ترازبندی اولویت های استراتژیک و عملکرد: عملیات ادغام و دیدگاه های مدیریت استراتژیک

In theory, strategic priorities at the functional level align with and support business level strategies. Alignment of priorities is presumed to contribute to enhanced organizational performance, just as misalignment is expected to undermine performance. This study further develops and tests these theoretical conventions by examining the perceptions of general managers and manufacturing managers regarding manufacturing priorities of their business units. Based on a sample of matched pairs of manufacturing managers and general managers from 98 manufacturing plants, the hypotheses regarding the alignment–performance relationship are tested. Specifically, we tested whether the performance of the manufacturing unit is enhanced when general managers and manufacturing managers agree on strategic priorities. Furthermore, the influence of organizational factors on the relationship between alignment and performance of the manufacturing unit is studied. Results support our hypotheses that certain organizational variables moderate the relationship between alignment of priorities and manufacturing performance.

The importance of the operations strategy field to manufacturing managers has sparked the interest of academics in the field and contributed to a significant increase in research activity over the past decade. One of the research streams in operations strategy has focused on the alignment of strategic priorities across hierarchical levels—corporate, business and functional—and its impact on performance. As early as 1974, Skinner had implicitly conceptualized the need for “strategic consensus” or “alignment” of competitive priorities throughout the manufacturing organization. According to Boyer and McDermott (1999) strategic consensus is achieved when various levels of employees within an organization agree on what is most important for the organization to succeed. Specifically, they define strategic consensus as “the level of agreement within an organization regarding the relative importance of cost, quality, delivery and flexibility to the organization’s operational goals” (p. 290). Robinson and Stern (1998), however, suggest that strategic consensus is achieved when the interests and actions of all company employees are focused on a company’s key goals. This concept of consensus or alignment is also a central theme in the field of strategic management (Venkatraman and Camillus, 1984 and Venkatraman, 1989). When formulating corporate strategy, for instance, Ansoff (1965) and Andrews (1971) emphasized the importance of fitting or aligning the organization’s strategy with an internal appraisal of the firm and an external assessment of environmental opportunities and threats. Alignment is important not only in developing strategies but also in their implementation. Implementation is fostered by aligning and adjusting key systems, processes, and decisions within the firm, including reward systems, information systems, resource allocations, corporate culture, and organizational objectives and priorities (Galbraith and Nathanson, 1978, Lorange and Vancil, 1977 and Stonich, 1982). An important corollary of achieving alignment is presumed to be enhanced organizational performance, just as misalignment is expected to undermine performance (Ward and Bickford, 1996). Likert (1961) emphasized the importance of coordinating the corporate, business and functional priorities and strategies of the firm, using the notion of a “linking pin”. Likewise, the “vertical linking process” was stressed by Hrebiniak and Joyce (1984). Indeed, “successful implementation of strategy depends on this integration and the development of short-term operating objectives that relate to strategic plans” (Hrebiniak and Joyce, 1984, p. 113). Lingle and Schiemann (1996, p. 59) state that “Effective organizations are organic, integrated entities in which different units, functions and levels support the company strategy—and one another”. Thus, in theory, the various levels of strategy, and strategic priorities are consistent, linked, and mutually supporting. The studies focusing on alignment or strategic consensus in the operations strategy literature have been classified under two categories—internal fit and external fit. Internal fit refers, in part, to the consistency between the manufacturing task and manufacturing policies and practices (Skinner, 1974). For example, Kathuria and Davis (2001) focused on the fit between manufacturing priorities, in their case quality, and work force management practices used by manufacturing managers. Safizadeh et al. (1996) addressed the fit between manufacturing task and process choice. Boyer and McDermott (1999) examined strategic consensus between plant operators and managers through their relative emphasis on competitive priorities and organizational variables, such as infrastructural improvements and advanced manufacturing technologies. Studies dealing with external fit stem from Skinner’s (1969) seminal work that underlined the need for aligning operations strategy with business and corporate strategies. Under this category, one set of studies examined the presence or absence of external fit. For instance, Schroeder et al., 1986, p. 405) found that “in those cases where the manufacturing strategy exists it is consistent with business strategy …”. On the other hand, using respondents from different managerial levels, Swamidass (1986) observed a lack of alignment of strategic priorities at the business and manufacturing levels. Another set of external fit studies examined alignment–performance relationships. Using a case study approach, Smith and Reece (1999) found that the fit between business strategy and the decision categories or operational elements, such as inventory and logistics decisions, workforce issues, and organization, leads to improved business performance. Their study focused on a single service firm with six divisions. Youndt et al. (1996) examined the relationships between human resources (HR) systems, manufacturing strategy and firm performance. They found certain types of HR systems were directly related to operational performance measures, such as employee productivity and machine efficiency. Further they found that certain competitive priorities moderated this relationship. Recently, Papke-Shields and Malhotra (2001) extended the alignment research further by examining factors that may lead to a greater degree of alignment between business and manufacturing strategies. They found influence and involvement of manufacturing executives to affect alignment, which, in turn, affects business performance. The alignment measure as used in their study was based on the perception of one respondent per business unit—a manufacturing executive’s perception of the congruence of manufacturing goals and objectives with organizational strategy. The four items they used to operationalize alignment focused on the manufacturing executive’s perception of how she understands and adapts strategic priorities of top management, and her/his perception of the role of the manufacturing function in supporting organizational strategy. Their operationalization of alignment is different from the one proposed by Boyer and McDermott (1999) because it does not focus on the extent of agreement on competitive priorities between different managerial levels, as is the case in other alignment studies including Swamidass (1986) and Youndt et al. (1996). From the above discussion, it appears that there are two specific gaps in the alignment–performance stream of the operations strategy literature. First, as suggested by Boyer and McDermott (1999), there are very few studies that explicitly examine the issue of alignment within a manufacturing organization. Second, implicitly or explicitly, when alignment has been studied, its impact on the manufacturing unit’s performance has rarely been examined. These concerns continue to exist despite the observation by Adam and Swamidass (1989) that the “greatest weakness” of the field is insufficient research that studies relationships among variables, and particularly the effects of strategy on performance. The present paper integrates the strategy and operations literature to focus on the issue of “consensus” or “alignment” within a manufacturing organization. The focus of this study is the interface between strategy-makers at the business level and manufacturing managers who are more involved in strategy implementation. Is the theory of alignment between organizational levels reflected in the practice of managers at the business and manufacturing levels? Based on a sample of matched pairs of manufacturing managers (MMs) and general managers (GMs), this study focuses on the alignment–performance relationship. Specifically, we investigate whether the performance of the manufacturing unit is enhanced when GMs and MMs agree on strategic priorities. Further, we study whether organizational factors influence the relationship between alignment and performance of the manufacturing unit. These relationships are depicted in Fig. 1.

