Managing beyond the factory walls: Effects of four types of strategic integration on manufacturing plant performance

TLDR

The study investigates how strategic objectives and process knowledge from external interfaces are integrated in manufacturing plants and how competitive capabilities mediate the link to business performance. Using data from multiple manufacturing industries, the authors examine four types of strategic integration at the plant level and apply a path analytic approach to assess how these integration types contribute to manufacturing‑based competitive capabilities and business‑level performance. Each type of integration activity yields distinct benefits and detriments, extending prior theory on strategic integration and providing managers with guidance for designing integration policies and resource deployments.

Abstract

Abstract In this paper we focus on the integration of strategic objectives and process knowledge that a manufacturing factory collects from its external interfaces. Using data from a variety of manufacturing industries, this study examines four different types of strategic integration at the manufacturing plant level. We use a path analytic approach to simultaneously assess the contributions of the various types of integration to manufacturing‐based competitive capabilities and business level performance. In addition, we examine the intervening roles that manufacturing‐based competitive capabilities play in mediating the relationships between strategic integration and business performance. We find that each type of integration activity has unique benefits and detriments. These findings extend prior studies of manufacturing and supply chain integration by broadening the theory relating to strategic integration. The results also provide implications for manufacturing managers who seek to design integration policies and associated resource deployments.