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Article history:
Received 22 July 2011
Received in revised form
13 September 2012
Accepted 18 October 2012
Available online 29 October 2012
Keywords:
Six sigma
Event study
Process improvement
Corporate performance
a b s t r a c t
The purpose of this study is to investigate the impact of adopting Six Sigma on corporate performance.
Although there is a fairly large and growing body of anecdotal evidence associated with the benets of
implementing Six Sigma, there is very little systematic and rigorous research investigating these benets.
This research extends previous research in several important ways including utilizing a sample of 84 Six
Sigma rms that represent a wide variety of industries and rm characteristics, utilizing rigorously constructed control groups to ensure the validity of our comparisons and conclusions, and investigating the
impact of adopting Six Sigma on corporate performance over a ten year period. To carry out this investigation, the event study methodology is employed. The ten year period consists of three years prior to Six
Sigma implementation, the event year corresponding to the year Six Sigma is adopted, and six years post
Six Sigma implementation. To assess the impact of adopting Six Sigma on corporate performance we utilize commonly used measures including Operating Income/Total Assets (OI/A), Operating Income/Sales
(OI/S), Operating Income/Number of Employees (OI/E), Sales/Assets (S/A), and Sales/Number of Employees (S/E). The sample Six Sigma rms are compared to different benchmarks including the overall industry
performance and to the performance of carefully selected portfolios of control rms. The results of the
study indicate that adopting Six Sigma positively impacts organizational performance primarily through
the efciency with which employees are deployed. More specically, enhanced employee productivity
results were observed in both static analyses that assessed the performance of the sample Six Sigma
rms relative to their control groups at discrete points in time and dynamic analyses of the Six Sigma
rms rate of improvement relative to the rate of improvement of their control groups. Benets in terms
of improved asset efciency were not observed. Finally, there was no evidence that Six Sigma negatively
impacts corporate performance.
2012 Elsevier B.V. All rights reserved.
1. Introduction
The Six Sigma methodology was created by Motorola in the mid
1980s. Over time it has evolved into a comprehensive approach for
improving business performance. Key elements of the Six Sigma
approach include a clear focus on the customers needs, the use
of performance metrics, a focus on improving business processes
often through the reduction of inherent variation in the processes,
clearly dened process improvement specialist roles, the use of
data-driven and highly structured problem solving methodologies,
and ultimately the generation of tangible business results (Hahn
et al., 1999; Linderman et al., 2003; Schroeder et al., 2008). Pande
et al. (2000, p. xi) provide a representative denition of Six Sigma
as:
A comprehensive and exible system for achieving, sustaining, and maximizing business success. Six Sigma is uniquely
driven by close understanding of customer needs, disciplined
use of facts, data, and statistical analysis, and diligent attention
to managing, improving, and reinventing business processes.
Six Sigma is a particularly timely topic and appears to be gaining
momentum in practice (Linderman et al., 2003; Schroeder et al.,
2008). Perhaps one factor driving the current popularity of Six
Sigma is the growing body of anecdotal evidence touting the benets high prole organizations have reported from their Six Sigma
initiatives. For example, in the three years ending in 2001, GE estimated that it saved $8 billion as a result of its Six Sigma initiatives
(Arndt, 2002). In the following year, GE budgeted $600 million for
Six Sigma projects and targeted an additional $2.5 billion in savings.
As another example, Bank of America claimed benets in excess
of $2 billion and increased customer delight by 25% in less than
three years through its Six Sigma initiatives (Jones, 2004). Importantly, Bank of Americas experience demonstrates the applicability
of Six Sigma beyond traditional manufacturing processes. Indeed,
Honeywell found that the average savings it achieved from service
522
research has indicated a two and a half year or longer lag between
implementing total quality management (TQM) and improved performance (GAO, 1991; Powell, 1995). Likewise, Hendricks and
Singhal (2001a, b) suggest a three to ve year period to implement
an effective TQM program. The ten year period was also chosen
so that short-term and longer-term patterns in the performance
of the sample Six Sigma rms could be investigated. For example,
one of the most interesting results observed was that the Six Sigma
rms outperformed their matched portfolios in year 3 in terms of
Operating Income/Total Assets (OI/A), Operating Income/Number
of Employees (OI/E), and Sales/Number of Employees (S/E), then
experienced a signicant decline in performance prior to adopting
Six Sigma on these three measures, and nally exhibited a quick
rebound in year +1 upon adopting Six Sigma. Likewise, as an example of longer term patterns, the performance advantage for the
Six Sigma rms in terms of employee productivity tended to be
larger after adopting Six Sigma and tended to increase as additional
experience was gained with Six Sigma.
