Technovation 21 (2001) 625–636

www.elsevier.com/locate/technovation

Organizational and strategic predictors of manufacturing

technology implementation success: an exploratory study
a,* b
Gregory N. Stock , Christopher M. McDermott
a
Department of Operations Management and Information Systems, College of Business, Northern Illinois University, DeKalb, IL 60115, USA
b
Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA

Received 11 April 2001; received in revised form 2 May 2001; accepted 11 May 2001

Abstract

In this study, we empirically investigate how organizational and strategic variables are related to success in technology implemen-
tation. Organizational culture, operations strategy, and the outcomes associated with manufacturing technology implementation are
assessed from data collected from a sample of manufacturing plants across a wide range of industries. We then analyze the relation-
ships between these variables using multiple regression analysis. Our findings indicate that both culture and strategy variables are
significantly related to technology implementation, but the relationships are dissimilar for different types of implementation out-
comes.  2001 Elsevier Science Ltd. All rights reserved.

Keywords: Manufacturing technology; Implementation; Organizational culture; Operations strategy; Empirical

1. Introduction means to the ultimate end of financial benefits, namely

The traditional paradigm of operations management
and manufacturing strategy holds that efficiency is poss-
ible only through the production of large volumes of
standard products, while customization is necessarily
penalized with higher costs. Advanced manufacturing
technology (AMT) directly contradicts traditional think-
ing by promising the capability of providing both
efficiency and flexibility. In particular, we define AMT
as a group of computer-based technologies, including
computer-aided design (CAD), robotics, group tech-
nology, flexible manufacturing systems, automated
materials handling systems, computer numerically con-
trolled machine tools, and bar-coding or other automated
identification techniques (Sambasivarao and Deshmukh,
1995; Zairi, 1992; Zammuto and O’Connor, 1992).
Clearly, the most distinguishing feature of AMT is its
capability to provide a combination of flexibility and
efficiency. While these operational benefits are
extremely important, they may generally be seen as a
* Corresponding author. Tel.: +1 (815) 753-9329; fax: +1 (815)
753-7460.
E-mail addresses: gstock@niu.edu (G.N.
mcderc@rpi.edu (C.M. McDermott).
improved profitability, market share, and sales growth.
This paper therefore explores relationships associated
with these competitive outcomes as well.
Successful implementation of AMT often requires dif-
ferent types of organizations and/or management prac-
tices than are found in more traditional environments.
This is because these technologies often directly chal-
lenge established norms and strategic options considered
in a pre-AMT facility. Because these technologies are
quite different from the equipment they may be replac-
ing, the culture of the adopting organization itself may
ultimately affect the level of success managers have with
the technology. A firm whose organizational culture is
characterized by flexibility-orientated values may be
more likely to be effective in implementing AMT than
one that is not (Zammuto and O’Connor, 1992). Prior
research has recognized a link between organizational
culture and operations strategy (Bates et al., 1996), so it
stands to reason that a firm’s operations strategy may
also be a factor in implementation success. A firm whose
strategy emphasizes operational flexibility might be
expected to be more effective in implementing manufac-
turing technology than a firm emphasizing other com-
Stock), petitive priorities.
Our paper focuses on how organizational culture and