This study has attempted to address the relationship between alignment of MM and GM manufacturing priorities and performance of the manufacturing unit. Based on a sample of manufacturing firms from several industries, the study revealed no direct relationship between alignment of manufacturing priorities and performance of the unit. Considering the findings of West and Schwenk (1996), Homburg et al. (1999) and Lindman et al. (2001), our finding is not entirely surprising. For example, Lindman et al. (2001) did not find consensus among managers on the firm’s business-level strategy to influence manufacturing performance. Homburg et al. (1999) also did not find support for the alignment–performance relationship in the case of a cost leadership strategy for any of their three performance dimensions. Similarly, West and Schwenk (1996) found no significant relationship between consensus among top management teams and any of the three performance measures. All of the above studies including ours, however, found alignment or strategic consensus to influence performance indirectly, either through a mediating variable (Lindman et al., 2001) or in the presence of some moderating variables. We were able to isolate the moderating effects of some organizational variables on the alignment–performance relationship. First, when the GM and MM have little history of association, and when the organizational tenure of the MM is negligible, there is a significant positive relationship between performance and alignment. Furthermore, regarding the interaction effect of organizational tenure and alignment on performance, at all levels of Years of Association (Fig. 3, Table 4) we find that for low levels of Organizational Tenure (less than 10 years) alignment and performance are positively related. The above findings when viewed in light of the contingency theory make sense. When we first analyze the entire heterogeneous sample of manufacturing units and their managers, we find no significant relationship between the two variables—alignment and performance. Later, when we introduce contingency variables and split the sample into homogeneous groups based on Organizational Tenure and years of association, we uncover some significant relationships that would otherwise lay beneath the surface in a larger heterogeneous sample. The findings of this study have significant implications for both academics and practitioners. From a managerial perspective it is important to know that alignment pays off under certain conditions. As we observed in this study, alignment is especially critical when the employees are relatively new to the organization. Other contextual variables that have been found to affect the alignment–performance relationship include the type of business environment (Homburg et al., 1999), human capital in the form of prestige of partners and tacit knowledge gained through experience (Hitt et al., 2001), among others. From a research perspective, this study underscores the importance of contingency variables. Strategic management researchers (Powell, 1994) have already observed that neglecting contingency variables may increase the risk of both types I and II error. Operations management research, especially in the operations strategy area, needs to incorporate contingency variables to unravel true underlying relationships. For example, in this study, if we did not include contingency variables and simply reported no significant relationship between alignment and performance, when the relationship actually exists within certain homogeneous groups, we would have made a type II error by not detecting the ‘true’ underlying relationship. On the other hand, studies that neglect contingency variables and find significant direct relationships may, in fact, report a spurious relationship, having increased the risk of a type I error by rejecting a ‘true’ null hypothesis. Future research should be directed at examining the influence of other moderating variables, such as functional backgrounds of managers and organizational culture, on the alignment–performance relationship. Future studies may also want to examine the moderating effects of differences in the hierarchical levels of paired-respondents on the alignment–performance relationship. This study examined the influence of only organizational variables as moderating factors, while previous studies (Homburg et al., 1999) used environmental variables as moderators. Future studies should attempt to simultaneously capture both organizational and external variables in one model. While we found consistent results with composite, as well as segregated measures of alignment based on competitive priorities and performance, some constructs, such as Cost and Quality-of-Design, may need further refinement. For the Quality-of-Design scale especially, future research should refrain from the use of “double-barreled” questions such as “manufacturing durable and reliable products”, and “meeting and exceeding customer needs and preferences”. Future researchers should split each such question into two. Measures of manufacturing performance used in this study are based on the perception of the GM to whom the MM reports. While objective and financial measures of performance are preferred in the strategy literature, given our focus on functional (i.e. manufacturing) performance, we have argued for the appropriateness of perceptual measures. Future studies of the interface between business and manufacturing strategy might extend this study by incorporating more objective measures of manufacturing performance, such as efficiency metrics, on-time delivery results, and results of customer satisfaction surveys. Though the sample in the study represents several industries, it is dominated by smaller firms. We recommend that managers use caution in generalizing the findings of this study to larger firms, which could be included in future research endeavors.