Third, beyond extending the research investigating the impact
of Six Sigma on rm performance, an additional contribution of this
research is to provide performance benchmarks for organizations
that have adopted or are considering adopting Six Sigma. Also, the
inclusion of commonly used measures of corporate performance
including OI/A, Operating Income/Sales (OI/S), OI/E, Sales/Assets
(S/A), and S/E facilitate comparisons with previous research.
This paper is organized as follows. Section 2 reviews the existing
empirical research related to process improvement methodologies
and rm performance. Section 3 provides the theoretical development for Six Sigmas impact on corporate performance, our
research hypotheses, and the performance variables included in
the study. Following this, our research methodology is discussed in
Section 4. Our empirical results are presented and discussed in Section 5. Finally, the paper is concluded in Section 6 with a discussion
of limitations and avenues for future research.
was mixed. Signicant main effects were found for cost per dollar
sales, EBITDA, sales, S/E, and number of employees while signicant main effects were not found for free cash ow per share, asset
turnover, return on assets (ROA), return on investment (ROI), and
total assets. A signicant limitation of the study is that the performance of the Six Sigma rms was compared to a random sample
chosen from the Fortune 500 as opposed to carefully selecting control groups. Barber and Lyon (1996) highlight the importance of
performance matching sample rms with control rms to ensure
that test statistics are well specied. Furthermore, the sample size
of 24 Six Sigma rms and the fact that only rms that announced
their adoption of Six Sigma from 1996 to 1998 limits the generalizability of the results. For example, if differences exist between
earlier adopters of Six Sigma and more recent adopters then the
rms included in the study would not provide a representative
sample of all organizations that have adopted Six Sigma.
Utilizing structural equation modeling, Lee and Choi (2006)
investigated how four Six Sigma management activities impact
process innovation, quality improvement, and corporate competitiveness improvement. The results of the study indicated that all
four management activities have a positive impact on process innovation. Furthermore, the results indicated that process innovation
signicantly affects quality improvement which in turn affects corporate competitiveness. Key limitations of this study are that only
a single organization was studied and as is the case with all survey
based research, there may be a self-report bias.
Of the process improvement approaches researched to date,
TQM has been researched the longest and accounts for almost half
of the empirical studies reviewed. In contrast to the studies investigating Six Sigma, the TQM event studies have generally found
a positive relationship between TQM and corporate performance
(Hendricks and Singhal, 1997; Easton and Jarrell, 1998; Hendricks
and Singhal, 2001b; Eriksson and Hansson, 2003). Hendricks and
Singhal (1997) found strong support for the hypothesis that quality
award winning rms outperformed a control sample on operating
income-based measures. In another study of quality award winning
rms, Eriksson and Hansson (2003) found that the quality award
recipients outperformed the competitor they were matched to in
terms of change in sales during the implementation period and
post implementation outperformed their matched competitor on
change in sales and return on assets. Easton and Jarrell (1998) found
strong evidence of overall improvement in operational and nancial performance over the long-term. More specically, across all
the variables investigated, more than half the TQM sample rms
outperformed their control group in terms of exceeding analysts
forecasts. Hendricks and Singhal (2001b) extended their previous research and investigated the role several rm characteristics
play in moderating the impact implementing effective TQM programs has on nancial performance over a four to ve year period.
