Is there a way to avoid trading off one capability for another in manufacturing? The prevailing wisdom says no. But some manufacturers seem to have been able to defy that: compared to their competitors, they have better quality, are more dependable, respond faster to changing market conditions and in spite of all that, achieve lower costs. How can this be explained? Our aim here is to provide an explanation. We contend that the nature of the trade‐offs among manufacturing capabilities is more complex than has been assumed. Depending on the approach taken for developing each capability, the nature of the trade‐offs change. In certain cases not only can trade‐offs be avoided altogether, but in fact one capability would enhance another. They become cumulative. Moreover, when a capability is developed in this way, it is likely to be more lasting and less fragile than if it were developed at the expense of other capabilities. We go on to suggest a model which shows how this can be done: To build cumulative and lasting manufacturing capability, management attention and resources should go first toward enhancing quality, then—while the efforts to enhance quality are further expanded—attention should be paid to improve also the dependability of the production system, then—and again while efforts on the previous two are further enhanced—production flexibility (or reaction speed) should also be improved, and finally, while all these efforts are further enlarged, direct attention can be paid to cost efficiency. We use data from 1988 European Manufacturing Futures Survey (167 respondents) to test and illustrate our model. While we cannot “prove” our model, nevertheless, we believe there is enough evidence for a critical reexamination of traditional managerial approaches for improving manufacturing performance. For example, except for the cases when there are obvious slacks in the production system, the belief that costs can come down quickly and lastingly needs to be questioned. Lasting cost efficiency in production can be achieved only through improvements in other capabilities.

T his article develops a model of a project as a payoff function that depends on the state of the world and the choice of a sequence of actions. A causal mapping, which may be incompletely known by the project team, represents the impact of possible actions on the states of the world. An underlying probability space represents available information about the state of the world. Interactions among actions and states of the world determine the complexity of the payoff function. Activities are endogenous, in that they are the result of a policy that maximizes the expected project payoff.A key concept is the adequacy of the available information about states of the world and action effects. We express uncertainty, ambiguity, and complexity in terms of information adequacy. We identify three fundamental project management strategies: instructionism, learning, and selectionism. We show that classic project management methods emphasize adequate information and instructionism, and demonstrate how modern methods fit into the three fundamental strategies. The appropriate strategy is contingent on the type of uncertainty present and the complexity of the project payoff function. Our model establishes a rigorous language that allows the project manager to judge the adequacy of the available project information at the outset, choose an appropriate combination of strategies, and set a supporting project infrastructure-that is, systems for planning, coordination and incentives, and monitoring.

Perceptions of environmental uncertainty and organizational control influence strategic behavior. As national culture influences these perceptions we expect to find cultural differences in interpretation and response to strategic issues. Given a case describing an issue concerning deregulation of the U.S. banking industry, managers completed questionnaires rating interpretations and responses to that issue. National culture was found to influence interpretation and responses. In particular, Latin European managers when compared with other managers were more likely to interpret the issue as a crisis and as a threat. Latin Europeans were also more likely to recommend proactive behavior. This study indicates that different cultures are likely to interpret and respond to the same strategic issue in different ways. These differences may help to explain and predict different responses of European countries to ‘1992’.

Successful application of concurrent development processes (concurrent engineering) requires tight coordination. To speed development, tasks often proceed in parallel by relying on preliminary information from other tasks, information that has not yet been finalized. This frequently causes substantial rework using as much as 50% of total engineering capacity. Previous studies have either described coordination as a complex social process, or have focused on the frequency, but not the content, of information exchanges. Through extensive fieldwork in a high-end German automotive manufacturer, we develop a framework of preliminary information that distinguishes information precision and information stability. Information precision refers to the accuracy of the information exchanged. Information stability defines the likelihood of changing a piece of information later in the process.This definition of preliminary information allows us to develop a time-dependent model for managing interdependent tasks, producing two alternative strategies: iterative and setbased coordination. We discuss the trade-offs in choosing a coordination strategy and how they change over time. This allows an organization to match its problem-solving strategy with the interdependence it faces. Set-based coordination requires an absence of ambiguity, and should be emphasized if either starvation costs or the cost of pursuing multiple design alternatives in parallel are low. Iterative coordination should be emphasized if the downstream task faces ambiguity, or if starvation costs are high and iteration (rework) costs are low.

No abstract