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Upgrade Document for “Robust design for quality management systems” Spring 2006 Page 1 of 26 UNIVERSITY OF OSLO Faculty of Mathematics and Natural Sciences UPGRADE DOCUMENT Spring 2006 Process Improvement by flexible Management Information Systems Written by: Petter Øgland Version 0.4 May 25th, 2006

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Upgrade Document for “Robust design for quality management systems”

Spring 2006 Page 1 of 17

UNIVERSITY OF OSLOFaculty of Mathematics and Natural Sciences

UPGRADE DOCUMENT

Spring 2006Process Improvement by flexible Management Information Systems

Written by: Petter Øgland

Version 0.4May 25th, 2006

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Upgrade Document for “Robust design for quality management systems”

Table of Contents1 Introduction..................................................................................................................3

1.1 Problem area........................................................................................................31.2 Research questions...............................................................................................31.3 Structure of the upgrade document......................................................................3

2 Theory..........................................................................................................................52.1 Knowledge management.....................................................................................52.2 Process improvement...........................................................................................52.3 Information infrastructures..................................................................................6

3 Method.........................................................................................................................74 Results..........................................................................................................................8

4.1 The COBOL programmers at NTAX..................................................................84.2 The documentation process as NTAX.................................................................84.3 The NTAX management information system......................................................84.4 Quality management at DNV..............................................................................8

5 Discussion....................................................................................................................95.1 Two ways of understanding.................................................................................95.2 Knowledge about the current system...................................................................95.3 Knowledge beyond the current system..............................................................10

6 Conclusion.................................................................................................................12References..........................................................................................................................13

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Upgrade Document for “Robust design for quality management systems”

1 IntroductionThis document has been written as an early draft for an “upgrade document” required for all PhD students at the Information Systems group at the Institute for Informatics at the University of Oslo. The upgrade document shall be written during the first year, in order to aid the PhD student in getting direction in his studies and convince the faculty members that progress is under control.

1.1 Problem areaIn most guidelines we’ve found on installing quality management systems, there is a strong focus on top management commitment. Often when TQM and BPR projects fail, it is common to complain about lack of top management commitment. However, there are many issues top management have to focus on, and in many cases it may not be expected that they are able to be fully committed to the implementation and continuous improvement of the organizations quality management system.

Information systems development (ISD) involves risk, and failures remain common despite advances in development tools and technologies. While the Norwegian Tax Authorities (NTAX) have generally received positive publicity with respect to their efforts on improving public services, there is a high level of complexity in running software development projects and maintaining software solutions. There is a high level of interaction between departments within NTAX and a low tolerance for error. The organization is constantly being monitored by the Department of Finance (FIN) and the Auditors General (AG).

As strategy for preventing problems, NTAX use various quality assurance methods, such as developing and improving technical schemes and management methods, certifying personnel to international standards, and participating in networks for sharing best practices.

The current quality assurance approach is developed as a set of policies, strategies and standards, defined as a part of the information security management system (NTAX, 1996), and to be used as a part of the general NTAX management system. The Quality Management System (QMS) was operationally implemented five years later by appointing a Quality Manager for coordinating the Quality Function (Quality Management Organization) (NTAX, 2001).

There are many challenges in managing the Quality Function, and from the point of view of NTAX, it is important to understand how to organize and utilize quality management in a manner that both generates efficient quality improvement and fits with corporate culture (NTAX, 1997; DNV, 2005).

1.2 Research questionsThe aim of the research is to gain insights on the following question:

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How does one handle the lifecycle of quality management systems given the scenario that there is little or no top management commitment?

We want to research this main question by breaking it down into several subquestions related to the Information Systems framework we use for analysis.

1.3 Structure of the upgrade documentThis is what the PhD Manual (UiO, 2006) says about the upgrade document:

By the end of the first year, the student shall develop and present a ‘1st year report’ that will make their research visible to the group and assure that they are, or alternatively provide apt support to make them, on course to successfully complete their PhD. The content of the 1st year report should include the following (8000-12.000 words in total):

Thesis title Introduction – Problem Area Description, and Research questions The significance of the issue to be discussed by the proposed research, and why further

research on the issue is required. How the research issue related to/draws upon existing research and is discussed in the

relevant literature – which should be critically reviewed. The theoretical approach/framework being followed and how this compares with possible

alternative approaches. Any preliminary fieldwork that has been carried out or previous work done by the student

with is being drawn upon. Research design and methodology to be employed, as well as a justification for this approach. Intended plan for fieldwork, if relevant, including arrangements for access. Anticipated outcomes of the proposed research.