0166-4972/01/$ - see front matter  2001 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 5 1 - 7
626 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636
operations strategy relate to operational and competitive
outcomes in AMT implementation. The remainder of the
paper is organized as follows. The second section exam-
ines the literature relating to AMT implementation,
organizational culture, operations strategy, and oper-
ational and competitive benefits. The next section dis-
cusses our methodological approach and sample. We
then present our findings and end with a discussion of
the contribution of this research to our understanding of
AMT implementation and how it may be relevant to
practicing managers.
2. Conceptual framework
While it often represents a radical change from their
predecessors on the shop floor, advanced manufacturing
technology is widely used in many companies. Its rise
in popularity has been accompanied by questions regard-
ing its effective implementation. In this section, we out-
line the conceptual basis for our study. Based on an
examination of the literature on organizational culture
and operations strategy, we consider how these con-
structs might be expected to affect AMT implementation
outcomes. We then present a set of hypotheses that fol-
low from this discussion.
2.1. Organizational culture
Culture as a factor in technology implementation has
received little attention in the literature. In fact, with few
exceptions (Bates et al., 1996), organizational culture
and its relationship to any area of operations manage-
ment has been the topic of very little research. 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 assumptions—invented, discovered,
or developed by a given group as it learns to cope
with its problems of external adaptation and internal
integration—that has worked well enough to be con-
sidered valid and, therefore, to be taught to new mem-
bers as the correct way to perceive, think, and feel in
relation to those problems (Schein, 1985).
The organization’s culture is built on its shared values
and ideas, but this is only one element that defines
organizational culture. An organization’s culture is the
set of shared ideas and values that serve as a means to
accomplish something (e.g. in the definition quoted
above, to solve problems).
Organizational culture affects the operation of a firm
in many different ways. As such, it is becoming increas-
ingly clear that it can and does play an important role
in many areas of managing an organization (Denison and
Mishra, 1995). Research on the topic provides useful
insight into the dimensions and variations of culture
within the firm. The conceptual model of organizational
culture used in this paper is the competing values frame-
work (Quinn, 1988; Quinn and Rohrbaugh 1981, 1983;
Zammuto and O’Connor, 1992). The competing values
model is characterized by a two-dimensional space that
reflects different value orientations (Denison and Spre-
itzer, 1991). The first dimension in this model, the flexi-
bility–control axis, shows the degree to which the
organization emphasizes 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 internal–
external axis, addresses the organization’s choice
between focusing on activities occurring within the
organization (internal) and those occurring outside, in
the external environment. An internal orientation reflects
an emphasis on the maintenance and improvement of
the existing organization, while an external reflects an
emphasis on competition, adaptation, and interaction
with the external environment.
This two-dimensional typology yields four ideal cul-
tural orientations that correspond to four major models
in organizational theory. Group culture emphasizes
flexibility and change and is further characterized by
strong human relations, affiliation, and a focus on the
internal organization. Developmental culture also
emphasizes flexibility but is externally oriented. The
focus is primarily on growth, resource acquisition, crea-
tivity, and adaptation to the external environment. Con-
tinuing with this model, rational culture is also exter-
nally focused, but is control oriented. Such firms
emphasize productivity and achievement, with objec-
tives 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. This orientation is
characterized by uniformity, coordination, internal
efficiency, and a close adherence to rules and regu-
lations. Fig. 1, which was adapted from prior work by
Quinn and Spreitzer (1991), provides an illustration how
these ideal types fit within the two-dimensional compet-
ing values framework.
There are two important assumptions underlying this
framework. First, each quadrant is an ideal type. It is
likely that an organization will exhibit a combination of
different culture orientations, although one type may be
more dominant than the others. An organization’s culture
would therefore be characterized by a profile in the two-
dimensional space, rather than a single point (Denison
and Spreitzer, 1991). Therefore, a high rating on one
 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636
Fig. 1. The competing values model of organizational culture.
dimension (e.g. internal orientation) does not exclude
high rating at the other end (e.g. external orientation).
The second key assumption of this model is that an
effective organization will most likely exhibit some
degree of balance among cultural types (and thus along
each axis). An overemphasis on one type (at the
exclusion of others) may be dysfunctional and provide
the organization with a limited capability to respond to
the demands of its environment (Denison and Spreitzer,
1991). For example, a “pure” group culture might be
prone to failure because a very limited knowledge of and
attention to external markets, as well as a lack of formal
mechanisms to guide it through times when such man-
agement style is warranted. Thus, a firm whose cultural
identity maps exclusively toward either end of the
flexibility/control axis would find it difficult to
adequately deal with the variety of challenges faced in
most business environments. The same point can be
made for a firm that is positioned exclusively at one end
of the internal/external axis.
2.2. Operations strategy
There is general agreement that a firm’s operations
strategy is comprised of four key competitive priorities:
cost, quality, flexibility and delivery (Adam and Swami-
dass, 1989; Anderson et al., 1989; Leong et al., 1990).
Similarly, the effectiveness of a company’s operations
strategy is a function of the degree of linkage or consist-
ency between the competitive priorities that are emphas-
ized and the corresponding decisions regarding the struc-
ture and infrastructure of operations (Adam and
Swamidass, 1989; Anderson et al., 1989; Hayes and
Wheelwright, 1984; Hill, 1994; Leong et al., 1990).
Specifically, Hayes and Wheelwright (1984) define
manufacturing strategy as “a sequence of decisions that,
over time, enables a business unit to achieve a desired
627
manufacturing structure, infrastructure, and set of spe-
cific capabilities.”
The degree of fit between an organization’s competi-
tive priorities and its key decisions regarding its invest-
ments provides the key to developing the full potential
of operations as a competitive weapon. This is nowhere
more true than for AMT, which fits within the realm of
“bricks and mortar” structural investments in the dis-
cussion above. Interestingly, while this is clearly an
important link, surprisingly little research has explicitly
explored its implications. Kim and Lee (1993), for
example, look at the relationship between manufacturing
technology and strategy, but at the business (not
operations) level. Ramasesh and Jayakumar (1993) argue
the importance of the link between operations strategy
and AMT selection, but in terms of technology justifi-
cation, not success. Others have considered this issue
from these and other perspectives (Boyer, 1998; Cagli-
ano and Spina, 2000), although surprisingly little has
been done which examines this issue directly.
As we noted in our earlier discussion, AMT is able
deliver a combination of flexibility and efficiency. From
a strategic perspective, the flexibility and economies of
scope (Goldhar et al., 1991) that arise from this capa-
bility of the technology are powerful. However, Jaiku-
mar (1986) argues that many US firms have acquired
flexible technology for cost improvements alone rather
than to improve flexibility. Voss (1986) concurs, arguing
that the choice of technology is too frequently decoupled
from the firm’s strategic goals. This misalignment
between strategic objectives and technology capabilities
can result in disappointment. The predominant feature
of AMT is its ability to provide flexibility without trad-
ing off against cost. When a firm tries to bypass the
flexibility in favor of cost reduction, benefits may not
be realized.
To include a consideration of how strategy may relate
to AMT implementation, the present study includes an
assessment of the relative importance firms place on the
competitive priorities of cost, quality, delivery and
flexibility. The scales used to measure each of these four
priorities are based on those developed, validated, and
used by the Boston University Manufacturing Futures
Survey (Miller and Vollmann, 1984).
2.3. Outcomes associated with AMT implementation
AMT can bring a number of benefits to a firm.
Expected operational outcomes are commonly used to
justify the purchase of the equipment to upper manage-
ment. Operational benefits of AMT implementation can
include either productivity improvements, flexibility
improvements, 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
628 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636
mix of benefits. Zammuto and O’Connor (1992) cite a
number of examples in the literature that illustrate these
different outcomes. In addition to these types of oper-
ational outcomes, AMT often provides improvements in
both the speed and quality of the manufacturing process.
However, the primary attributes that distinguish AMT
from other production technologies is its ability to pro-
