Perspectives on Various Issues of Interest

Protecting Brand Value through Anticounterfeiting Supply Chain Strategies

Combating counterfeits is not a matter of developing software or systems or markings. Our research suggests that a multi-layered approach that adopts multiple strategies and engages the entire organization is needed. Initially, the size of the problem must be defined and the return on investment approximated. This can help define the need for a team of experts to work in this area, leading to a set of performance metrics that are aligned with business objectives and outcomes. Next, the key focal product seg­ ments should be targeted, and a system for identifying products through product trade­ mark registration with customs authorities should be completed.

We discuss the roles of Drug Serialization and the Drug Quality and Security Act, Pharmaceutical Security Institute Database, and technologies such as Blockchain for combating the counterfeiting problem.

Withstanding the economic recession: Examining the efficacy of manufacturing strategy alignment and process integration

In this paper, we examine how manufacturing strategic alignment and process integration affect manufacturing plant performance under two distinct environmental contexts presented by long-term macroeconomic instability. A large-scale dataset was specifically assembled for the purpose of this research investigation by combining plant-level survey data on practices and performance with secondary macroeconomic data for 14 countries from multiple sources. The results from multi-level regression analyses indicate that while manufacturing strategy alignment and process integration are beneficial for plant performance, they have distinct effects when the contingency factor, macroeconomic instability, is taken in consideration. Notably, when plants face high macroeconomic instability, process integration has a stronger effect on performance whereas in low instability environment manufacturing strategy alignment provides higher performance benefits. 

The findings have implications for managers in pointing out ways in which firms can successfully compete during times of recession. In particular, the study found that overly emphasizing the internal manufacturing alignment during recession could lead to opposite result than expected. Although, it could be a common policy to strengthen the internal alignment during recession, too much internal focus could lead firms to go far away from the requirements of the market. The study also offers practical insight regarding the lack of cost implication of manufacturing alignment during recession. The study finds no costs, delivery and flexibility benefit of alignment but negative impact of the same on quality performance. Hence, it would be important for the managers to re-consider the justification of investigating in alignment, especially during recessions. Recessions do not have a set start and conclusion time; hence, decisions about any questionable investment during recession can be detrimental to the future survivability of the firms.

On the other hand, the findings validate the need for process integration during economic instability. Supply and operation managers might hesitate to support processes integration due to initial negative impact on costs and popular negative news such as the cost overruns at Boeing and Airbus due to poor suppliers’ integration. However, the findings of this study highlight that process integration exerts a positive effect on all dimensions of performance when there is no recession, and provides higher quality, delivery and flexibility performance in the presence of economic recession (although cost performance does suffer). Hence, during recession, process integration efforts by firms present a trade-off between costs and other three operational performance factors. Moving the focus from internal alignment to external integration through improving real time information sharing with suppliers and customers will help firms identify the problems quickly and respond accordingly, especially during recession. It is also suggested by several studies that during recession, firms’ sole focus on cost cutting could be detrimental for brand image, future recovery and overall performance. Nonetheless, considering the range of practices required for supplier integration, such as, product/process integration, supplier involvement with new product development, joint decision making, and information sharing, the focal firms need to identify the priority areas for integration rather than integrating all aspects between the parties. To summarize, managers should not expect universal impact of recession on the manufacturing performance but should carefully consider the wide-ranging impact of the recession on the firm’s performance. This is in line with other contingency theory studies that found that contingency factors could have varied influence on manufacturing performance.

Internationalization of manufacturing is a growing trend necessitating a joint examination of international business and operations management issues. Our study aimed at finding the role played by organization-level and supply chain-level factors that impact perfor- mance under different environmental conditions, particularly as pre- sented by the severity of the recent Great Recession. The conceptual framework and the results of this study allow us to integrate these issues and show that careful attention to these factors is needed for manufacturing competitiveness. The organizational and supply chain factors have distinct performance implications. 

The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Dialysis Facilities

In a recently published article we find that the size of chain organizations has a nonlinear effect on performance of dialysis facilities. Medium-sized chain organizations have lower efficiency and higher quality than smaller and larger chain organizations. 