As I got my PhD proposal accepted on the 9 th of March 2006, it feels a bit early presenting an upgrade document, as I have not yet a full overview of related research and I do not even have a full understanding of the research question I’m trying to answer.

When I wrote the initial PhD proposal, I had only a superficial understanding of the culture and ideas of the information systems group at the Institute of Informatics at the University of Oslo. My ambition for doing a PhD in quality management has been that of having a background in industrial mathematics from 1991 and working in the field of quality control and industrial engineering for 15 years.

When working with quality control and process improvement, the mode of working is similar to that of doing action research. However, unlike the tradition of information systems (IS), my approach has not been qualitative. It has been a mixture of qualitative and quantitative methods, with a focus on applying quantitative methods due to the belief of “what gets measured gets done”.

However, as I gradually get to know the IS community, I get the impression that the kind of problems that I need to address in order to be a part of this community are the socio-technical problems that may have implications for design of information systems, or in my case Management Information Systems (MIS).

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Consequently, in this first attempt to write an upgrade document, I will try to refocus my research problem from problems related to the role of the quality manager of large public organizations to the problems of designing and continually redesigning Management Information Systems in compliance with the requirements and guideless of the ISO 9000 series and additional international, regional and de factor standards such as EFQM, CMMI, TickIT, ITIL and CobiT.

Designing quality management systems is a non-trivial task. My own experience with the ISO 9001:2000 has showed me that things are not as simple as they seem. There is also international research showing how and why TQM, Six Sigma and other types of quality management programs tend to fail. What we are looking for is robust design. It doesn’t matter if it should take a bit of time to implement the quality management system, as long as it gets gradually implemented in compliance with the philosophy of Deming and general “best practice” philosophy of doing quality management.

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2 TheoryAs a part of the PhD curriculum, I plan to take courses in qualitative methods (INF5220), knowledge management (INF5190), process and product improvement (INF5180) and information infrastructures (INF5210). So far I’ve almost completed the course on knowledge management, and this draft version of the upgrade document is written to fulfill the requirements of the qualitative research course.

This means that I do not yet have all the theoretical understanding for describing related research. In fact, one of the major problems since I got introduced to the IS community in September 2005 and participated on the 9th PhD Days Workshop in September/October has been to define the problems I want to research in a manner that will make both to me personally (wanting to use the PhD to lead to new jobs and possibilities in quality management), the requirements of the Norwegian Tax Administration in addressing practical problems relevant for their current status, and to fit with the philosophy of the IS group at the Institute of Informatics at the University of Oslo.

A possible way of structuring the theory section is by summarizing relevant aspects of the courses I’ve taken or plan to take, thus putting Knowledge Management (KM), Process and product improvement (SPI) and information infrastructures (II) in context with the problem of designing Management Information Systems.

2.1 Knowledge managementIn the reports I made for the INF5190 course, I tried to understand the KM concepts from the perspective of TQM, and thus focusing on explicit knowledge rather than on the tacit knowledge which was what the course mainly focused on. When addressing the theory in the context of the upgrade document, perhaps it would be better to discuss the ideas with a more clear relevance to the problem of designing Management Information Systems.

2.2 Process improvementAlthough I haven’t taken this course yet, I’ve gone through some of the lectures and read some of the course literature. Much of it relates to quality management. It uses CMMI as a framework for discussing processes improvement, and it seems to place CMMI in the context of scientific management and total quality management. In other words, this is the course that corresponds more or less directly to my current way of thinking, and it uses the same models and methods that I would use for improving processes.

It could be interesting to try to contribute something to the theory being discussed here, but the way of designing waterfall projects for installing process improvement systems etc is not the way I prefer to work and neither is it a way I believe is a particularly good way of working with these issues. Current experience from how DNV is trying to aid NTAX in getting certified to the ISO 9001:2000 standard, and my experience with the Wipro CMM assessment, tells me that the traditional top-down way of installing a quality management system through the use of some great project is not the best way of doing it.

