Journal of Operations Management 17 1999.

521533

Organizational culture and advanced manufacturing technology

implementation
Christopher M. McDermott
b

a,)

, Gregory N. Stock

b,1

a
Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA
Department of Management and General Business, Frank G. Zarb School of Business, 134 Hofstra Uniersity, Hempstead, NY 11549,
USA

Received 17 March 1998; accepted 3 December 1998

Abstract
Using data collected from a sample of 97 manufacturing plants, we examine how organizational culture is related to
outcomes associated with advanced manufacturing technology AMT. implementation. Multiple item scales are developed
and adapted from a wide range of sources in the literature to measure managers perceptions of organizational culture, AMT
benefits, and implementation outcomes such as operational benefits, organizational benefits, satisfaction, and competitive
success. Regression analysis is used to analyze the relationships between these variables. The results suggest that cultural
characteristics, as defined by the competing values model, are significantly related to AMT implementation outcomes. We
conclude by discussing the managerial implications of these results. q 1999 Elsevier Science B.V. All rights reserved.
Keywords: Advanced manufacturing technology; Implementation; Satisfaction; Organizational culture; Empirical research

1. Introduction
Advanced manufacturing technology AMT. has
different meanings in different situations, but it can
be broadly defined as an automated production
system of people, machines, and tools for the planning and control of the production process, including
the procurement of raw materials, parts, and components, and the shipment and service of finished
products Pennings, 1987, p. 198.. More specifically, AMT can be described as a group of computer-based technologies, including computer-aided
)
Corresponding author. Tel.: q1-518-276-4861; fax: q1-518276-8661; e-mail: mcderc@rpi.edu
1
Tel.: q1-516-463-5723.

design CAD., robotics, group technology, flexible

manufacturing systems, automated materials handling systems, computer numerically controlled machine tools, and bar-coding or other automated identification techniques Zairi, 1992; Zammuto and
OConnor, 1992; Sambasivarao and Deshmukh,
1995..
AMTs can provide a variety of benefits. The most
distinguishing feature of AMT is its ability to provide a combination of flexibility and efficiency to
end-users. This combination of capabilities directly
contradicts the traditional paradigm of operations
management and manufacturing strategy. In traditional thinking, efficiency is possible only in the
production of large volumes of standard products,
while customization is necessarily penalized with

0272-6963r99r$ - see front matter q 1999 Elsevier Science B.V. All rights reserved.
PII: S 0 2 7 2 - 6 9 6 3 9 9 . 0 0 0 0 8 - X

522

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

higher costs. In addition to these operational benefits

e.g., efficiency and flexibility., AMT implementation can often provide benefits to the firm at the
organizational level through improvements in areas
such as work flows and communication Zairi, 1992..
The use of AMT has become pervasive among
manufacturing firms in the US. The AMT promise
might be characterized as the Holy Grail of production: the flexibility to produce customized products
combined with the efficiency of mass production,
together with a host of organizational benefits. The
promise of AMT does not always coincide with its
reality in the harsh world of the shop floor, however,
and users of these technologies are often left less
than satisfied with its implementation.
Successful implementation of AMT often requires
different types of organization andror management
practices than are found in more traditional environments Zammuto and OConnor, 1992.. This is because, as noted above, these technologies directly
challenge established norms and strategic options
considered in a pre-AMT facility. Because these
technologies are quite different from the equipment
they may be replacing, organizational characteristics
or capabilities are likely to affect the success of the
implementation. Organizational culture has been suggested as a factor that may ultimately influence the
effectiveness with which a firm implements AMT
Zammuto and OConnor, 1992.. For example, a
firm whose culture is more flexible may be more
likely to experience success with AMT than one that
is not.
The objective of this paper is to examine the
relationship between organizational culture and implementation of AMT. We examine this relationship
for a number of different types of implementation
outcomes. In addition to the operational and organizational benefits discussed above, we consider managerial satisfaction with the implementation and the
competitive performance of the organization. One
general expectation is that the effects of various
cultural characteristics would vary with different
types of implementation outcomes. In other words,
organizations emphasizing one set of cultural characteristics might attain operational benefits, while an
organization emphasizing a different set of cultural
variables might more effectively obtain competitive
benefits.

The remainder of the paper is organized as follows. Section 2 examines the literature relating to
technology implementation, AMT benefits, and culture. Section 3 discusses our methodological approach and sample. Findings are presented, followed
by a discussion of the contribution of this research to
our understanding of AMT implementation.

