Process Management Practices and Plant Performance: A Configuration

Approach

Janine L. SandersOperations and Management Science DepartmentCarlson School of ManagementUniversity of Minnesota

Advisors: Dr. Roger Schroeder and Dr. Kevin Linderman

Motivation

Practical Increased emphasis on process management in

organizations Several drivers for adoption

i.e., Customer requirement, Strategic, Imitation

Some organizations will fail for a variety of reasons– Mismatch with strategy, structure, culture– Lack of top management support

Motivation

Research Institutional forces strong influence on other

manufacturing practices Process management practices impact on

performance inconsistent– Limited studies specifically on process management

practices– Numerous definitions and measures

Research Questions

How do institutional forces affect the degree of use of process management practices?

When is process management practices beneficial to an organization? Are there specific configurations of external and internal organization components that align with process management practices to yield better plant performance?

Literature Review

Process Management as an element of TQM(Flynn et al.,1995; Anderson et al.,1995; Powell, 1995; Choi and Eboch, 1998; Rungtusanatham et al., 1998, 2005; Samson and Terziovski, 1999)

Process Management Practices(Ahire and Dreyfus, 2000; Ittner and Larcker, 1997)

Process Management and Strategy(Benner and Tushman, 2002, 2003; Sousa and Voss, 2001)

Definition and Context

Process Management Practices– The tools and techniques used to manage processes that

create customer value, organizational value, and/or support key business operations

– Three types of practices: map, improve, and control

Context: Shop-floor level manufacturing processes

Institutional affect

Institutional theory Types of forces

– Industry– Country– Competitive Intensity– Customer driven– Government regulations

P1: Institutional forces, such as industry, country, competition, customer demands, and regulatory requirements, will influence the use of process management practices.

Configuration Approach

Configuration Theory(Miller, 1987; Meyer et al., 1993; Doty et al., 1993; Dess et al., 1993; Drazin and Van de Ven, 1985)

Elements for Configuration (Miles and Snow, 1978)– Environment– Strategy– Structure – Process Management Practices

Configuration Model

Ideal Organization TypesProspectorDefenderAnalyzer

Degree of use of Process Management Practices

Alignment(Ideal organization type fit with process management practices)

Plant Competitive Performance

Table 2: Organizational Types Configurations 

Dimension Prospector Defender Analyzer

ENVIRONMENT      

Uncertainty H L M

Complexity H L M

STRUCTURE      

Hierarchical levels L H M

Centralization of Authority

L H M

Formalization L H M

Functional Interdependence

M L H

STRATEGY      

Narrow market, Cost leader

           

Broad markets, First mover

           

Mixed market, Follower            

Quality Values and principles

M H H

Process Management Practices

L H M

H=high, M=medium, L=low

Configuration Propositions

P2: There is a difference in the level of use of process management practices between Prospectors, Defenders, and Analyzers. Defenders use process management practices the most, while Prospectors use them the least.

P3: The alignment between organization type and use of process management practices is positively associated with plant performance.

P4: There is no difference in plant performance when there is a high degree of alignment between organization type and process management practices.

Research Methodology

Sample– N=189– Automotive, electronics, and machinery industries– Japan, Sweden, Finland, Korea, Germany, USA

Measures Classification Methods

– Interval scaling– Calibration sample– Expert panel

SEM and Multivariate Techniques

Conclusion

Potential Contributions– Identify important institutional factors– Further understand impact of context

Potential Limitations– Missing measures for some variables– Configuration Development– Classification Method

Future Research– Other manufacturing practices– Service organizations and transactional processes

Thank you!