The effect of environmental complexity and environmental dynamism on lean practices

TLDR

Manufacturers increasingly adopt lean practices to improve performance, yet operate in complex and volatile environments. This study investigates how environmental complexity and dynamism affect lean operations and lean purchasing practices. Using archival and survey data from 126 manufacturers, the authors empirically examine these relationships. Environmental complexity enhances the performance benefits of both lean operations and lean purchasing, while environmental dynamism diminishes the benefits of lean operations but amplifies those of lean purchasing, and robustness tests confirm these contingent effects.

Abstract

Abstract Increasingly manufacturers implement lean practices to improve operational performance. In addition, manufacturers operate in ever more complex and volatile environments. This research investigates the effects of environmental complexity and dynamism on lean operations and lean purchasing practices. It empirically examines these relationships using archival and survey data from 126 manufacturers. The results show that environmental complexity positively moderates the effects of lean operations and lean purchasing on performance. However, environmental dynamism reduces the benefits of lean operations on performance, but enhances the benefits of lean purchasing on performance. Robustness tests further confirm the contingent effects of complexity and dynamism on lean operations and lean purchasing. This research offers a more nuanced understanding of the effect of external environmental context on lean practices, and suggests that practitioners should carefully consider the external environment when implementing different types of lean practices.