2. Conceptual framework
While often representing a radical change from
their predecessors on the shop floor, AMTs have
become a staple in many industries. Along with their
increased use come questions regarding their effective implementation. In this section, we outline the
conceptual basis for our study. We begin with a
consideration of organizational culture as a possible
determinant in AMT implementation success. We
next discuss the benefits, looking inward operational, organizational, and overall satisfaction., as
well as outward overall competitive., which are
associated with AMT implementation in the literature. Based on this discussion, we then present the
hypotheses to be tested.
2.1. AMT implementation outcomes
AMT can bring a number of benefits to a firm.
Operational benefits, which include improvements in
both productivity and flexibility, are the most commonly cited results, and are commonly used to justify the purchase of the equipment to upper management. Another criterion for implementation effectiveness is the extent to which the technology yields
organizational or managerial benefits, which might
include improvements in work flows, communication, integration of work, and managerial control
Zairi, 1992.. A third type of outcome that might
result from AMT implementation, competitie benefits, can include improved sales growth, market share,
and return on investment Ramamurthy, 1995.. All
of these types of benefits are advantageous, yet it is
unclear to what extent each one of these drives
managements ultimate satisfaction with the technology.
Operational outcomes of AMT implementation
can include productivity benefits, flexibility benefits,

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

or both Zairi, 1992.. For example, a firm might

make productivity gains as a result of an AMT, yet
not achieve any benefits such as increased product
line breadth. Another firm might have just the opposite mix of benefits Zammuto and OConnor, 1992..
In addition to these types of operational outcomes,
AMT often provides improvements in the speed and
quality of the manufacturing process.
Interestingly, it is conceivable that an implementation that provides no improvements from an operational perspective may be considered a success with
respect to organizational improvements andror
worker satisfaction. For example, the implementation
might lead to better communication, redesigned work
flows, or better integration of work across functional
boundaries, even if the AMT system itself provides
no operational improvements Zairi, 1992.. These
associated changes in communication and interaction
related to AMT implementation can in turn result in
greater satisfaction de Pietro and Schremser, 1987..
Thus, from a strictly operational perspective, the
firm may be no better off after implementing the
AMT, yet the firm may learn enough about themselves from the implementation process to make it
quite worthwhile Tyre, 1991..
Operational and organizational improvements are
often less visible than the big picture: profitability,
sales growth, and market share. It is possible, but not
always the case, that the implementation of AMTs
leads to higher levels of competitive performance, as
measured by variables such as market share, sales
growth, or return on investment Ramanujam et al.,
1986; Ramanujam and Venkataram, 1987; Ramamurthy, 1995; Boyer et al., 1997..
The preceding observation brings us to a fourth
category of AMT implementation outcomes: satisfaction. The literature on technology implementation
focuses extensively on this variable Ives et al.,
1983; Majchrzak and Cotton, 1988; Galleta and Lederer, 1989; Melone, 1990; Wall et al., 1990;
Leonard-Barton and Sinha, 1993; Gatian, 1994; Iivari
and Ervasti, 1994; Torkzadeh and Dwyer, 1994;
Ramamurthy, 1995; Etezadi-Amoli and Farhoomand,
1996; von Dran et al., 1996.. The MIS literature is
notable for its use of satisfaction as a performance
metric. Given that AMT is based primarily on computerrinformation-based technology, this literature
can provide a good deal of insight into the use of

523

satisfaction as a measure of implementation effectiveness.

We examine satisfaction with AMT implementation as an additional outcome variable for a number
of reasons. It stands to reason that greater satisfaction with an AMT fosters willingness to use the
system in a way that is consistent with organizational
goals Ramamurthy, 1995.. Additionally, satisfaction
has been identified as an indicator of how well
organizational goals have been met Ramanujam et
al., 1986.. Further, when the use of technology is
mandatory, as is the case with many AMTs, satisfaction with the system is an especially important metric Ives et al., 1983.. Satisfaction has also been used
as a dependent variable in other recent studies Denison and Mishra, 1995. exploring relationships between culture and organizational effectiveness. While
much of the extant literature has focused primarily
on specific tangible measures of AMT implementation benefits, such as operational improvements or
financial performance, measuring satisfaction provides a more holistic indication of the success of the
implementation process at an organizational level.
In this paper, we explore the relationship among
operational, managerial, competitive and satisfaction
outcomes and the possible effects of organizational
culture.
2.2. Organizational culture
There are a number of ways in which to consider
the relationship between technology implementation
and the organization. For example, the relationship
between technology and organizational structure has
been explored in a good deal of research Bamber
and Lansbury, 1988; Adler and Shenhar, 1990; Barley, 1990; Burkhardt and Brass, 1990; Parthasarthy
and Sethi, 1992, 1993; Zammuto and OConnor,
1992; McCutcheon, 1993; Sohal, 1996; Gupta et al.,
1997.. Another characteristic related to technology
implementation is organizational culture. Although
structure and culture may be related, particularly
with respect to technology Adler and Shenhar, 1990;
Zammuto and OConnor, 1992., culture as a factor
in technology implementation has not received as
much attention in the literature. In fact, with few
exceptions Zammuto and OConnor, 1992; Bates et
al., 1996., organizational culture and its relationship