The results call attention to being cognizant of the advantages and disadvantages of their growing size. Our study indicates that as chain organizations grow from a small size to an intermediate size, their efficiency drops and quality improves. We find that the efficiency bottoms out when chain organizations grow to have about 882 dialysis facilities whereas quality reaches its peak when the number of dialysis facilities in a chain organization reaches to about 796. After reaching these inflection points associated with efficiency and quality, facilities within the chain organizations become more efficient, but their quality levels suffer. This presents implications for decision makers to carefully think about the underlying mechanisms. The initial drop in efficiency as chain organization size increases may reflect the investments facilities affiliated with medium-sized chain organizations make when adding dialysis stations and personnel to address the demand growth. We conjecture that facilities affiliated with medium-sized chain organizations do not fully utilize their stations, thereby bringing down the efficiency. Their quality however increases, since staff in these medium-sized chain organizations has more time to give to each patient.

As chain organizations grow in size, it is likely that they see an increase in demand due to cross referrals among facilities within the chain. This increase in demand eventually provides the needed efficiency gains through economies of scale, but the associated deterioration in the quality of care raises concerns. It is possible that the approaches large chain organizations take to increase staff capacity, which differ from those taken by medium-sized chain organizations, could contribute towards deterioration in quality. Larger chain organizations tend to employ fewer registered nurses and licensed practical nurses as a percentage of their staff than medium-sized organizations. To offset the cost associated with staffing, large chain affiliated facilities employ higher levels of patient care technicians as compared to medium-sized chain organizations, which can lower their quality levels. As chain organizations grow, decision makers should appropriately manage the staffing patterns so as to avoid erosion of quality with a corresponding increase in efficiency.

To address both efficiency and quality performance, chain organizations should be strategic and develop appropriate coordination capabilities so that affiliated facilities can improve their quality while retaining efficiency gains through economies of scale. Technological innovations may make it easier to spread tacit knowledge pertaining to quality-oriented best practices. Opportunities for enabling interactions among people involved with clinical care, as well as nonclinical support services, can enhance learning and improve the quality of care. To facilitate quality improvement efforts, chain organizations can oversee the establishment of cross-disciplinary teams comprised of members from the affiliated dialysis facilities as well as the area manager from the chain organization. Organization-wide policies and procedures, including standards for clinical processes and quality improvement activities, should be widely communicated with affiliated dialysis facilities. Performance goals and objectives for dialysis facilities should be established and appropriate reporting structure of quality improvement initiatives and performance should be put in place. Chain organizations should provide feedback to affiliated facilities and, when needed, offer training and cross learning opportunities to the affiliated dialysis facilities.

For facilities within the chain organization, the results present implications for awareness of the influence of the contextual environment that chain organizations create. An independent facility has a better understanding and awareness of its resources and practices than facilities within chain organizations. Our results show that as these independent facilities join others to form a small- to medium-sized chain organization, they are able to improve quality but their efficiency suffers. The efficiency suffers, as these facilities have to coordinate efforts toward pooling their resources. As the size of chain organizations crosses a certain threshold level, the affiliated facilities gain economies of scale and increased demand, such that their efficiencies improve. However, they also witness growing heterogeneity and have difficulty managing the associated ambiguities, which have detrimental effects on their quality performance. An awareness of the changes in the environmental context and adoption of proactive adaptation measures, such as information exchange site visits to other affiliated facilities and training of staff members, can help manage efficiency and quality. Our results may be useful in other service settings beyond healthcare that have multiunit organizational forms, in that becoming part of a network, such as joining a chain organization, can have a positive or negative effect on efficiency and quality, depending on the size of the network.

Source: Dreyfus, D., Nair, A. and Talluri, S., 2020. The Impact of Chain Organization Size on Efficiency and Quality of Affiliated Facilities—Implications for Multi‐Unit Organizational Forms. Production and Operations Management, 29(7), 1605-1623

 

How much control should buyers exert over their suppliers in complex supply networks?

