Manufacturing strategy-technology relationship among auto suppliers

Each manufacturing plant has to develop its own path to success based on contingencies and on manufacturing practices links. On the basis of the latter, this paper tests the link between two of the most important manufacturing practices areas, manufacturing strategy (MS) and technology, without addressing causality or their combined effect on performance. This is done by selection fit, i.e. congruency adjustment. However, this paper goes beyond grouping both sets of practices in pairs, by using a more general selection view version, with practices from both sets related multidimensionally and subordinated by regression analysis to test for any congruent pattern. Regression results from a wide-ranging survey of auto supplier plants show that, in general, MS seems to have some kind of impact on technology, and that technology has some kind of influence on MS. In addition, a strong congruency between both practices areas is observed when using correlation. This suggests that when implementing or adjusting MS or technology, the other should also be considered; otherwise they may not operate effectively.     

Consistency Matters in Formally Selecting Incremental and Radical New Product Ideas for Advancement

Several new product development (NPD) scholars have argued that formal processes should be used when selecting incremental new product ideas for advancement at the very beginning of the fuzzy front end (FFE), but that such formal processes may be less beneficial when selecting radical new product ideas. However, arguments also exist for using formal idea selection processes for both types of new product ideas. In practice, informal processes are used for selecting both idea types and more formal processes are used for selecting radical ideas. Unequivocal empirical evidence for either of the opposing views or practices is lacking. This study sheds light on this matter using data from 161 of the firms that participated in the Product Development and Management Association's latest (2012) Comparative Performance Assessment Study. The results reveal that the highest idea success rate (i.e., the proportion of selected ideas that are eventually launched as new products and are successful in the marketplace) is associated with firms’ use of formal processes to select the vast majority of both incremental and radical new product ideas for advancement. This finding supports earlier claims that even for (raw) idea selection processes that take place at the very beginning of the FFE, managers need to adopt a portfolio perspective and consistently use formal idea advancement selection processes to ensure attaining the right balance between radical and incremental projects in later stages of the NPD pipeline to enhance overall NPD success. Notably, this finding shows that common managerial practices of using inconsistent approaches for selecting radical and incremental ideas for advancement need to be reconsidered.     

Backing outsiders: selection strategies for discontinuous innovation

A key challenge in managing innovation is to explicitly identify ways to improve an organization's performance with regard to discontinuous innovation. However, discontinuous innovation does not fit the existing ‘frame of reference’ and hence requires a reframing of the traditional ways of innovating within the organization. More specifically, previous research shows that practices that work well in the context of incremental innovation do not work in the context of discontinuous innovation. Thus, the aim of this paper is to explore innovation practices that enable organizations to select innovation projects, which are ‘outside the box’ of its prior experience, i.e. are discontinuous in nature. Building on the experience of more than 150 firms across 12 countries, we have identified nine innovation practices for the selection of discontinuous innovation; these can be grouped into three clusters: enable, engage and experience. In sum, we identify that an organization needs to acknowledge that its choice to engage in discontinuous innovation will have consequences for the innovation practices chosen to select which discontinuous projects to carry forward.     

Intermedia Substitutability and Market Demand by National Advertisers

We assess substitute and complementary relationships among eight national advertising media classes, as well as the magnitude of their own-price elasticities. We employ a translog demand model, whose parameters we estimate by three-stage least squares, based on 1960–94 annual U.S. data.We find aggregate demand by national advertisers for each of the eight media isown-price inelastic, and that cross-price elasticities suggest slightly more substitutethan complementary relationships, although both are rather weak. These patterns areconsistent with long prevailing institutional arrangements and media selection practices.     

THE GOVERNANCE AND CONTROL OF VOLUNTARY CORPORATE SPIN-OFFS

We investigate the role that a voluntary corporate restructuring can play in the design of efficient internal corporate control mechanisms. To this end, we examine the post-restructuring internal control practices in 78 voluntary corporate spin-offs that were completed between 1972 and 1987. We find that the selection of the new CEOs, the design of their compensation contracts, and the staffing of the boards of directors and their compensation committees in the spun-off firms can be seen as ex ante efficient. These governance and control practices, however, are not strongly related to the observed positive market reactions to the spin-off announcements. The results indicate that equity reorganizations facilitate the implementation of efficient internal governance and control practices, but that other factors must influence the share price reactions to the announcement of such voluntary corporate restructurings.     

