tems, variation, psychology, and knowledge itself. It equates to a sufficient understanding of the organizational system to identify and predict cause-and-effect relationships. When interventions are made without profound knowledge, they are not likely to have their intended effect—subsystem performance may be enhanced, but the performance of the larger system will not be because the linkages are not understood. The consequence is the productivity paradox—extensive investments in enhancing the productivity of individuals and groups that do not lead to expected improvements in larger organizations or in the enterprise.


In our examination of linkages, we identified structures and processes that inhibit increases in individual productivity from increasing organizational productivity. These structures and processes are common to organizations engaged in varied activities—office work, software development, postal services, manufacturing, computer-aided design, and others.

A structural inhibitor, for example, can be found in the existence of core and peripheral activities in most organizations. Core activities, such as the production of engineering design specifications, are directly related to the process of transforming inputs into outputs. Peripheral activities, such as updating computer-aided design software, are only indirectly related to this process. Thus, as a consequence of this structure, increases in individual productivity in core activities will be more likely to contribute to organizational productivity than increases in peripheral activities.

Process operates as an inhibitor when an intervention that increases productivity in one set of activities cancels the gain by decreasing productivity in a related set. For example, the introduction of a computer system resulted in increased productivity on routine tasks by individual customer service representatives. However, the change had negative consequences for the functions of supervisors of the customer service representatives. It reduced the visibility of the operations they supervised and thereby reduced their ability to solve problems and coordinate activities. The net result was no gain in the productivity of the work group, even with the intervention of new technology and the improvement in the productivity of the customer service representatives.

Facilitators are equivalent in importance to inhibitors. Facilitators are processes that can function either to remove conditions that impede linkages or to create conditions that facilitate linkages. Several critical facilitative processes were defined and examined in vari-

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