The results indicated that smaller rms do signicantly better
than larger rms and rms that received awards from independent organizations signicantly outperformed rms that received
supplier-based awards. The results of the study provided weak
support that less capital intense rms outperform more capital
intense rms and that more focused rms outperform more diversied rms. Finally, there were no signicant differences observed
between early and late adopters of TQM.
A key strength of many of the TQM event studies are the use
of quality award winning rms which helps ensure only sample rms that effectively implemented TQM were included in the
study (Hendricks and Singhal, 1997, 2001b; Eriksson and Hansson,
2003). A key weakness of the TQM event studies is that TQM
sample rms were not performance matched with control rms
(Hendricks and Singhal, 1997, 2001b; Eriksson and Hansson, 2003)
or were matched in unconventional ways (Easton and Jarrell,
1998).
523
524
525
Product/
Service
Design
Top
Management
Support
Six Sigma
Role
Structure
Six Sigma
Focus on
Metrics
Quality
Performance
Process
Management
Business
Performance
Six Sigma
Improvement
Procedure
Fig. 1. Theoretical model of relationship between Six Sigma and organizational performance.
variation in organizational processes by using improvement specialists, a structured method, and performance metrics with the aim
of achieving strategic objectives. Importantly, all three Six Sigma
practices shown in Fig. 1 are key elements of this denition.
Beyond identifying the elements of Six Sigma, the denition
offered by Schroeder et al. (2008) describes the goal associated with
Six Sigma, namely, to reduce the variation inherent in organizational processes and as such claries how the Six Sigma practices
shown in Fig. 1 contribute to corporate performance. Accordingly,
Six Sigma seeks to improve business processes by studying and
reducing the inherent variation present in the process. Less process variation boosts quality performance by allowing the process
to obtain more consistent outcomes in terms of quality, lead times,
yield rates, and so on.
Of course, and is shown in Fig. 1, reducing process variation and
improving quality performance are simply the means to an end.
Fundamentally, the overarching goal is enhanced business performance including higher sales, increased market share, increased
operating income, improved return on assets, and so on. For example, improved process execution resulting in less process variation
leads to higher quality performance which in turn could provide a
competitive advantage that translates into increased market share
and higher revenues. Likewise, less process variation can help to
reduce waste and inefciency which in turn leads to lower costs
and higher protability.
Based on these insights and the model shown in Fig. 1, we offer
two hypotheses related to the impact of Six Sigma on business
performance. First, we hypothesize that implementing Six Sigma
will improve the organizations protability. To assess protability
and to be consistent with Zu et al. (2008), we rely on Operating
Income (OI) before depreciation, interest, and taxes as opposed to
net income (NI). OI is calculated as sales minus total cost (cost of
goods sold + selling and administrative expenses). OI provides a relatively clean measure of the cash that is generated from operations
since it is not impacted by decisions made on how to treat depreciation and amortization, by interest charges which are impacted by
the capital structure of the rm, or by taxes that can be inuenced
by a variety of decisions. However, two factors OI does not control
for are the affect that capital expenditures (particularly mergers
and acquisitions) have and the size of the rm. Therefore, in order
to retain this clean measure of cash ows while at the same time
controlling for capital expenditures and rm size, we normalize OI
by dividing it by the average of total assets (A), sales (S), and number of employees (E). Thus, we assess the impact of Six Sigma on
protability based on OI/A (or return on assets, ROA), OI/S (or return
on sales, ROS), and OI/E. According to Barber and Lyon (1996), ROA
is the most commonly used measure in studies aimed at detecting
abnormal operating performance.
Second, consistent with Zu et al. (2008), we hypothesize that
implementing Six Sigma will increase the organizations revenues.
Like OI, to control for capital expenditures and rm size, we normalize S by dividing it by the average of total assets and the number
of employees. Thus, we assess the impact of Six Sigma on revenues
based on S/A and S/E.
Zu et al. did not investigate Total Costs as a separate factor and
investigating it in the present study would not provide additional
insight since it can be derived from OI and S which are already
included (i.e., total cost = S OI). Essentially then, this study focuses
on the impact Six Sigma has on an organizations the top line (S)
and bottom line (OI).
