Optimal Time Allocation for Process Improvement for Growth-Focused Entrepreneurs

• 成果类型: Article
• 署名作者: Yoo, Onesun Steve; Corbett, Charles J.; Roels, Guillaume
• 署名单位: University of London; University College London; University of California System; University of California Los Angeles
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2015.0568
• 发表日期: 2016
• 页码: 361-375
• 关键词: Entrepreneurship; process improvement; time allocation; dynamic programming

摘要

For many entrepreneurs, time is a key constraint. They need to invest time to achieve growth, but also lose time because of recurring crises. We develop a simple stochastic dynamic program to model how an entrepreneur should prioritize between improving processes to reduce crises versus harvesting revenue or ensuring future growth. We show that it is initially optimal to prioritize process improvement: an entrepreneur should strive for high process quality early in the venture's growth process. We numerically analyze a simple heuristic derived from this optimal policy and identify the conditions under which it is (or is not) effective. It performs near optimally except when process quality or revenue rate may deteriorate too fast or when the cost of process improvement or revenue enhancement is too high. Our work provides a theoretical foundation for the advice found in the popular entrepreneurship and time management literature to invest time now to save time later.