بررسی تاثیر نقش اجرایی تولید بر عملکرد کسب و کار از طریق هم ترازی استراتژیک

Many researchers over time have stressed the importance of incorporating the manufacturing perspective in the formulation of business strategy. Prior work in this area has tended to focus primarily on the involvement of the manufacturing executive in strategic decision making processes, while relatively little attention has been given to the level of influence enjoyed by the manufacturing executives. This study jointly examines the role of both influence and involvement in achieving better business performance, which we posit is expected to occur through alignment between the organizational and manufacturing strategies rather than directly. A research model based on procedural justice and strategic information management literature is proposed to represent this phenomenon. Structural equation modeling is used to empirically test the research model and its related hypothesis on the basis of data collected from 202 senior manufacturing executives representing mid to large sized firms from diverse industry groups across the US. In addition, interviews with a sub-sample of respondents are used to further explore the contextual nature of these relationships. The results indicate that involvement and influence are indeed two different, but highly related, aspects of the manufacturing executive s role. The interviews revealed numerous differences between the two with respect to achieving each and individual benefits derived from them. As expected, both involvement and influence are important determinants of strategy alignment with influence appearing to play a more substantive role. More importantly, it is this alignment that affects business performance. Implications of our findings for improving manufacturing practice, along with possible avenues for future research directions in this area, are also provided.

Over the course of years, many researchers and practitioners have stressed the importance of incorporating the manufacturing perspective in the formulation of business strategy (Skinner, 1969, Anderson et al., 1991, Anderson et al., 1989, Hayes and Wheelwright, 1984, Hayes et al., 1988, Hill, 1994, Leong et al., 1990, Rafii, 1984 and Swamidass and Newell, 1987). These authors have argued that the exclusion of manufacturing from strategic business planning results in lack of consideration of manufacturing’s capabilities and limitations in the decisions taken. This often leaves manufacturing in a reactive mode; it cannot support the business strategy as currently configured and cannot acquire the resources needed to do so (Hayes et al., 1988, Hill, 1994 and Ward et al., 1994). As summarized by Ward et al. (1994, p. 351): “The nature of manufacturing management’s involvement in strategy making and ties between this issue and firm performance remain important process issues that are worthy of further empirical research.” While there has been some evidence that the tendency to exclude manufacturing executives from business strategy decisions may be changing, there is room for substantial improvement (Anderson et al., 1991). For example, one of the vice presidents interviewed as part of this study described the lack of involvement of manufacturing in a new product introduction at his organization. Top-level managers, including those from marketing and research and development (but not from manufacturing), made a decision to substantially change a product. Such a change “would have had an enormous impact on manufacturing in terms of cost, retooling, etc. that had not really been thought of.” Manufacturing was finally brought in to the decision-making process, but at the “tail end”. Although that involvement did “change slightly how the product was eventually introduced”, the costs incurred were higher than necessary because manufacturing was left to operate in a reactive mode. Prior theoretical work in this area has focused primarily on involvement of the manufacturing executive, defined as the extent to which the manufacturing executive actively participates in business-level strategic decision-making (Anderson et al., 1991, Swamidass and Newell, 1987 and Ward et al., 1994). Within this research, the strong theoretical agreement that manufacturing involvement should lead to better economic performance has been supported by early anecdotal evidence (e.g. Anderson et al., 1991, Hayes and Wheelwright, 1984, Hayes et al., 1988 and Hill, 1994). Yet empirical research that confirms or supports this idea has been limited and the results show a lack of consistency. Results of several of these studies indicate that a more substantive role is associated with greater economic performance (Ho, 1996, Rafii, 1984 and Swamidass and Newell, 1987). However, another study examining involvement as one dimension of “manufacturing proactiveness” found that distinction between low and high performers existed only when involvement was also coupled with structural and infrastructural investments. Involvement alone, and by itself, was not enough (Ward et al., 