Rising competition in world and domestic markets for the past 2 decades has necessitated that U.S. companies undergo significant transformations to improve their performance with respect to a wide array of efficiency and quality indicators. Research on the transformations recently undertaken by some U.S. companies to boost performance revealed two distinct and coherent models of high-performance work systems: (1) a vision of "lean production" that relies more heavily on managerial and technical expertise and centralized coordination and decision making than conventional systems do; and (2) a U.S. version of "team production" that combines principles of Swedish sociotechnical systems with principles of quality engineering and that more thoroughly decentralizes management of work flow and decision making. Only a few organizations have yet achieved major transformations and performance improvements. Obstacles remain to be overcome: the continuing temptation of mass production, the ambiguous role of technology, high initial training costs, and managerial resistance to change. An interrelated set of public policies addressing the following issues must be developed: improving job training, increasing employee and union participation, increasing firms' commitments to stakeholders, building interfirm collaboration and quality standards, and ruling out the low-wage path. (Contains 107 references.) (MN)