In a recently published paper, my co-authors and I examine how much control should a focal firm exert on the suppliers within its supply network. Control over suppliers is a core issue for a buying firm. Despite the amount of research on the topic, how much of its supply network (i.e., scope of control) a buying firm should control, so as to increase supply network performance, is a question that has not received adequate research attention. The study addresses this research question by considering the supply network as a complex adaptive system and developing an empirically informed agent-based simulation model using the NK fitness landscape framework, to examine how varying levels of scope of control influence supply network performance. We also investigate the direct effect of two supply network complexity dimensions (i.e., number of firms and level of supply interactions) on supply network performance and the moderating effect played by the scope of control. Results show that the relationship between scope of control and supply network performance follows an inverted-U shape. Furthermore, we find that the complexity dimensions negatively affect supply network performance with the performance decrease depending on the scope of control. Based on these findings, we formulate different control strategies to mitigate the negative influence of complexity.

Our main finding is that a moderate scope of control results in higher SN performance than when the scope of control is either too high or too low. Controlling a right number of suppliers improves coordination and helps in aligning the conflicting goals of supply chain partners, while with no control, coordinated activities become difficult and performance suffers. At the same time, controlling a large number of suppliers may deteriorate SN performance because it constraints the ability of the SN to adapt. Therefore, focal firms should consider allowing some level of autonomy so as to improve the efficacy of adaptation of their SNs.

Our study also found that the scope of formal control influences the negative effect of complexity on SN performance. In the case of complexity due to high level of supply interactions, if the scope of control is high (low), SN performance suffers less (more). This also suggests that in networks that are highly interconnected, the focal firm should guide its suppliers toward a coherent direction by means of control. As to the negative effect of the number of firms on SN performance, we found that the higher the scope of control, the higher the negative influence on SN performance. This suggests that when SN complexity is associated with a higher number of firms, less control is beneficial. Our results suggest two different strategies to mitigate the negative influence of complexity. If the source of complexity is the level of supply interactions, more scope of control is needed; if the complexity is due to the number of firms, less scope of control should be applied.We were able to establish the validity of our results by exploring the boundary conditions.

To pursue our research aims, we use a simulation-based approach to model supply network and develop an NK simulation model that is based on empirical data that we collected from Honda. In particular, the network data of the Accord’s center console are used to calibrate the NK model parameters and build the baseline model using real values concerning the critical variables of this study (i.e., the number of firms, number of supply interactions among firms, relative power of the focal company vis-`a-vis suppliers in the network, and level of formal control exerted on upstream suppliers). Our interactions with Honda managers during the empirical data collection revealed that Honda exerts control on its supply base with the help of its first-tier suppliers. Hence, in this study, we conceptualize the notion of scope of control to include formal control exerted by either the focal firm (i.e., Honda) or its first-tier suppliers. Complexity is associated with the number of firms and the level of interconnections in the SN.

 

An Examination of the Relationship between Intellectual Capital and Supply Chain Integration in Humanitarian Aid Organizations: A Survey-Based Investigation of Food Banks

Food banks are humanitarian aid organizations that collect, organize, and deliver food to nonprofit member agencies and also to individuals to help alleviate the society’s hunger problem. The supply chain of food banks is characterized by private sector companies, individual donors and governmental agencies providing monetary support and food inventory on the supply side, and the member agencies such as food pantries, soup kitchens, shelters, and volunteers delivering support on the demand side. Within the purview of this supply chain, food banks strive to improve their performance, which is commonly measured in terms of the amount of food delivered to the communities in need. Food banks rely on managerial talent that is relatively more constrained than the private sector and also use a voluntary workforce for attaining their performance goals. Considering the unique yet pertinent role of human assets in food banks to manage their supply chain integration (SCI) initiatives, in a recent paper my co-authors and I employ an intellectual capital (IC) framework to analyze the human, organizational, and social capital antecedents of supply chain integration in food banks. Specifically, we suggest that intellectual capital drives supply chain integration in humanitarian organizations. Moreover, we propose specific relationships between the dimensions of intellectual capital. A carefully crafted survey is used to inform our results. The results indicate that human capital significantly impacts social capital, which, in turn, drives all supply chain integration dimensions.