4. Research methodology
4.1. Sample rm selection
In searching the web for organizations that adopted Six Sigma,
a list of approximately 400 organizations that were reported
adopters of Six Sigma was discovered. This list became the starting
point for identifying the sample Six Sigma organizations for this
study. Systematically, follow-up Google queries, searches of each
organizations website and annual reports, and queries of publication databases were executed for each public organization on
the list in an effort to identify the date when the organization
adopted Six Sigma. One advantage to studying Six Sigma compared
to other process improvement methodologies such as TQM or lean
is that with Six Sigma there is typically a clear start date as Six
Sigma is often initiated with some type of formal training program.
Ultimately, we were able to nd public announcements or articles discussing the year that Six Sigma was adopted for 88 of the
public organizations on the list. Of these 88 organizations, Compustat nancial data was available for 84 of the rms and these 84
rms comprised our sample Six Sigma rms. Because the disclosures used to identify the adoption date tended to coincide with
the actual adoption of Six Sigma, the inclusion of the sample Six
Sigma rms in this study is unrelated to their ultimate success or
lack of success with Six Sigma. Thus, while public disclosures may
be related to an organizations commitment to its Six Sigma initiative, there is no bias toward including only rms that have had
success with Six Sigma.
Table 1 provides distribution data on when the 84 sample rms
adopted Six Sigma. Approximately 45% of the sample rms adopted
Six Sigma in 2000 or 2001 and 81% adopted it between 1998 and
2002. It is interesting to observe the decline in identifying rms
announcing or receiving other publicity regarding their adoption of
Six Sigma post 2001. This may reect a perception that Six Sigma
has become more mainstream and therefore less worthy of a formal
announcement.
The 84 sample Six Sigma rms included in this study represents
a diverse set of rms. In particular, the sample rms represent 57
distinct 4-digit SIC codes and 27 unique 2-digit SIC Codes. Table 2
526
Table 1
Distribution of the year when sample rms adopted Six Sigma.
Year
Number of rms
Percentage of rms
1986
1988
1990
1994
1995
1997
1998
1999
2000
2001
2002
2003
2004
19862004
1
1
1
2
1
5
13
8
16
22
9
3
2
84
1.2
1.2
1.2
2.4
1.2
6.0
15.5
9.5
19.0
26.2
10.7
3.6
2.4
100
Table 2
Summary nancial data for Six Sigma sample rms in year Six Sigma adopted.a
OI
(000,000)
Mean
Median
Std Dev
Max
Min
3851
1380
7005
37,895
1391
S
(000,000)
18,001
10,072
26,987
183,691
506
A
(000,000)
51,036
9569
120,304
665,287
454
E
(000)
59.6
35.5
74.3
373.8
1.9
a
OI, S, and A in each sample rms event year adjusted to equivalent 2004 dollars
using CPI, The Federal Reserve Bank of Minneapolis, http://www.minneapolisfed.
org, May 23, 2011.
to three year lag period. For example, the study by the US GAO
found an average lag of approximately 2.5 years from the time
when the companies initiated their focus on quality until the performance improvements became evident (GAO, 1991). Easton and
Jarrell (1998) found no statistically signicant effects in terms of
unexpected performance for NI/S, NI/A, and OI/S one and two years
after the event year in their study of TQM and corporate performance. However, the unexpected average performance over years
three to ve on these three variables was statistically signicant.
In the Easton and Jarrell (1998) study, the lag in improved performance is even more understated since the event year was dened
as six months after the rst major TQM initiative.
For the purpose of this study, scal years are converted into
event years in order to pool observations over time. By convention,
event year 0 corresponds to the scal year a given sample rm
adopted Six Sigma, event year 1 corresponds to the year preceding
the year Six Sigma was adopted, and event year +1 corresponds to
the year following the year Six Sigma was adopted.
