Abstract for: Competitive Dynamics of Business Process Improvement

We offer a theory of competitive process improvement to explain the process of how best business practices emerge through dynamic interactions between competing processes. Grounded on the history of the interaction between two distinctive competing processes, Mass Production System vs. Toyota Production System, we employ the lens of competitive dynamics to develop a formal model. Three insights emerged: for sustainable competitive advantage, (1) a firm needs to invest in explorative activities at an early and continuous fashion; (2) external competitive tension plays a vital role in managing internal tension of organizational learning; (3) a firm may commit perception biases when interpreting others’ learning (re)actions.