole customer during the years

of military sanctions against the country, it also had an

autocratic military style of management during those

years. At its height during the 1960s, the conglomerate

employed in excess of 14,000 employees.

During the 1990s, South Africa’s political situation

was normalized. Military operations were scaled

down drastically, and sanctions were lifted. This presented

both opportunities and significant challenges.

On the one hand, government expenditures on arms

were slashed, and a policy to commercialize the enterprise

was adopted. On the other hand, export markets

opened up, but previously excluded competitors were

now also able to compete in BoxCo’s home market.

Considerable expertise had been built-up due to the

need to be self-sufficient, and the ability to manufacture

certain types of aircraft and helicopters from the

ground up was considered a core competence.

A dynamic divisional manager, who jumped at the

opportunity to conclude a contract with one of the

world’s leading manufacturers of jet engines, led the

BoxCo division. While the quality and delivery specifications

were extremely tight, the contract was seen

as an opportunity to break into a lucrative international

market. Although very experienced technicians were

operating the sophisticated machining equipment, a

culture of responsibility avoidance and poor performance

permeated the workplace. Further, after several

rounds of severe cutbacks on employee numbers,

morale was low.

In order to turn perceptions about the restructuring

process around, a re-engineering initiative was embarked

on. It was made clear that after the number

of employees within the BoxCo division had been

cut back from over 1500 people to about 600, no

further retrenchment would take place as a result of

the re-engineering process. Instead, there would be

a focus on improving the manufacturing processes

and support systems. In addition to a high-level “Restructuring

and Transformation Committee” (RTC),

a “Permanent Negotiating Committee” was formed

where shopfloor employee concerns could be dealt

with. Financial statements and strategic plans were

made available to the RTC so that they could make informed

decisions. After a culture audit, it was realized

that a radical change with respect to human resource

management and work organization was necessary.

A high-level project team undertook a strategic

benchmarking project during which a number of

overseas plants were visited. On the strength of their

report and a survey of helicopter manufacturers conducted

by a well-known American consultancy it was

decided to:

• place much greater focus on their customers (internal

and external);

• improve productivity and cycle time in the manufacturing

process;

• break down functional hierarchies into crossfunctional

teams;

• introduce new information and measurement systems

to improve data distribution and decision making.

In preparation for the implementation of work teams,

the organizational layers in the division were reduced

and new job specifications were drafted. The new

organizational chart showed teams as a permanent

feature of the organizational structure. Internal applications

were invited for the posts of team leader, and

the applicants were screened against pre-set criteria

using psychometric assessment and interviews to ensure

their ability to lead teams. All employees were

trained in teamwork and interpersonal skills and provided

with education in business management. Everyone

in a leadership position, from team leaders on up,

was given transformational leadership training. At the

time of doing the fieldwork, a skills audit and training

needs assessment system was being implemented to

manage teamwork and team leadership skills needs.

All employees on the shopfloor were divided into

teams according to the part of the process they worked

in. They met briefly every morning and afternoon in a


650 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

Fig. 3. Product features not to specification at BoxCo (as accepted by customer).

designated area to address obstacles to their production.

These teams had decision-making authority over

work allocation, scheduling and implementation of

suggestions that did not require significant resources.

As at DrinksCo, each team identified problems and

proposed solutions or the need for more information.

Individual problems were assigned to team members

to follow up and report back to the team for implementation.

The walls of the meeting area were covered with

information such as the team’s code of conduct, work

procedures, production schedules, and data on quality,

delivery, and other performance parameters. There

were before and after photographs of housekeeping

initiatives and flipcharts with notes and diagrams of

problem-solving and improvement projects.

In part, the meetings focused on coordination of

daily activities in order to achieve particular deadlines.

This was due to about 25% of production at any time

being expedited by means of an “action plan”. A group

leader (coordinator of several teams) spent a lot of

time chasing components required for gearboxes due

for assembly. This problem was mostly due to unanticipated

quality problems, but also because the MRP

system did not always contain accurate information

about stocks.

