Organizational Structure, Integration, and Manufacturing Performance: a Conceptual Model and Propositions

Topics: Supply chain, Management, Organization Pages: 28 (8746 words) Published: September 4, 2013
Volume 5• Number 1 • January - June 2012

ORGANIZATIONAL STRUCTURE, INTEGRATION, AND MANUFACTURING PERFORMANCE: A CONCEPTUAL MODEL AND PROPOSITIONS Universidade do Vale do Rio dos Sinos rafaelte@unisinos.br

Rafael Teixeira

Xenophon Koufteros
Texas A&M University xkoufteros@mays.tamu.edu

Xiaosong David Peng
Texas A&M University xpeng@mays.tamu.edu

ABST R AC T: One major characteristic of studies in operations and supply chain management literature is a focus on how integration can lead to superior operations and manufacturing outcomes. Most of these studies, however, focus only on internal or external integration and few have been dedicated to understand how both internal and external integration influence performance outcomes. In addition, few studies, if any, have looked to the antecedents of organizational structure as a driver for such forms of integration. To help filling this gap, we draw on organizational structure and resource-based view theoretical perspectives to present a conceptual model that proposes a relationship between organizational structure and integration. The model also considers major antecedents of organizational structure and the manufacturing performance consequences of integration. As a result, we introduce a series of propositions to be subject to empirical scrutiny as well as serve as a reference for future conceptual and empirical models.

1. I N T RODUC T ION Because of the competitive challenges imposed by globalization, which has made firms adopt practices such as outsourcing and cooperation between companies (Harland, Lamming, & Cousins, 1999), literature in operations management has placed considerable attention in the supply chain phenomenon (Chen & Paulraj, 2004; Ireland & Webb, 2007; Ketchen & Hult, 2007; Krause, Handfeld, & Tyler, 2007; Li, Rao, RaguNathan, & Ragu-Nathan, 2005; Storey, Emberson, Godsell, & Harrison, 2006). Organizations that want to succeed have to enhance their connections with other organizations in order to acquire and mobilize complementary resources for their core activities. In fact, there has been a growing consensus among researchers regarding the importance of integration between a given organization and its customers and suppliers (Bowersox, Daugherty, Droge, Rogers, & Wardlow, 1989; Eloranta & Hameri, 1991; Lee, Padmanabhan, &

Whang, 1997; Morris & Calantone, 1991; Stevens, 1989) and recent studies have empirically demonstrated how integration positively impacts organizational performance (Frohlich & Westbrook, 2001; Koufteros, Cheng, & Lai, 2007; Koufteros, Vonderembse, & Jayaram, 2005; Rosenzweig, Roth, & Dean, 2003; Morgan Swink, Narasimhan, & Wang, 2007; Vickery, Jayaram, Droge, & Calantone, 2003). One characteristic of studies about supply chain integration is the investigation of its potential effects on organizational performance outcomes. Frohlich and Westbrook (2001) are among the first authors to empirically demonstrate that organizations with high levels of integration with their customers and suppliers achieve superior firm performance when compared to organizations with low levels of integration. Stank et al. (2001 ) tested a model including not only external integration with customers and suppliers, but also internal integration. Their

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Teixeira, R., Koufteros, X. A., Peng, X. D.: Organizational Structure, Integration, and Manufacturing Performance: a Conceptual Model and Propositions ISSN: 1984-3046 • Journal of Operations and Supply Chain Management 5 (1), pp 69 - 81

results showed that internal and external integration have effects on different firm performance variables. Subsequent empirical studies on internal and external integration have demonstrated their effects on financial performance and competitive capabilities (Rosenzweig et al., 2003), customer service performance (Vickery et al., 2003), product innovation (Koufteros et al., 2007; Koufteros et al., 2005), and customer satisfaction (Swink et...
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