QUESTION 2

Review and analyze the scholarly research related to your school-approved dissertation topic to identify gaps in the literature. Justify how a specific research question based on your school-approved dissertation topic would address these gaps and potential ethical research concerns related to the topic and study population. Synthesize your findings and determine the implications of such a study for scholar-practitioners.

Introduction

The desire to better understand the impact of Continuous Improvement (CI) on strategy and innovation has piqued academics and business executives’ interest. Continuous improvement (CI) is an organizational strategy that drives non-stop innovation of culture and systems. Gutierrez-Gutierrez & Antony (2020) described continuous improvement as an innovative strategy used by managers to guarantee the production of high-quality goods and services to meet or exceed customer expectations. Many research investigations that looked into the link between CI and profitability have come up with ambiguous results. Research (Beyhan Yasar et al., 2019) that looked at the mediating influence of CI on financial performance concluded that CI is strategically essential for innovation, which leads to company success.

The fundamental goal of CI was to achieve long-term development focused on waste elimination in all aspects of a company’s operations. Furthermore, it necessitates a determined effort on all stakeholders to achieve progress with minimal capital expenditure (Bhuiyan & Baghel, 2005). Various techniques are used to achieve CI, including productivity improvement mechanisms, employee idea systems, lean, total quality management (TQM), and quality control circles. One of the fundamental concepts in the practice of CI is to achieve sustainability in buildings (Garvin, 1987). More specifically, quality service improvement and product improvement (Nair, 2006; Naveh and Erez, 2004; Rungtusanatham, 2001; Schroeder et al., 2005) are all part of the implementation of CI. According to Juergensen (2000), the fundamental goal of CI was to decrease project failures and enhance project success.

Another research on Kaizen and business development (Omotayo et al., 2018) found that managers in developing nations, such as Nigeria, who are trying to liquidate, frequently use CI as a business strategy to meet profitability targets. Managers questioned in another research that compared how medium and big manufacturing services in two Latin American businesses innovated (Alvarado-Ramírez et al., 2018) said Kaizen was a business strategy that helped them innovate and enhance their quality processes and management systems. According to a study on Kaizen’s impacts on Mexican Maquiladora firms (Midiala et al., 2016), CI was used as a management technique to bring cost-cutting advantages to the business. While these studies contribute to our understanding of CI’s use in organizational strategy, none of them clarified whether managers regard CI as a way of reaching profitability targets. This research gap will be filled by interviewing managers at a digital advertising agency in the United States to explain how they utilize CI to increase business profitability through product innovation.

This study will show how business managers at a digital advertising firm in the United States utilize CI to meet profitability goals, using the decision theory (Giacomoni, 2019) as a framework to promote brands. Digital advertising comprises the internet broadcast of films or pictures. Businesses like Facebook, Google, YouTube, Amazon, and Twitter are digital advertising platforms that allow marketers to broadcast promotional creatives such as marketing videos and pictures (Gordon et al., 2021). There are certain managers whose job guarantees that the ads on their platforms are of good quality and provide a pleasant experience for users (Belleflamme & Peitz, 2019). In this qualitative research study, I investigated managers’ perspectives on how CI helps organizational strategy and innovation increase profitability based on Kaizen Methodologies. According to Imai (1997), Kaizen methodologies are two types, namely individual vs. team Kaizen.

History of Continuous Improvement

Several academics have looked into the history of the term “continuous improvement.” Two instances of continuous improvement programs dating back to 1871 are given by Schroeder & Robinson (1991). The first example was a program established in 1894 at Denny’s, a Scottish shipbuilder and the second example was a program established in 1894 at the National Cash Register. Both companies solicited written suggestions for improvements from factory workers. The company president expressed the desire to create an organization with a “hundred-headed brain,” referring to his own. According to Zangwill and Kantor (1998), CI can be traced back to two significant historical developments that began in the 1950s. According to the authors, the first occurred at Toyota, where Taichi Ohno and Shigeo Shingo conceived Just-in-Time (J.I.T.). The second was the quality movement and statistical reasoning, which Shewhart conceived in the 1920s and reinvigorated in a series of lectures given by Deming to Japanese executives in 1950. He highlighted the importance of data collection Shewhart’s Plan Do Check Act.