vide low cost, flexible manufacturing.
A second type of outcome might result from AMT
implementation, namely competitive benefits. Oper-
ational 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 implemen-
tation of AMT leads to higher levels of competitive per-
formance, as measured by variables such as market
share, sales growth, or return on investment (Boyer et
al., 1997; Ramamurthy, 1995).
2.4. Control variables
In addition to the primary variables of interest
(organizational culture, operations strategy, and oper-
ational and competitive outcomes), there are two sets of
control variables that are included in our analysis. First,
we consider the organizational change that might result
from the AMT implementation. In addition to direct
operational and competitive improvements, it is possible
that the process of implementing the technology might
lead to better communication, redesigned work flows, or
better integration of work across functional boundaries
(Zairi, 1992). Changes in communication and interaction
related to AMT implementation have been shown to
result in greater satisfaction with the technology (de Pie-
tro and Schremser, 1987). Thus, apart from operational
and competitive benefits, the firm may have learned
enough from the implementation process to make it quite
worthwhile (Tyre, 1991). Although organizational
change may have some intrinsic value, our interest in
this variable is in its possible role in the achievement of
the direct operational and competitive outcomes associa-
ted with AMT implementation. It stands to reason a firm
will be more likely to obtain these direct benefits if they
have also achieved organizational improvements from
the technology. We therefore wish to separate the effect
of these organizational changes on implementation suc-
cess from the direct effects of our primary explanatory
variables of interest, culture and strategy.
A second set of control variables is related to the nat-
ure of the technology itself. Technology can differ in
many different ways, and it seems likely that these dif-
ferences would have an effect on implementation effec-
tiveness. Therefore, it is important to control for the
characteristics of the technology when considering the
effects of organizational culture and operations strategy.
In characterizing the technology, we consider two attri-
butes: the newness of the technology and the level of
resources required by the firm to implement the tech-
nology.
Technology newness has been characterized in a num-
ber of different ways. In one respect, it is organization-
specific, reflecting the firm’s level of experience or fam-
iliarity with the technology (Abernathy and Clark, 1985;
McDonough and Barczak, 1992; Roberts and Berry,
1985; Yoon and Lilien, 1985). Green et al. (1995) extend
this concept to differentiate between technical experi-
ence and business experience associated with a given
technology. Technology newness may also be charac-
terized as the maturity of the technology. In contrast to
relative, firm-specific nature of technology newness as
discussed above, technology maturity is an “absolute”
attribute, reflecting the level of development of the tech-
nology apart from any particular’s organization’s expert-
ise or experience (Ulrich and Ellison, 1998).
A second attribute of the technology to be considered
is the level of resources required for its implementation
(Galbraith, 1990). Prior research has shown that
implementation projects experiencing cost overruns,
which is an indicator of a greater-than-expected level of
resources required, had lower levels of effectiveness in
implementation (Leonard-Barton and Sinha, 1993). In
addition, the cost of a technology, which is a reflection
of the resources required for implementation, has been
identified as an important technology attribute (Green et
al., 1995).
In particular, we would expect that higher levels of
newness and resource requirements would negatively
affect the success of AMT implementation. Explicitly
considering these constructs allows us to control for their
effects in our analysis.
2.5. Hypotheses
The discussion of organizational culture above, parti-
cularly the implications provided by the Zammuto and
O’Connor (1992) framework relating AMT implemen-
tation to the competing values model, leads to first set
of hypotheses to be tested in this study. The primary
argument is that flexibility oriented cultures will be more
likely to achieve operational success from AMT
implementation than control-oriented cultures. Although
it is not explicitly argued by Zammuto and O’Connor
(1992), their framework would also seem to imply that
a firm whose culture is control-oriented would be ill-
suited to the task of implementing advanced manufactur-
ing technology and would therefore be unlikely to achi-
eve success in this activity.
Hypothesis H1a: A flexibility orientation (group or
developmental culture) will be positively associated
with operational success in AMT implementation.
Hypothesis H1b: A control-oriented culture
(hierarchical or rational culture) will be negatively
 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636
associated with operational success in AMT
implementation.
The next set of hypotheses relate organizational cul-
ture to competitive success, as measured by financial
outcomes such as profitability, market share, and sales
growth. As a firm becomes more externally focused, it
should become more attuned to the demands of the mar-
ket. 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 competitive success if it has a high degree of
external orientation. Although this specific proposition
has not been explored in the literature, a good deal of
prior research has shown the importance of access and
use of external sources of information in similar activi-
ties such as new product development (Clift and Vand-
enbosch, 1999; MacPherson, 1997; Moorman and Slote-
graaf, 1999).
A more general theoretical construct that considers the
use of external information is that of absorptive capacity,
which is the ability of an organization to acquire and
exploit external information for commercial ends (Cohen
and Levinthal, 1990). In fact, a small subset of research
has found that absorptive capacity is an important factor
in technology-related activities such as information sys-
tems use (Boynton et al., 1994) and new product devel-
opment (Atuahene-Gima, 1992; Stock et al., 2001).
From the perspective of the competing values model,
we would thus expect a firm that emphasizes an external
orientation (developmental or rational culture) would be
more likely to be skilled in acquiring and using external
information and therefore to be more likely to achieve
positive competitive outcomes. Conversely, we would
also expect that an internal orientation would be nega-
tively related to competitive outcomes. Therefore, the
next two hypotheses follow:
Hypothesis H2a: An external orientation
(developmental or rational culture) in organizational
culture will be positively associated with competitive
success in AMT implementation.
Hypothesis H2b: An internal orientation (group or
hierarchical culture) in organizational culture will be
negatively associated with competitive success in
AMT implementation.
In addition to these expectations related to specific
cultural orientations, we also draw on the assumption of
the competing values model that an organization will be
more effective if it exhibits a balance in its cultural
orientation. We would therefore expect that a balanced
orientation (one that exhibit high levels of more than one
dimension) would be more likely to achieve effective
629
outcomes from AMT implementation. Therefore, the
next hypothesis follows:
Hypothesis H3: A balanced cultural orientation (high
levels on more than one dimension) will be positively
associated with effective outcomes in AMT
implementation.
The final hypothesis explores the relationship between
implementation benefits with operations strategy. As we
noted above, the literature indicates an important con-
nection between operations strategy and the success of
technology implementation. In particular, prior research
has provided evidence that a flexibility emphasis in a
firm’s strategy is likely to result in more effective
implementation. Therefore, our final hypothesis follows:
Hypothesis H4: A flexibility emphasis in a firm’s
operations strategy will be positively associated with
effective outcomes in AMT implementation.
3. Methodology
3.1. Data collection
A mail questionnaire, based on several areas in the
literature, was sent to 470 plant managers and vice-presi-
dents of manufacturing. In cooperation with the Amer-
ican Production and Inventory Control Society (APICS),
six industries were selected to increase the generaliz-
ability of our findings; automotive, electrical, plastics,
textiles, metal fabrication, and furniture. Out of the orig-
inal 470 questionnaires, 97 responses were received, for
a response rate of 20.6%. This response rate is consistent
with other published survey-based works in both oper-
ations and technology management (Ramamurthy, 1995;
Vickery et al., 1993). Although our study is limited to
some extent by the use of a single respondent, using a
single, well-informed source is common in recent
empirical research in advanced manufacturing tech-
nology implementation (Ramamurthy, 1995; Small and
Yasin, 1997) and manufacturing strategy (Klassen and
Whybark, 1999; Vickery et al., 1993). Furthermore, this
approach is consistent with that used in Denison and
Mishra’s (1995) study of organizational culture and
effectiveness.
The questionnaire requested that the respondent con-
sider a recent AMT implementation project in answering
the questionnaire items. The instrument collected data
for variables measuring organizational culture, organiza-
tional change achieved as a result of AMT implemen-
tation as well as a battery of questions assessing the spe-
cific type of technology implemented and about the
respondent and their firm. In developing the survey
630 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636