Does a cassava research-for-development program have impact at the farm level? Evidence from the Democratic Republic of Congo

This paper evaluates the impact of a cassava research-for-development program on farm level outcomes. The program was implemented in the Democratic Republic of Congo from 2001 to 2009. We apply propensity score matching, Rosenbaum bounds on treatment effects, Altonji et al. method of selection on observables and unobservables and endogenous switching regression to farm survey data collected during the 2009 cropping season. We use these methods to test whether the R4D program has a statistically significant effect on outcomes of interest and if these are not driven by selection on unobservables. Using propensity score matching, we find statistically significant positive effects on household participation in cassava markets, adoption of improved varieties and crop management practices and household food adequacy; and no statistically significant effects on yields and profits. The results show that bias due to selection on unobservables is not severe enough to invalidate the impact estimates. Bias may still be a problem that is present in the analysis. But there is evidence that it is not substantial. Although the program does not have a statistically significant positive effect on yields and profits, the significant program effects on market participation, variety adoption, and food adequacy merit further promotion of the program since these positive outcomes tend to be pre-conditions for realizing long-term yield and profit benefits.     

Exploring Portfolio Decision‐Making Processes*

Portfolio management is the set of activities that allows a firm to select, develop, and commercialize a pipeline of new products aligned with the firm's strategy that will enable it to continue to grow profitably over the long term. To appropriately manage the firm's new product portfolio, decisions must be made about which projects to fund, to what levels, at what point in time. Previous research has investigated portfolio management decisions as individually discrete decisions. Significant streams of research have investigated both project selection and project termination decisions. This research project shows, however, that portfolio decision making may be better understood if it is considered as an integrated system of processes that considers these decisions simultaneously, along with other decisions such as those to continue a project with reduced funding. Using in‐depth data from four diverse case studies, we use a grounded theory approach to develop a general model of how firms make new product portfolio decisions. According to the findings from these cases, effective portfolio decision‐making processes produce a portfolio mindset, focus effort on the right projects, and allow agile decision making across the portfolio's set of projects. Effective portfolio decision making is the result of the interaction between three types of decision‐making processes that managers use in making decisions: evidence‐, power‐, and opinion‐based. Being able to use each of these types of processes to make decisions depends upon having the data inputs that they require. Three domain‐based decision input‐generating processes (i.e., cross‐functional collaboration, practices of critical thinking, and practices of market immersion) are associated with making evidence‐based portfolio decisions. In addition, organizational politics produces the inputs that are associated with power‐based portfolio decision making, while managerial intuition is associated with opinion‐based portfolio decision making. Firm cultural factors, including trust, collective ambition, and leadership style, are associated with how these evidence‐, power‐ and opinion‐based processes are combined into an overall portfolio decision making process, and whether the firm's processes are more rational and objectively made, or more politically and intuitively made. The article presents propositions for how the decision‐making processes interact in their associations with decision‐making effectiveness.     

Impact of the alternate wetting and drying (AWD) water-saving irrigation technique: Evidence from rice producers in the Philippines

This article evaluates the impacts of a controlled irrigation technique in rice production called alternate wetting and drying (AWD). Propensity score matching (PSM) and regression-based approaches applied to farm-level survey data are used to achieve the objective of the study. The PSM and regression-based approach accounts for the potential bias due to selection problems from observable variables. Results of the impact analysis using both empirical approaches indicate that AWD, particularly the “Safe AWD” variant, reduces the hours of irrigation use (by about 38%), without a statistically significant reduction in yields and profits. This reduction in irrigation time translates to corresponding savings in the amount of irrigation water and pumping energy used. However, further analysis of the impact estimates suggests that the potential magnitude of the selection bias based on unobservable variables may still be able to eliminate the measured impact from the PSM and regression-based techniques that only control for selection based on observable variables. Hence, the current impact results have to be interpreted with caution and further data collection is needed to construct a panel data that would allow one to account for selection problems due to unobservable variables and, consequently, better estimate the AWD impact.     