Our study sheds light on the mechanism through which Social Capital is built in a humanitarian aid setting. The findings from SUR and mediation analyses indicate that Human Capital and Organizational Capital precede Social Capital, which, in turn, helps in building SCI in food banks. Since Social Capital channels the impact of Human Capital and Organizational Capital on SCI, it suggests that the quality of relationships shaped by the Social Capital plays a critical role in attaining SCI in food banks. Prior studies have reported that relational embeddedness, which is a part of Social Capital, is especially instrumental in terms of process innovation. We show that achieving strategic collaborative relationships in humanitarian supply chains is driven by the interplay among the dimensions of IC. This is one of the significant theoretical contributions of our study. We show that Human Capital and Organizational Capital play a foundational role in developing Social Capital. The Social Capital thus formed, in turn, determines the way SCI is driven. Specifically, Social Capital acts as a mediator between Human Capital and Supply Integration, and between Human Capital and Internal Integration. Moreover, we also observe a mediating role of Social Capital between Organizational Capital and Supply Integration, and between Organizational Capital and Internal Integration. Systematic lack of support of the mediation of the relationship between Human Capital and Demand Integration, and between Organizational Capital and Demand Integration by Social Capital is interesting and is worth investigating in future research.

It seems that upstream and internal SCI is achieved via Social Capital facilitating Human Capital and Organizational Capital; however, we do not observe the same facilitating influence of Social Capital in the downstream. There are studies that investigate supply integration or buyer–supplier relationships and Social Capital in the literature. However, the relationship between demand integration and Social Capital has not been studied as much and it could shed light on the lack of significance for the mediating role of Social Capital. Age of the food bank did not turn out to be a significant variable in our model. While one might suspect the history of the organization to play a significant role in terms of establishing SCI, a lack of significance or a negative relationship between age and SCI has been observed in the literature before. Traditional organizations might not be willing to engage in joint decision making, which is a common indicator of integration with supply chain partners, due to their inertia and resistance to change. In our case, we observe no significant relationship between SCI and age. Therefore, we can say that in the nonprofit sector, determinants of supply chain dynamics might be different than the amount of time the organization has been in existence.

In general, our study presents valuable insights for the management of food banks. First, given that IC precedes and acts as an antecedent to SCI, food banks should be proactive in managing their Human, Organizational, and Social Capital. Human Capital is especially instrumental in building Social Capital. Our findings show that Social Capital is influenced more by the skilled workforce as compared to codified knowledge repository and information exchange mechanisms. Hence, food bank managers should give emphasis to enhancing the skill levels of their workforce, perhaps with training programs and workshops that focus on continuous improvement. Our results support the argument that good information does not translate into productive coordination unless knowledge facilitates the use of these resources effectively and contributes to collaboration. Further, information is transformed into knowledge when it is combined with know-how and expertise of the staff. This knowledge helps in making informed decisions and also promotes collaboration by improving alignment between parties involved in decision-making. Hunger issue needs to be addressed urgently and on a continuous basis, and the food bank staff has to work under various financial and time constraints to find creative solutions to deliver food. Food banks, like other humanitarian organizations, need to be agile and adaptable so as to handle the operational issues they face. In this respect, the intellectual structure of the organization is instrumental in achieving the required responsiveness by appropriately shaping the supply chain management practices.

As Social Capital is a crucial aspect of IC and influences all dimensions of SCI, it should be given particular attention in food banks. Our pre-analysis interviews with the food bank executives indicated that they are quite cognizant of the criticality of human assets in their business. We show that while this recognition of the importance of Human Capital is good, executives in charge of strategic decisions in the food-banking sector should prioritize development of Social Capital to enhance their internal and external integration initiatives. The results of our study show that Social Capital provides the pathway for obtaining the SCI benefits resulting from both Human Capital and Organizational Capital. Social Capital is the sum of all resources, existing and potential, residing in and available through the network of relationships of members of a group. Social Capital encourages cooperative behavior and promotes value creation through development of new forms of association and innovative methods.We find support for the facilitating role of this important dimension of IC in a humanitarian aid setting. Food banks are social enterprises that require practical solutions, dynamism, and agility to operate and survive. Social Capital provides access to broader sources of information that is relevant, timely, and of high quality. The knowledge, capabilities, and skills of the actors (Human Capital) and the knowledge engrained in structures, systems, and processes (Organizational Capital) are transformed into practices that support integrated supply chains through the network of interrelationships (Social Capital).