instrument, we drew on previously validated question- Table 1

naire items whenever possible. Organizational culture, Principal component loading matrix (varimax rotation) for outcome
variables
as conceptualized by the competing values model, was
measured using an instrument adapted from a published, Item Component
validated scale by Quinn and Spreitzer (1991). Where
appropriate questionnaire items were not available for 1 2
other constructs, we used relevant variables discussed in
Improved work flow 0.688 0.191
the literature to develop the needed scales. Increased output 0.800 ⫺0.027
The survey instrument designed by Quinn and Spre- Increased efficiency 0.856 0.004
itzer (1991) measures each of the four quadrants in the Increased reliability 0.813 0.062
competing values model discussed above. Each of these Increased repeatability 0.776 ⫺0.014
ideal types is measured by four items. Each item lists Increased quality 0.725 0.015
Increased flexibility 0.646 ⫺0.065
an organizational attribute, and asks the respondent to Sales growth 0.073 0.765
indicate on a five-point scale (1 is lowest and 5 is Market share 0.086 0.775
highest) the extent to which the attribute characterizes Return on investment ⫺0.026 0.744
the respondent’s organization. This questionnaire was % Variance explained 40.6 17.9
used for a sample of 796 observations in an earlier study % Cumulative variance explained 40.6 58.5
and found that it was highly reliable, with Cronbach’s
alpha coefficients ranging from 0.77 to 0.84.
Consistent with our discussion above, we explore two are related to competitive outcomes. For interpretation
types of AMT benefits in this paper: organizational and purposes for this and other principal components analy-
operational. The literature suggested a number of items ses, we follow the procedure of Stevens (1992), which
to include to measure these constructs. Operational bene- explicitly considers sample size in determining whether
fits can cover a number of different areas, including out- a component loading is statistically significant. For a
put levels, efficiency, cost reduction, reliability, repeat- sample size of 97, this procedure indicates that loadings
ability, quality, and flexibility (Boyer, 1998; Zairi, of approximate 0.520 and higher would be significant at
1992). We therefore developed a set of scales that indi- the 0.01 level. Significant loadings are shown in bold
cate the effectiveness of implementation for a set of type in Table 1. In deciding how many components to
operational measures. Our scale measuring operational retain, we employed the Kaiser (1960) criterion of keep-
benefits is similar to the scale of internal operating per- ing components with eigenvalues of greater than one.
formance variables developed by Small and Yasin Two variables were created by averaging the significant
(1997). items for each component (Dunteman, 1989). The vari-
The literature also suggested a number of items to able measuring operational outcomes was named
include which measure the elements of the organiza- OUTFOPER; the variable measuring competitive out-
tional change construct. An extensive literature review comes was named OUTFCOMP.
indicated that specific measures in this category should To assess perceptions of organizational culture, we
include the extent to which the technology has improved used a scale based on the competing values model
work flows, communication, integration of business developed by Quinn and Spreitzer (1991). This scale
activities, and management control. At a more general consists of four variable groupings (each of which in
level, another indicator in this category would be the turn consists of four items) corresponding to the four
extent to which the technology has enabled the firm to ideal culture types specified in the competing values
meet organizational goals (Goodman and Griffith, 1992; model. To explore our sample of firms within the com-
Zairi, 1992). peting values framework, we employed principal compo-
nents analysis on these questionnaire items. Our results
3.2. Variable definition are shown in Table 2, with significant loadings again
shown in bold type. The first component included items
We initially reduced the original questionnaire data to that are characteristic of two culture types; developmen-
a smaller, more meaningful data set. The first step was tal culture and rational culture. Because this component
to perform a principal components analysis to obtain the represents a balance between developmental culture and
operational and competitive outcome variables used as rational culture, we have named the variable associated
dependent variables in the subsequent regression analy- with this component CULTFBAL1. The second compo-
sis. The varimax rotated component matrix for this nent included items associated with the group culture
analysis, shown in Table 1, indicates that there are two type. Its associated variable is named CULTFGRP. The
components. In the first component, items with signifi- third component also represented a balance among more
cant loadings are related to operational outcomes, while than one culture type, in this case, developmental cul-
in the second component items with significant loadings ture, hierarchical culture, and rational culture. The vari-
 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636 631