Similarly, Bhuiyan & Baghel (2005) tracked the development of certain continuous improvement philosophies in their article “An overview of CI from past to present.” The authors cited the development of the T.W.I. (Training Within Industry) set up by the U.S. government in the 1940s, which was then transferred to Japan by experts like Deming, Juran, and Gilbreth, which eventually developed into CI (Imai, 1986). The authors discuss how several continuous improvement techniques evolved, beginning with Taiichi Ohno’s Toyota Production System (T.P.S.), which later became the foundation for Lean Manufacturing, which was popularized by Womack et al. (1990). In addition to T.P.S. and Lean, Motorola created 6-sigma, a continuous improvement technique that focuses on utilizing statistical methods to reduce defects and enhance process control and performance, in the 1980s. Finally, the authors include the “Balanced Scorecard (B.S.C.) method,” which was created by Kaplan and Norton in the early 1990s, in their assessment of continuous improvement. However, the B.S.C. approach may be more of strategy implementation, measurement, and communication than a continuous improvement methodology. The “Agile” methodology, which originated in the software industry and was developed as an alternative to traditional project management approaches, has the appearance of a continuous improvement approach. Agile focuses on regular reviews (or scrums, to use agile terminology), improvements, and ongoing adjustments, despite being developed as an alternative to traditional project management approaches. It is worth noting that most authors who write about the history of continuous improvement depict it as the tale of a succession of techniques that gained popularity through time.

In conclusion, most authors agree that T.W.I. was the first spark, which led to T.P.S., which evolved into Lean. Then, owing to Motorola’s success, 6-sigma became more popular, and hybrid approaches like lean-6 sigma emerged. However, the authors believe that, while the name, technique, tools, and even philosophy may vary, the fundamental principles of CI remain constant. These principles embody a philosophy that has been consistent throughout the history of continuous improvement: that CI may be used by any individual, team, or organization to achieve improved quality and performance. A review of papers on the history of continuous improvement reveals that the authors are primarily interested in developing “enterprise-wide continuous improvement” rather than the fundamental approaches and methods of continuous improvement, which one could argue are innate human capabilities. Before the nineteenth century, people may have collaborated and improved things. To grasp the origins and foundations of continuous improvement, one must look beyond the popular programs of the previous century. The subject of learning should be included in a more comprehensive assessment of continuous improvement. This is confirmed by Locke and Jain (1995), who claim that learning is identical to continual progress.

Continuous Improvement Practices

According to Taylor and Wright (2003), several elements will influence an organization’s quality system implementation success or failure. Additionally, according to Bessant (1994), continuous development has many advantages since it does not require much money, and employees’ ideas and abilities can be easily exploited. According to Woods (1997), employees gain from continual improvement since they have healthier working circumstances, consumer satisfaction, and a better monetary yield. Firms that do not implement continuous improvement, according to Martichenko (2004), are likely to confront changeable systems in terms of reorganizing the organization, structure, simplifying operations within management, and techniques that will exhilarate the delegate to feel they are on the right track. Customer focus, employee involvement, process approach, and quality improvement programs are the major continuous improvement factors, including top leadership initiatives and evidence-based decision-making.

Continuous Improvement as Organizational Strategy

On the subject of continuous improvement, several studies have been done. Many academics feel that interest in the subject is growing. The competitive nature of the corporate environment and the demand for managers to discover faster, cheaper, and more effective ways to innovate are driving this trend. Providing high-quality goods and services that meet or exceed customer expectations requires a culture of innovation (Gutierrez-Gutierrez & Antony, 2020). Researchers have described CI as a strategic instrument for increasing production efficiency and management processes (Van Der Aalst, La Rosa, Santoro, 2016) and a learning process (Delgado et al., 2014).

The notion that CI is an organizational strategy was established in a landmark study of continuous improvement behavior in businesses (Bessant et al., 2001). According to the report, the implementation of CI projects requires a series of sustained incremental improvement procedures. Businesses in the United States and throughout the world have struggled with long-term innovation and organizational structure improvements. Large firms, like Apple, rely on continuous improvement methodologies to maintain developing complex goods and product experiences for their customers.