Social Capital makes exchange of knowledge possible both within the organization and across boundaries with external partners because the actors identify themselves with a community and commit to collective goals and shared targets. In sum, we consider IC as a structural characteristic that drives managerial practices (SCI) in the organization. As food banks deal with extensive uncertainty in terms of supply base, inconsistency and lack of standards in donations, variety of partners, and matching supply to demand, these organizations can and do benefit from strategic supply chain management practices. We propose an IC framework to analyze a potential driver for SCI in this type of resource-constrained nonprofit organizations. Managers of food banks should spend effort in recruiting and maintaining talent and relationships for the survival of their organizations as our analysis provides empirical support for the influence of the human factor in the nonprofit organization and emphasizes the social aspect of operations in this setting.

Re-visiting collaborative behavior in supply networks – structural embeddedness and the influence of contextual changes and sanctions

In a recently published paper, my co-authors and I consider decision making beyond a dyadic buyer-supplier context to the network context. Decisions made by firms are shaped by behavioral norms within the supply network as perceived by the decision makers. Firms can perceive themselves to be part of a collaborative regime or one in which the potential for noncooperation is high. Further, the ability to put sanctions on non-cooperating firms could shape the overall behavioral patterns in the network. To gain further insights into these aspects and their interactive effects on firm behavior, our study investigates decision-making in supply network by means of behavioral experiments. By organizing practicing managers in a supply network, the study investigates the role of structural embeddedness, incentive structure, and sanctioning mechanisms on the level of collaboration. The results of this study confirm that while sanctions are detrimental for collaborative behavior in a supply network, they play an important role when the underlying norms of governance of such a network are perturbed. The results show that structural embeddedness provides a context that aids adaptive collaborative behavior by firms that are part of the supply network. Once the incentive structure is altered such that there is a higher payoff from defection, the adaptive collaborative behavior is replaced by a behavior in which firms try to maximize their returns and forego collaborative decision-making behavior.

The study reveals that collaboration behavior in embedded supply networks is far more complex than simple buyer-supplier dyads might have indicated in the past. Managers face the daunting task of reacting to this increasing complexity. Foremost, managers have to pay attention to the level of structural embeddedness present in supply networks as it fosters collaboration in the network. This means that managers must understand their behavior as part of a network and be aware of how interdependent and interconnected their sourcing network is. In the presence of high structural embeddedness, collaboration in the network is likely to be high even though the action of every single network member might not necessarily be collaborative. The results suggest that managers should not be myopic in terms of focusing on the actions of individual actors in the network even though these actors might be the ones with whom they are in a direct relationship in their supply network activities. The overall outcome in the network might turn out to be quite distinct from the observations at individual firm level.

The study's findings suggest that managers have to pay attention to the presence of institutional forces that change the incentive structure and thereby impact the level of collaboration in the supply network. It is necessary for managers to act quickly in order to sustain collaboration before the tipping point is reached and collaboration is driven out of the network. Collaboration in networks calls for great attention and continuous care by managing embedded structures and sanctioning options based on the circumstances. The study provides managerial insights regarding the likelihood of supply chain members changing their behavior based on the alterations in the underlying incentive structure. When institutional factors diminish the incentives for collaboration by making private investments more attractive than group investments, as is observed in the case of industry consolidation, firms adopt maximizing behavior at the detriment of the overall collaborative environment in the supply network. In the presence of collaborative regime, managers tend to adopt a satisficing stance, whereas changed incentive structure towards defection results in a focus on maximizing the outcome of self. Thus, with changed incentive structures that provide higher rewards for noncooperative behavior, sanctions become specifically necessary.

Differential Impact of Network Size on Cost Performance for High and Low Quality Hospitals

In a recently published study my co-authors and I consider the deductive configuration perspective and distinguish high and low quality hospitals by using clinical and experiential quality as two dimensions of quality capability. We examine the impact of healthcare network size on operating costs of hospitals. Additionally, we investigate the interaction effect of hospital demand and healthcare network size on operating costs.  The results of this study show that quality laggards experience lower costs per day through their affiliation with larger healthcare networks, but experiential quality focusers and clinical quality focusers experience higher costs. In contrast to our hypothesis, affiliation with a large healthcare network does not adversely affect the operating costs of holistic quality leaders. We show that clinical quality focusers and holistic quality leaders can complement the effect of network size and hospital demand to reduce their operating costs. However, quality laggards and experiential quality focusers do not observe a reduction in their costs due to the complementary effects of network size and hospital demand. 