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It may perhaps be a good way of getting the infrastructure for running the quality management system, but it doesn’t take into account that it is difficult to know how to design quality indicators and know what to measure.

My impression is that a much better way of installing quality management systems would be by growing them through the practice of an evolutionary or what Hanseth describes as Information Infrastructures (II).

In this section, I might also say something on systems thinking (Checkland, 1981).

2.3 Information infrastructuresThis is another course I haven’t taken yet, but as I’ve read some of the literature that is used, I feel I may be able to present my current impression of what the theory is all about. In fact, some of the most insightful comments I’ve read on II are the review comments Hanseth and Lyttainen received when trying to have his latest II article published in ISR.

A recent external investigation of the IT function of NTAX concluded that NTAX could be interpreted as a Machine Bureaucracy developing in the direction of an Administrative Adhocracy (Mintzberg, 1983; Statskonsult, 2002). When standardized and repetitive routines of the tax administration is taken over by computers, the computer department automatically grows in power, regardless of how power may have been defined according to the organizational charts.

From a quality management point of view, this is interesting in two aspects. Firstly, the power relationships defined on the organizational charts may not be the best way to understand the operational QMS. Secondly, the IT strategy and the methods of further computerizing the Machine Bureaucracy could have a major strategic importance for how the QMS is maintained and improved.

As quality management normally works within the paradigm of viewing the organization as a cybernetical system to be optimized (Morgan, 1997: chapter 3), the Administrative Adhocracy produces a challenge in terms of a paradigm of complexity, flow and growth (ibid: chapter 8). Some writers (e.g. Kelly, 1994: 196) have pointed out that the Japanese quality management practices (for the IT function) follows this new paradigm (see also: Liker, 2004; Womack & Jones, 2003).

One of the core ideas in complexity theory as applied to management problems, is to let go of central planning and control, but rather distribute the system into weakly tied units and let this loosely connected system steer itself bottom-up (e.g. Kelly, 1994: 468-469).

However, in order to let loose on the overall control, more control much be put into each separate unit. Kelly (ibid: 469) describes this as the “Fourth Law of God”, stating that “the only way to make a complex system work is to begin with a simple system that works; […an ecology] is created from assembling it incrementally from simple modules that can operate independently.”

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If we regard the QMS as a Complex Adaptive System (CAS) (Battram, 1996), the Fourth Law could be interpreted as controlling and improving the complete QMS by making sure each weakly tied unit follows a strictly deterministic logic like, say, a computer program. According to the CAS theory, this would constitute a robust strategy for making the organization “automatically” grow, long-term, in the direction of “organizational excellence” (Oakland, 2001).

Without explicitly referring to the theory of CAS, it is my impression that similar ideas are prevalent in the information systems research environment at UiO. It has, for instance, been suggested (Hanseth, 2005) that insights from current research on broadband deployment and development of communication standards (research that reveal CAS-like structures and strategies), should be used for implementing information systems in health-care organizations.

At the moment there seems to be much interest in applying complexity theory into the area of organization and management research (Stacey et al, 2000; Urry, 2003), including the problems of quality management (Dooley et al, 1995). The idea of seeing the quality manager as an actor (component) within a CAS seems to be implicit in some of this research (e.g. Dooley, 2002), but investigations of the role of the quality manager as a leverage node of the system (and what the programmable logic of this node might be) appears to be unexplored territory.

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3 MethodIn terms of methods, I should try to frame what I’m doing as action research. Perhaps I could even write a paper on this…

As this document is also a part of the research methodology, it should be possible to discuss how to apply action research (AR) within the framework of updating this document. In fact, although the update document is primarily meant as a document for controlling the first year of output from the research, the upgrade document should be updated and presented also for the second year, and it should evolve into the “kappa” for the thesis of the third year.

3.1 Action research and quality improvementThe basis for creating quality improvement by applying the system of ISO 9000…

The method will focus on building a general QMS model based on the CAS point of view. The model should be sufficiently abstract to fit various organizations, but also sufficiently detailed to be used for predicting performance (on a simple level) of a concrete Quality Function, such as the NTAX Quality Function, and also other organizations if possible.

