Firms’ integrating efforts to mitigate the tradeoff between controllability and flexibility

We consider three manufacturing capabilities: controllability, flexibility, and integrating capability. Controllability is a firm's ability to control its process to enhance efficiency and accuracy and to better meet specifications. Flexibility is a firm's ability to cope with uncertainty and variation, both internal and external. Integrating capability is a firm's ability to integrate and coordinate diverse functions and parts of its supply chain, embodied in overall operations effectiveness and new product innovation. We put forth two hypotheses. First, there is an inherent tradeoff between controllability and flexibility. Second, a firm's integrating effort across its supply chain enables it to overcome such a tradeoff, making it possible to improve both controllability and flexibility simultaneously. Using data from 193 manufacturing companies, we test our hypotheses. It turns out that the relationship between controllability and flexibility is convex-shaped, indicating there are two distinct regions: one in which the relationship is negative and the other, positive. Further, the firms in the positive relationship region make significantly more effort to integrate, that is to say coordinate and communicate, across their supply chains, implying that as the firm strives to integrate its supply chain functions, it can mitigate the tradeoff between controllability and flexibility to a considerable extent.     

Dancing with wolves: how value creation and value capture dynamics affect complementor participation in industry platforms

ABSTRACT

Industry platforms shape the interactions among participating firms, especially between the platform owner and its complementors. However, little research has examined how such dynamics would influence the initial participation by complementors. Based on the coopetition perspective, we develop hypotheses about the relationship between platform owner’s value appropriation potential and complementor participation, at platform initiation. Using a comprehensive dataset of open source software (OSS) platform initiations, this study empirically examines how the resource profiles of platform owner firms may affect complementor participation in the platform. We find that when the platform owner has higher percentage of sales from complementary market segments, the number of complementors for the platform is lower. Furthermore, the platform owner’s sales growth positively moderates this relationship. The findings shed new lights on how the value creation and value appropriation dynamics between the platform owner and its complementors may shape the outcome of industry platform launching.     

Business model-network interactions: Comparative case studies from Zhongguancun and Silicon Valley

This paper explores the firm's business model-network relationship in two regional innovation systems of China and the USA. A longitudinal analysis was used for this research. Four cases of high-tech enterprises from Zhongguancun (China) and Silicon Valley (USA) were investigated, focusing on how a business model and its ties with the stakeholders in the network interact and evolve over time. Applying Granovetter's network theory, we show that the companies' business model's development depends on the strength of network ties that differ between the two geographical regions. Results reveal that the influence of stakeholders' ties on the business model can vary depending on the regional context. It also shows the network impact value proposition, value capture, and value creation and delivery.     

Composite value index of trademark indicators: A market value analysis using Tobin's Q

This paper provides novel empirical evidence on the market valuation of a firm's intangible assets for U.S. firms during the period 1991–2015, exploring the relationship between Tobin's q, R&D, advertising, utility patents, international patent applications, design patents, trademarks, and value weighted IP measures. The Tobin's q is found to be positively and significantly associated with the proposed composite value index of trademark indicators above and beyond the other measures of intangible assets. The paper articulates some managerial implications on how firms could benefit from investing in trademarking and enlarge market value through the combination of multiple IP strategies.     

Analysing the roles of CEO's financial literacy and financial constraints on Spanish SMEs technological innovation

Drawing on human capital and upper echelons theories, this study analyses how CEO's financial literacy influences a firm's technological innovation and investigates the mediating role of alleviating financial constraints of Small and Medium-sized Enterprises (SMEs) in the former relationship. We develop and test hypotheses applying a Structural Equation Model to a sample of 310 Spanish SMEs. The results show that CEO's financial literacy exerts both a direct and an indirect impact, through alleviating financial constraints, on a firm's technological innovation.     