The results of the workplace change initiative were

encouraging. From 1 year to the next, the output of

the division increased from 34 to 107 gearboxes (a

more than three-fold increase with roughly the same

number of employees). Lead time decreased from 7.5

months to 20 days (an 87% improvement), and quality

improved dramatically as shown in Fig. 3. Given

the crucial role of the technicians in achieving the extremely

high specifications and deadlines, it is fair to

conclude that the teamwork on the shopfloor played

a significant role in making these achievements possible.

In his public and informal communications the

divisional manager attributed these performance improvements

to the new team-based work organization.

4.4. A comparison of the cases

In the three cases, the initiatives appeared to be

driven in different ways. At DrinksCo, the team

managing the initiative was well resourced, and the

implementation was based on an advanced system

of best operating practices. At CarCo, the initiative

was driven by the overseas head office through a

sophisticated global database of the improvements

recorded by all their plants. Despite a company-wide

policy to transform the work organization in the corporation,

at BoxCo, only the gearbox division, led

by a charismatic leader, made the transition. Of the

three companies, BoxCo was the only one experiencing

any serious financial difficulties. In keeping

with Nutt’s four tactics for implementation used by

managers, an analysis of the cases finds a combination

of intervention and participation tactics used

by DrinksCo, edict and intervention tactics used by

CarCo, and intervention and participation tactics by

BoxCo.


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 651

Comparing the three cases provides a basis for developing

hypotheses associated with ongoing performance

improvement teams. Differences among the

cases include varying managerial tactics of implementation,

implementation environments (e.g. the three

cases were different types of manufacturing operations),

and work team composition (e.g. technicians

at BoxCo versus less educated employees at CarCo).

However, in all three cases, significant efforts had been

made, in terms of financial investment and managerial

time, to implement the respective initiatives. While all

three performance improvement programs were permanent,

in only two of the three cases (DrinksCo and

BoxCo) were the teams themselves intended to be

permanent. This provides an opportunity to compare

the implementation characteristics of successful ongoing

performance improvement teams with successful

project-oriented teams that are part of a permanent

performance improvement program. The hypotheses

that follow, while focusing on ongoing performance

improvement teams, reflect the contingencies associated

with these two team types.

5. Case study-based hypotheses

We follow a similar approach to that taken by

Narasimhan and Jayaram (1998) in their development

of a process model for re-engineering service operations,

by developing propositions associated with the

implementation of performance improvement teams.

Because we had the opportunity to follow these teams

over a long period of time, we were able to observe

longitudinal characteristics and/or changes in both

management and team actions. The three sets of hypotheses

below summarize the main insights derived

from the cases. The first hypothesis addresses the

early implementation period when teams initially engage

(or fail to engage) in goal-directed activities.

The second hypothesis is relevant to the ongoing activities

of the team and the rate of performance gains.

Finally, the third hypothesis addresses the sustainability

of performance gains over time. As previously

discussed, the contribution of this study is to extend

existing theory by focusing on the actions of both

management and teams to determine how and why

successful performance improvement teams evolve as

they do.

Hypothesis 1. Work team engagement is positively

associated with early implementation credibilitybuilding

activities.

Hypothesis 1a. Credibility-building activities associated

with project-oriented teams will be primarily

aimed at establishing credibility at the program level.

Hypothesis 1b. Credibility-building activities associated

with ongoing teams will be aimed at establishing

credibility at both the work team and program levels.

Hypothesis 1c. Work teams implemented in organizations

with a history of abandoned work

team initiatives will primarily engage in reactive

credibility-building activities.

Hypothesis 1d. Work teams implemented in organizations

with no history of previous work

team initiatives will primarily engage in proactive

credibility-building activities.

In Hypothesis 1, we distinguish between team formation

(i.e. teams existing as an identifiable organizational

structure) and team engagement (i.e. initial

efforts at goal-directed activities). Because the tactics

of implementation varied among the teams, we cannot

attribute team engagement to the implementation

tactic directly. Further, while it is clear, based on past

research and our observations, that role and goal clarity

are important pre-conditions for work team engagement,

they are not sufficient to explain engagement

for ongoing performance improvement teams

in particular. In fact, for these teams, the level of a

priori goal clarity is limited because the actual performance

improvement projects are determined later

by the team. Rather, we observed something more

fundamental in the actions of management and the

teams, which we term “credibility-building activities”.

