Knowledge that Transforms

AbstractManagement literature has suggested that contextual factors may present strong inertial forces within organizations that inhibit implementations that appear technically rational [R.R. Nelson, S.G. Winter, An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, MA, 1982]. This paper examines the effects of three contextual factors, plant size, plant age and unionization status, on the likelihood of implementing 22 manufacturing practices that are key facets of lean production systems. Further, we postulate four “bundles” of inter‐related and internally consistent practices; these are just‐in‐time (JIT), total quality management (TQM), total preventive maintenance (TPM), and human resource management (HRM). We empirically validate our bundles and investigate their effects on operational performance. The study sample uses data from IndustryWeek’s Census of Manufacturers. The evidence provides strong support for the influence of plant size on lean implementation, whereas the influence of unionization and plant age is less pervasive than conventional wisdom suggests. The results also indicate that lean bundles contribute substantially to the operating performance of plants, and explain about 23% of the variation in operational performance after accounting for the effects of industry and contextual factors.

AbstractSix Sigma is a phenomenon that is gaining wide acceptance in industry, but lacks a theoretical underpinning and a basis for research other than “best practice” studies. Rigorous academic research of Six Sigma requires the formulation and identification of useful theories related to the phenomenon. Accordingly, this paper develops an understanding of the Six Sigma phenomena from a goal theoretic perspective. After reviewing the goal theory literature, these concepts, when applied to Six Sigma, suggest some propositions for future research. This paper can help serve as a foundation for developing scientific knowledge about Six Sigma.

AbstractThis paper estimates the shareholder wealth affects of supply chain glitches that resulted in production or shipment delays. The results are based on a sample of 519 glitches announcements made during 1989–2000. Shareholder wealth affects are estimated by computing the abnormal stock returns (actual returns adjusted for industry and market‐wide influences) around the date when information about glitches is publicly announced. Supply chain glitch announcements are associated with an abnormal decrease in shareholder value of 10.28%. Regression analysis is used to identify factors that influence the direction and magnitude of the change in the stock market’s reaction to glitches. We find that larger firms experience a less negative market reaction, and firms with higher growth prospects experience a more negative reaction. There is no difference between the stock market’s reaction to pre‐1995 and post‐1995 glitches, suggesting that the market has always viewed glitches unfavorably. Capital structure (debt–equity ratio) has little impact on the stock market’s reaction to glitches. We also provide descriptive results on how sources of responsibility and reasons for glitches affect shareholder wealth.

AbstractThe interest in strategic human resource management (HRM) has spawned a number of empirical research studies that investigated the impact of HRM practices on organizational performance. However, very little attention has been paid to address the impact of HRM practices on operations management and to generalize the findings across countries and industries. Success of some business decisions (e.g. globalization and merger and acquisition) necessitates recognition and reconciliation of the differences among HRM practices in different countries and industries. This study attempts to generalize the efficacy of seven HRM practices proposed by Pfeffer in the context of country and industry, focusing primarily on the effects of these practices on operations. The findings provide overall support for Pfeffer’s seven HRM practices and empirically validate an ideal‐type HRM system for manufacturing plants.