Competitive strategy and plant-level flexibility

Abstract

Choosing how and where to be flexible is a critical issue for manufacturers, particularly as competition becomes more intense and environments become more turbulent. Unfortunately, attempts by scholars to make useful prescriptions remain hampered by the fragmented nature of the literature on flexibility. The present paper integrates a review of that literature with concepts from organization theory and competitive strategy in proposing two types of flexibility—tactical and strategic—at the plant level. Using canonical correlation analysis and data gathered from multiple US industries, the relationship between competitive strategy and the perceived value of tactical and/or strategic flexibility is explored. Results tentatively indicate significant strategic effects on the choice of flexibility emphasis at the plant level.