Kirton (1976), in one of his important publications, defined continuous improvement as the ability to think of new ways to accomplish things. Kirton went on to say that companies who embrace CI are typically quite deliberate about it and are determined to change the way they do business. Research findings on using innovative techniques to loan repayment in the Nigerian construction sector support this argument (Omotayo et al., 2018). Financial managers in the Nigerian construction sector searching for ways to improve the quality of their financial risk management procedures use CI approaches. According to Omotayo et al. (2018), financial managers in the Nigerian construction sector used Kaizen costing to offset the effects of price cost and pricing risks on their businesses’ financial projections.

The integration of CI, lean, and kaizen techniques into the organizational structures of Japanese management teams is a top priority. The Toyota Production System (TPS) gave rise to Kaizen . A study (Midiala et al., 2016) that looked into the impact of CI on management effectiveness in Mexican Maquiladora companies, large companies with CI-based organizational structures are highly innovative and profitable if they implement successful CI systems. Tesla, for example, was able to overcome the car industry’s high entry hurdles by using a CI organizational structure. Not only that, but Tesla has created a leadership niche as the world’s most inventive electric car manufacturer by unleashing ideas that have rocked the auto industry. Following the launch of its first electric automobile, the Roadster, in 2003 (Stringham et al., 2015), the firm has improved its ability to innovate its products and operations swiftly.

The character of today’s corporate environment has been pinpointed through studies on CI as an organizational strategy. Organizations are increasingly operating in a hypercompetitive and constantly changing environment. As highlighted in research that utilized the Rasch Measurement theory to evaluate innovation facilitators in businesses, surviving in such a complex and chaotic environment necessitates an inventive approach (Sanchez-Ruiz et al., 2019). According to the findings, CI aids businesses in achieving defined goals and reusable knowledge, which speeds up innovation.

Continuous Improvement and Profitability

Any company’s primary objective is to be profitable. Profitability is defined as the difference between revenue and expenditure. To be profitable, businesses must increase revenue by consistently meeting and surpassing their consumers’ expectations. Companies that wish to survive must adapt and maintain new systems that can help them remain competitive, according to Alarussi & Alhaderi (2018) in their research of the determinants influencing profitability in Malaysia. The survey also revealed that managers are often tasked with achieving these two objectives: innovation and profitability.

The important concern is how managers can increase profitability, and research shows that CI is a significant component. Although there is a link between continuous improvement and financial performance (Beyhan Yasar et al., 2019), the study cautioned that relying solely on innovation and continuous improvement might lead to financial problems. Managers must be thorough and impartial when making decisions on how to achieve profitability goals through innovation. When other variables such as feelings or ego influence the selection of CI, the outcomes are usually poor. Beyan et al. (2019) used the example of Steve Jobs’ Next, which aspired to create a successful computer business. The firm took an innovative approach to product creation, but there was no demand for their goods, resulting in terrible financial performance.

Tesla, on the other hand, a business with innovative tech objectives like Next that made a game-changing entry into the care sector, has seen great demand and financial success. Tesla Inc is the market leader in electric car design, manufacturing, and delivery. Energy storage and solar energy generation products are also manufactured and distributed by the company. In 2020, the company’s sales were estimated at over USD 31.4 billion (Dun & Bradstreet, 2021). Tesla was founded in 2003 by a group of engineers who came together to build electric vehicles that could compete with petroleum automobiles (Nelson, 2020). With over 146 subsidiaries and 223 branches, the firm has developed and expanded internationally. Tesla has a significant presence in the U.S., Europe, Asia, and Canada markets. A key element in its international success is customer interest in ecologically friendly cars (Mehta & Bhavani, 2018). However, as other EV manufacturers such as NIO and XPeng enter the EV manufacturing field, Tesla’s 16 percent market share is in danger (Manufactuing.Net, 2021). The company must find innovative ways to continuously stay ahead and profitable amidst the industry’s chaotic competition.

CI at the Level of an Individual Employee

Kaizen’s focus on a unit, according to Landwójtowicz (2015), emerges as a type of suggestion system, which allows for the rationalization of operations done by a single person and has a good influence on their level of work dedication. Although the management does not anticipate immediate economic consequences, it does pay attention to employee morale. The recommendation system, on the other hand, must be well-organized. It was separated into two sections in the examined company: unique ideas and group recommendations. The recommendation system allows workers to have direct conversations with their supervisors, promotes bilateral communication, and allows employees to assist other employees with issue resolution.