524

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

to any area of operations management has been the

topic of very little research. Therefore, in this paper,
we explicitly examine the relationship between organizational culture and AMT implementation.
In general, culture is the programming of the
mind which distinguishes the members of one human
group from another Hofstede, 1980.. To be more
specific, organizational culture is
a pattern of basic assumptionsinvented, discovered, or developed by a given group as it learns to
cope with its problems of external adaptation and
internal integrationthat has worked well enough
to be considered valid and, therefore, to be taught
to new members as the correct way to perceive,
think, and feel in relation to those problems
Schein, 1985, p. 9..
The organizations culture, then, is built on shared
values and ideas. Culture is a pervasive entity, effecting the way a firm operates in countless ways. As
such, it is becoming increasingly clear that it can and
does play an important role in many facets of the
organization Denison and Mishra, 1995.. Research
on the topic provides useful insight into the dimen-

sions and variations of culture within the firm. The

conceptual framework of organizational culture used
in this paper is the competing values framework
Quinn and Rohrbaugh, 1981, 1983; Quinn, 1988;
Zammuto and OConnor, 1992.. The competing values model is characterized by a two-dimensional
space, shown in Fig. 1, that reflects different value
orientations Denison and Spreitzer, 1991.. The first
dimension in this model, the flexibilitycontrol axis,
emphasizes independent desire for a focus on change
or stability. A flexibility orientation reflects flexibility and spontaneity, while a control orientation reflects stability, control, and order.
The second dimension in this framework, the
internalexternal axis, concerns a focus on activities
occurring within internal. or outside external. the
organization. The internal dimension emphasizes the
maintenance and improvement of the existing organization, while the external emphasizes competition,
adaptation, and interaction with the external environment. As such, a manufacturing firm that is exclusively internally-oriented might expend resources to
optimize existing operational equipment and practices. An externally-oriented firm, on the other hand,
would tend to scan the competitive environment to

Fig. 1. The competing values framework of organizational culture adapted from Denison and Spreitzer, 1991..

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

assess their relative competitive strengths and weaknesses vis-a-vis their competition and customers, and
strive to make changes to their firm accordingly.
This two-dimensional typology yields four ideal
cultural orientations that correspond to four major
models in organizational theory. Group culture emphasizes flexibility and change. It is also characterized by strong human relations, affiliation, and a
focus on the internal organization. Deelopmental
culture also emphasizes flexibility, but is externallyoriented. The focus is primarily on growth, resource
acquisition, creativity, and adaptation to the external
environment. Rational culture is also externally focused, but is control-oriented. Such firms emphasize
productivity and achievement, with objectives typically well-defined and external competition a primary motivating factor. Hierarchical culture, like
rational culture, emphasizes stability. However, the
focus is on the internal organization. Uniformity,
coordination, internal efficiency, and a close adherence to rules and regulations characterize this orientation Quinn and Rohrbaugh, 1981, 1983; Quinn,
1988..
An important assumption underlying this framework is that each quadrant is an ideal type. It is
likely that an organization will exhibit a combination
of different culture orientations, although it may be
that one type is more dominant than the others. An
organizations culture would therefore be characterized by a profile in the two-dimensional space,
rather than a single point Denison and Spreitzer,
1991.. As such, a high rating on one dimension e.g.,
internal orientation. does not exclude high rating at
the other end e.g., external orientation..
The conceptual framework of Zammuto and
OConnor 1992. argues that organizations characterized by high levels of flexibility will be more successful in AMT implementation than organizations
characterized by control. The reasoning behind their
argument is that AMT fundamentally changes the
way a firm manufactures its products. In addition to
providing greater efficiency, AMT allows a wider
variety of parts to be produced than traditional,
inflexible automation. However, an AMT production
system is much more complex, which can lead to a
good deal of uncertainty on the part of both workers
and managers. An organization whose culture is
characterized by flexibility and spontaneity will most

525

likely be able to deal with uncertainty better than one

characterized by control and stability. User involvement and empowerment during technology implementation, both elements of the group culture described above, have been found to be positively
related to satisfaction with newly implemented technology Majchrzak and Cotton, 1988; Wall et al.,
1990; Leonard-Barton and Sinha, 1993; Torkzadeh
and Dwyer, 1994; von Dran et al., 1996.. An implication of the framework of Zammuto and OConnor
1992. is that an organization characterized by a
more flexible culture would show a higher level of
effectiveness with AMT implementation than those
that are more control-oriented. Therefore, the expectation would be that organizations characterized by
group and developmental culture the culture types
exhibiting a flexibility orientation. would be more
effective in implementing AMT.
However, an important qualification must be
added to the implications of the Zammuto and
OConnor framework. In their model, they explicitly
refer to the relationship between flexibility orientation and direct outcomes associated with AMT implementation, in particular productivity and flexibility benefits Zammuto and OConnor, 1992, p. 716..
Productivity and flexibility benefits can be considered to be a subset of what we have categorized as
operational benefits. In addition to operational benefits, we have discussed two other types of direct
outcomes associated with AMT implementation: organizational benefits and satisfaction. All three are
directly related to the implementation of the technology from an internal perspective, and could be expected to be influenced by culture. The arguments of
Zammuto and OConnor 1992. therefore, provide
the conceptual framework for the first set of hypotheses relating to direct AMT implementation outcomes:
Hypothesis H1a: A flexibility orientation group
andror developmental culture. in perceived organizational culture will be positively associated with
operational benefits of AMT implementation.
Hypothesis H1b: A flexibility orientation group
andror developmental culture. in perceived organizational culture will be positively associated with
organizational benefits of AMT implementation.
Hypothesis H1c: A flexibility orientation group
andror developmental culture. in perceived orga-