4.3. Assessing corporate performance
In an ideal world the impact of implementing Six Sigma on
a rms performance would be assessed by comparing how the
company performed both with and without Six Sigma. Unfortunately making this type of assessment is not possible and therefore
assessing the impact of Six Sigma on a rms performance requires
the identication of relevant performance benchmarks. We evaluate a variety of different benchmarks to ensure that the benchmark
choice is not driving the results.
At one end of the spectrum of benchmarks, we take a nave viewpoint and use an industry adjusted performance of our sample Six
Sigma rms. We calculate this by subtracting the industry median
performance from the performance of our sample rms. Industry median performance is used because of the non-normality of
the nancial data. Industry medians are created by rst computing
the 4-digit, 3-digit, 2-digit, and 1-digit SIC industry classications
medians excluding sample rms. Then the sample rm SIC code is
matched to the most detailed industry level median which has at
least ve other companies in the industry classication.2
There are several benets associated with using industry
adjusted performance. First, because organizations in different
industries face unique challenges and market conditions, adjusting a rms performance relative to its industrys performance
permits comparisons across industries. Second, assessing a rms
performance relative to its industry provides an evaluation of the
company relative to a large sample of its competitors. Third, industry adjusted performance is a very nave measure which relies
upon minimal assumptions. Across all performance measures in
year 1, the average number of rms included in a given Six
Sigma sample rms industry was 61.4 with a range of six to
590.
At the other end of the continuum, we also compare a sample Six Sigma rms performance to the performance of the closest
matched rm and a portfolio of control rms matched to it on the
basis of industry, year, and similar past performance. Because the
results were similar with either the best match or the portfolio of
matching rms, we report the results of the portfolio of matching
rms.
Matching control rms on the basis of similar pre-event performance helps on several dimensions (Barber and Lyon, 1996).
First, it helps to control for the endogeneity problem because the
level of performance may be due to managerial ability, rm-specic
527
Table 3
Six Sigma rms median industry adjusted performance by event year.
Event year
OI/A
N
3
2
1
0
+1
+2
+3
+4
+5
+6
*
**
***
76
77
79
82
83
83
83
83
82
81
OI/S
Median
***
0.0290
0.0258***
0.0258***
0.0264***
0.0353***
0.0391***
0.0380***
0.0313***
0.0278***
0.0269***
N
76
77
79
82
83
83
83
83
82
81
OI/E
($000/employee)
Median
***
0.0363
0.0471***
0.0487***
0.0442***
0.0449***
0.0404***
0.0418***
0.0329***
0.0346***
0.0327***
N
76
76
79
79
83
83
82
82
81
79
S/A
Median
***
11.3375
11.5158***
11.3365***
13.2159***
17.3888***
18.7008***
13.4381***
12.1594***
11.7895***
15.0333***
S/E
($000/employee)
Median
Median
77
78
80
83
84
84
84
84
82
81
0.0538
0.0429
0.0046
0.0240
0.0086
0.0121
0.0420*
0.0195
0.0303
0.0516
77
77
80
80
84
84
83
83
81
79
37.5602***
26.0943***
23.7185***
35.2630***
33.5807***
40.8392***
45.7888***
49.6187***
55.6561***
59.7682***
choices or the set of investment opportunities. By matching on performance, a researcher can control for various factors, unrelated to
an event, that affect the operating performance of assets (Barber
and Lyon, 1996, p. 366).
Second, matching on pre-event performance eliminates the
reversion to the mean effects that are common in accounting
data. Finally, matching sample rms with control rms based on
performance is also important to help ensure that our test statistics are well specied. Barber and Lyon concluded that selecting
control rms on the basis of pre-event performance is the only
way to ensure that the test statistics are well specied and that
matching on pre-event performance is considerably more important than selecting control rms on the basis of industry and/or
size.