For building such a model, literature on organizations, management and complexity need to be done, emphasizing the dynamics of an organization from a Machine Bureaucracy to an Administrative Adhocracy.

Data collection will focus on interviewing and assessing the quality manager and key personnel within his circle of influence. The assessments will be structured according to various quality management standards, and will be based on available documentation. Interviews will be done partly to validate the assessments and partly as interpretive investigations in order to understand how the world-view of the quality manager is compliant with the conditions of the CAS model. If there seems to be a reasonable level of consistence, then the method will focus on how to use CAS as a language for discussing management issues.

A typical way of doing assessments of the quality manager could be to ask the questions in ISO 9004 (ISO, 2000c: Appendix A) and categorize the results according to the ISO 9004 maturity scale from 1 to 5. The parts of the CMM / ISO 15504 and CobiT assessments standards that relate to quality management could be used in a consistent manner.

In general the research will follow the conventions of Management Research (Easterby-Smith et al, 2002; Collis & Hussey, 2003), including aspects of Action Research when needed, although further details have to be discussed with each of the quality managers that are to be used as research subjects in the investigation.

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4 ResultsWe start by giving a short description of NTAX from the organizational perspective, in order to identify two major substructures we call the professional bureaucracy and the machine bureaucracy, and thus motivating a more narrow inspection of the software lifecycle models that are within the machine bureaucracy although bordering on the professional bureaucracy.

4.1 The COBOL programmers at NTAXI’ve written on IRIS article on the COBOL programmers, but it’s a problematic paper because, even though the empirical data may be interesting, the paper is not clear on what research questions it is trying to solve. As I write this upgrade document, I feel that I should try to redesign the COBOL paper, as I still have time, in order to focus more on the question of how to design Management Information Systems.

4.2 The documentation process as NTAXThe documentation process is another part of the Management Information System. Although I plan to focus on technicians, the methods I apply could be used for the documentation as a whole, as I did when I worked as quality manager. Perhaps one of the design problems could relate to the fact that the people got irritated by having to follow the standards they had made themselves.

4.3 The NTAX management information systemAfter these two single cases, it could be interesting to talk to Barbakken in order to try to understand the NTAX management information system from the perspective of top management.

4.4 Quality management at DNVIn order to get supplementary insights, it could be interesting to interview the people at DNV in order to understand how they designed their QMS and how they are continuously redesigning the system.

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5 DiscussionWe would now like to discuss the results from the case analysis through the perspectives and theoretical framework presented in chapter two. We chose to structure the discussion by first returning to the perspective of the two cultures and types of knowledge, then discuss the case with respect to the first type of knowledge (knowledge about the system) and finally discuss the case from the perspective of the second type of knowledge (knowledge that challenges the current system).

5.1 Two ways of understandingIn this chapter we want to return to the idea about two epistemologies corresponding to the two cultural traditions of literary critique and natural science. As mentioned in chapter two, we see the idea behind literary critique and storytelling in general to be an aid for discussing meaning and direction, while the idea behind natural science being that of finding out what is true or not when the direction of research (“paradigm”) is given.

While the distinction between the type of knowledge to be found within the traditions of literary critique and natural science may to a certain extent correspond to Nonaka’s distinction between tacit and explicit knowledge, as also pointed out by Kuhn (1962: 44), but we feel that the distinction between science and meta-science is missed in Nonaka’s argument. On the contrary, what seems to us to be a natural way of reading Nonaka is to think of tacit and explicit knowledge as two ways of representing same level knowledge, like the practice on riding a bike and a manual on how to ride a bike. The way the concepts are used by Kuhn would, it seems to us, be more like the science of riding a bike on one hand and the sociology (or history) of scientists studying how to ride a bike on the other hand.

From out point of view, this distinction between science and the sociology of scientists seems to have an interesting parallel in production improvement and customer research. In public organizations, such as the Norwegian tax administration, the word “customer” may perhaps not be the most natural way of describing the tax payer, but in the terminology of ISO 9000:2000, the receiver of products (or services) from any process is named the “customer of the process”.

