Abstract

Process Management Programs (PMPs) rely heavily on the standardization of activities to improve organizational efficiency and reliability. Standardization, however, can lead to rigidity and inertia, which may eventually inhibit exploration and innovation. While scholars have provided cognitive and routine-based arguments to cope with this dilemma, the fact that standardization is a social process that requires collaboration between individuals has been overlooked. In this paper, we propose that standardization can improve a team's social capital and thereby facilitate the activities that enable exploration. Specifically, we hypothesize that standardization relates positively to external communication, psychological safety, and the perception of support for innovation in operational teams. These three social capital attributes mediate the relationship between standardization and exploration. We tested this multilevel mediation model by analysing 431 members of 62 operational teams in a large multinational mining company that had recently implemented a Process Management Program (Lean Management). Our multilevel mediation results confirmed that standardisation promoted exploration by enhancing the teams' social capital. For robustness we tested our model with a second survey of 450 workers of different companies and obtained similar results. Therefore, we propose that the productivity dilemma can be balanced by improving operational teams' social capital.