Table 2
Principal component loading matrix (varimax rotation) for organizational culture variables

Item Component

1 2 3 4

Participation, open discussion 0.088 0.816 0.265 ⫺0.018

Empowerment of employees to act 0.337 0.602 0.510 ⫺0.197
Assessing employee concerns 0.413 0.764 0.130 0.001
Human relations, teamwork, cohesion 0.194 0.847 0.245 0.020
Flexibility, decentralization 0.357 0.268 0.530 ⫺0.307
Expansion, growth, and development 0.706 0.041 0.202 ⫺0.239
Innovation and change 0.832 0.243 0.068 ⫺0.001
Creative problem solving processes 0.626 0.471 0.024 0.075
Control, centralization 0.029 ⫺0.179 ⫺0.413 0.731
Routinization, formalization, structure ⫺0.199 0.061 0.137 0.822
Stability, continuity, and order 0.021 0.079 0.479 0.684
Predictable performance outcomes 0.192 0.125 0.789 0.214
Task focus, accomplishment, achievement 0.378 0.369 0.559 0.042
Direction, objective setting, goal clarity 0.169 0.336 0.720 0.024
Efficiency, productivity, profitability 0.613 0.264 0.408 ⫺0.041
Outcome excellence, quality 0.678 0.151 0.318 ⫺0.121
% Variance explained 21.45 19.75 16.36 13.84
% Cumulative variance explained 21.45 41.20 57.56 71.40

Table 3
Principal component loading matrix (varimax rotation) for operations strategy variables

Item Component

1 2 3 4

Inventory costs 0.491 0.245 ⫺0.037 0.220

High performance products ⫺0.145 0.114 0.773 0.171
Fast delivery 0.158 0.105 0.356 0.685
Rapid design changes 0.388 0.057 0.707 ⫺0.147
Capacity utilization 0.858 ⫺0.004 0.202 0.068
Consistent quality 0.116 0.208 0.618 0.261
Delivery reliability 0.195 ⫺0.023 0.071 0.817
Rapid volume changes 0.107 0.427 ⫺0.045 0.524
Labor productivity 0.698 0.257 0.030 0.254
Conformance to specifications 0.534 0.518 0.038 0.174
Lead time reduction 0.283 0.652 0.201 0.138
Large product variety ⫺0.087 0.817 0.339 0.011
Quick changeover 0.376 0.638 ⫺0.027 0.076
% Variance explained 30.80 11.64 9.55 8.98
% Cumulative variance explained 30.80 42.44 51.99 60.97

able associated with this component is named
CULTFBAL2. Finally, the fourth component includes
three items characteristic of hierarchical culture, and its
associated variable is named CULTFHIER. As before,
the variable associated with each component was created
by averaging its significant items.
The presence of these mixed components
(CULTFBAL1 and CULTFBAL2) allows us to examine
whether organizations in our sample exhibiting a balance
of culture types were more effective in achieving organi-
zational and operational benefits than pure ideal types.
As will be discussed below, each of the two mixed vari-
ables, CULTFBAL1 and CULTFBAL2, represents vary-
ing degrees of balance among cultural types.
To measure operations strategy among these firms, we
again employed principal components analysis to reduce
a multiple item scale to a smaller set of variables. This
scale consisted of multiple items assessing operations
strategy along four primary competitive priorities: cost,
quality, flexibility, and speed. The results of this princi-
pal components analysis are shown in Table 3, with sig-
nificant loadings shown in bold type. The variable
STRFCOST indicates a strategic emphasis on cost;
STRFQUAL indicates a strategic emphasis on quality
632 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636