However, before we comment on the analysis of NTAX by applying ANT to the “customers of the processes” for challenging the way things are presently being done, we start by commenting on the “normal science” of the system as it is.

5.2 Knowledge about the current systemAs we noticed from the section on knowledge management and total quality management, viewing knowledge management as a “normal science” (Kuhn, 1962) seem to give clear operational definitions for distinguishing between data, information and knowledge. To make the argument more explicit:

Data, in the software lifecycle model, would correspond to any sort of fact or information being recorded by the ISO 9000 quality management system. Information would be data

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that can be attributed to some specific statistical distribution, describing the process. Knowledge would be the statistical distribution in itself (Øgland et al, 2006).

In other words, as long as we work within the area of explicit knowledge, and apply the standard epistemology of quality management (Deming, 1992; Lewis, 1929), then the concepts of data, information and knowledge are all possible to define in an operational manner, using the SPC chart as a way of illustrating the principles.

As all knowledge can be codified as statistical distributions, all the knowledge management processes can be handled as information management processes (Weaver & Shannon, 1949), and all other KM concepts seem to fit into the framework of viewing the organization as a machine. The language of systems thinking and artificial intelligence seems to be a natural way for describing, analysing and improving the organization.

We will also argue that this could perhaps be the best way of approaching knowledge management in the public sector, as public sector organizations are supposed to be a part of the national and international infrastructure, and thus to function predictably as a machine. Even though Nonaka and Tageuchi (1995) point out that Cartesian dualism is less apparent in oriental philosophical traditions, Cartesian dualism being the basis for modernity and scientific thinking, this does not seem to indicate that the way of the machine bureaucracy would be a less natural way for the Japanese. On the contrary, as has been pointed out by Tsutsui (1998), some of the keys for understanding Japanese management seems to be work in better harmony with the ideas of Taylor and Ford than what has been the case in Europe and the US.

What seems to make a difference, though, is the issue of consumer research. Understanding consumers from the perspective of designing, producing and marketing requires sociological, anthropolical and psychological knowledge, depending on the type of product and the type of consumer. Although mass production for mass audiences does not necessarily require as much sociological or anthrological insight as more specialized products or specialized consumer groups would require, the type of knowledge is different. In the case of process improvement of the software lifecycles at NTAX, we have looked at the people responsible for the software lifecycles from the perspective of ANT, in order to see whether this will create knowledge on how to improve the process improvement strategies.

5.3 Knowledge beyond the current systemWhen Kuhn talks about scientific revolutions, he talks about collecting knowledge that indicate problems with the current way of thinking or knowledge saying that there may be a better way of thinking and solving problems, i.e. knowledge about different paradigms of doing science.

In out NTAX analysis, we tried using ANT as a lens for understanding for this purpose, focusing on the ideas from ANT about inscriptions and translations. Among the various methods applied by NTAX management in order to control the behavior of the people working within the software life cycle system, we identified the metrics and statistics as

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important elements of the socio-technical infrastructure. Furthermore, through the ANT concept of translation we suggested a need for changing the culture into a culture more based on scientific thinking and less based on “rules of the thumb”.

If we regard this in the context of the two cultures discussed in section 2.1, we notice that this corresponds to attempting to change the current paradigm of the organization, or, in other words, to stimulate double loop learning by challenging the mindless way of working by applying a more scientific way of working.

In the context of section 2.5, were we mentioned the importance of considering the culture at large, by reducing communication barriers based on differences in cultural perceptions, we believe that an organization can enhance knowledge transfer and improve its own knowledge management system.

By focusing more on metrics and statistical methods, we believe that NTAX can facilitate the transfer of tacit knowledge to explicit knowledge in its infrastructure, thus getting on step closer to achieving its objectives.

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6 ConclusionAmong the findings, after written several papers for journals and articles, I hope to have made some contributions on the psychology and sociology on how to improve processes in large organizations, partly based on my own experience as quality manager at the Norwegian Directorate of Taxes and partly based on an understanding on the community of quality managers at large.

What I expect to find, is that most quality managers in large organizations are incompetent in terms of not understanding even the basic ideas of quality management as developed by Shewhart, Deming, Juran etc. to be imbedded in the ISO 9000 standards. In particular, I expect to find that the people responsible for quality management only have a marginal understanding of statistical process control (SPC), if any understanding at all, and that such methods are hardly ever used at all.

