INNOVATION STRATEGY AND FINANCIAL PERFORMANCE IN MANUFACTURING COMPANIES: AN EMPIRICAL STUDY

An innovation strategy for the manufacturing function covers four areas: a firm's desired innovation leadership orientation (i.e., being a leader versus being a follower), its level of emphasis on process and product innovation, its use of internal and external sources of innovations, and its intensity of investment in innovation. We examine two models of the association between manufacturing companies' innovation strategy and their financial performance. The first examines the variations in company financial performance as a function of the simultaneous effect of the dimensions of innovation strategy. The second is a sequential model that suggests a causal sequence among the dimensions of innovation strategy that may lead to higher performance. We used data from a sample of 149 manufacturing companies to test the models. The results (1) support the importance of innovation strategy as a determinant of company financial performance, (2) suggest that both models are appropriate for examining the associations between the dimensions of innovation strategy and company performance, and (3) show that the sequential model provides additional insights into the indirect contribution of the individual dimensions of innovation strategy to company performance. Finally, we discuss the implications of these results for managers.     

EFFECTS OF ENVIRONMENTAL MANAGEMENT SYSTEMS ON ENVIRONMENTAL MANAGEMENT PRACTICES AND OPERATIONS

To date, it is unclear as to how Environmental Management Systems (EMS) are implemented and what effects these systems have on other environmental and operational practices. This study reports empirical insights to EMS practices based on the largest EMS survey of manufacturing firms in the United States. The objective of the study is to test for a relationship between environmental management systems and perceived operations performance while considering direct and indirect effects of various environmental practices. The results of this study are supported by several field studies and provide a new source of information regarding EMS theory development. The results also indicate a positive relationship between an EMS, the environmental practices a firm engages, and operations performance measures.     

COMPETITIVE PRIORITIES: INVESTIGATING THE NEED FOR TRADE‐OFFS IN OPERATIONS STRATEGY

A heated debate continues over the need for trade‐offs in operations strategy. Some researchers call for plants to focus on a single manufacturing capability and devote their limited resources accordingly, while others claim that advanced manufacturing technology (amt) enables concurrent improvements in quality, cost, flexibility, and delivery. Yet there is little empirical evidence for or against the trade‐off model. In response, this study addresses the question: “To what extent do manufacturing plants view competitive priorities as trade‐offs?” We employ survey data collected from managers and operators in 110 plants that have recently implemented AMT. Our findings suggest that trade‐offs remain. However, perceived differences in competitive priorities are subtle and may vary across levels of the plant hierarchy.     

COMPARING THE ENVIRONMENTAL AND QUALITY INITIATIVES OF BALDRIGE AWARD WINNERS

Can best‐practice quality firms leverage their quality programs for environmental management? This paper explores this question by comparing the implementation of successful and unsuccessful quality and environmental initiatives in five manufacturing‐ and five service‐sector Malcolm Baldrige National Quality Award (mbnqa) winners. The results lead to a series of propositions to guide future research. While the literature suggests that quality and environmental programs are closely related, this study finds that drivers of successful environmental initiatives are not the same as those for successful quality initiatives.     

MANUFACTURING STRATEGY ON THE “S” CURVE

The concept and techniques of “manufacturing strategy” offer managers the opportunity to use their production function as a strategic weapon in competition, an apparently attractive objective. Yet after about 25 years, the use of manufacturing in corporate strategy (MCS) as a management practice is not widespread. In contrast, however, in academic literature it appears to be flourishing and rapidly growing in popularity. This paper seeks to answer this apparent paradox, beginning with the history of MCS as it was developed as a theory of design to enable a manufacturing system to be focused on a key competitive task. Common criticisms of MCS, such as “tradeoffs,” “focus” and “undynamic,” are examined and refuted as valid reasons for its only modest usage. Instead, three “new” problems in the MCS concept and its techniques are suggested as genuine needs for the completion of the theory and for its becoming more universally understood and used by industrial managers.     

PLANT‐LEVEL ENVIRONMENTAL MANAGEMENT ORIENTATION: THE INFLUENCE OF MANAGEMENT VIEWS AND PLANT CHARACTERISTICS

As customers, the public and other stakeholders are increasingly demanding that manufacturing firms improve their approach to environmental management, some plants have moved to develop an orientation that is increasingly proactive. Synthesizing earlier research, environmental management orientation is defined here to include system analysis and planning, organizational responsibility, and management controls. The relationship between a proactive orientation and two sets of internal factors, specifically the personal views of plant managers and plant‐specific characteristics, was tested using survey data from the furniture industry. The production outlook for the plant was critical, with a favorable outlook fostering a more proactive environmental management orientation. After controlling for plant‐specific factors, personal views also were influential; an increasing emphasis on short‐term economic value was related to a more reactive plant‐level orientation. Thus senior corporate management can foster strong plant‐level environmental management through a more balanced emphasis on economic and ethical values and continued investment in a plant's long‐term viability.     