The portfolio of same 4-digit SIC industry and year control rms
were selected based on similar performance on the variable being
assessed in the year prior (event year 1) and four years prior
(event year 4) to the sample rm adopting Six Sigma.3 Because
the results were similar with either event year match, we focus
on the year 1 match. Similar performance was operationalized
as the control rms performance being within 10% of the sample
rms performance in event year 1.4 Barber and Lyon (1996) found
that using a 90110% performance lter yields well-specied test
statistics. Note that because performance was matched separately
for each performance measure, the composition of the portfolio of
performance matched control rms for a given sample rm could
vary across the ve performance measures. Across all performance
measures in year 1, the average number of rms included in a
given Six Sigma sample rms matched portfolio was 4.4 with a
range of 134.
Finally, for the purposes of this study, our benchmarks are a conservative measure of performance because it is possible that other
rms included in the benchmark may have also implemented Six
Sigma or other process improvement programs. Along these lines,
if adopting Six Sigma does indeed enhance organizational performance, then including other Six Sigma rms in the benchmark
3
We also matched on 4-digit, 3-digit, 2-digit and 1-digit industry and found
similar results.
4
Because some of our measures are a very small percentage, we expanded the
match to include anything within an absolute one percent if the ratio is between 10
and +10 percent. In other words, if the sample rms operating income to sales is
three percent, the matching rm ratio is between two and four percent. Not including these expanded matches reduces our sample size but it does not change the
results. In addition, we required control rms to have ve years of data, event year
1 through +3.
5
Though the results are not reported, we also winsorized and trimmed the data
and found similar results. We winsorized at the 2.5 and 97.5 percentiles which sets
the observations below the 2.5 percentile and above the 97.5 percentile equal to the
values at the 2.5 and 97.5 percentiles, respectively. We similarly trimmed the data.
528
Table 4
Industry adjusted rate of improvement.
Time period
3 to 1
1 to +1
1 to +3
+1 to +3
+1 to +6
3 to +6
*
**
***
OI/A
OI/S
OI/E
($000/employee)
S/A
S/E
($000/employee)
Median
Median
Median
Median
Median
76
79
79
83
79
72
0.0097
0.0055
0.0099
0.0077
0.0075
0.0044
76
79
79
83
79
72
0.0041
0.0035
0.0026
0.0023
0.0045
0.0012
76
79
78
82
77
70
1.3027
0.5119
2.3733**
2.0001
2.5371
6.7310***
77
80
80
84
80
73
0.0099
0.0502*
0.0017
0.0074
0.0072
0.0511
77
80
79
83
78
71
8.8337
7.7962
13.6938**
14.4206**
20.0235***
22.9155***
did generate more sales per employee and are more efcient at generating operating income relative to assets, sales and employees.
Furthermore, the Six Sigma rms performance advantage over
the industry generally increased in the short-term period immediately after implementing Six Sigma compared to the period prior
to Six Sigma implementation. For example, referring to Table 3, the
average industry adjusted S/E over the period 3 to 1 was 29.12.
In contrast, the average industry adjusted S/E over the periods +1
to +3 was 40.07 indicating a larger performance gap after implementing Six Sigma. Similar improvements in the performance gap
were also observed for OI/A and OI/E. Over the longer-term period
of +4 to +6, the Six Sigma rms continued to increase their performance advantage in terms of S/E. In particular, the average industry
adjusted S/E over the periods +4 to +6 increased to 55.01 (compared
to an average of 29.12 over 3 to 1 and 40.07 over +1 to +3).
In terms of OI/A and OI/E, the Six Sigma rms outperformed their
industry over the period +4 to +6 by a larger margin than during
the pre-implementation period of 3 to 1, but by a smaller margin than the short-term period of +1 to +3 immediately following
Six Sigma adoption.
In contrast to the static analysis summarized in Table 3, Table 4
provides a dynamic comparison between the rate of improvement
of the sample Six Sigma rms and the median industry rate of
improvement. This provides a direct test whether Six Sigma rms
improve performance after adoption. More specically, Table 4
summarizes the industry adjusted rate of improvement across various time periods by calculating the difference between the change
in a given sample Six Sigma rms performance over the time period
and the change in median industry performance over the same time
period. A positive industry adjusted rate of improvement indicates
that the sample Six Sigma rms rate of improvement was greater
than the overall industrys rate of improvement over the specied
time period.
