Strategic Consensus And Manufacturing Performance [*].

Our results did suggest that a high level of consensus on the business unit's overall competitive strategy (SC) was more likely to result in a high level of consensus on manufacturing-specific items (MTC) necessary to support the overall competitive strategy. For example, if SBU managers agreed that price was the superior method of competing in the product group's industry, then they would be more likely to agree that manufacturing-specific items such as high production volume or labor productivity should be emphasized. Alternatively, agreement that customer service was the optimal method of competing in the industry would imply manufacturing-specific items such as product reliability or product delivery speed should be given more emphasis at the manufacturing level.

While we found that consensus on the firm's general strategic direction (SC) was more likely to produce increased consensus on manufacturing-specific items (MTC), our results suggest that, in absence of this relationship, superior manufacturing performance (MP) was less likely to be attained. For example, agreement on product price as the competitive method of choice would not likely result in superior manufacturing performance if manufacturing-specific items such as product variety and features or new product introductions were emphasized at the manufacturing level. Thus, we found that strategic consensus (SC) served as a stimulus for the occurrence of a more manufacturing-specific, task-oriented form of managerial consensus (MTC), which was a necessary condition for the attainment of high levels of manufacturing performance (MP).

Product Process Alignment, Flexible Manufacturing Systems, and Manufacturing Performance

We examined three hypotheses regarding the degree of product-process alignment. First, it was assumed that strategic consensus (SC) would be a logical precondition for a business unit to obtain correct product-process alignment (PPA). The design and implementation of production systems necessary to support the goals of the business unit result from strategic choices on competitive methods. Thus, consensus on competitive methods was hypothesized as a necessary requirement for choosing the correct production process for a given product or product line. Consistent with Hayes and Wheelwright's (1984) prescription for an early and extensive degree of manufacturing management involvement in the strategic planning process, we found that general strategic consensus (SC) was positively related to product-process alignment (PPA).

Second, the concept of a direct positive association of product-process alignment (PPA) and manufacturing performance (MP), while intuitively appealing, could not be substantiated in the present study. Wharton (1987) tested the relationship between product-process alignment and financial performance and found no significant relationship between the variables. Thus, although a higher level of strategic consensus (SC) resulted in a more correct degree of product-process alignment (PPA), there was no eventual impact on manufacturing performance (MP).

Finally, much has been written in the operations management literature regarding the use of flexible manufacturing systems to enable a manufacturing unit to potentially operate off the diagonal of the Hayes and Wheelwright product-process matrix (Jelinek and Goldhar, 1984; Wharton, 1987; Meredith, 1987). In line with this literature, the use of such automated systems (FMS/RB) was hypothesized to be negatively related to the degree of correct product-process alignment (PPA). A surprising result of our analysis was that, while the relationship between product-process alignment and the use of flexible manufacturing systems and robotics was significant, this association was positive rather than negative. Specifically, the use of flexible automation and robotics by the sampled business units was found to be positively related to correct, or on-diagonal, product-process matrix placement, as defined by Hayes and Wheelwright (1979a,b).

It should be noted that two of the three hypotheses regarding the degree of product-process alignment produced results contrary to those expected. The variable measuring product-process alignment was designed to accommodate a variety of product life-cycle stage and operational process combinations. Our data, however, produced a maximum level of misalignment to one interval off the prescriptive diagonal placement, thus the measured values of product-process alignment were bivariate in nature. More importantly, none of the production processes employed by the SBU's in our sample represented a substantial mismatch with respect to the product's life-cycle stage, and this lack of variation may have influenced our results.

Perhaps more important are the results related to the impact of flexible manufacturing systems and robotics (FMS/RB) on manufacturing performance (MP). We found the use of such advanced technologies was directly related to the attainment of high levels of manufacturing performance. Support for a positive relationship between manufacturing flexibility and performance has also been found by Swamidass and Newell (1987). Using Hall's (1983) definition of flexibility as the capability of switching very quickly from one product to another, or from one part to another almost instantly, Swamidass and Newell (1987) note that of the four dimensions of manufacturing strategy, flexibility offers the capability to cope with environmental uncertainty.

CONCLUSIONS

Managerial Implications

Overall, our results reinforce the central assumptions and beliefs of operations management scholars regarding the importance of a well-understood, coordinated manufacturing-specific strategy in support of the business unit's general competitive strategy. The importance of manufacturing functional involvement in the strategic planning process and an operationally-specific sense of strategic direction for the manufacturing firm cannot be over-emphasized. The implications are far-reaching as organizational decisionmakers strive to develop and implement multi-faceted strategic planning and decision-making processes that will foster the development of consensus. Reaching consensus on the firm's overall business-level strategy is not sufficient to ensure improved levels of manufacturing performance.

Limitations and Future Research

One of the limitations of our research concerns the sample of firms. Only three strategic business units were included in the electronics manufacturing industry. Future research should address the generalizability of our findings to other types of firms and industries. Additionally, our research focused on manufacturing performance levels. More research is needed to determine the impact of consensus on other performance variables. Finally, as new technologies become available, future studies should investigate their impact on the development of consensus and manufacturing performance.

(*.) We wish to thank the editor and two anonymous reviewers for their invaluable comments and suggestions. All authors contributed equally to this article.

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