The Adoption of High-Involvement Work Practices

This article provides a theoretical framework for understanding why high-involvement work practices are adopted more rapidly by some organizations than others. Drawing on evolutionary economics and innovation literature, we identify three key drivers: (1) the level of complementary human resource practices and technology; (2) performance achieved with previous practices; and (3) factors that alter the cost of introducing new practices. Empirical analyses of a unique longitudinal data set of forty-three automobile assembly plants worldwide provide support for hypotheses about complementary HR practices (but not complementary technologies) and partial support for hypotheses about past performance and factors that alter adoption costs.     

Prospects for developing absorptive capacity through internal information provision

Theories of absorptive capacity propose that knowledge gained from prior experience facilitates the identification, selection, and implementation of related profitable practices. Researchers have investigated how managers may develop absorptive capacity by building internal knowledge stocks, but few have focused on the distribution of this knowledge within the firm and the role managers play in administering information to organizational subunits. In this paper, we explore the degree to which managers can develop absorptive capacity by directly providing information to agents in the organization that might potentially adopt a new practice. We find that the effectiveness of managerial information provision depends on the degree to which potential adopters have information from other sources. We find that information from previous adopters and past events reduces the effect of information provision, while experience with related practices amplifies it. Our research helps clarify when absorptive capacity may provide a sustained competitive advantage. Copyright © 2004 John Wiley & Sons, Ltd.     

Practices and functions of customer reference marketing — Leveraging customer references as marketing assets

This multiple-case study focuses on the practices and functions of customer reference marketing and on the ways through which customer references can be deployed as marketing assets. Analysis of 38 interviews with managers in four case companies suggests that customer references can be leveraged externally as marketing assets to (1) gain status-transfer effects from reputable customers, (2) signal passing a selection process, (3) concretize and demonstrate complex solutions, and (4) provide indirect evidence of experience, previous performance, technological functionality, and delivered customer value. Customer references can also be leveraged internally to (1) facilitate organizational learning, (2) advance offering development, (3) motivate personnel, and (4) develop understanding of customer needs, internal competencies, and delivered customer value. By identifying the practices and functions related to customer reference marketing, the paper deepens understanding of this highly relevant but relatively under-researched phenomenon and contributes to the literature on customer-based marketing assets.     

Human Resource Management in the Japanese Financial Institution Abroad: The Case of the London Office

The evidence on human resource management in overseas offices of Japanese multinational service-sector firms is far less abundant than that for manufacturing firms. Existing studies describe employment practices that vary, both between firms and over time. To supplement the existing body of evidence, the present study investigates employment practices at two Japanese financial services firms in the City of London through the use of interviews and questionnaire surveys. It focuses on those facets of the ‘Japanese’ management system that may be considered fundamental characteristics: recruitment and selection procedures, training methods, pay and promotion policies, employment security, company culture, and the position of workers within the overall organization. The study considers the implications of changes over time within the two firms when viewed in the context of the existing evidence; such comparison suggests that both corporate strategy and human resource management policy in Japanese financial organizations may have changed during the 1980s.     

Matching salesmen to the selling job

To develop and maintain a successful salesforce, it is essential for sales managers to “match” a salesperson's characteristics with the selling job he/she has to perform and with the overall selling environment. Such a match is established in this paper as we have identified three main selling styles based on the criteria used by manufacturing companies to select salespersons. These are “missionary selling,” “trade selling,” and “technical selling.” The association between selection policies and other aspects of sales management behavior is also investigated. Results are based principally upon a mail survey of 113 U.K. manufacturing companies and a profile is presented showing the sales management practices that were found to be associated with each of the selling styles identified.     

Produce growers’ cost of complying with the Food Safety Modernization Act

Small and medium size growers using both conventional and sustainable farming practices have expressed concern that compliance with the Produce Rule implementing the Food Safety Modernization Act will be prohibitively costly. We use data from an original national survey of fruit and vegetable growers to examine that contention. In particular, we analyze how expenditures on food safety practices required by the Produce Rule vary with farm size using a double hurdle model to control for selectivity in both using food safety practices and reporting expenditures. We find that expenditures per acre decrease with farm size. We also find some evidence that growers using sustainable farming practices spend more than conventional growers on many food safety practices. We use our estimates to quantify how the cost burden of compliance varies with farm size. We then explore the policy implications of exemptions to the Rule by simulating how more stringent exemption thresholds for farm revenue and share of direct sales might affect the cost burden of each food safety practice on farms at the threshold.     

