THE INFLUENCE OF MANUFACTURING STRATEGIES AND ENVIRONMENTAL MUNIFICENCE AS MODERATORS OF TECHNOLOGY-MANUFACTURING PERFORMANCE RELATIONSHIP: An Evidence From Indonesia
Abstract: During the past
twenty years, we have witnessed a wide array of advanced manufacturing technology,
computer based technology,
and new management practices implemented in varying
degree of success. A growing body of research in manufacturing and
technology management literatures
suggest that firms
are investing considerable sums
into advanced manufacturing
systems (hard technology) and
new management practices
(soft technology) to
deal with fast changing product and fragmentation of
traditional market, and to learn new process technologies that are important
for shaping future industry evolution AMT systems, when properly
understood and implemented,
can help firms
compete along dimensions of
cost, quality, flexibility,
delivery speed, productivity
and even profitability of the
firms. There is an abundant of literatures that have analyzed the relationship between
technology adoption and
performance (Porter, 1985;
Morone, 1989; Higgins, 1995; Hottenstein & Dean, 1995). Maidique and
Patch (1988) argued that technology is
a critical force
for a business
organization in a competitive
environment. Morone (1989)
viewed technology as
a source of
competitive advantage. While Stacey
and Aston (1990)
argued that technology
advancement plays a vital
role in long-term
profitability, and Higgins,
(1995) identified technology as a
contributing factor to successful operations.
Prior studies on
technology adoption found
that the increased
use of advanced manufacturing
technologies (AMT) and new management practices cannot be directly
related to higher
performance (Sweene, 1991;
Kotha & Orne,
1989; Schroeder, et al., 1995). Significant benefits can be reaped by
the firms that integrate technology
and innovations considerations with
strategic corporate development (Shariff, 1997).
Scholars have argued
that strategy must
be viewed as
a major moderating variable and
the success of business organizations depend on the ability of new technologies
to support the competitive strategy. Another issue raised on the relationship between
technology and competitive
advantage is whether
the relationship is the
same in all
environmental context. Relating
to this issue inconclusive results
have been found
on the impact
of environmental munificence on the technology-performance
relationship. Meyer and Goes (1988) and Shcroeder and Sohal (1999) found that
the relationship between technological innovations and performance will be
stronger for bigger organizations that have abundant resources, whereas, Irwin
et al. (1998) found that the impact of technology on performance is greater for
those organizations operating in less munificent environment, where the resources
are scare. This
study is conducted
to investigate the
moderating role of strategy
and environmental munificence
on the technology-manufacturing performance relationship,
other than to
investigate the impact
of the level
of technological adoption on
manufacturing performance of
the Indonesian medium and large manufacturing firms.
Author: Lena Ellitan
Journal Code: jpmanajemengg070003