Table 4
Principal component loading matrix (varimax rotation) for control variables

Item Component

1 2 3 4

Immature technology ⫺0.143 0.040 ⫺0.138 0.893

New technology to firm ⫺0.238 ⫺0.091 0.807 0.023
New technology to industry 0.237 0.248 0.467 0.526
Technology required new business practices 0.230 0.347 0.694 ⫺0.172
Required more business resources ⫺0.099 0.836 0.008 0.742
Long implementation time ⫺0.115 0.785 0.119 0.126
Required more technical resources ⫺0.043 0.857 0.067 ⫺0.031
Improved communication 0.741 ⫺0.095 0.030 ⫺0.165
Improved integration of business activity 0.839 ⫺0.068 ⫺0.063 0.132
Improved management control 0.750 ⫺0.031 0.117 0.081
Met organizational goals 0.668 ⫺0.160 ⫺0.096 ⫺0.138
% Variance explained 22.49 20.67 12.88 10.87
% Cumulative variance explained 22.49 43.36 56.04 66.91

Table 5
Variable definitions

Variable name Description Questionnaire items Cronbach’s a

Output, efficiency, reliability, repeatability, quality,

OUTFOPER Operational outcomes 0.87
flexibility, work flows
OUTFCOMP Competitive outcomes Profitability, market share, sales growth 0.63
CULTFGRP Group culture Participation, empowerment, concern, teamwork 0.87
CULTFHIER Hierarchical culture Control, formalization, stability 0.63
CULTFBAL1 Developmental and rational culture balance Growth, change, creativity, productivity, quality 0.82
Hierarchical, rational, and developmental
CULTFBAL2 Predictable outcomes, task focus, goal clarity, flexibility 0.78
culture balance
Inventory reduction, capacity utilization, labor
STRFCOST Cost emphasis 0.64
productivity
High performance products, rapid design changes,
STRFQUAL Quality/design emphasis 0.58
consistent quality
STRFFLEX Flexibility emphasis Lead time reduction, product variety, quick changeover 0.67
STRFSPD Speed/responsiveness emphasis Fast delivery, delivery reliability, rapid volume changes 0.57
TECHFMAT Immaturity of technology Technology immaturity Single item
New technology to firm, new business practices needed
TECHFEXP Inexperience with technology 0.42
for implementation
Technical resources, business resources, implementation
TECHFRES Resources required to implement technology 0.80
time
Communication, integration, management control,
ORGFCHNG Organizational change 0.76
organizational goals met

and design; STRFFLEX indicates a strategic emphasis
on flexibility; and STRFSPD indicates a strategic empha-
sis on speed and responsiveness.
Finally, we developed the control variables using
scales consistent with technology and organizational
change dimensions outlined above. Seven technology
items and four organizational change items were
included in this scale, and then principal components
analysis was performed to reduce these items to a set
of four variables that were generally consistent with the
expected theoretical constructs. Table 4 shows the results
of this analysis, again with significant loadings shown
in bold print. The first component can be interpreted as
indicating the extent of positive organizational change
occurring after the AMT implementation, and is defined
as the variable ORGFCHNG. The second component is
interpreted as the degree to which business and technical
resources required for implementation exceeded the
level expected before implementation. The component
score for this component we defined to be the variable
TECHFRES. The third and fourth components were
slightly more troublesome to interpret because the item
“new technology to industry” loaded highly on both the
third and fourth component. To avoid confusion, we
dropped this item in defining the remaining two vari-
ables. Therefore, the variable associated with the third
 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636 633

Table 6
Correlations

OUTFOPER OUTFCOMP CULTFGRP CULTFHIER CULTFBAL1 CULTFBAL2 STRFCOST

OUTFOPER 1.000
OUTFCOMP 0.054 1.000
CULTFGRP ⫺0.047 0.033 1.000
CULTFHIER ⫺0.166 ⫺0.212*a ⫺0.105 1.000
CULTFBAL1 0.039 0.286* 0.618* ⫺0.170 1.000
CULTFBAL2 0.139 0.168 0.643* ⫺0.017 0.607* 1.000
STRFCOST 0.067 ⫺0.118 0.163 0.220* 0.037 0.245* 1.000
STRFQUAL 0.217* 0.158 0.055 ⫺0.068 0.173 0.169 0.309*
STRFSPD 0.220* 0.034 0.079 ⫺0.135 0.207* 0.119 0.398*
STRFFLEX 0.229* 0.036 0.223* 0.097 0.110 0.228* 0.426*
TECHFMAT ⫺0.250* ⫺0.070 ⫺0.037 0.063 0.107 ⫺0.057 ⫺0.002
TECHFEXP 0.042 ⫺0.069 ⫺0.098 0.025 ⫺0.066 ⫺0.089 0.052
TECHFRES ⫺0.214* 0.032 ⫺0.151 0.040 0.034 ⫺0.068 ⫺0.036
ORGFCHNG 0.443* 0.147 0.200* 0.067 0.116 0.363* 0.096

STRFQUAL STRFSPD STRFFLEX TECHFMAT TECHFEXP TECHFRES ORGFCHNG

STRFQUAL 1.000
STRFSPD 0.275* 1.000
STRFFLEX 0.405* 0.376* 1.000
TECHFMAT 0.015 ⫺0.071 0.113 1.000
TECHFEXP 0.006 0.036 ⫺0.039 ⫺0.105 1.000
TECHFRES 0.102 0.001 0.014 0.119 0.212 1.000
ORGFCHNG 0.049 0.171 0.200* ⫺0.140 ⫺0.018 ⫺0.162 1.000

a
*Significant at 0.05 level.