As illustrated in Table 4, in the pre-implementation period
comprised of event years 3 to 1, the sample rms rate of
improvement was not statistically different with the industry on all
ve performance measures. So prior to the adoption of Six Sigma,
the sample rms were not on a different performance trajectory
than the industry. Thus, the adoption of Six Sigma was not motivated by a change in performance in the two years prior.
Once Six Sigma was adopted, we nd evidence that the sample
rms rate of improvement in utilizing employees was signicantly
better than the industry. Over event year 3 to +6 and 1 to +3
the sample Six Sigma rms outperformed their industries on both
employee productivity measures OI/E and S/E (see Table 4). Correspondingly, the sample Six Sigma rms rate of improvement in
terms of OI/A, OI/S and S/A was not statistically different from their
respective industries.
More specically, the sample Six Sigma rms rate of improvement was greatest relative to their rms respective industry
rate of improvement on S/E. The sample Six Sigma rms rate of
529
Table 5
Six Sigma rms median adjusted performance based on portfolio of matched control rms by event year.
Event year
OI/A
N
3
2
1
0
+1
+2
+3
+4
+5
+6
*
**
***
OI/S
Median
39
43
48
48
48
48
48
48
45
42
N
*
0.0131
0.0079
0.0003
0.0014
0.0125**
0.0114**
0.0036
0.0018
0.0144
0.0032
OI/E
($000/employee)
Median
39
41
46
46
46
46
46
46
42
39
0.0006
0.0012
0.0012
0.0023
0.0063
0.0101*
0.0097**
0.0121***
0.0130**
0.0279***
S/A
Median
31
33
37
37
37
37
37
36
34
32
2.1602
0.9961
0.3529
2.7288**
7.7801**
6.7384***
9.6990***
10.3645***
14.5282***
14.6827*
S/E
($000/employee)
Median
Median
40
43
46
46
46
46
46
44
40
39
0.0409
0.0317
0.0029
0.0023
0.0202
0.0675
0.0004
0.0090
0.0080
0.0254
44
46
48
48
48
48
48
46
43
41
15.9693*
13.1148***
0.5978
7.6650
19.0194***
26.7210***
25.6801***
35.8037***
29.8120**
35.6440**
Table 6
Adjusted rate of improvement based on portfolio of matched control rms.
Time period
OI/A
Median
3 to 1
1 to +1
1 to +3
+1 to +3
+1 to +6
3 to +6
39
48
48
48
42
33
0.0144*
0.0140**
0.0037
0.0038
0.0145
0.0048
39
46
46
46
39
33
*
**
***
OI/S
OI/E
($000/employee)
S/A
S/E
($000/employee)
Median
Median
Median
Median
0.0031
0.0041
0.0117**
0.0140
0.0048
0.0342***
31
37
37
37
32
27
2.3375**
7.1443**
11.4627***
3.6265*
8.5194
11.2845
40
46
46
46
39
35
0.0272
0.0212
0.0057
0.0071
0.0030
0.0290
44
48
48
48
41
37
12.9774*
11.7228**
26.0909***
20.6390***
17.2024**
12.3567
6
In unreported analysis, we matched on year 4, rather than year 1, performance and though there were some minor differences in the pre-adoption period,
the post-adoption results and rates of improvement results are unchanged.
530
531
have integrated their Six Sigma initiatives with lean versus rms
that have kept them separate or only adopted Six Sigma?
Related to these research issues, another important area of
research is to investigate the relationship between an organizations motivation for adopting Six Sigma and corporate
performance. For example, can patterns be observed suggesting
that some rms adopted Six Sigma during periods when they were
outperforming the industry while other rms adopted Six Sigma
during periods when they were underperforming the industry? If
so, is there a difference in performance between the more proactive
rms versus the more reactive rms? And even more fundamentally, is there a difference between the types of rms that benet
from adopting Six Sigma versus those that do not? Addressing these
research issues would provide important insights to managers and
researchers on the relationship between Six Sigma and corporate
performance.
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