Our results offer important theoretical and managerial implications that we discuss next. Healthcare networks are becoming ubiquitous. Even distinct health systems that can either take the form of a diversified single hospital system or multi-hospital system comprising of two or more hospitals owned, leased, sponsored, or contract managed by a central organization are entering into network arrangements. By being part of a network quality laggards may gain additional patients, which helps in increasing their resource utilization levels. In addition, the ability to learn best practices from other hospitals in the network further helps in reducing their operating costs. The marginal cost for these hospitals to be part of a network is low. However, experiential quality focusers and clinical quality focusers face the challenge of coordinating with other hospitals in the network while at the same time maintaining their quality levels. While health systems have a central governance structure, health networks do not have this ability to exert centralized control for efficiency. Hence, operations of healthcare networks require hospitals to complement their network-based benefits with their demand. Holistic quality leaders are especially well positioned to gain this complementary benefit. The clinical process of care and the practices that are aimed at enhancing patient experience are synergistic. These quality leaders attract larger numbers of patients by their intrinsic quality characteristics and network effects; however, they stand in good stead to achieve demand-based utilization levels and reduce the coordination burden of affiliation with large healthcare networks.

Growth in hospital networks, healthcare demand, and experiential learning calls attention to a better understanding of the relationship between a hospital’s holistic quality profile and its ability to gain benefits from healthcare network. This research sheds some important insights in this domain. There has been increasing evidence suggesting that hospitals must carefully manage both clinical and experiential quality. By focusing on both clinical and experiential quality, unlike experiential quality focusers and clinical quality focusers, holistic quality leaders are not adversely affected by the size of their network. Our results suggest that experiential quality focusers and clinical quality focusers should either embrace holistic quality management or restrict the size of their networks to maintain their quality level and to reduce coordination costs. 

Technology alignment in the presence of regulatory changes: The case of meaningful use of information technology in healthcare.

In a recently published study my co-author and I examine the impact of regulatory change on technology implementation and use. The findings show that the seeds for structural change necessitated by regulatory changes are cultivated very early in the decision making sequence. The pivotal role of the length of IT planning horizon and frequency of steering committee meetings in broadening the scope of IT plans is evident in the results. Hospitals that have a longer IT planning horizon go beyond myopic technical and cost issues. This helps in creating a broader scope of IT plan. Hospitals with more frequent steering committee meetings will have higher engagement in fulfilling the IT plans and additional opportunities to ask questions and receive help on any implementation issues. Additionally, meetings keep priorities at the forefront of a person’s thoughts, so that solutions and time spent on implementation is increased. The scope of IT plans forms the basis for technology appropriation within the contextual environment set by the choice of IT adoption strategy.

The findings show that hospitals with a broader scope of IT plan are able to fulfill meaningful use requirements when they use best-of-suite strategy. Meanwhile, the association between the scope of IT plan and achievement of meaningful use requirements in the top quartile is absent for those hospitals that rely on single-vendor or best-of-breed strategies. These results highlight the risks involved with using a single-vendor or best-of-breed strategy and suggests that hospitals could be constrained by vendor’s capabilities for successfully integrating all of the IT applications. Centralized and decentralized IT strategies such as the single-vendor or best-of-breed adoption strategies may lead to sub-optimal rationalizing such that an organization settles for what may integrate with their current set of applications or vendor capabilities. As the breadth of IT applications grows, a decentralized organization may find it difficult to adapt their applications to meet new or updated requirements. Similarly, a centralized organization may find that their vendor is not capable of quickly implementing new or updated requirements, which will delay achievement of strategic objectives, like the meaningful use mandates and the associated reimbursements from the HITECH Act. Since the best-of-suite adoption strategy emphasizes integration among various information systems within a hospital, the appropriation of technology is more efficient than the single-vendor and best-of-breed strategies. The dynamic nature of the healthcare environment has resulted in an increase in managed-care contracts in hospitals, which calls for finding appropriate mechanisms for risk-sharing and ensuring financial stability. It is therefore important to find appropriate mechanisms to structure IT to ensure that IT adoption is not disruptive to the overall functioning of hospitals.

