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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Operations Management, Volume 18, Issue 3, April 2000, Pages 257–277
This study investigates the complex relationships among strategy, advanced manufacturing technology (AMT) and performance using survey responses from 160 U.S. manufacturing firms. In contrast to previous studies that emphasize only the flexibility dimension of AMT, this study adopts a multidimensional view of AMT by stressing the information processing capability inherent in AMTs. The study found support for four dimensions of AMT: information exchange and planning technology (IEPT), product design technology (PDT), low-volume flexible automation technology (LVFAT), and high-volume automation technology (HVAT). The results found also indicate empirical support for the study's major premise that a fit between certain strategy–AMT dimensions will be associated with superior performance. Using the findings, the study discusses the implications of the findings and suggests several avenues for future research.
The study of advanced manufacturing technologies (AMTs) and its relationship with business strategy is currently receiving much scholarly attention. It is widely recognized that AMTs, especially those that support the technical transformation process in organizations, are a major determinant of strategy and vice versa. An increasing number of researchers frequently posit that maximum benefit will accrue if there is a fit between AMTs employed by the firm and the firm's strategies (cf. Skinner, 1984; Voss, 1986; Meredith, 1987; Boyer et al., 1996; Dean and Snell, 1996). This notion of strategy–AMT fit is identical to the contingency theory arguments linking strategy and other organizational variables. However, this hypothesis has escaped rigorous empirical validation. The objective of this exploratory study is to examine whether strategy–AMT fit is indeed associated with superior performance using survey data from 160 U.S. manufacturing firms. The notion of fit between strategy and certain variables is built on the “internal consistency” argument which asserts that a functionally motivated step that seems to have merit when viewed alone may lead to poor results because of its mismatch with the firm's strategy orientation (Andrews, 1971). In extending this argument, it is only logical that a number of scholars assert that strategy and AMT should fit each other for the firm to perform well (e.g., Blois, 1985; Lei and Goldhar, 1990; Williams and Novak, 1990; Grant et al., 1991; Parthasarthy and Sethi, 1992 and Parthasarthy and Sethi, 1993; Boyer et al., 1996; Dean and Snell, 1996). On face value, this argument has intrinsic appeal but the evidence directly supporting it is sparse (Boyer, 1997). The strategically important interdependence between AMTs and marketing is well-recognized in the literature. Improved fit between manufacturing capabilities and marketing is now possible with the advent of new AMTs (Blois, 1985; Lei and Goldhar, 1990). For example, Blois (1985)argues that improved effectiveness results when manufacturing capabilities are matched with appropriate changes in the marketing function; a poor match (i.e., lack of fit) will exacerbate the natural differences between the two functions. Many observers (Swamidass, 1988; Williams and Novak, 1990) echo Blois's observations that AMTs can complement marketing strategies thereby enhancing competitive advantage in the following situations where: the product variety demanded by the customers is high, and the markets that the firm competes in are volatile and unpredictable (Pine, 1993). Other manifestations of the strategic AMT–market relationships can be found in firms competing on time-to-market and product variety. For example, Lei and Goldhar (1990)explain why firms that compete on the basis of time-to-market and product variety adopt AMTs that emphasize flexibility (see also Pine, 1993). Another view of strategy–AMT fit can be traced to the notion of “optimal” use of manufacturing technology. According to Grant et al. (1991), “optimal” technology for a business is contingent upon the firm's strategic goals, its available resources, and the nature of its product–market environment. Additionally, Parthasarthy and Sethi (1992)discuss the importance of the reciprocal relationships between technology and strategy. A review of this literature suggests the following conclusion. First, while some arguments for strategy–AMT fit have been put forth, the underlying theoretical rationale for such a match is not fully developed. Perhaps, the notion of strategy–AMT fit is so appealing at face value that a strong theoretical rationale to explain this idea has been slow in coming in the literature. Consequently, the existing AMT classifications need to be reassessed so that strategy orientations and AMT choice at the business unit level can be directly investigated. Second, in recent years, there has been an emphasis on the “flexible” nature of AMT. It is common to classify AMT as either fixed or flexible while other attributes of AMT such as its information processing capabilities are not sufficiently emphasized (cf. Meredith, 1987; Parthasarthy and Sethi, 1993). Is this conceptualization of AMT reasonably complete? Could it be expanded to incorporate or consider the inherent information processing capabilities of AMT that go beyond “flexibility” per se? These issues are addressed as part of this paper. This exploratory study employs a broader conceptualization of AMT in examining whether the strategy–AMT fit leads to superior firm performance. This paper is organized as follows. First, the paper proposes a classification of AMT that captures its multifaceted nature and emphasizes the information processing capability of AMTs. Second, it discusses the theoretical rationale for linking strategy and AMT, and proposes a set of hypotheses highlighting the nature of the linkages. Third, it describes the methods and analysis undertaken to test these hypotheses. Finally, the study's results and avenues for future research on the topic are discussed.
