The link between successful process change and knowledge creation

Summary form only given. In this paper, the critical link between successful process change and knowledge creation is examined. A dynamic profit maximizing model is introduced to investigate the impact of knowledge creation that enhances process change effectiveness. We also explore the trade off between the long term increase in capacity sought and the short term disruption during implementation. We consider process change in terms of its effect on the maximum volume of output generated (effective capacity) over time. As a result, we can assess the impact of both process change and knowledge creation on the firm´s ability to generate revenue from output over time. Overall, the firm´s profit maximizing objective embodies:(i) the net revenue earned from effective capacity, and (ii) the costs of process change and preparation/training