Credibility-building activities are actions undertaken

by management that indicate a real commitment to

the stated goal or actions undertaken by team members

to test that commitment. These activities take

various forms, depending on whether the teams are

project-oriented or ongoing, and whether the activities

are proactive or reactive.

While we saw credibility-building activities associated

with each of the teams, fewer credibility-building


652 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

activities were in evidence at CarCo than at DrinksCo

or BoxCo. Further, the activities at CarCo were

mostly aimed at establishing credibility at the program

level as opposed to credibility at the team level.

Because the temporary project-oriented teams at

CarCo had shifting team membership and a very high

level of goal clarity (projects were pre-specified),

establishing credibility at the program level is likely

to be sufficient to also establish credibility at the

team level (Hypothesis 1a). On the other hand, the

performance improvement teams at DrinksCo and

BoxCo, with less specific goals (just an overall performance

improvement mandate), stable membership,

and a long-term orientation, would benefit from

credibility-building activities at both the program and

team levels (Hypothesis 1b).

Examples of credibility-building activities at CarCo

include: sending local plant managers overseas to the

parent company to be trained in the methodology of

team-based improvement workshops; establishing an

office to support implementation of the team-based improvement

workshops; and including the program of

team-based improvement workshops in the company’s

strategic objectives. All of these activities are aimed

at the program level.

DrinksCo and BoxCo had credibility-building activities

at both the program and team levels. Examples

of credibility-building activities at the DrinksCo include:

involving labor representatives in a study tour

prior to the implementation of work teams; making a

big up-front investment by taking the team members

off production for several months while they received

training; employees requesting and receiving pay at

the highest grading in lieu of their shift-work bonus

while being trained; management support to facilitate

early team meetings; and forming a representative

steering committee early in the team implementation

process where employee and management concerns

could be dealt with. At BoxCo, credibility-building

activities include: forming a high-level “RTC” and

“Permanent Negotiating Committee”, where shopfloor

employee concerns could be dealt with; encouraging

transparency, for instance, by providing company

financial statements to these committees; providing

training to all team members and training team leaders

on transformational leadership; and allocating team

leader positions in the new team-based work organization

not on the basis of seniority, but through

pre-determined job specifications and a transparent selection

process in which equitable allocations were

seen to be made.

Performance improvement teams were new to these

companies; none of them had a history of past, possibly

failed, attempts at introducing work teams. It is

instructive to contrast these teams with teams in another

study by Banker et al. (2001), where teams were

re-introduced after previous failed attempts, to further

understand the range of credibility-building activities

that are found with ongoing performance improvement

teams. In the study by Banker et al. (2001), the discussion

of the initial implementation phase suggests

that credibility-building activities primarily took the

form of team members testing management’s commitment

to team implementation. For example, early

improvement ideas put forth by the team members

tended to be focused on individual, rather than systemic,

issues (e.g. replacing a tool or fixing a broken

chair). According to the authors of the study, the team

members used management’s response to these issues

to assess whether management was really committed

to work teams in light of the numerous instances in

the past of programs being introduced and then abandoned

(Hypothesis 1c). However, because the South

African companies did not have a history of previous

attempts at implementing performance improvement

teams, this type of reactive credibility-building activities

did not occur (Hypothesis 1d).

Comparing the teams in this study to those in the

Banker et al. (2001) study also sheds some light

on the initial performance improvement trajectory.

The case data suggest that the use of proactive

credibility-building activities is likely to result in earlier

work team engagement than the use of reactive

credibility-building activities. This is also consistent

with the Marks et al. (2001) framework in which

the timing of outputs, such as work team engagement,

is affected by the timing of inputs, such as

credibility-building activities.

Following work team engagement, the case studies

provide further insights into the timing of performance

gains resulting from the efforts of the team. These

insights are formalized in Hypotheses 2, 2a and 2b.

