Empiriceme · Model · Theory / Model

Milgrom–Roberts Complementarities

Practices work best in coherent bundles; partial adoption underperforms.

Milgrom and Roberts's 1990 finding: lean manufacturing, flexible machinery, cross-training and supplier integration reinforce each other, so adopting one or two produces worse results than adopting none.

In practice

  • A firm buys flexible machinery and keeps its narrow job descriptions, and the machinery is used as though it were fixed.
  • A hospital adopts electronic records without changing the ward round, and the records become a typing task rather than a clinical tool.
Subject
Organizations & Bureaucracy
Essay
Why organisations learn, harden and decline

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