Honey without money? Kaizen effects on Brazilian firms

Abstract

One of the key drivers for a firm’s productivity growth is management. One management practice considered cost effective is Kaizen. Originally from Japan, the Kaizen basic concept is continuous improvement with the involvement of the full workforce. Using firm-level dataset from Brazil’s innovation and manufacturing surveys, this paper evaluates quantitatively whether Kaizen has impacted the performance of domestic firms. Our initial results suggest a productivity premium on Kaizen adopters, yet when it materializes is not detectable in the short-term. Moreover, impact on innovation is observable after Kaizen implementation. Understanding these outcomes with a qualitative approach, our analysis highlights the importance of Kaizen on innovation, especially by improving worker’s time at production line as well as the long-term vision of Kaizen on productivity.