526

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

nizational culture will be positively associated with

managerial satisfaction in AMT implementation.
The final hypothesis relates organizational culture
to competitive success, as measured by financial
outcomes such as profitability, market share, and
sales growth. All things equal, as a firm becomes
more externally focused, it becomes more attuned to
the demands of the market. It follows that such a
firm is implementing AMT in order to satisfy an
identified market need, rather than purely to achieve
some technical objective that may or may not be
important to customers. We would therefore expect
that a firm implementing AMT is more likely to
achieve business success if it has a high degree of
external orientation. With respect to the competing
values model, we would thus expect a firm that
emphasizes an external orientation developmental
andror rational culture. to be more likely to experience positive competitive outcomes:
Hypothesis H2: An external orientation developmental andror rational culture. in perceived organizational culture will be positively associated with
competitive success in AMT implementation.

The competing values model and hypothesized

relationships are shown graphically in Fig. 2.

3. Data and variables

This study employs a survey methodology to
collect data used to test the hypotheses developed
above. A mail questionnaire, based on areas in the
literature described above, was sent to 470 plant
managers and vice-presidents of manufacturing in
cooperation with the American Production and Inventory Control Society APICS.. A broad sample of
industries was selected to increase the generalizability of the studys findings. In total, 11 industries
were represented among the respondents: textiles,
furniture, paper and printing, chemicals and plastics,
primary metals, fabricated metals, machinery, electrical and electronic products, transportation equipment, lumber and wood, and other. Out of the original 470 questionnaires, 97 responses were received,
for a response rate of 20.6%. This response rate is

Fig. 2. Hypothesized relationships between competing values framework and implementation outcomes.

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

consistent with other published survey-based works

in both operations and technology management
Vickery et al., 1993; Ramamurthy, 1995.. Although
our study is limited to some extent by the use of a
single respondent, this approach is common in recent
empirical research in AMT implementation Ramamurthy, 1995; Small and Yasin, 1997.. Furthermore,
this approach is consistent with the exploratory,
quantitative study on organizational culture and effectiveness of Denison and Mishra 1995..
The questionnaire requested that the respondent
consider a specific AMT implementation project in
answering the questionnaire items. The instrument
collected data for variables measuring organizational
culture, implementation outcomes, and satisfaction,
as well as other information e.g., specific type of
technology implemented. about the respondent and
their firm. In developing the survey instrument, we
drew on previously validated questionnaire items
whenever possible. Organizational culture, as conceptualized by the competing values model, was
measured using a validated scale published in Quinn
and Spreitzer 1991.. Where appropriate questionnaire items were not available for other constructs,
we used relevant variables discussed in the literature
to develop the needed scales.
The mean values of the questionnaire items comprising the composite satisfaction variable ranged
from 3.14 to 3.77, with an overall mean of 3.46.
Although this value is slightly above the midpoint
value of the measurement scale of 3, it appears to
show only a minimal bias toward more successful
implementation projects. In addition, standard deviations for these items ranged from 0.83 to 1.14.
Therefore, it appears that sample bias would not be a
problem.
The survey instrument designed by Quinn and
Spreitzer 1991. measures each of the four quadrants
in the competing values model discussed above.
Each of these ideal types is measured by four items.
Each item lists an organizational attribute, and asks
the respondent to indicate on a five-point scale 1 is
lowest and 5 is highest. the extent to which the
attribute characterizes the respondents organization.
Quinn and Spreitzer 1991. administered this questionnaire to a sample of 796 executives in an earlier
study and found that it was highly reliable, with
Cronbachs a coefficients ranging from 0.77 to 0.84.

527

Consistent with our discussion above, technology

implementation benefits were measured along four
dimensions: operational benefits, organizational benefits, competitive performance, and satisfaction. The
literature suggested a number of items to include to
measure these constructs. Operational benefits can
include output levels, efficiency, cost reduction, reliability, repeatability, quality, and flexibility Zairi,
1992; Zammuto and OConnor, 1992; Boyer, 1996..
We, therefore, developed a set of scales that indicate
implementation effectiveness for a set of operational
measures. Our scale measuring operational benefits
is similar in many respects to a scale of internal
operating performance variables developed by Small
and Yasin 1997..
An extensive literature review indicated that specific measures relating to organizational and managerial benefits should include the extent to which
the technology has improved work flows, communication, integration of business activities, and management control. At a more general level, another
indicator of effectiveness in this category is the
extent to which the technology has enabled the firm
to meet organizational goals Goodman and Griffith,
1992; Zairi, 1992..
Relative competitive performance, including sales
growth, market share, and return on investment, has
also been used as a measure of implementation
effectiveness in a number of studies Ramanujam et
al., 1986; Ramanujam and Venkataram, 1987; Denison and Mishra, 1995; Ramamurthy, 1995.. Each
item in this construct is a self-reported assessment,
where the respondent indicates on a five-point scale
how the respondents firm performed in each category relative to other firms in the same industry.
While this method suffers from a number of limitations, respondents are usually reluctant to provide
financial performance information in any other form,
and as noted above, this method has been widely
used in the literature.
Satisfaction with technology implementation is
considered widely in the literature Ramanujam et
al., 1986; Ramanujam and Venkataram, 1987; Goodman and Griffith, 1992; Zairi, 1992; Leonard-Barton
and Sinha, 1993; Denison and Mishra, 1995; Ramamurthy, 1995.. This survey used multiple items to
measure this construct, including satisfaction with
the technical aspects of the system, satisfaction with

