Firm performance and the strategic fit of manufacturing technology

Abstract

Scholars have widely asserted that a firm’s manufacturing technologies must be aligned with its competitive strategy. This study tests the existence of such a strategy‐technology “fit”, determines whether good fit results in better performance, and examines the nature of fit in light of computer controlled or “advanced manufacturing technologies”. For a sample of 399 metal machining firms, a strategy‐technology alignment was found to exist and relate to higher financial performance. Advanced manufacturing technologies were found to both reinforce and alter conventional thinking about the flexibility‐efficiency tradeoff. Specific technologies were found to be uniquely bundled or combined to support specific competitive requirements.

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