The findings suggest that the best-of-suite adoption strategy allows adaptive changes to technology while it is in use and thereby aids in aligning complex hospital IT applications to achieve the top quartile of meaningful use requirements. As hospitals fulfill the requirements set in various stages of meaningful use as stipulated in the HITECH Act, they receive payments from the federal government. To examine the financial impact of fulfilling meaningful use requirements, we compared federal payments received by hospitals in the top 10% fulfilling meaningful use requirements with those who received payment in the bottom 10%. We find hospitals in the top 10% receive on average $2,209,679 more in federal financial incentives than those in the bottom 10%. Additionally, ANOVA results show significant difference in terms of meaningful use payments for hospitals adopting single-vendor, best-of-breed, and best-of-suite strategies [F(2, 524) =5.78, p= 0.01]. A Tukey post-hoc test confirmed that payments to hospitals with the best-of-suite adoption strategy are higher than those with single-vendor (p < 0.01) and best-of-breed (p < 0.10) adoption strategies. A hospital with a best-of-suite adoption strategy can expect an additional payment ranging from $425,732.10 to $659,593.00 than hospitals using a single-vendor adoption strategy during the first year of completing meaningful use requirements. Since the Phase I meaningful use payments are paid out over four years at 100%, 75%, 50% and 25%, respectively, the benefits increase substantially to $1,064,330.25 to $1,648,982.50 over the course of four years. Similarly, hospitals with a best-of-breed strategy can expect up to $378,208.20 less than hospitals with a best-of-suite strategy during the first year of completing meaningful use requirements. This could lead to $945,520.50 less in meaningful use payments spread out across four years. These results provide a compelling reason for hospitals to carefully consider their IT planning structure and adoption strategies.

The fit between supply chain strategies and practices: A contingency approach and comparative analysis

In a recently published paper, my co-authors and I present a contingency model that examines the external links between the business environment and supply chain strategies, and the internal links between supply chain strategies and supplier management practices. The research model theorizes that flexibility and low-cost oriented supply chain strategies should fit with the underlying business environments, and, in turn, supplier management practices (i.e., long-term relationships, supplier assessment, and integration) should fit with the chosen supply chain strategies. The dataset to test the research model was drawn from a survey of managers from 232 Australian manufacturing firms, and comparative path analyses were employed to assess the fit among different business environments, supply chain strategies, and supply chain practices. The findings show that dynamic environment has a better fit with flexibility strategy than low-cost strategy, while competitive environment surprisingly does not show a stronger fit to low-cost strategy than flexibility strategy. Additionally, the results show that while supplier assessment is important for both flexibility and low-cost oriented strategies, longterm relationship and logistics integration are more important for flexibility strategy than for low-cost strategy. 

From a managerial perspective, this study demonstrates the importance of understanding the right supply chain strategies with respect to the business environment and the practices for supporting the strategies. Managers need not only understand the external fit between the business environment and supply chain strategy but also the internal fit between supply chain strategies and supplier management practices. The findings suggest that companies following low-cost strategy are less concerned with building long-term strategic relationships and might be prepared to switch suppliers more frequently—primarily based on the price offered by the suppliers. This is particularly true when firms adopt an arm’s length approach in their relationship with suppliers, which is aimed at maintaining competition in the supply base by putting pressure on suppliers to keep their prices low or even reducing them. A closer observation of the findings confirms this point as they show that low-cost strategy only has a weak (marginal) relationship with logistics integration, and even no association with long-term relationship. Flexibility strategy, on the other hand, is linked with more advanced steps in supplier management by incorporating both logistics integration and long-term relationship, which reflect the technical and social aspects of SCM. 