528

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

the implementation process, and satisfaction with

how the technology will affect jobs within the organization. Each of these outcome questionnaire items
was measured on a five-point scale, where 1 was
lowest and 5 was highest.
We will describe the data analysis in more detail
below in Section 4, but we briefly outline our general approach here. First, a principal components
analysis reduced the raw questionnaire data to a set
of meaningful variables corresponding to the construct scales we developed. We expected components
to emerge from this analysis that would reflect the
constructs of operational benefits, organizational
benefits, competitive performance, and satisfaction.
We also checked to see whether satisfaction loaded
on one or more components. Component scores calculated from the principal components analysis then
became the variables in the next step of the analysis,
multiple regression, to test the relationships predicted
in the hypotheses above.

Table 2
Principal component loading matrix varimax rotation. for AMT
benefit variables
Item

Component
1

Improved work flow

0.576
0.463
0.129
Improved communication
0.198
0.759 y0.085
Improved integration of business
0.070
0.853
0.001
activity
Improved management control
0.107
0.754
0.149
Met organizational goals
0.376
0.509
0.286
Increased output
0.819 y0.001 y0.020
Increased efficiency
0.802
0.287 y0.021
Increased reliability
0.784
0.224
0.062
Increased repeatability
0.786
0.068
0.004
Increased quality
0.730
0.079
0.031
Increased flexibility
0.645
0.125 y0.032
Sales growth
0.025
0.195
0.740
Market share
0.026 y0.067
0.788
Return on investment
y0.036
0.035
0.740
Percentage variance explained
28.77
18.21
13.21
Percentage cumulative variance
28.77
46.98
60.19
explained

4. Results
4.1. Principal components analysis
To begin the data analysis, we reduced the original questionnaire data to a smaller, more meaningful
data set. A principal components analysis obtained
the dependent variable of satisfaction SAT. used in
the subsequent regression analysis. The results of
this principal components analysis, shown in Table
1, indicate that all four satisfaction items loaded onto
a single factor. We then computed the composite
variable SAT as the average of these questionnaire
items.
Table 2 shows the principal components loading
matrix with varimax rotation for the other AMT

Table 1
Principal component loading matrix for satisfaction variable
Item

Loading

Satisfaction with choice of system

Satisfaction with implementation process
Satisfaction with time required
Satisfaction with effect on job
Percentage variance explained

0.708
0.825
0.840
0.842
64.9

benefit operational, organizational, and competitive.

items. For interpretation purposes, we follow the
procedure of Stevens 1992., which explicitly considers sample size in determining whether a component loading is statistically significant. For a sample
size of 97, this procedure indicates that loadings of
approximately 0.52 and higher would be significant
at the 0.01 level. In addition, because the loading of
the fifth item was so close to this value 0.509. for
the second component and was quite a bit lower for
the other two components, we chose to include this
item as a member of the second component for
interpretation purposes. Significant loadings are
shown in bold type in Table 2. Three components
were retained using the Kaiser 1960. criterion of
keeping components with eigenvalues of greater than
one.
The identified components are consistent with the
theoretical constructs discussed above. In particular,
the first principal component includes items related
to operational benefits from AMT implementation.
The second component relates to organizational benefits obtained, and the third component to competitive benefits. As in the case of the satisfaction vari-

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

able, for each component, the items with significant

loadings were averaged to compute the associated
composite variable.
To assess perceptions of organizational culture,
we used the scale based on the competing values
model developed by Quinn and Spreitzer 1991.. As
noted above, the scale they developed consists of
four variable groupings each of which consists of
four items. corresponding to the four ideal culture
types specified in the competing values model. Because earlier research had indicated the measures of
ideal culture types to be reliable, we used the set of
questionnaire items identified with each culture type
in Quinn and Spreitzer, 1991. to define culture
variables. The average of the four questionnaire items
associated with each ideal type was used to compute
each culture variable. The only exception was the
composite variable for hierarchical culture, where
dropping one of the questionnaire items increased its
Cronbachs a reliability measure from 0.57 to 0.64.
This variable was therefore the average of three
questionnaire items.
The complete set of variables included in the
regression analysis is listed in Table 3, along with
the questionnaire items included in each variable.

529

Values of Cronbachs a calculated for each variable

ranged from 0.64 to 0.87, indicating an acceptable
level of reliability. In addition, Table 3 shows mean
and standard deviation values. Table 4 shows the
correlations between each of these variables. In addition to the variables discussed above, dummy variables corresponding to the industries listed above
were defined to control for possible industry effects
in the regression analysis described below.
4.2. Regression analysis
We employed regression analysis to test our hypotheses. The analysis consisted of four multiple
regression models using the four outcome variables
above as dependent variables. Table 5 shows the
results for these models. In all four models, 10
dummy variables were included to control for possible industry effects. For clarity, the coefficient estimates are not listed in Table 5. In only one model
the fourth model. were any of these variables statistically significant. In the fourth model, the dummy
variable for the Machinery industry was significant
at the 0.05 level.