1994). This result led them to conclude that further research is needed in this area to truly understand the role of involvement in shaping business performance. Given prior work and reasoned expectations, involvement by itself may not be sufficient if it fails to influence decision-making. For example, during the mid-1990s Boeing chose a low-price strategy in competing with its rival, Airbus, in the small plane sector (Browder and Reinhardt, 1998 and Greenwald, 1998). The strategy appeared to work with Boeing booking record orders for new planes in 1996. And to meet that increased demand, manufacturing was expected to ramp-up production to over twice the normal rate, cut costs by 25% over a 4-year period, and redesign a production system that had previously produced customized planes. The result was a “tailspin”, a reported loss of around US$ 400 million in 1997 caused by Boeing’s production backlogs, disruptions, and inability to meet delivery schedules. How could such a fiasco happen when the business anticipated record sales? Although manufacturing was represented in the strategic planning process, it was obvious that their influence was limited in affecting the eventual decision outcomes. This left the manufacturing function to operate in a reactive mode, struggling to overcome the lack of resources required to support the overall business strategy. Relatively little explicit attention has been given in prior operations literature to the level of influence of the manufacturing executive, defined as the extent to which the manufacturing executive can directly affect the outcome of decisions that affect him/her (Keys and Case, 1990 and Sapienza and Korsgaard, 1996). And in most cases, no clear distinction has been made between involvement and influence as different characteristics of the executive’s role. For example, Rafii (1984), Anderson et al. (1991) and Ward et al. (1994) referred to involvement and influence as if they are interchangeable. Yet Rafii (1984) focused on influence, while Anderson et al. (1991) and Ward et al. (1994) focused on involvement. Swamidass and Newell (1987) also focused specifically on involvement, but suggested that “intra-organizational power and influence” may be one factor affecting the role of the manufacturing executive in strategic decision making. Literature in other business disciplines tends to differentiate between the level of involvement and influence in decision-making. For example, in the procedural justice literature, which focuses on decision-making processes, there is a distinction between process control (“degree to which the procedure gives those affected by a decision an opportunity to express their views”) and decision control (“degree of actual influence over the nature of decisions made”) (Tyler et al., 1985, p. 72) ( Dulebohn, 1999, Houlden et al., 1978 and Tyler et al., 1985). Early research in this area focused on ‘participation’, without distinguishing between process and decision control, and found that it heightens outcome satisfaction. However, Tyler et al. (1985) distinguished between process and decision control and observed that they are distinctly different, although strongly related, characteristics governing the perception of process fairness. This distinction can also be seen in the area of strategic information systems planning. For example, Das et al. (1991) differentiated between the level of involvement (participation) and influence of the MIS executive in business-level strategic planning. We believe that organizational performance may not only be impacted by the inter-play between involvement and influence of the manufacturing executives, but also by how their actions can jointly facilitate a better “fit” or agreement/alignment between the business and manufacturing strategies. Such agreement has been measured as the “fit” or “congruency” between strategies (Richardson et al., 1985) and as “production competence” (Cleveland et al., 1989), which reflects the value of manufacturing’s capabilities being able to support the business strategy. The recent work by Gupta and Lionel (1998) showed that one outcome of more effective manufacturing leadership is a greater degree of alignment between the business and manufacturing strategies. Such alignment is, in turn, associated with better business performance (i.e. Cleveland et al., 1989, Gupta and Lionel, 1998, Richardson et al., 1985, Schroeder et al., 1986, Swamidass, 1986 and Vickery et al., 1993). Thus, all three — involvement, influence, and the resulting alignment — must be looked at in conjunction with one another if the goal is to identify the antecedents of improved organizational performance. Our study is focused on attaining this objective. The theoretical framework and hypotheses are presented next. This is followed by the research methods, operational constructs, and data used to test these hypotheses. Structural equation modeling is used to analyze the results. Finally we conclude with the discussion of results, contributions of this study, and future research directions.