Project Structure and Buyer-supplier Collaboration Quality in New Product Development: A US-China Comparative Study

In a study my co-author and I study how the national context (the social system) interacts with the project structure (the technical system) in influencing buyer-supplier collaboration quality, an indicator of project-level effectiveness of inter-firm interactions. We further examined how structural deviation, the difference between the actual and ideal project structure, differentially influence collaboration quality in China and U.S. We tested the hypotheses using survey responses from 214 U.S. based and 212 China based buying companies. Due to their distinctive national cultures and economic ideologies, the two countries differ in their ideal project structures, the ones that lead to the highest level of collaboration quality. Our research model is as follows:

 

Results suggest that a formal project structure is only effective in enhancing buyer-supplier collaboration quality in the U.S. and not in China. Centralization hurts collaboration quality only in U.S. based projects. These results highlight the important and differential role played by the administrative structure for motivating collaborative behaviors in different national contexts. The task structure, characterized as task interdependence, does not play such a differentiating role as the results show it to be equally effective in improving buyer-supplier collaboration quality in both U.S. and Chinese NPD projects. Supporting the STS view, we also show that the ideal project structure, a result of the interaction between the social and technical systems, varies between U.S. and China. Specifically, the ideal project structure in U.S. is more formal and less centralized as compared to that in China. We also found some support for our prediction that the negative effect of structural deviation on collaboration quality is dampened by China’s national context. Below we discuss theoretical and managerial implications of these findings.

This study presents key insights for project managers about the relative importance of different aspects of the project structure in influencing the quality of buyer-supplier interactions. Compared to the task structure, the administrative structure has a more nationally-contingent impact in shaping buyer-supplier project interactions. Specifically, a formal and decentralized structure, though usually advocated by the project management literature, does not always lead to more effective project-level interactions, especially in countries with similar cultural and economic contexts as China. The significant association between task structure and collaboration quality in both countries suggests the importance of assigning interdependent tasks to each group for encouraging collaborative behaviors. This finding questions the traditional wisdom about outsourcing modular, rather than integral, tasks to external suppliers with the purpose of reducing transaction cost. Specifically, we show that task modularity, though reducing short-term transaction costs, might hurts the quality of inter-firm interactions, which limiting the dyad’s value creation potential. Overall, our findings suggest that project managers could encourage effective project-level collaborations by creating mutually dependent tasks involving both buyer and supplier sub-groups.

Results from this study point to the importance of considering the national context when structuring an interorganizational team. Testing the conceptual model in two culturally distinct countries, China and the U.S., reveals varying effects of project structures on collaboration quality. The comparison between U.S. and China presents two culturally distinct nations who are playing important role in the emerging global product development initiatives. While U.S. has always been a leader in NPD, China is increasingly displaying its product development capabilities. The findings from this study have direct implications for project managers who are in charge of NPD teams in these two countries. Specifically, a formal and decentralized inter-group structure is found to be more effective in enhancing collaboration quality in the U.S. than in China, while task interdependence is equally effective in promoting inter-group collaboration in China and in the U.S. Thus, when initiating interorganizational product development efforts in the global context, project managers are advised to consider the impact of the national culture and economic ideology of different locations in order to cultivate a high-quality collaboration process. By revealing country-level contingency effects evidenced in Chinese and the U.S. based NPD projects, this study shows the inappropriateness of a “one-size-fits-all” approach when structuring NPD teams globally.

The stronger negative effect of structural deviation in the U.S., as compared to China, also has managerial implications. In low-context cultures, such as the U.S., project manages need to pay more attention to identify and stick to the ideal project structure because deviating from it adversely impacts collaboration quality. As shown in this study, the ideal project structure should be congruent with social values held by project members. Such structure-value congruence motivates collaborative behaviors among project members. In contrast, managerial efforts of ensuring maximum conformance to the ideal project structure are less rewarding in high-context cultures, such as China, where negative effect of divergence from the ideal-state is partly mitigated by cultural ethos that dominate public life beyond NPD projects. In such high-context cultures, rather than solely relying on the governance of the ideal project structure, project managers need to understand the implicit rules and unspoken protocols embedded within the cultural ethos in order to cultivate a high-quality collaboration process.

Source: Yan, T. and Nair, A. 2015. Project Structure and Buyer-supplier Collaboration Quality in New Product Development: A US-China Comparative Study. Unpublished manuscript.