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The relative influence of external versus internal integration on plant performance in China

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  • Jayaram, Jayanth
  • Xu, Kefeng
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    Abstract

    In this study, we first examine the relative impact of integration (both internal integration and external integration) on plant performance. Internal integration is operationalized as process integration which includes both information management and statistical process control. External integration is operationalized as firm processes that are aligned with those of customers and suppliers. Next, we show that by including the key contextual variables of firm size, clockspeed and TQM maturity, some of the relationships between integration and plant performance are modified suggesting that contingencies matter. Plant data from China are used to test our hypotheses. The results provide interesting insights of how plant level capabilities in the areas of information management, process management, and aligning with external entities enhance different dimensions of plant performance. Also, the contingency analyses results show that consideration of key contexts in China inform the extent to which external and internal integration mechanisms are effective. Implications for academic literature and policy making in China are offered.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 146 (2013)
    Issue (Month): 1 ()
    Pages: 59-69

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    Handle: RePEc:eee:proeco:v:146:y:2013:i:1:p:59-69

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: China; External integration; Internal integration; Coordination theory; Contingency analysis;

    References

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    1. Wu, Zai Bin & Yeung, Godfrey & Mok, Vincent & Han, Zhaozhou, 2007. "Firm-specific knowledge and technical efficiency of watch and clock manufacturing firms in China," International Journal of Production Economics, Elsevier, vol. 107(2), pages 317-332, June.
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    3. Prajogo, Daniel & Olhager, Jan, 2012. "Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration," International Journal of Production Economics, Elsevier, vol. 135(1), pages 514-522.
    4. Zhao, Xiande & Li, Yina & Flynn, Barbara B., 2013. "The financial impact of product recall announcements in China," International Journal of Production Economics, Elsevier, vol. 142(1), pages 115-123.
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    8. He, Yuanqiong & Lai, Kin Keung, 2012. "Supply chain integration and service oriented transformation: Evidence from Chinese equipment manufacturers," International Journal of Production Economics, Elsevier, vol. 135(2), pages 791-799.
    9. Robb, David J. & Xie, Bin & Arthanari, Tiru, 2008. "Supply chain and operations practice and performance in Chinese furniture manufacturing," International Journal of Production Economics, Elsevier, vol. 112(2), pages 683-699, April.
    10. Yeung, Jeff Hoi Yan & Selen, Willem & Zhang, Min & Huo, Baofeng, 2009. "The effects of trust and coercive power on supplier integration," International Journal of Production Economics, Elsevier, vol. 120(1), pages 66-78, July.
    11. Sang Ko, Hoo & Nof, Shimon Y., 2012. "Design and application of task administration protocols for collaborative production and service systems," International Journal of Production Economics, Elsevier, vol. 135(1), pages 177-189.
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