COLLABORATION AND EVALUATION IN THE SUPPLY CHAIN: THE IMPACT ON PLANT‐LEVEL ENVIRONMENTAL INVESTMENT

Manufacturing organizations can potentially improve environmental management both by increasing the level of investment in environmental technologies and by shifting that investment away from pollution control and toward pollution prevention. However, managers must not only consider their own manufacturing operations in isolation, but also those of others along the supply chain. This paper explores two dimensions of supply chain activities—collaboration and evaluation—that might be leveraged by plant managers to improve environmental management in their own plant. The linkages with suppliers and customers were assessed. Both customer‐ and plant‐initiated collaboration were found to have a significant effect on the level and form of investment in environmental technologies for a sample of Canadian plants. Of greatest importance, as customer‐initiated collaborative activities increased, plant‐level investment in environmental management was increasingly allocated toward pollution prevention. In contrast, only very limited evidence was found that evaluative activities influenced environmental investment.     

A MECHANISM DESIGN APPROACH TO CLIMATE‐CHANGE AGREEMENTS

We take a mechanism design perspective to investigate how environmental agreements should account for multilateral externalities, incentive compatibility, and voluntary participation by sovereign countries. The optimal mechanism involves a tradeoff between a free rider problem in the effort provision of participating countries and the necessity of inducing countries to ratify the agreement. This mechanism can be approximated by a simple menu with attractive implementation and robustness properties. Limits on enforcement and commitment might nevertheless hinder the performance of this menu, making the “business as usual” scenario more likely.     

COMBINED PRODUCTION AND MAINTENANCE SCHEDULING FOR A MULTIPLE‐PRODUCT,SINGLE‐ MACHINE PRODUCTION SYSTEM

Traditionally, the problems of equipment maintenance scheduling and production scheduling in a multi‐product environment have been treated independently. In this paper, we develop a Markov decision process model that simultaneously determines maintenance and production schedules for a multiple‐product, single‐machine production system, accounting for the fact that equipment condition can affect the yield of different product types differently. The problem was motivated by an application in semiconductor manufacturing. After examining structural properties of the optimal policy, we compare the combined method to an approach often used in practice. In the nearly 6,000 test problems studied, the reward from the combined method was an average of more than 25 percent greater than the reward from the traditional method.     

PRODUCT OFFERING,PRICING, AND MAKE‐TO‐STOCK/MAKE‐TO‐ORDER DECISIONS WITH SHARED CAPACITY

In an era of mass customization, many firms continue to expand their product lines to remain competitive. These broader product lines may help to increase market share and may allow higher prices to be charged, but they also cause challenges associated with diseconomies of scope. To investigate this tradeoff, we considered a monopolist who faces demand curves, which for each of its potential products, decline with both price and response time (time to deliver the product). The firm must decide which products to offer, how to price them, whether each should be make‐to‐stock (mts) or make‐to‐order (mto), and how often to produce them. The offered products share a single manufacturing facility. Setup times introduce disceonomies of scope and setup costs introduce economies of scale. We provide motivating problem scenarios, model the monopolist's problem as a non‐linear, integer programming problem, characterize of the optimal policy, develop near‐optimal procedures, and discuss managerial insights.     

MULTIPLE RATERS IN SURVEY‐BASED OPERATIONS MANAGEMENT RESEARCH: A REVIEW AND TUTORIAL

Research in the area of operations strategy has made significant progress during the past decade in terms of quantity of articles published, as well as the quality of these articles. Recent studies have examined the published literature base and determined that, in general, the field has progressed beyond an exploratory stage to a point where there is a core set of basic terminology and models. Concurrent with the formation and solidification of a core terminology, there is an increasing emphasis on developing and employing a set of reliable, valid, and reproducible methods for conducting research on operations strategy. We provide a review of common methods for assessing the degree of reliability and agreement of the responses provided by multiple raters within a given organization to a set of qualitative questions. In particular, we examine four methods of determining whether there is evidence of disagreement or bias between multiple raters within a single organization in a mail survey.     

FROM SHAME TO GAME IN ONE HUNDRED YEARS: AN ECONOMIC MODEL OF THE RISE IN PREMARITAL SEX AND ITS DE‐STIGMATIZATION

Societies socialize children about sex. This is done in the presence of peer‐group effects, which may encourage undesirable behavior. Parents want the best for their children. Still, they weigh the marginal gains from socializing their children against its costs. Churches and states may stigmatize sex, both because of a concern about the welfare of their flocks and the need to control the cost of charity associated with out‐of‐wedlock births. Modern contraceptives have profoundly affected the calculus for instilling sexual mores. As contraception improves there is less need for parents, churches, and states to inculcate sexual mores. Technology affects culture.