Hypothesis 2. Both an outcome-orientation and substantive

participation are positively associated with a

rapid rate of performance gains.


A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 653

Hypothesis 2a. Interpersonal issues and team process

disagreements are more likely to surface with

ongoing performance improvement teams than with

project-oriented teams.

Hypothesis 2b. As a result, the level of outcomeorientation

over time will exhibit greater variability

for ongoing performance improvement teams than for

project-oriented teams.

The Mohrman and Novelli (1985) model, in which

the implementation of improvement ideas leads to

performance gains, has been supported by many empirical

studies (e.g. Anderson et al., 1995; Latham and

Steele, 1983; Tanskanen et al., 1998). Further, inputs

such as rewards and (dis)incentives, resource

availability, and organizational support in alignment

with organizational goals have been associated with

desired outcomes (Gladstein, 1984; Hackman, 1987;

Klein and Sorra, 1996; Yeatts and Hyten, 1998).

However, Hypotheses 2, 2a and 2b extend existing

theory by focusing on the actions of the team to help

explain how and why this model works, as well as the

timing of performance gains. In particular, because

performance gains are linked to the implementation

of improvement ideas, Hypothesis 2 identifies two

key characteristics associated with the implementation

of improvement ideas: outcome-orientation and

substantive participation.

The specific “performance improvement” objectives

for each team differed, although they all centered

on productivity and quality improvement. For

example, the teams at BoxCo focused on the plant’s

strategic priority of on-time delivery. We define

“outcome-orientation” as a focus on achieving performance

objectives. “Substantive participation” is the

ability of the team to make and implement decisions.

When aiming for a rapid rate of performance gains, an

outcome-orientation hastens both idea generation and

implementation, and substantive participation hastens

idea implementation.

Based on our observations each team exhibited an

outcome-orientation and substantive participation to

varying degrees. In the case of CarCo, the one company

where the teams were project-oriented rather

than ongoing, an outcome-orientation was in evidence

from the beginning of each workshop. This

is not surprising because of the limited focus of the

improvement workshops and the associated high level

of goal clarity. It is also notable that the workshop

objectives were not set by the team members, but

were assigned by the line manager, thereby limiting

the potential for workshop objectives that were not

focused on process or work practice improvements.

Further, each workshop team had the authority to

directly implement their ideas (up to a certain cost

level that accommodated most ideas). This combination

of a project-driven outcome-orientation and

substantive participation accelerated both idea generation

and implementation. While we did not observe

multiple companies with project-oriented teams, we

did observe many workshops within CarCo that all

exhibited a high-level of outcome-orientation.

The teams at DrinksCo and BoxCo followed a

similar process for identifying performance problems

and implementing improvement ideas. Their

method of focusing meetings on performance problems

(termed “gaps” by DrinksCo), assigning responsibility

for resolving the problem, and discussing

progress toward resolving the problems, indicates

an outcome-orientation. Based on our observations,

team records, and interviews, the teams in both cases

had a decisive role in seeing that good ideas were

implemented.

At DrinksCo tasks such as simple quality checks

and maintenance activities were devolved to the

shopfloor teams, and quality assurance and technical

staff were incorporated into the teams to strengthen

the team’s capacity to handle these tasks. Hand-over

meetings between shifts were introduced to coordinate

activities and alert the next shift of potential

problems. The shift team members also had regular

shift meetings. Each shift team structured their

team meetings around an operational performance

report that alerted them to problem areas where performance

needed to improve. Numerous suggestions

were generated and documented, with the implementation

monitored by the teams. All suggestions from

shopfloor teams were recorded and followed-up until

implemented to the satisfaction of the team. Progress

reports were given at each team meeting.

At BoxCo, the emphasis was on work coordination

and scheduling because the nature of the fabrication

process required flexibility to meet delivery deadlines

in spite of delays, such as uncertain availability of specialized

raw materials and unexpected rework due to


654 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

the very high product specifications. Often more than

one team meeting per shift took place when rescheduling

of production was necessary. Many corrective and

preventative actions were also generated and implemented

by the team members.