Estimating the Use of Agency Workers: Can Family‐Friendly Practices Reduce Their Use?

This paper uses establishment data to estimate the determinants of using agency workers. It contends that there is a class of family‐friendly practices including workplace nurseries, flexitime, home working, and job sharing that promote the norm of the “ideal worker” who concentrates on work. Because such practices increase the ability of employers to direct worker effort, they will be associated with a lower use of agency workers. Our findings confirm this hypothesis. The implication is that any growth in family‐friendly practices may work against the ongoing expansion in agency jobs.     

Strategic Dilemmas: How Managers Use HR Practices to Meet Multiple Goals

Contrary to the classic assumptions in the business and human resource (HR) strategy literatures, real‐world organizations often pursue multiple and potentially contradictory performance goals. They may adopt ‘hybrid’ strategies to maximize both differentiation and low cost — leading middle managers to face dilemmas in how to achieve different goals using the same HR practices. We link employee‐level surveys of HR practices to establishment‐level data on service quality, labour efficiency and profitability to examine the effects of HR practices on these outcomes. We find that establishments with greater use of high involvement practices have significantly higher service quality, which mediates the relationship between HR practices and profitability. Findings for labour efficiency are positive, but generally not significant. These findings also have implications for the quality of jobs.     

Globalization,Human Resource Practices and Innovation: Recent Evidence from the Canadian Workplace and Employee Survey

This study examines the triangular relationship that connects the degree to which a workplace is internationally engaged, the extent to which it innovates, and the human resource practices it adopts. By pooling various years of data from the Canadian Workplace and Employee Survey, a nationally representative data set, we found that certain practices, such as variable pay and autonomy training, are more likely to be used in international workplaces. We subsequently found that for an international workplace, the use of variable pay contributes very little to workplace innovation while autonomy training has a positive relationship with innovation.     

Adopting Design Thinking in Novice Multidisciplinary Teams: The Application and Limits of Design Methods and Reflexive Practices

Scholarly and practitioner literature have both described the potential benefits of using methods associated with a “design thinking” approach to develop new innovations. Most studies of the main design thinking methods—needfinding, brainstorming, and prototyping—are based either on analyses of experienced designers or examine each method in isolation. If design thinking is to be widely adopted, less‐experienced users will employ these methods together, but we know little about their effect when newly adopted. Drawing on perspectives that consider concept development as broadly consisting of a divergent concept generation phase followed by a convergent concept selection phase, we collected data on 14 cases of novice multidisciplinary product development teams using design methods across both phases. Our hybrid qualitative and quantitative analysis indicate both benefits and limits of formal design methods: First, formal design methods were helpful not only during concept generation, but also during concept selection. Second, while brainstorming was valuable when combined with other methods, increased numbers of brainstorming sessions actually corresponded to lower performance, except in the setting where new members may join a team. And third, increased team reflexivity—such as from debating ideas, processes, or changes to concepts—was associated with more successful outcomes during concept generation but less successful outcomes during concept selection. We develop propositions related to the contingent use of brainstorming and team reflexivity depending on team composition and phase of development. Implications from this study include that novice multidisciplinary teams are more likely to be successful in applying design thinking when they can be guided to combine methods, are aware of the limits of brainstorming, and can transition from more‐ to less‐reflexive practices.     

Flexibility and Standardization: Test of a Contingency Model of Product Design–Manufacturing Integration

This article proposes and tests a contingency model of system integration of product design and manufacturing among producers of goods involving tooling development. The model predicts which combinations of organizational and technical practices will be most effective under conditions of high and low design newness. The results, based on data from 74 firms, largely support the model. Differentiating mechanisms, such as a tall hierarchy and job specialization, are negatively associated with design–manufacturing integration, particularly for new designs. Socio-integrative mechanisms, including such flexible practices as cross-functional teaming and collocation, are positively related to design–manufacturing integration for new designs only. However, the use of in-process design controls is positively related to design–manufacturing integration regardless of design newness, which suggests that some modes of standardization may be beneficial even for new designs.