The quantity of recommendations provided by workers is an essential factor for evaluating direct supervisors’ work excellence. Senior supervisors should help the supervisory personnel so that they may support them in making additional ideas. The goal is to enable the display of many proposals, with information about that number posted in a prominent location across the manufacturing plant to motivate employees to compete (both between employees and between the teams). Employees find it simpler to accept a standard that they created themselves.

CI at the Management Level

The activities of people or leaders of organizations are typically regarded to serve two roles at management levels, utilizing the idea of the CI that is maintenance and standards improvement. Standardization is one of the inherent aspects of the concept; thus, predetermined standards are the major method in making any modifications. When the research was done, it was discovered that the only method to achieve uniformity was to utilize resources like manuals and procedures that described how to act in processes and workplaces (Landwójtowicz, 2015).

Kaizen tools and practices come in a variety of shapes and sizes. Table I lists the methods and techniques that have been recognized as having a substantial impact on attaining many of the objectives. These goals are to minimize change-over (set-up) times, zero defects, zero waste, zero delays, and zero breakdowns. Shirose (1990) has more information on P-M analysis, Hirano and Talbot (1995) have more information on 5S, Shingo (1985) has more information on SMED, and Shirose (1990) has more information on eliminating minor stoppages. Achieving any of the above objectives would indirectly contribute to a high overall equipment effectiveness (O.E.E.) value. The product of availability, performance, and quality, O.E.E. is a performance measure given as a percentage (Nakajima, 1988). During Kaizen implementation, Kaizen practitioners employ a variety of tools that are appropriate to the application area.

The Benefit of the Application of CI

The advantages of CI cannot be overstated since the investment required to finance it is extremely little, and employee ideas are efficiently used (Bessant et al., 1994). According to Woods (1997), employees gain immensely from CI by working in a healthy atmosphere, increasing customer satisfaction, and increasing sold financial returns. According to Martichenko (2004), for leaders to feel like they are doing the right thing, the company must embrace CI. In his research, Cole (2001) claimed that CI is all about organizational development and renewal in the public and private sectors.

Cole highlights the following benefits of CI:

Enhances employee dedication and inventiveness because it accommodates the mobilization of many people and intellectual resources.

Concurrent improvements and minor victories are achievable and amplify the attainment of goals.

Small victories can lead to enormous potential changes.

Revolutions may be used to create a series of little wins. Small victories based on practice and approved after implementation by the same individuals who recommended the improvements foster learning.

Learning with modest successes dispersed throughout the organization may promote helpful information about a complete system.

Small win procedures are typically reliant on tacit knowledge, making them difficult to duplicate for other businesses.

Moreover, Temponi (2005) identified the following benefits of CI to academic institutions in the United States and the United Kingdom:

There is no monopoly on ideas; suggestions and ideas come straight from those carrying out the work. Taylor and Hirst, 2001; Jha et al., 1996; Goh, 2000; Taylor and Hirst, 2001).

Low-cost improvements are made gradually, resulting in substantial changes in capital investment (Jha et al., 1996).

Employee dedication has improved (Temponi, 2005).

Enhancement of quality and performance (Chassin, 1997; Goh, 2000).

Waste minimization (Gallagher et al., 1997).

Lowering costs (Gallagher et al., 1997); and increasing customer satisfaction (Gallagher et al., 1997; Taylor and Hirst, 2001).

Implementing CI: Obstacles and Challenges

The difficulties of sustainability over a long period are among the primary problems and hurdles to CI deployment, making success rare. Furthermore, innovation can be induced by CI in a conducive environment at an institution, according to Bessant et al. (1994). According to Gallagher et al. (1997), the gains intended to be achieved via the implementation of CI efforts frequently fail. Still, there is no explanation for the causes or a method to counteract it. Gallagher et al. (1997) found that structure, background, and corporate culture are all important variables that impede the successful implementation of CI projects. Unsuccessful implementations are caused by ineffective measurement mechanisms and a failure to address the behavior that needs to change. We need a decent structure, a solid foundation, and an effective corporate culture to accomplish a successful high-level execution of the CI effort.

In this study, we create a case study around that assumption to see how digital media firms in the United States utilize CI to achieve profitability.

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