However, due to the permanent nature of the

DrinksCo and BoxCo teams, interpersonal issues and

team process disagreements were more likely to surface

than with the project-oriented, short-term teams

at CarCo (Hypothesis 2a). For example, a team at

DrinksCo struggled with interpersonal issues that frequently

shifted their focus away from performance

outcomes. In one such instance, the team had decided

on the importance of a certain housekeeping initiative,

but one of the team members refused to participate.

A significant amount of time was spent on resolving

this issue (which was eventually resolved to the satisfaction

of all involved). However, it took time away

from other goal-directed activities. In general, we

observed more of these types of issues at DrinksCo

than at BoxCo. As a result, we observed variability

in the level and persistence of outcome-orientation

and goal-directed activities among the teams at

DrinksCo and BoxCo that we did not observe among

the project-oriented teams at CarCo (Hypothesis

2b). Consistent with our observations, Table 1 and

Figs. 1–3 provide some evidence that the rate of performance

improvement was quite fast at CarCo, less

so for BoxCo, and the slowest for DrinksCo.

Finally, in Hypothesis 3, we address the persistence

of performance gains over time and the role of team

institutionalization.

Hypothesis 3. Team institutionalization is positively

associated with sustaining performance gains.

The fact that the teams in each of these companies

are in operation several years after their formation suggests

that they have become institutionalized (i.e. a

permanent organizational structure for how work gets

done; in this case, with the purpose of maintaining the

momentum of improvement activities). More specific

evidence of institutionalization includes the following:

at DrinksCo, shifts were re-organized into teams

which included quality control and maintenance people;

time was taken off production for team meeting

on every shift; job specifications were changed to include

teamwork skills; and HR and industrial relations

policies were changed and re-negotiated to accommodate

team-based work organization requirements

(e.g. pay grades, training, performance assessment for

shopfloor employees was introduced, shift schedules

were changed). At CarCo line managers budgeted for a

certain number of workshops in their area of responsibility

every year, and their annual performance reviews

included an assessment of the actual number and effectiveness

of improvement workshops conducted against

the number of budgeted workshops. At BoxCo job

titles, job specifications and responsibilities changed

to include teamwork; team meeting areas were permanently

allocated; team meetings were permanently

scheduled into the workday; and HR and industrial

relations policies were changed and re-negotiated to

accommodate team-based work organization requirements.

Again, we need look to the actions of management

and the shopfloor teams to explain why institutionalization

is associated with sustaining performance

gains. We observed that institutionalization provides a

mechanism for teams to revisit specific performance

issues and evaluate the effectiveness of previously implemented

solutions over time. Instances of revisiting

performance issues and monitoring effectiveness were

observed with teams at each of the companies.

This is especially critical in the case of ongoing

performance improvement teams. At CarCo performance

issues can be revisited by convening another

workshop. However, at DrinksCo and BoxCo, revisiting

performance issues and monitoring previously

implemented solutions were the responsibility of the

shopfloor improvement team itself. This reflects the

level at which institutionalization occurred. In the case

of CarCo, the workshop program was institutionalized,

while at DrinksCo and BoxCo the teams themselves

were institutionalized. In the former case, maintaining

performance gains was facilitated by the establishment

of an office to administer the workshop program.

One of the purposes of the office was to serve as an

institutional memory to monitor team-initiated performance

outcomes. In the latter cases, maintaining performance

gains was facilitated by the continuity of the

individual teams.

In the article by Banker et al. (2001), the authors

argued that mandated team membership promotes institutionalization.

While the teams in all three companies

had mandated membership (either permanently,


Table 2

Implementation phases of performance improvement teams

A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657 655

Implementation phase

Early Short- to medium-term Medium- to long-term a

Management/team actions Credibility-building activities Outcome-orientation and

substantive participation

Moderators of management/ Project-oriented or ongoing teams, Project-oriented or

team actions

proactive or reactive activities ongoing teams

Key performance metric(s) Work team engagement Rate of accrual of performance

gains

a Outcome-orientation and substantive participation continues in the medium- to long-term.

as in the cases of DrinksCo and BoxCo or temporarily,

as in the case of CarCo), mandated team membership

is not the same as institutionalization. Rather, it is the

persistence of goal-directed activities over time that is

the true indicator of institutionalization.