نتیجه گیری انگلیسی
The purpose of this paper was to empirically examine the relationships between AMT use and strategy orientations in U.S. manufacturing firms. The hypothesized relationships were: (1) a cost-leadership strategy will be positively related to the use of high-volume process automation technologies; (2) a differentiation strategy will be positively related to the use of several forms of AMTs; (3) a dual-strategy orientation (i.e., a combined strategy of differentiation and cost leadership) will be positively related to use of all AMTs; and (4) strategy–AMT fit will be stronger in superior performers than in poor performers. A summary of the important findings from Table 7 and Table 8 are provided in Table 9 to aid the discussion in this section. 6.1. Profitability, strategy and AMT This study found that none of the AMT factors is significantly related to a cost-leadership strategy in firms showing superior profitability (see Cell 1, Table 9). In other words, profitable firms emphasizing a cost-leadership approach are indifferent to AMT use. This result is consistent with the findings provided by Dean and Snell (1996)who found no relationship between a cost-leadership strategy and AMT. These authors lament that this result is ironic because many firms use cost reduction as their principal justification for adopting AMTs.7 This finding is also consistent with the arguments of Parthasarthy and Sethi (1992)that AMT's flexibility capabilities are not likely to be used to its potential when it is utilized as part of a cost-leadership strategy. In this setting, size is the only variable that is correlated with cost-leadership strategy. Perhaps, the traditional arguments that a cost-leadership strategy emphasizes high-volume production and efficiency appear to be still valid (Clark, 1995). AMTs may indeed be important for gaining a competitive advantage but they are by no means the only approach to competing (Garvin, 1993). In contrast to a cost-leadership approach, firms pursuing a differentiation strategy employ more AMTs (compare Cells 1 and 5 in Table 9). This validates earlier arguments that AMT use requirements are higher for firms pursuing a pure differentiation strategy than a cost-leadership approach. A comparison of Cells 1 and 3 suggests that a dual strategy is more AMT dependent than a cost-leadership approach. Also, with regards to its dependency on AMT, a dual strategy lies in-between a cost-leadership and differentiation extremes. This suggests a need for a progression in AMT induced flexibility and information processing capability (FIPC) from a cost-leadership strategy to a dual strategy to a differentiation strategy. 6.2. Growth, strategy and AMT use From Table 9, it is clear that firms that show superior growth emphasize AMT use more than firms showing superior profitability (compare columns 2 and 3 in Table 9). In high-growth firms, two technologies, PDT and LVFT, are consistently utilized (column 3, Table 9). PDT provides a firm with an enhanced capability to design products more rapidly, while LVFT provides a firm with an enhanced capability to manufacture products in low volumes without incurring the significant additional costs associated with frequent volume changes. Results found here suggest that it is the combined use of these two technologies that enable firms to pursue a high-growth strategy. Results also suggest that firms using differentiation strategies are more AMT dependent than other strategies regardless of the performance measure (see Cells 5 and 6). Further, high-growth firms pursuing a differentiation strategy are more AMT dependent when compared to other approaches (see Cell 6); in other words, a differentiation strategy in superior growth firms appears to be a “technology hog”. In the case of Model 6 (Table 8), the use of IEPT and PDT factors are associated with poor growth in firms that use a pure differentiation strategy. But, the successful firms pursuing this strategy employ all four technology factors (Model 5, Table 8). This suggests that the use of a few AMTs is insufficient for success, but the use of the same technologies along with other technologies (e.g., LVFAT and HVAT) can be effective. The use of all AMT factors increases the potential for integration, which may be at the heart of AMT effectiveness as argued in the extant literature (cf. Meredith, 1987; Dean and Snell, 1996). 6.3. Implications The implications of these findings for practitioners is rather straight forward. Results of this study validate the key premise that a fit between strategy and AMT use is associated with successful performance. In other words, it is the judicious matching of AMT and strategy that leads to superior performance. It appears that, although AMTs offer greater information processing capability and/or flexibility, these capabilities are not necessarily associated with superior profitability when cost leadership is the strategy. These findings strongly echo the observations that scale and cost competition may be inconsistent with AMT use (Jaikumar, 1986; Lei and Goldhar, 1990; Parthasarthy and Sethi, 1992). This caveat should be considered seriously in evaluating suggestions that, in highly competitive environments, all firms will be forced to adopt AMT (cf. Pine, 1993). Another striking finding is that firms that are superior growth performers emphasize AMT use regardless of their strategy orientation. This confirms what others have consistently argued, that AMTs should be utilized in conjunction with a revenue-producing (i.e., growth) rather than cost-cutting strategy (Lei and Goldhar, 1990). Fig. 1 captures the evidence on the interactions between strategy types and