component corresponds to the level of the firm’s inex-
perience with the technology (TECHFEXP), and the
variable corresponding to the fourth component consists
of the single item measuring the level of the tech-
nology’s immaturity (TECHFMAT).
The complete set of variables included in the
regression analysis is listed in Table 5 along with the
questionnaire items corresponding to each variable. In
addition, with the exceptions of TECHFMAT (which is
a single item), and TECHFEXP (a=0.42), the values of
Cronbach’s a calculated for each variable indicated an
acceptable level of reliability (Nunnally, 1967). Table 6
shows the correlations between each of these variables.
4. Findings
We employed regression analysis to test our hypoth-
eses. The analysis consisted of estimating two regression
models. The results are shown in Table 7. As discussed
above, the first uses OUTFOPER as the dependent vari-
able, and in the second, OUTFCOMP is the dependent
variable. To ensure that there were no differences across
industries, we also estimated models including a set of
dummy variables corresponding to the industries listed
above. None of the industry dummy variables was sig-
nificant, and there were no meaningful changes (either
in direction, magnitude, or significance) among the other
variables. For reasons of clarity and precision, we there-
fore report only the results of the models without the
industry control variables.
In the first model, there were a number of statistically
significant variables. Two culture variables, CULTFGRP
and CULTFHIER, were significant with negative coef-
ficients, indicating that higher levels of these cultural
orientations were negatively related to the achievement
of operational benefits from the AMT implementation.
Of the strategy variables, only STRFFLEX was signifi-
cant, with a positive coefficient, which indicates that a
strategic emphasis on operational flexibility is positively
associated with operational success in AMT implemen-
tation. In addition, as we expected, a number of the con-
trol variables were significantly related to operational
outcomes. In particular, higher levels of technology
immaturity and resource requirements were associated
with lower levels of operational success; higher levels
of positive organizational change were related to higher
levels of operational benefits.
In the second model, with OUTFCOMP as the depen-
dent variable, a somewhat different set of relationships
emerged. The CULTFGRP and CULTFHIER variables
were again significant with negative coefficients, but one
of the balanced culture variables, CULTFBAL1, was
also significant. However, the sign of its coefficient was
positive. None of the strategy variables was statistically
significant, nor were any of the control variables. This
model shows a relatively clear pattern, where a greater
internal cultural orientation (group or hierarchical
634 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636

