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The purpose of this research is empirically investigating the effect of Kaizen on organizational performance in Ethiopian manufacturing industries. Developing research framework, experimental analysis of the empirical study and developing new model are the research approaches used in this study. Moreover, the primary data was collected through self-administered questionnaire and was analyzed using statistical package for social science (SPSS) 20. The findings were triangulated to relate with the existing literature. Based on this, the findings discovered that Kaizen practices relating social and technical factors have a highly positive effect on organizational performance. It was also found that people, process and partnership factors were apparent as the foremost Kaizen practices in achieving organizational performance. However, strategy does not have significant impact on achieving society results. The study showed that effective implementation of Kaizen philosophy results in enhancing organizational performance. The study was limited with small number of companies in Ethiopia with little respondents on each company and it may not be adequate to generalize the results for the entire Ethiopian manufacturing companies. The findings of this study emphasized that Kaizen philosophy with 2 social and 4 technical factors as a total of 36 items practice holistically rather than on a piecemeal basis able to get the full potential of the identified Kaizen practices with improving the operational and financial performance of companies. Since there is lack of literature on Kaizen empirical evidence, the study has contributed to the Kaizen philosophy literature with a better understanding of its practices and their association with performance measures that will provide valuable knowledge to Ethiopian manufacturing company managers, academicians, practitioners and Ethiopian Kaizen Institute on improving Kaizen philosophy current practices.

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