Table 2 summarizes the research hypotheses in a

framework that delineates the evolving management

and team actions, moderators of management and team

actions, and key performance metrics for performance

improvement teams over time.

6. Conclusions

A literature review and three case studies of programs

to introduce shopfloor improvement teams

were used to generate hypotheses and provide a

framework for understanding longitudinal issues

such as the timing and sustainability of performance

gains following the implementation of performance

improvement teams. We focused, in particular, on

ongoing performance improvement teams. In temporal

order, the hypotheses are given as follows:

(1) work team engagement is positively associated

with early implementation credibility-building activities

((1a) credibility-building activities associated

with project-oriented teams will be primarily aimed

at establishing credibility at the program level; (1b)

credibility-building activities associated with ongoing

teams will be aimed at establishing credibility at both

the work team and program levels; (1c) Work teams

implemented in organizations with a history of abandoned

work team initiatives will primarily engage

in reactive credibility-building activities; and (1d)

work teams implemented in organizations with no

Institutionalization


Continued performance gains

and sustainability of prior gains

history of previous work team initiatives will primarily

engage in proactive credibility-building activities);

(2) outcome-orientation and substantive participation

are positively associated with a rapid rate of performance

gains ((2a) interpersonal issues and team

process disagreements are more likely to surface

with ongoing performance improvement teams than

with project-oriented teams; and (2b) as a result, the

level of outcome-orientation over time will exhibit

greater variability for ongoing performance improvement

teams than for project-oriented teams); and (3)

team institutionalization is positively associated with

sustaining performance gains. Taken together, these

propositions suggest that management and team actions

and key performance metrics change as the

teams mature.

Existing models such as Mohrman and Novelli

(1985) and Yeatts and Hyten (1998) include a longitudinal

dimension in the way constructs are related

to one another. However, they do not address

the timing of performance gains and the

implications for the sustainability of performance

gains. Even longitudinal studies such as Banker

et al. (1996) and Banker et al. (2001) examine only

one type of performance improvement team. Thus, the

primary contribution of this paper to theory development

is to extend existing theory to better understand

how the actions of management and teams contribute

to the success of performance improvement teams

over time.

One limitation is that the study was restricted to

large corporate manufacturing firms in South Africa,

possibly limiting the generalizability of the findings.

However, considering the diversity of situations in

which work teams are formed, developed, and operate,


656 A.W. Grütter et al. / Journal of Operations Management 20 (2002) 641–657

further theory development related to the longitudinal

nature of work teams requires research that reflects this

diversity. Research in lesser-studied countries, such as

South Africa, provides valuable insights into the application

of the general principles of team-based process

improvement within country-specific contexts.

Another limitation involves the inherent difficulty

in field studies of controlling for other factors that

might impact the hypothesized relationships. This is

especially true in a study, such as ours, in which other

organizational changes are occurring contemporaneously.

However, because we are examining the actions

of management and teams and providing direct links

between these actions and performance outcomes, we

are confident that, even if other organizational changes

help explain the performance outcomes, our hypothesized

relationships are still valid.

The study results and hypotheses suggest several

directions for future research. In general, further empirical

research is needed to test the theories proposed

in this paper. Other possible directions for future research

would follow from the substantiation of each of

the hypotheses. Hypotheses 1 and 1a–1d point to the

need for research on the types of confidence-building

activities that are most effective for work team engagement.

Hypotheses 2, 2a and 2b suggest the importance

of better understanding how to develop and maintain

a focused outcome-orientation. Hypothesis 3 suggests

that research needs to be undertaken into the kinds of

institutional mechanisms that are most effective at sustaining

team-based shopfloor improvement programs.

Finally, it may be that a combination of Hypotheses 2

and 3 could provide explanations for the results reported

by Lawler and Mohrman (1989) and Locke and

Schweiger (1979).

Acknowledgements

We wish to acknowledge the helpful suggestions of

three anonymous reviewers and the associate editor on

an earlier version of this paper.

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