Table 7 support for both of these hypotheses. Both CULTFGRP

Regression resultsa and CULTFHIER, which represent an internal orientation,
Dependent variable were significant with negative coefficients. CULTFBAL1,
composed of items from both developmental and rational
OUTFOPER OUTFCOMP culture, represents an external orientation. This variable
was significant with a positive coefficient. Therefore, an
INTERCEPT 3.058*** 3.330*** external orientation was positively related to competitive
(0.675) (0.892)
CULTFGRP ⫺0.284*** ⫺0.299** success, while an internal orientation was negatively
(0.106) (0.140) related to competitive success.
CULTFHIER ⫺0.167** ⫺0.184* The third hypothesis explores the relationship between
(0.082) (0.109) balance in cultural orientation and implementation out-
CULTFBAL1 0.125 0.456*** comes. To evaluate H3, we consider both regression
(0.127) (0.167)
CULTFBAL2 0.053 0.045 models. In the first model, neither balanced culture vari-
(0.121) (0.158) able (CULTFBAL1 or CULTFBAL2) was significantly
STRFCOST ⫺0.025 ⫺0.080 related to operational success. However, because
(0.091) (0.120) CULTFBAL1 was significantly related to competitive
STRFQUAL 0.103 0.096 success, there is some partial support for this hypothesis.
(0.086) (0.112)
STRFFLEX 0.157* ⫺0.146 Finally, the fourth hypothesis predicts that a flexibility
(0.079) (0.141) emphasis in operations strategy will lead to better
STRFSPD 0.005 0.077 implementation outcomes. As in the case of the third
(0.104) (0.105) hypothesis, our results provide partial support for H4. In
TECHFMAT ⫺0.139** ⫺0.091 particular, a strategic flexibility emphasis was positively
(0.062) (0.082)
TECHFEXP 0.046 ⫺0.056 related to better operational outcomes, while there was
(0.063) (0.083) no relationship with competitive outcomes.
TECHFRES ⫺0.151** 0.024
(0.068) (0.090)
ORGFCHNG 0.383*** 0.187 5. Implications and conclusions
(0.096) (0.130)
R2 0.399 0.215
Overall F 4.533*** 1.867* The findings of our analysis present some interesting
implications. First, there are certain orientations of
a
Standard errors are shown in parentheses. *p⬍0.10; ** organizational culture that are likely to lead to positive
p⬍0.05; ***p⬍0.01. results in implementing advanced manufacturing tech-
nology, and there are other orientations that are likely
culture) is associated with lower competitive perform- to lead to negative results. Contrary to our expectations,
ance outcomes. In contrast, a tendency toward cultural for operational outcomes, the cultural dimension that
balance, as shown by higher levels of CULTFBAL1, is proved to be important was the internal/external orien-
associated with better competitive performance out- tation, rather than the flexibility/control orientation.
comes. Moreover, the constituent items of the Higher levels of internal orientation, whether reflecting
CULTFBAL1 variable represent an external cultural flexibility (group culture) or control (hierarchical
orientation. culture), were negatively related to operational success.
Our first set of hypotheses examines the question of A similar conclusion can be drawn for competitive out-
whether organizational culture is related to operational comes, namely that an internal orientation is likely to
success in AMT. In particular, hypothesis H1a predicts lead to undesired results. However, higher levels of
that a flexibility orientation will result in positive oper- external orientation were positively related to competi-
ational outcomes, while H1b predicts that a control tive success, which was consistent with our expectations.
orientation will result in negative operational outcomes. Because this culture variable reflected two culture types
The results of the first regression model provide no sup- (development and rational culture), these results also
port for H1a, but they do support H1b. Clearly, neither suggest that a somewhat balanced cultural orientation
a group nor a hierarchical cultural orientation is associa- encompassing more than one orientation (in this case
ted with better operational performance. both control and flexibility) would likely lead to positive
The second set of hypotheses considers cultural orien- competitive outcomes. Operations strategy was parti-
tation and its relationship to competitive outcomes. Here, cularly interesting, because for one type of outcome
we predicted that an external orientation would be posi- (operational success) it played a significant role, while
tively related (H2a), and an internal orientation would be for the other (competitive success) it did not.
negatively related (H2b), to competitive success. In this We can now tie these individual implications and
case, the results of the second regression model provide results together into a broader set of recommendations.
 G.N. Stock, C.M. McDermott / Technovation 21 (2001) 625–636
For both types of implementation outcomes, there seems
to be a consistent pattern of what to avoid in an organiza-
tion—namely, a culture that overemphasizes an inward-
looking orientation. Having identified what is likely not
to work, we can also identify what to encourage in an
organization. Here, there are different recommendations
for different types of outcomes. As a manager, one
would want both operational and competitive success.
Consistent with the findings of Voss (1986), our results
imply that technology implementation should be linked
to a firm’s strategic objectives. For operational success
in particular, a strategic emphasis on flexibility appears
to be key. For competitive success, an outward-looking
culture that incorporates a balance of both control and
flexibility seems to be an important organizational
characteristic. Values such as growth, change, creativity,
and productivity should be encouraged within the
organization. The lessons are therefore relatively
straightforward—a manager should foster an externally
oriented organizational culture and formulate an oper-
ations strategy that emphasizes flexibility as a key com-
petitive priority.
The importance of organizational culture to manufac-
turing strategy has been recognized in prior literature
(1996), but little empirical research relating organiza-
tional culture to other areas of operations management
is found in the literature. This study addresses that need
in the literature by specifically considering the relation-
ship between organizational culture, operations strategy,
and technology implementation effectiveness. The
results of this study suggest that both culture and strat-
egy are linked to different types outcomes related to
AMT implementation. Given our sample size and level
of industry representation, however, we would caution
that our findings should be viewed as exploratory. Inves-
tigation of these issues for a larger sample size and
across a greater range of industries would useful, as
would further refinement and validation of our measure-
ment instrument. In addition, a good deal more work still
needs to be done to explore these issues in greater detail.
For example, one direction for future research might
investigate why strategy and culture variables were
related differently to different types of implementation
outcomes. Another potentially valuable area of inquiry
would be an examination of specific managerial actions
that may lead to the development of different cultural
types. These topics would provide interesting and valu-
able first steps for future research in this area.
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Gregory N. Stock is Assistant Professor in the College of Business at
Northern Illinois University. His research has focused on technology and
supply chain management. His recent articles have examined technology
transfer, manufacturing technology implementation, product development,
and new organizational approaches to supply chain management and have
been published in journals such as IEEE Transactions on Engineering
Management, the Journal of Operations Management, the Journal of High
Technology Management Research, Production and Inventory Manage-
ment Journal, and the International Journal of Operations and Production
Management. Prior to beginning his academic career, Dr Stock spent sev-
eral years in industry as a design engineer in high technology industries
such as computer graphics and data communications. He has B.S. and
M.S. degrees in electrical enginering from Duke University and the Ph.D.
degree in operations management from the University of North Carolina.
Dr Stock has taught undergraduate and gradate courses in operations man-
agement, supply chain management, and technology management at a var-
iety of institutions, including Northern Illinois University, Arizona State
University, and the China-Europe International Business School.
Christopher M. McDermott is Associate Professor in the Lally School
of Management at Renssealer, where he teaches operations/technology
management, new product development, and strategy at the Masters,
Ph.D., and Executive levels. Dr McDermott’s courses also engage corpor-
ate clients such as General Motors, Ford, IBM, Hewlett-Packard, and Gen-
eral Electric through Renssealer’s satellite distance education program. His
research on the above and other topics is based on his ongoing interactions
with numerous organizations, as both a researcher and consultant. He has
a B.S. in Engineering from Duke University and his Ph.D. in Business
from the University of North Carolina. His work experience includes pos-
itions at Westinghouse Electric Company and at Fairchild, where he was
an on-site contractor at NASA’s Goddard Space Flight Center. His
research has been published in journals such as Production and Inventory
Management Journal, The Journal of Operations Management, IEEE
Transactions on Engineering Management, Business Horizons, and the
Journal of High Technology Management Research. He is co-author of a
book on the management of radical innovation, Radical Innovation: How
Mature Companies Can Outsmart Upstarts.