Our findings agree with those from prior research in that both involvement and influence are found to affect business performance. As one of the executives, who responded that he is both highly involved and influential, stated, “I have visited other companies where they [the manufacturing executives] are not involved enough and the company’s financial performance suffers because of that.” However, an important difference between this study and prior work is that we observe this effect happening through better alignment of the business and manufacturing strategies, rather than directly. Most executives, in talking about the benefits of involvement and influence, echoed this idea since commonly mentioned benefits were alignment of strategies and ensuring that manufacturing could support the strategic direction of the firm. And these enhance the company’s performance. “There are three ways it [alignment] helps: getting the right product or service, timeliness of your response, and cost”. But are there differences between the involvement of the manufacturing executive and his/her ability to influence decisions? The answer to this, based on both survey results and the executive interviews, is yes. First, the strong evidence of discriminant validity indicates that they are seen as distinctly different constructs. In the interviews, the manufacturing executives not only agreed with the definitions of each (one executive stated, “I participate but don’t dictate” in discussing involvement), but also easily addressed them as being different concepts. But the executives see them as more than just different concepts. Table 5 shows this distinction in terms of different managerial actions, contingencies, and benefits associated with each.To increase the level of involvement, the manufacturing executive must be willing to both work and think cross-functionally. Our respondents stressed that the manufacturing executive should no longer focus just on the technical aspects of the manufacturing function, but must become knowledgeable about the business as a whole. As one executive summarized, they need “to understand the business from all functional organizations, everything from development, sales, marketing, product management, financial”. But to become more influential requires this and more. Establishing credibility was indicated by virtually all of the manufacturing executives as essential in becoming more influential. Such credibility may result from the executive’s past performance on projects or routine work. It is important to gain respect by demonstrating the ability to grasp facts, thereby creating a reputation as a good problem solver. This finding supports observations by Conger (1998) that establishing credibility is one of the essential steps in effectively persuading and influencing others. However, to some extent, the degree of a manufacturing executive’s involvement or influence is not under their control. Rather it is shaped by factors such as the corporate climate, the type of company or industry, or the head of the firm’s and other top managers’ perceptions about manufacturing. One executive stated that manufacturing is commonly not involved because “ops people are looked at as the guy who grew out of the factory … and a lot of time people say they are factory rats”. If greater involvement and/or influence are achieved, numerous benefits are realized due to the alignment between the business and manufacturing strategies. However, the route to that end differs between the two roles. The executives indicated that greater involvement often leads to better decisions because more information is available, specifically about the capabilities and limitations of the manufacturing system. As one executive stated: “Greater involvement by manufacturing really puts a face on manufacturing. In some companies, and ours is no exception, manufacturing is viewed as a big warehouse out there that you walk into like a supermarket and you pick things off the shelf that you want. Very flexible and they can change things around very quickly to satisfy marketing, satisfy sales, satisfy finance, etc. If you don’t stay on top of what is going on, sooner or later you are going to be put between a rock and a hard place.” At a minimum, involvement increases the manufacturing executive’s awareness of what is happening. As one executive described, “I might not like the strategy, but I know its coming. As long as I am involved I am not going to trip over it”. But, as demonstrated by Boeing, involvement alone may not be enough. Influence, on the other hand, creates a greater chance for success. This is not surprising since greater influence means that the opinion of the manufacturing executive is actually affecting the outcome of the process, rather than just being heard by others involved in it. Greater influence can result in more resources being allocated to the value added manufacturing function to support the overall competitive strategy of the firm. Many executives noted that influence is important in attaining greater investments in structural and infrastructural development programs. “You have to be influential, you have to gain the ability to be influential in order to attract capital for programs you want to do, that you feel will benefit the business.” This may explain why such investments, in conjunction with involvement, were a key factor in distinguishing between low and high performers in the Ward et al. (1994) study. Understanding these two different facets of the manufacturing executive’s role and how they can be used to improve firm performance has significant organizational implications. Table 6 summarizes the related insights gleaned from our executive interviews. A manufacturing executive could independently have low and high levels of involvement and influence, which reflect whether the firm views manufacturing as a competitive weapon or a millstone around the neck. Table 6 shows that not having sufficiently high influence leads to manufacturing being relegated to a minor role or having a non-sustainable set of opportunities in affecting the firm performance. Yet, a manufacturing executive that exerts influence without involvement will likely be “in a bad situation”. It is obviously desirable to have high levels of both .These different roles of the manufacturing executive are thus intertwined. But what is the relationship between them? The executives’ responses shed some light on this issue (see Table 7). All executives believe that greater involvement can lead to greater influence (“Involvement starts out first and lets you build trust and credibility and then it moves to influence”), but one-third of them believe that influence does not lead to involvement. There was a consensus that influence without involvement was unadvisable. Two-thirds of the executives felt that the relationship could occur in both directions, and most of these felt that this “circular” relationship, where “one begets the other”, starts with involvement. Typical of examples given, one manufacturing executive was able to influence a decision about a product line because of successful involvement in prior projects. Because of his ability to influence a decision seen as “out of his area”, he was asked to work on other projects. These observations suggest that the nature of the relationship between involvement and influence is complex and evolves over time. Although this study sheds considerable light on this relationship, longitudinal research studies in the future can perhaps further isolate the impact of the contingency factors shown in Table 5.