If I should find an organization where the quality management people actually seem to know anything about quality management, I do not expect them to be applying the process improvement methods upon their own processes. In other words, I do not expect to find anybody with a proper understanding of quality management.

Why do I expect these findings? What would be the conclusion based on such findings? What kind of story am I trying to tell?

What attracts me very much if Ole Hanseth’s ideas on information infrastructures. These ideas seem to correlate nicely with Kevin Dooley’s ideas on quality management systems from the perspective of complex adaptive systems (CAS).

Although it is important to convince academia that I contribute something new to the theory of designing quality management systems (management information systems), what is most important from a personal point of view is to spend time on convincing myself on developing a proper philosophy of process improvement that can be used both personally and on groups.

The lackmus test of the research would be if I could apply the process improvement on myself in the process of doing the PhD research, and also if I could apply it on the IS group, and then finally if I could apply it on NTAX or parts of NTAX. In the case of NTAX, however, I consider the culture of the organization to be too politically charged to really be able to contribute anything at all.

When I was in the position of being quality manager, I put an enormous lot of time and effort into improving processes by use of measurements, and the methods worked quite well. However, rather than getting any credit for my work, I got reorganized. It is a community of idiots, and if it were not for NTAX sponsoring my PhD research, I would not have anything to do with those people.

However, I have to think of the positive aspects of process improvement.

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ReferencesCoghlan, D. & Brannick, T. (2001): “Doing Action Research in Your Own Organization”, SAGE: London.

UiO (2006): Phd Manual, Information Systems Group, Department of Informatics, University of Oslo, http://www.ifi.uio.no/forskning/grupper/is/docs/PhDManual.pdf.

Easterby-Smith, M., Thorpe, R. and Lowe, A. (2002) Management Research: An Introduction. 2nd Edition. Sage Publications: London.

Battram, A. (1996) Navigating Complexity: The Essential Guide to Complexity Theory in Business and Management, The Industrial Society: London.

Checkland, P. (1999) Systems Thinking, Systems Practice. Wiley: Chichester.

Collis, J. and Hussey, R. (2003) Business Research: A practical guide for undergraduate and postgraduate students, 2nd Edition, Palgrave Macmillan: New York.

DNV (2005) Kvalitetsarbeid i IT-funksjonen, Vurdering av systemet for kvalitetsstyring i IT-funksjonen i Skattedirektoratet, Rapport unntatt offentlighet, 03.10.2005, Det Norske Veritas: Høvik.

Dooley, K. (2002) “Organizatonal Complexity,” International Encyclopedia of Business and Management, M. Warner (ed.), Thompson Learning: London, p. 5013-5022.

Dooley, K., T. Johnson, and D. Bush (1995) “TQM, chaos, and complexity”, Human Systems Management, 14(4): 1-16.

Hanseth, O. (2005) “Globally Scaleable Information Structures” presentation at PhD Days Workshop in Information systems, 30 Sept – 1 Oct 2005, Department of Informatics, University of Oslo: Oslo.

ISO (2000a) Quality management systems – Fundamentals and vocabulary (ISO 9000:2000), International Standards Organization: Geneve.

ISO (2000b) Quality management systems – Requirements (ISO 9001:2000), International Standards Organization: Geneve.

ISO (2000c) Quality management systems – Guidelines for performance improvements (ISO 9004:2000), International Standards Organization: Geneve.

Kelly, K. (1994) Out Of Control: The New Biology of Machines, Social Systems and the Economics World, Addison-Wesley: New York.

Liker, J. (2004) The Toyota Way, Addison-Wesley: New York.

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Oakland, J.S. (2001) Total Organizational Excellence: Achieving World-Class Performance, Butterworth-Heinemann: Oxford.

Statskonsult (2002) Organisering av IT-funksjonen i Skatteetaten, Statskonsult: Oslo.Urry, J. (2003) Global Complexity, Polity: Cambridge.

Womack, J.P. and Jones, D.T. (2003) Lean Thinking: Banish Waste and Create Wealth in Your Corporation, 2nd Edition, Free Press Business.

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