Absorptive Capacity,Proximity in Cooperation and Integration Mechanisms. Empirical Evidence from CIS Data

The paper extends available findings on the antecedents and impact of the firm's absorptive capacity. Innovation cooperation is recognized as a driver of its potential side (PAC). Considering different forms of proximity, we expect to find a higher impact for interactions occurring between close partners. Human capital (HC) is expected to be as important as other organizational mechanisms for the innovation impact of PAC. An empirical application with Community Innovation Survey data confirms these arguments only partially. The firm's cooperation with geographically closer partners (i.e., in the same country) increases its PAC, but it is cooperation with institutionally distant ones (e.g., research organizations) that augments it. Among the integration mechanisms of external knowledge, those increasing the firm's HC are the only ones that positively moderate the innovation impact of PAC.     

The impact of operations capability on firm performance

We propose that a firm's operations capability is manifested through its new product design and development, just-in-time, and quality-management efforts. Moreover, we propose that operations capability, so defined, directly and positively impacts firm performance. Survey data were used to independently calibrate and validate a structural equation model linking operations capability, a second-order construct, to firm performance. Results provide support for the model and demonstrate a positive relationship between operations capability and firm performance.     

Supply chain management practices as a mediator of the relationship between operations capability and firm performance

The current study uses mediated regression analysis and structural equation modelling to test the proposition that supply chain management practices mediate the relationship between operations capability and firm performance. Operations capability is defined in terms of a firm's new product design and development, total quality management and just-in-time capabilities. Results support the research model and also suggest the existence of a direct relationship between operations capability and performance.     

Top management Team's cognitive diversity and the Firm's ambidextrous innovation capability: The mediating role of ambivalent interpretation

The top management team (TMT) diversity has received considerable attention in literature, especially due to its influence on an organization's innovation strategy. While previous studies have considered diversity in terms of education, experience, skills, functionality, and gender, little is known about the TMT's cognitive diversity. We contribute to the literature by examining the influence of the TMT's cognitive diversity on an organization's ambidextrous innovation capability; i.e., its incremental and radical innovation capability. Results from 50 TMTs involved in the electronics industry support our hypothesized mediating role of ambivalent interpretation; that the TMT cogitative diversity positively influences ambivalent interpretation, and this, in turn, positively influences both radical and incremental innovation capability. These findings have important implications for how a firm's decision makers (i.e., the TMT) with their diverse cognitive styles support building the firm's ambidextrous capability through ambivalent interpretation.     

Learn to survive crises: The role of firm resilience,innovation capabilities and environmental dynamism

Exogenous crises, while disruptive, may also present learning opportunities that could affect a firm's viability and performance. In this study, we examine how exogenous crises can constitute learning opportunities and assess their impact on firm survival. In particular, we investigate the role of learning in response to exogenous crises and how firm resilience, innovation capabilities, and environmental dynamism influence this relationship. Drawing from crisis management and organisational learning literature, we propose that these factors can bolster the connection between learning from crises and firm survival. To test our hypotheses, we conduct a nuanced analysis using both regression analysis and Fuzzy Set Qualitative Comparative Analysis (fsQCA) on data from 249 Italian manufacturing Small and Medium-sized Enterprises (SMEs). This approach allows us to simultaneously examine the impact of firm resilience, innovation capabilities, and environmental dynamism on the relationship between learning from crises and firm survival. Our findings offer theoretical and practical insights into the role of learning from crises in a firm's survival. They also highlight the importance of embracing learning opportunities in crisis situations and suggest that how firms deal with crises could be an opportunity to fine-tune their internal processes and thrive in the long run.     

Effectiveness of planning and control systems: An empirical study of US and Japanese firms

Both researchers and practitioners have investigated the effectiveness of manufacturing planning and control systems (MPCS) in an attempt to justify the investment in MPCS. This study uses the Wight's (1981) detailed questionnaire to measure the degree of planning and control implementation in a manufacturing system, which is referred to as MPCS rating. The MPCS rating is then used to study the relationship between the self-assessed manufacturing competitiveness (cost, quality, delivery and flexibility) and the objective performance measures of manufacturing performance such as production cost, productivity change, customer reject percent, manufacturing lead time, etc. The results show that there is a strong relationship between MPCS ratings and objective performance measures as well as self-assessed competitiveness in both Japanese and US firms. The results are important since they indicate that fundamental manufacturing planning and control procedures improve a firm's performance on both its internal operations as well as external competitiveness goals.     