AMT induced FIPCs in successful firms. The X-axis identifies the three strategy types discussed in the paper, the Y-axis represents FIPC. To make this figure possible, we are presuming that the use of any one dimension of AMT contributes to a quantum increase in FIPC represented by the Y-axis. The resulting figure brings greater clarity to the preceding discussions. Cell 1 in Table 9 is represented at the far left end of the figure, which represents a cost-leadership orientation in profitable firms. Cell 1 in the figure becomes the lowest reference point for FIPC. Similarly, the point associated with Cell 6 in the figure represents maximum FIPC in manufacturing firms. Unexpectedly, dual strategy lies in between the two pure strategies at the extremes. This may be because a dual-strategy orientation can occur when firms using cost-leadership strategies begin widening their product strategies to include some form of differentiation. Therefore, the evidence from the use of AMTs suggests that a dual strategy is not a full blown combination of the two extreme strategies; it is more likely a user of cost leadership creeping towards some form of differentiation. The results have few strong implications for researchers. In contrast to earlier studies that have employed AMT as a unidimensional construct (e.g., Dean and Snell, 1996), this study finds that AMT is a multidimensional construct. Using a multidimensional approach to conceptualizing and testing AMT–strategy–performance relationships has enabled this study to examine in greater detail the often subtle relationships among these constructs than was possible in previous studies (cf. Dean and Snell, 1993). The implications for future researchers examining the AMTs is that they need to consider it as a multidimensional construct. The results offered here are early, but strong, empirical evidences to illustrate the relationships between strategy and AMT use. In contrast to previous studies (e.g., Boyer et al., 1996; Dean and Snell, 1996) that found no relationship between strategy–AMT–performance, this study found many significant relationships. However, given the fact that some researchers and practitioners prescribe AMTs indiscriminately as a panacea for most problems faced by U.S. manufacturers, this study stresses the need to be discriminating in the adoption of AMT; that is, carefully match strategy and AMT in seeking growth or profitability. General Motors' ineffective investment of nearly US$80 billion in manufacturing technology during the eighties (Keller, 1989) is a good example of why it is important to be discriminating regarding such investments. The findings of this study offers guidance on how strategy and AMT investment can be selectively matched to attain either a profitability or a growth objective. 6.4. Avenues for further research As noted earlier, this study focused on discrete product manufacturing industries (SIC codes 34–39). This is because these are the industries that have been acknowledged to employ AMTs extensively. Moreover, industries that belong broadly to this SIC code employ similar discrete manufacturing processes to manufacture products. Perhaps, this latter reason is the cause for several investigations of this industry specific grouping in the literature (cf. U.S. Department of Commerce, 1988; Swamidass, 1996). Hence, given this limited choice of industries, the findings are generalizable only to these SIC categories. This study also relied on cross-sectional data to examine strategy–AMT fit. Although the cross-sectional nature of this study is not a serious limitation, it does not permit the study to highlight the causal directions between strategy–AMT relationship. Further, it does not permit the examination of performance impact of AMT adoption over time. Given that: (a) firms rarely adopt all AMTs simultaneous (Twigg et al., 1992), and (b) the performance impact of AMT adoption may vary significantly over time (Dean and Snell, 1996), an evolutionary perspective that examines how firms adopt and utilize AMTs over time is needed. This study used two commonly articulated generic strategies — cost leadership and product differentiation. However, it is recognized that more studies examining strategy–AMT–performance relationships using an expanded notion of strategy (cf. Mintzberg, 1988) are needed. This is especially important because some researchers (e.g., Parthasarthy and Sethi, 1993) have argued that the performance of firms employing AMTs will be increased in the context of quality leadership strategy. Also, dimensions of strategy that help better capture operational issues such as speed to market, agility, product co-development with customers should be employed. Doing so could help researchers better highlight the causal linkages between AMTs and important operational strategy dimensions. Past research indicates that generic strategies are appropriate in a wide variety of competitive environments, both in advanced and developing nations. Since a firm's strategy reflects the environment in which it operates, we expect our arguments to apply to environments where generic strategies are appropriate. However, it is recognized that future studies should explicitly consider organizational infrastructure measures, and the competitive context in which strategies are pursued.8 Such explicit consideration is important because the effective utilization of AMTs can be seriously impacted by both organizational and the external contexts (Zammuto and O'Conner, 1992). Finally, researchers should seek to understand the intriguing findings concerning dual strategy, which, according to evidence, lies midway between the two pure generic strategies.