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An empirical examination of the relationship between competitive strategy and process technology in the tooling and machining industry

Steven Wayne Congden, University of Massachusetts Amherst

Abstract

A considerable segment of the business literature has espoused the importance of appropriately using process or manufacturing technology to support competitive strategy. This literature implicitly and explicitly suggests the importance of "fit" between a firm's business level strategy and its process technology. Three gaps remain with respect to the "fit" assertion: (1) The nature of fit is insufficiently specified. (2) No empirical research has attempted to statistically validate the existence of fit within an industry. (3) No empirical research has attempted to statistically link fit to firm performance. To address these issues, this dissertation surveys firms in the U.S. tooling and machining industry to test hypotheses on the nature, existence, and impact on performance of fit. Strategy is assessed as membership in one of six strategic groups derived from clustering eight strategy factors. Factor analysis results in four technology factors, Dedicated Automation, Non-Dedicated Automation, Range of Capabilities, and Computer Aided Design. Performance comprises ROS and average annual sales growth. Findings regarding the nature of fit suggest: (1) Dedicated and non-dedicated automation relate positively to new and existing product stability. Broad product range (products very different from each other) relates negatively to dedicated automation, but does not relate to non-dedicated automation. (2) Linkages may be obscured because multiple capabilities are often bundled in a given technology so that different strategies use the same technology for different reasons. (3) Process technology appears to relate primarily to strategic dimensions concerning physical product characteristics, and very little to service dimensions. The existence of fit is demonstrated by highly significant differences in technology between groups, combined with the qualitative plausibility with which these differences appear to correspond to each strategic group. Although insufficient support was found for fit linked to performance (technology moderating strategic group membership's impact on performance), results suggest that performance advantage from a technology is gained not in the group where it is most appropriate or a given, but in a group where it is also appropriate, but less widespread.

Subject Area

Management|Operations research

Recommended Citation

Congden, Steven Wayne, "An empirical examination of the relationship between competitive strategy and process technology in the tooling and machining industry" (1991). Doctoral Dissertations Available from Proquest. AAI9132832.
https://scholarworks.umass.edu/dissertations/AAI9132832

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