Table 3
Variable definitions
Variable name

Description

Questionnaire items

Cronbachs a

Mean

Standard deviation

GROUP a

Group culture

0.87

3.61

0.76

HIERa
DEVELOP a

Hierarchical culture
Developmental culture

0.63
0.78

2.99
3.50

0.72
0.70

RATIONALa

Rational culture

0.79

3.53

0.66

SAT

Satisfaction

0.82

3.46

0.77

OPS

Operational benefits

0.87

3.82

0.64

COMP

Competitive performance

0.64

3.66

0.73

ORG

Organizational and
managerial outcomes

Participation, empowerment,
concern, teamwork
Control, formalization, stability
Flexibility, growth,
change, creativity
Task focus, goal clarity,
efficiency, quality
Choice of system, operation
of system, implementation
process, implementation
time, effects on job
Output, efficiency, reliability,
repeatability, quality,
flexibility, work flows
Sales growth, market share,
return on investment
Communication, integration,
management control,
organizational goals met

0.76

3.63

0.77

As defined by Quinn and Spreitzer 1991..

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

530
Table 4
Correlations

SAT
OPS
ORG
COMP
GROUP
HIER
DEVELOP
RATIONAL
U

SAT

OPS

ORG

COMP

GROUP

HIER

DEVELOP

RATIONAL

1.000
0.516UU
0.426UU
0.249U
0.248U
y0.168
0.123
0.287UU

1.000
0.443UU
0.054
y0.047
y0.166
0.076
0.074

1.000
0.147
0.200U
0.067
0.166
0.249U

1.000
0.033
y0.212U
0.230U
0.237U

1.000
y0.105
0.600UU
0.662UU

1.000
y0.227U
y0.043

1.000
0.620UU

1.000

Significant at 0.05 level.

Significant at 0.01 level.

UU

What is most noticeable about the results for the

first two models with operational OPS. and organizational ORG. as dependent variables. is that neither was statistically significant in an overall sense.
In addition, none of the culture variables was statistically significant. However, the third and fourth models present a different picture. In the third model,
where satisfaction SAT. is the dependent variable,
we were concerned that managerial assessments of
satisfaction with AMT implementation might be colored by more direct outcomes associated with implementation. Therefore, to account for these possible

influences, we include OPS, ORG, and competitive

performance COMP. as control variables in this
model. Here, two culture variables are statistically
significant at the 0.05 level: group culture GROUP.
and developmental culture DEVELOP.. In this
model, the coefficient for GROUP is positive and the
coefficient for DEVELOP is negative. In the fourth
model, with competitive performance COMP. as the
dependent variable, we again include OPS and ORG
as control variables. Here, three of the culture variables are statistically significant: GROUP, hierarchical HIER., and RATIONAL. The coefficients for

Table 5
Regression results
Dependent variable
OPS
INTERCEPT
Industry dummies
GROUP
HIER
DEVELOP
RATIONAL
OPS
COMP
ORG
Overall F
R2
U

ORG
UUU

4.531

0.638.

y0.159 0.585.
y0.133 0.096.
0.074 0.135.
0.106 0.160.

0.889
0.132

SAT
UUU

2.485

0.645.

0.057 0.127.
0.069 0.097.
0.031 0.136.
0.182 0.162.

0.702
0.107

p - 0.10.
p - 0.05.
UUU
p - 0.01.
Standard errors are listed in parentheses below the coefficient estimates.
UU

y0.181 0.840.
0.277UU 0.130.
y0.127 0.100.
y0.322UU 0.131.
0.184 0.163.
0.499UUU 0.121.
0.190U 0.103.
0.247UU 0.124.
4.104UUU
0.475

COMP
2.837UUU 0.861.
y0.357UU 0.136.
y0.249UU 0.105.
0.113 0.143.
0.461UUU 0.171.
y0.083 0.132.
0.175 0.135.
1.853UU
0.275

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

GROUP and HIER are negative, while the coefficient for RATIONAL is positive. We will discuss the
implications of these results in Section 5.

5. Discussion and implications

The first set of hypotheses relates organizational
culture to direct AMT outcomes. Direct AMT outcomes include operational and organizational benefits, and managerial satisfaction with the AMT implementation. Following the framework of Zammuto
and OConnor 1992., we hypothesized that flexibility-oriented cultures would be positively associated
with direct AMT outcomes. In the competing values
framework, group and developmental cultures both
reflect flexibility values. Therefore, we expected both
group and developmental culture variables to be
statistically significant with positive coefficients in
the three regression models with direct outcomes as
dependent variables. The results from these three
regressions were mixed, and at first glance, puzzling.
However, further examination provides an interesting
and useful interpretation.
The first two regressions, which had the more
tangible outcomes operational and organizational
benefits. as dependent variables, were not statistically significant. As a result, hypotheses H1a and
H1b were not supported. However, the third regression yielded unexpected and possibly conflicting results. The coefficient for GROUP was positive and
significant, while the coefficient for DEVELOP was
significant and negative. The result for GROUP was
consistent with H1c. However, we expected that
DEVELOP would also be positively associated with
managerial satisfaction with the AMT implementation. What can explain this apparently contradictory
result?
Taken together, however, these findings do make
sense. In the first two regressions, it is clear that
none of the culture types and developmental culture,
in particular. was associated with either of the tangible outcomes operational and organizational benefits.. Developmental culture within the competing
values model is characterized by flexibility- and
externally-oriented values, emphasizing such attributes as innovation, creativity, and growth. One
would expect this culture type to be especially effec-

