a b s t r a c tWhile firms increasingly adopt lean inventory practices, there is limited evidence that inventory leanness leads to improved firm performance. This study reexamines this relationship in an attempt to overcome some shortcomings of previous research. To that end, a theory-based measure of inventory leanness, which takes into account industry-specific inventory management characteristics, is proposed. The analysis of a large panel data set of U.S. manufacturing companies reveals that the significance and shape of the inventory-performance relationship varies substantially across industries. This relationship is significant in two-thirds of the 54 industries studied. In most of these instances, the relationship is concave, suggesting that there is an optimum level of inventory leanness beyond which firm performance deteriorates. A post-hoc analysis is conducted to identify industry-level characteristics that may determine the nature the inventory-performance relationship. Managerial implications are discussed and several opportunities for future research are outlined.
a b s t r a c tEnvironmental management (EM) issues have received substantial attention in operations management. While the link between EM practices and firm performance has been well studied, little is known about the competitive drivers of a firm's EM activities. In this research, a Schumpeterian economics perspective is adopted to investigate competitive interactions among leader and challenger firms in the domain of EM, with a particular focus on operational EM activities. Using econometric methods, the empirical analysis of panel data from a broad cross-section of US manufacturing firms reveals that such rivalry does exist and that the effect of a rival's past EM activity on a focal firm's EM activity is greater for more profitable and smaller firms. In addition, firm characteristics such as market leadership, firm size and firm profitability are found to significantly affect the magnitude of a firm's EM activities. This study presents theoretical and empirical evidence of rivalrous behaviors in the domains of EM and OM and, thus, has interesting implications for operations management research and practice.
a b s t r a c tThis paper adds to the empirical inventory management literature by examining the moderating effects of environmental dynamism on the relationship between inventory leanness and financial performance. While the financial implications of inventory management practices have been extensively studied in the literature, it is clear that lean inventory strategies may not have the same payoff for all firms in all industries. Grounded in inventory theory, this study explores how firm characteristics and environmental dynamism-measured in terms of innovative intensity, demand uncertainty and competitive intensity-moderate the inventory leanness-performance link. We use hierarchical linear modeling to analyze a data set of 5749 firm-year observations from 123 U.S. manufacturing industries. In line with the hypotheses set forth, the results indicate that innovative intensity in an industry increases the effect of inventory leanness on firm performance while competitive intensity has the opposite effect. The hypothesis with respect to the moderating role of demand uncertainty is not supported. Another interesting and important finding is that inventory leanness accounts for nearly one third of the variation in firm performance after controlling for firm size and growth, thus underlining the importance of efficient and effective inventory management for overall firm success.
The effects of inventory management on firm performance have been well documented. Most previous research, however, has focused on the performance effects of total inventories and has ignored the potentially differential performance effects of raw materials, work‐in‐process, and finished goods inventories. This research investigates the effects of various inventory types on firm performance. The empirical analyses of data from U.S. manufacturing industries reveal that the magnitude of the inventory–performance relationship varies by type of inventory and across industries. Specifically, raw materials inventories have a greater impact on firm performance than work‐in‐process and finished goods inventories. As a possible explanation, intertemporal interactions among these inventory types are explored using vector autoregressive and vector error correction models. The results suggest that raw materials and finished goods inventories asymmetrically affect each other over time. Implications for research and practice as well as future research opportunities are discussed.
Stakeholders increasingly put pressure on firms to ensure their suppliers' adherence to corporate social responsibility principles and standards. A firm's supplier monitoring activities (SMA) are, thus, central to achieving supply chain transparency. In an effort to help build a business case for SMA, this research explores the effect of SMA disclosures on consumers' attitude toward the firm and purchase intention. In so doing, we also examine how consumer attitude and purchase intention vary as a function of SMA disclosure characteristics. The results of three behavioral studies reveal more positive consumer attitude and higher purchase intention when a firm discloses that its supplier monitoring extends to lower‐tier suppliers (SMA depth) and the firm monitors its lower‐tier suppliers directly rather than relying on its first‐tier suppliers or third parties to do so (lower‐tier supplier monitoring mechanism). Greater SMA breadth—monitoring both suppliers' social and environmental activities—in turn, is not associated with more positive consumer attitude and higher purchase intention. Further, attitude toward the firm mediates the relationship between SMA disclosure characteristics and purchase intention. Collectively, these findings underline that consumers value firms' SMA and point toward an economic rationale for a firm's transparency regarding its supplier monitoring efforts.
O riginally adopted by the automotive manufacturers, lean management practices have since been applied to many other manufacturing industries. This study reviews the different theoretical perspectives on the leanness-performance relationship in the context of the motor carriage industry. Drawing on both the lean management in logistics and organizational slack literatures, we develop hypotheses addressing the link between asset leanness and financial performance. These hypotheses are empirically tested using a comprehensive panel data set of 1,172 firm-quarter observations from the U.S. publicly traded truckload motor carriers. Initially expecting an inverted U-shaped relationship between asset leanness and performance, findings indicated a U-shaped relationship, both for carriers' total assets and the subset of trailer assets.
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