Achieving manufacturing flexibility through entrepreneurial orientation
| Date | 28 August 2007 |
| DOI | https://doi.org/10.1108/02635570710816711 |
| Published date | 28 August 2007 |
| Pages | 997-1017 |
| Author | Shih‐Chia Chang,Ru‐Jen Lin,Fu‐Jen Chang,Rong‐Huei Chen |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Achieving manufacturing
flexibility through
entrepreneurial orientation
Shih-Chia Chang
Department of Business Administration,
National Taipei College of Business, Taipei, Taiwan
Ru-Jen Lin
Institute of Business and Management,
Lunghwa University of Science and Technology,
Taoyuan, Taiwan
Fu-Jen Chang
Department of Business Administration,
National Taipei College of Business, Taipei, Taiwan, and
Rong-Huei Chen
Department of Business Administration,
Lunghwa University of Science and Technology, Taoyuan, Taiwan
Abstract
Purpose – Entrepreneurial orientation (EO) purportedly enhances a firm’s competitive edge, but its
alignment with specific dimensions of manufacturing flexibility has not been convincingly
documented. The purpose of this study is to investigate the effects of several identifiable aspects of EO
on particular types of manufacturing flexibility.
Design/methodology/approach – Using the data collected from 115 motherboard manufacturers,
the study employs multiple regression analysis to examine the effects of entrepreneurial practices on
manufacturing flexibility.
Findings – The statistical results lead to the following conclusions: autonomy, innovativeness,
risk-taking and proactiveness have significant positive effects on new product flexibility; autonomy,
innovativeness, and competitive aggressiveness improve product mix flexibility; innovativeness,
proactiveness, and competitive aggressiveness determine volume flexibility.
Research limitations/implications – The research focuses exclusively on external manufacturing
flexibility, ignoring, for the time being, internal manufacturing flexibility factors.
Practical implications – The outcomes of the present study reveal that manufacturing flexibility
cannot be achieved by simply installing a computer-aided system; rather, it needs to be planned,
managed, and integrated with a firm’s entrepreneurial endeavors.
Originality/value – This is the first empirical study to investigate the effects of EO on
manufacturing flexibility rather than on business performance, which most of theprevious research on
this topic has emphasized. In terms of practical applicability, the findings provide plant managers with
valuable guidelines for improving manufacturing flexibility by undertaking appropriate
entrepreneurial action.
Keywords Manufacturingindustries, Flexibility, Entrepreneurialism, Innovation, Risk assessment,
Competitive strategy
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
Achieving
manufacturing
flexibility
997
Industrial Management & Data
Systems
Vol. 107 No. 7, 2007
pp. 997-1017
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570710816711
Introduction
In today’s dynamic environment of global competition, rapid technological
innovations, short product life cycles, and demanding product customization,
manufacturing firms face a high level of uncertainty caused by ongoing change.
Previous research has suggested development of manufacturing flexibility as a
strategy to deal with the more dynamic and competitive market (Anand and Ward,
2004; De Toni and Tonchia, 1998; Verdu-Jover et al., 2006). Many believe that
high-manufacturing flexibility could enable a faster and more cost-efficient response to
rapid market changes. Flexibility has become an effective weapon for gaining
competitive advantage in an uncertain manufacturing environment (Gerwin, 1993;
Narasimhan et al., 2004; Scala et al., 2006). Meanwhile, entrepreneurial orientation (EO)
has been promoted as necessary to improve a firm’s competitiveness and performance.
In practice, EO includes a wide range of processes or activities characterized by a
tendency to act autonomously, a propensity to innovate and take risks, and a
predisposition to be aggressive toward competitors, as well as proactive with regard to
marketplace opportunities, to aim at new venture creation (Lumpkin and Dess, 2001).
Schumpeter(1970) was the first to indicate that the characteristics of entrepreneurship
can be an important source of developing manufacturing flexibility, and other scholars
have subsequently confirmed his claim (Hussey, 1997; Burgelman, 1991; Miller, 1983;
Covinand Slevin, 1989; Zahra,1993). In general, it is believedthat an entrepreneurialfirm’s
strategicposture to be first-mover and capitalizeon emerging opportunitiesahead of their
competitors facilitates its development of manufacturing flexibility (Barringer and
Bluedorn,1999). In order to take advantageof emerging opportunities,these firms monitor
market changes and develop more flexible manufacturing systems that allow a faster
response(Li et al., 2005). In other words,when faced with a fiercelydynamic and changing
environment, such EO practices help to develop manufacturing flexibility necessary to
respond promptly. Specifically, it has been argued by several scholars that a more
innovative, risk-taking posture, which is also proactive in regard to marketplace
opportunities and aggressive towar ds competitors, is more likely to promote
manufacturing flex ibility (Covin, 1991; Covin and Slevi n, 1991).
Although many previous studies addressed the importance of EO practices in
manufacturing flexibility improvement, the supposed link between the types of EO
activities and manufacturing flexibility has never been empirically demonstrated in
the field of strategic management. The purpose of this study is to investigate how
different EO practices (autonomy, innovativeness, proactiveness, competitive
aggressiveness, and risk taking) link with specific types of flexibility (new product,
volume, and product mix).
The contents of this paper comprise a brief overview of the literature concerned
with defining manufacturing flexibility and EO, ways of measuring them, and the
theoretical relationship between them; a description of research design including the
basic model, hypothesis, and statistical methods; and finally, statistical results and
their implications for management.
Literature review
Manufacturing flexibility
Since, the characteristics of manufacturing flexibility are vague and ambiguous, the
definitions of flexibility are often colored by a particular managerial situation
IMDS
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