531

tive at implementing AMT. However, given the fact

that DEVELOP was not associated with tangible
outcomes in our sample, it is possible that an organization characterized by this culture would find a low
level of satisfaction with an AMT implementation
that, from their perspective, did not work. The technology did not provide the expected tangible benefits
that these firms anticipated and felt were needed to
compete in the external environment. Although group
culture is also characterized by flexibility-oriented
values, its emphasis is internal and focuses on empowerment, teamwork, and participation. We can
therefore surmise that an organization characterized
by group culture found value in the process of AMT
implementation, perhaps as a capability- or teambuilding exercise, even in the absence of operational
and organizational benefits.
The findings related to competitive benefits partially support hypothesis H2. In particular, we expected that externally-oriented culture would be positively related to competitive benefits. An externallyoriented firm tends to focus on meeting its markets
needs, leading to greater market success as measured
by higher financial performance. In the fourth regression model, we found that rational culture, which has
an external orientation, was positively related to
competitive performance. However, developmental
culture was not significantly related to competitive
performance. This was a surprising result given the
developmental cultures external orientation and its
emphasis on creativity and growth.
An especially interesting result in this model is
the significant and negative relationships between
competitive performance and both of the internallyoriented culture variables. These results show that,
within our sample, an internal orientation was negatively associated with competitive benefits, while at
least one type of externally-oriented culture was
positively associated. Again, developmental culture
may have not been associated with competitive benefits for the reason stated above: their focus on growth
and innovation was not met through the AMT implementation as seen in H1 and H2., and as a result,
the firms did not perform as well in the marketplace.
Moreover, rational culture was positively associated
with competitive performance. According to the
competing values model, rather than focusing on
innovation and growth as do developmental cul-

532

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

tures., rational cultures tend to focus on broadly-defined goals of productivity and profitwhether
through technology acquisition or not.
The importance of organizational culture to manufacturing strategy has been recognized Bates et al.,
1996., but there has been little empirical research
relating culture to other areas of manufacturing management. This study addresses that niche in the
literature by specifically considering the relationship
between organizational culture and AMT implementation effectiveness. The results of this study suggest
that culture does indeed have a connection to this
area. However, a good deal more work still needs to
be done to explore this phenomenon in greater detail.
While our study found a tentative link between
culture and AMT implementation, it is likely that
other managerial practices and organizational variables not considered here may also be related to
success in implementing AMT. This topic, among
others, would seem to be a fruitful direction for
future research.

References
Adler, P.S., Shenhar, A., 1990. Adapting your technological base:
the organizational challenge. Sloan Management Review 32
1., 2537.
Bamber, G.J., Lansbury, R.D., 1988. Management strategy and
new technology in retail distribution: a comparative case
study. Journal of Management Studies 25 3., 197216.
Barley, S.R., 1990. The alignment of technology and structure
through roles and networks. Administrative Science Quarterly
35, 61103.
Bates, K.A., Amundson, S.D., Schroeder, R.G., Morris, W.T.,
1996. The crucial interrelationship between manufacturing
strategy and organizational culture. Management Science 41
10., 15651580.
Boyer, K., 1996. An assessment of managerial commitment to
lean production. International Journal of Operations and Production Management 16 9., 4859.
Boyer, K.K., Leong, G.K., Ward, P.T., Krajewski, L.J., 1997.
Unlocking the potential of advanced manufacturing technologies. Journal of Operations Management 15 4., 331347.
Burkhardt, M.E., Brass, D.J., 1990. Changing patterns or patterns
of change: the effects of a change in technology on social
network structure and power. Administrative Science Quarterly 35, 104127.
Denison, D.R., Mishra, A.K., 1995. Toward a theory of organizational culture and effectiveness. Organization Science 6 2.,
204223.

