The relationships between manufacturing strategy process, manufacturing-marketing integration, and plant performance: an empirical study of Korean manufacturers

Abstract

The purpose of this study is to examine the interrelationships between manufacturing strategy process (manufacturing strategy formulation and manufacturing strategy implementation), manufacturing-marketing integration and plant performance. For this study, a survey was conducted on 221 manufacturers from the machinery, automotive and electronics in South Korea. Subsequently, the related hypotheses were tested using structural equation modeling. According to the results, positive relationships were observed between the manufacturing strategy process, manufacturing-marketing integration and plant performance. Specifically, manufacturing strategy formulation positively influenced both manufacturing strategy implementation and manufacturing-marketing integration. Further, not only manufacturing strategy implementation, but manufacturing-marketing integration also has a direct positive influence on plant performance. Although manufacturing strategy formulation does not directly affect plant performance, its influence on plant performance is transmitted through two paths intermediated by both manufacturing strategy implementation and manufacturing-marketing integration, respectively. In contrast to quite a number of studies focused on the manufacturing strategy content, there only exists a relatively small number of studies related to the manufacturing strategy process. Therefore, this study is one of the few broad empirical studies that investigated the interrelationships between manufacturing strategy formulation, manufacturing strategy implementation, manufacturing-marketing cooperation and plant performance using structural equation modeling. Furthermore, it also verified that the manufacturing strategy process can be a source of plant performance improvement.