Supplier development or supplier switching?

We study a firm's cost-based sourcing decision of whether to invest in an incumbent supplier or switch to an alternative supplier in order to realise lower purchasing costs. In isolation, it can be shown that the development of an incumbent supplier (i.e., a cooperative investment) becomes more attractive, the higher the uncertainty about the price the buying firm can realise on the market and the incumbent supplier's cost. Likewise, switching to an alternative supplier becomes more attractive, the higher the expected value of and the uncertainty about the buying firm's market price. For comparing these two sourcing strategies simultaneously we provide a profit-maximising framework for the buying firm that shows that switching is less recommendable the higher the variance of the incumbent's cost and if the uncertain maximum demand is negatively correlated with the uncertain incumbent supplier's cost. Overall, our study substantially expands the frequently followed approach of basing supplier development versus supplier switching decisions merely on strategic and qualitative considerations.     

The role of the competitive environment in studies of strategic alignment: a meta-analysis

Numerous studies in operations management have investigated alignment between business and functional level strategies. In spite of the considerable amount of research that has been conducted, little consensus exists regarding how the competitive environment affects the relationship between strategic alignment and organisational performance. In this study, we build on prior operations management research that has examined alignment by examining whether the competitive environment mediates or moderates the relationship between alignment and performance. Using meta-analytic procedures, we find evidence that the competitive environment functions as a mediator in the relationship between strategic alignment and organisational performance. The implications of our study are that researchers should carefully consider how the competitive environment may affect their results in strategic alignment studies. Results from our study also suggest that the environment is a salient contributing factor to a firm's performance and that managers need to pay close attention to its competitive environment when make strategic and operational decisions.     

New Technologies and Firm Organization: The Case of Electronic Traceability Systems in French Agribusiness

This paper considers the relationship between the adoption of electronic traceability systems (ETSs) and the organization of firms. More precisely, it analyzes the respective roles of a firm's organizational structure, and organizational changes, in the process of ETS adoption in agribusiness. We use data from the French “Organizational Changes and Computerization” survey from 2006. We test a probit model to demonstrate the organizational structure and organizational changes underlying the firm's ETS adoption choice. Results show that ETS adoption is strongly favored by organizations with heavy hierarchical structures, standardized managerial practices and contractual mechanisms with external partners. This adoption process seems to coevolve with the organization: firms that implemented an ETS during the observed period (2003–2006) have experienced the most important organizational changes in terms of managerial practices, information systems and contractual relations, as well as the strengthening of the intermediate levels in the hierarchy.     

Theory of constraint methodology where the constraint is the business model

This paper addresses the issue of business model (BM) management and its relationship to the theory of constraints (TOC). Coman and Ronen (Coman, A. and Ronen,B., 2007. Managing strategic and tactical constraints in the hi-tech industry. International Journal of Production Research, 38(7), 1631–1639) have extended TOC methodology to include the alignment of the organisation's competencies with the business arena's strategic constraints. The aim of this paper is to take TOC one step further and to combine it with the business models theory. Business models have become important value creators due to the proliferation of new and innovative business models (i.e. new ways of creating value). New firms with new business models are threatening and replacing established companies and conventional ways of doing business. Among these are the music, publishing, books, retail, airline and many other industries. This paper argues that in the wake of the World Wide Web, contract manufacturing and globalisation it not enough to manage the firms (internal, external or strategic) constraints. In addition, the management of the firm's BM as a potential constraint is a key factor in the modern management theory.     

Organizational development and time-based flexibility: An empirical analysis of AMT adoptions

It has been consistently reported that many firms that have adopted advanced manufacturing technology (AMT) are failing to exploit the true flexibility potential of these systems. Since a firm's ability to improve flexibility is thought to be reliant on the flexibility of its people, it is often suggested that inadequate emphasis on people-centred implementation activities such as worker development are major contributors to many of these failures. The purpose of this study is to determine if differences in the level of effort exerted on several organizational development activities have any impact on a firm's time-based flexibility ability to respond quickly to changes in customer needs. Our analysis indicates that firms which expend higher levels of effort on worker development and functional integration strategies will achieve higher levels of time-based flexibility.     