Denison, D.R., Spreitzer, G.M., 1991. Organizational culture and

organizational development: a competing values approach.
Research in Organizational Change and Development 5, 121.
de Pietro, R.A., Schremser, G.M., 1987. The introduction of
advanced manufacturing technology AMT., and its impact on
skilled workers perceptions of communication, interaction,
and other job outcomes at a large manufacturing plant. IEEE
Transactions on Engineering Management 34 1., 411.
Etezadi-Amoli, J., Farhoomand, J., 1996. A structural model of
end user computing satisfaction and user performance. Information and Management 30, 6573.
Galleta, D.F., Lederer, A.L., 1989. Some cautions on the measurement of user information satisfaction. Decision Sciences 20,
419438.
Gatian, A.W., 1994. Is user satisfaction a valid measure of system
effectiveness?. Information and Management 26, 119131.
Goodman, P.S., Griffith, T.L., 1992. A process approach to the
implementation of new technology. Journal of Engineering
and Technology Management 8, 261285.
Gupta, A., Chen, I.J., Chiang, D., 1997. Determining organizational structure choices in advanced manufacturing technology
management. Omega 25 5., 511521.
Hofstede, G., 1980. Cultures Consequences: International Differences in Work-Related Values, Sage, Beverly Hills.
Iivari, J., Ervasti, I., 1994. User information satisfaction: IS
implementability and effectiveness. Information and Management 27, 205220.
Ives, B., Olson, M.H., Baroudi, J.J., 1983. The measurement of
user information satisfaction. Communications of the ACM
26, 785793.
Kaiser, H.F., 1960. The application of electronic computers to
factor analysis. Educational and Psychological Measurement
20, 141151.
Leonard-Barton, D., Sinha, D.K., 1993. Developeruser interaction and user satisfaction in internal technology transfer.
Academy of Management Journal 36 5., 11251139.
Majchrzak, A., Cotton, J., 1988. A longitudinal study of adjustment to technological change: from mass to computer-automated batch production. Journal of Occupational Psychology
61 1., 4366.
McCutcheon, D.M., 1993. Impacts of vendor project management
methods on flexible manufacturing system implementation: a
field study. Journal of Engineering and Technology Management 10 4., 339362.
Melone, N.P., 1990. A theoretical assessment of the user-satisfaction construct in information systems research. Management
Science 36 1., 7691.
Parthasarthy, R., Sethi, S.P., 1992. The impact of flexible automation on business strategy and organizational structure. Academy
of Management Review 17 1., 86111.
Parthasarthy, R., Sethi, S.P., 1993. Relating strategy and structure
to flexible automation: a test of fit and performance implications. Strategic Management Journal 14, 529549.
Pennings, J.M., 1987. Technological innovations in manufacturing. In: Pennings, J.M., Buitendam, A. Eds.., New Technology as Organizational Innovation: The Development and Diffusion of Microelectronics. Ballinger, Cambridge, MA.

C.M. McDermott, G.N. Stock r Journal of Operations Management 17 (1999) 521533

Quinn, R.E., 1988. Beyond Rational Management. Jossey-Bass,
San Francisco.
Quinn, R.E., Rohrbaugh, J., 1981. A competing values approach
to organizational effectiveness. Public Productivity Review 5,
122140.
Quinn, R.E., Rohrbaugh, J., 1983. A spatial model of effectiveness criteria: towards a competing values approach to organizational analysis. Management Science 29, 363377.
Quinn, R.E., Spreitzer, G.M., 1991. The psychometrics of the
competing values culture instrument and an analysis of the
impact of organizational culture on quality of life. Research in
Organizational Change and Development 5, 115142.
Ramamurthy, K., 1995. The influence of planning on implementation success of advanced manufacturing technology. IEEE
Transactions on Engineering Management 42 1., 5061.
Ramanujam, V., Venkataram, N., 1987. Planning system characteristics and planning effectiveness. Strategic Management
Journal 8, 453468.
Ramanujam, V., Venkataram, N., Camillus, J.C., 1986. Multi-objective assessment of effectiveness of strategic planning.
Academy of Management Journal 29, 347372.
Sambasivarao, K.V., Deshmukh, S.G., 1995. Selection and implementation of advanced manufacturing technologies: classification and literature review of issues. International Journal of
Operations and Production Management 15 10., 4362.
Schein, E.H., 1985. Organizational Culture and Leadership.
Jossey-Bass, San Francisco.
Small, M.H., Yasin, M.M., 1997. Advanced manufacturing tech-

533

nology: implementation policy and performance. Journal of

Operations Management 15 4., 349370.
Sohal, A.S., 1996. Assessing AMT implementations: a field study.
Technovation 16 8., 377384.
Stevens, J., 1992. Applied Multivariate Statistics for the Social
Sciences. Lawrence Erlbaum Associates, Hillsdale, NJ.
Torkzadeh, G., Dwyer, D.J., 1994. A path analytic study of
determinants of information systems usage. Omega 22 4.,
339348.
Tyre, M.J., 1991. Managing innovations on the factory floor.
Technology Review 94, 5865.
Vickery, S.K., Droge, C., Markland, R.E., 1993. Production competence and business strategy: do they affect business performance. Decision Sciences 24 2., 435455.
von Dran, G.M., Kappelman, L.A., Prybutok, V.R., 1996. Empowerment and the management of an organizational transformation project. Project Management Journal 27 1., 1217.
Wall, T.D., Corbet, J.M., Martin, R., Clegg, C.W., Jackson, P.R.,
1990. Advanced manufacturing technology, work design, and
performance: a change study. Journal of Applied Psychology
75 6., 691697.
Zairi, M., 1992. Measuring success in AMT implementation using
customersupplier interaction criteria. International Journal of
Operations and Production Management 12 10., 3455.
Zammuto, R.F., OConnor, E.J., 1992. Gaining advanced manufacturing technologies benefits: the roles of organization design and culture. Academy of Management Review 17 4.,
701728.