To better understand the factors that support or inhibit
internally focused change, we conducted an inductive
study of one firm's attempt to improve two of its core
business processes. Our data suggest that the critical
determinants of success in efforts to learn and improve
are the interactions between managers' attributions
about the cause of poor organizational performance and
the physical structure of the workplace, particularly
delays between investing in improvement and recogniz-
ing the rewards. Building on this observation, we pro-
pose a dynamic model capturing the mutual evolution of
those attributions, managers' and workers' actions, and
the production technology. We use the model to show
how managers' beliefs about those who work for them,
workers' beliefs about those who manage them, and the
physical structure of the environment can coevolve to
yield an organization characterized by conflict, mistrust,
and control structures that prevent useful change of any
type.?