Intelligent automation implementation and corporate sustainability performance: The enabling role of corporate social responsibility strategy

Although Intelligent Automation (IA) represents the future of business automation, the organizational implementation and sustainability performance of this emerging technological innovation is vastly understudied. Understanding the implications of IA for sustainability is critical since leveraging these technologies shapes operations and policies that can promote sustainable digitalization and automation practices. We study how firms' technological, organizational, environmental, and human resource contexts impact IA implementation. The study further explains how IA may associate with the firm's triple bottom line while accounting for the moderating role of corporate social responsibility strategy. The study surveyed 207 multinational firms in 2022 and used partial least square-structural equation modeling to test the hypothesized relationships. Results showed that IA implementation is mainly determined by the characteristics of the firm's internal environment, such as absorptive capacity, employee socio-behavioral concerns, and social capital competency. IA may offer valuable opportunities for boosting the firm's economic and environmental sustainability performance. Nonetheless, IA is a double-edged sword for social sustainability, harming social values in implementing firms with informal corporate social sustainability strategies. Conversely, firms with formal corporate social sustainability strategy have a significantly higher opportunity to transform the value of IA into social sustainability performance. Findings are expected to assist managers and decision-makers with streamlining an impartial and sustainable transition of organizations toward automation.     

Measuring long-term performance of a manufacturing firm using the Analytic Network Process (ANP) approach

This paper provides a multicriteria performance measurement model to measure a manufacturing firm's performance in terms of areas of success, which can be defined as critical areas in generating revenues and controlling costs in the operations of a manufacturing firm. In developing the performance measurement model, the Analytic Network Process (ANP) approach is used. The ANP approach, which is the general form of the Analytic Hierarchy Process (AHP) methodology, is recommended when independence among different elements of a system assumption is violated. In a manufacturing system, the system's attributes are interrelated. Furthermore, the relative importance of these attributes with respect to each other and their contribution to the overall performance are affected by the competitive strategies applied by the manufacturing firms. The performance evaluation model developed here incorporates the competitive strategies and interdependence between the system attributes in its hierarchical structure and achieves a more realistic and accurate representation of the firm's long-term performance.     

Developing a practical framework for assessing ERP post-implementation success using fuzzy analytic network process

Implementing an enterprise resource planning system is a sophisticated, lengthy, and costly process which tends to face serious failure. Thus, it is essential to perform a success assessment at the post-implementation stage of an ERP project to evaluate how much the system has succeeded in achieving its predetermined objectives. This paper proposes a practical framework for assessing a firm's ERP post-implementation success utilising current models through a fuzzy analytic network process. The construct of ERP success is broken down into three main parts, including managerial success, organisational success, and individual success. Using this framework, the firm's ERP system success can be determined and the required improvement projects can be proposed to promote the success level. The proposed framework has been applied to a real international company, in the field of manufacturing and supplying turbines, to measure the firm's ERP post-implementation success. Finally, the advantages of the model are illustrated.     

The impact of market focus on operations practices

A key element of successful organisations is the alignment of their strategy and tactics. This study explores the relationship between a firm's competitive strategy and its operations practices in the context of a developing economy. Two competitive strategies are examined; a niche market strategy characterised by targeting specific market segments, and a broad market strategy characterised by serving a wide range of market segments. Three sets of operations practices consistent with the adoption of lean manufacturing, Total Quality Management, and relationship development in a supply chain context, are explored. Using survey data from senior managers in Thailand, results show that for firms adopting a niche market focus, competitive strategy directly influences process management and relationship development, which in turn affect workforce commitment. Only workforce commitment has a direct effect on operational performance. In contrast, for firms adopting a broad market focus, competitive strategy directly influences workforce commitment, which in turn affects process management and relationship development practices. It is the latter practices that directly influence operational performance.