a b s t r a c tThis study examines the effects of operational scope (breadth of product offering, extent of geographical diversification, and extent to which production processes can effectively meet varying demand) and operational slack (resources in excess of what is required to fulfill expected demand) on firm performance, contingent on two components of a firm's dynamic environment, unpredictability and instability. We collate quarterly data on 3857 publicly traded firms in 19 industries from the years 1991 to 2013 (representing 99,559 firm-quarter observations). Using panel data analysis, we find that narrow product offerings, low geographical diversification, low levels of excess capacity, and low inventory slack are each positively associated with firm performance. More importantly though, we find that operational scope is associated with improved performance in unpredictable environments, whereas operational slack is associated with improved performance in unstable environments. These findings contribute to the research on operations strategy by identifying the industry-specific environmental conditions under which operational slack and operational scope are associated with firm performance.

We analyze how salesforce incentives influence a firm's remanufacturing strategy and profitability. We first consider a salesforce incentive model based on the practice of a North American consumer products firm, which offers commissions based on the total revenue generated from new and remanufactured product sales. We then consider a model with differentiated linear commissions for new and remanufactured products. We show that the incentives offered to a salesforce to induce effort can create conditions where a firm should not sell remanufactured products, even if the cost of remanufacturing is negligible. We demonstrate that this result holds for the compensation plan observed in practice of the focal firm as well as with differentiated linear commissions. We further find that linear sales commissions for remanufactured products should generally be lower than those for new products under both compensation models. However, commissions based on the total sales revenue generated by a salesperson, which do not differentiate between the sales of the two products, are not well suited for remanufacturing. This is because incentives based on total sales revenue result in unit sales commissions that are proportional to product prices, which always induce lower than optimal remanufactured product sales due to their lower prices. We show that by offering differentiated commissions for new and remanufactured products, firms can expand the conditions favoring remanufacturing and substantially improve profits.

PurposeThe purpose of this study is to investigate how managers' abilities to design and implement organizational change initiatives affects supply chain (SC) responsiveness. Extant research focuses on specific process and resource options to address responsiveness, with only limited reference to managers' capabilities in adapting to new organization designs that organize processes and resources. Consequently, organizational theory that characterizes the implications of developing and implementing various designs is ignored. The study directly leverages organization adaption, organization design and the dynamic managerial capabilities literature to address the question of how to improve SC responsiveness.Design/methodology/approachQualitative data are used to identify specific dynamic managerial capability constructs, as well as the expected relationships depicted in our conceptual model. The authors test these relationships using quantitative survey data collected from 199 SC leaders.FindingsThe authors find that capabilities in organization design, functional leader negotiations and workforce communications foster SC responsiveness via improved structural adaptability (SA). The findings explain how and when organization design actions impact SA and responsiveness, and more importantly, why managers should invest in developing a workforce communication capability as the foundation for organizational adaptability.Originality/valueBy applying organization adaption, organization design and dynamic managerial capabilities concepts, the research expands the existing study of responsiveness in the SC organizational context.

As a means of acquiring trade credit, delaying supplier payments by extending payables (days to payment) offer financial benefits for buyers. However, such extensions may also engender costly supplier retaliation that results in operational disruptions and financial loss. Terms of payment between buyers and suppliers often affect the relationships established between trade partners; thus, changes to these terms should be evaluated within a social context. Social exchange theory (SET) is applied to analyze the benefits and costs of abrupt payable extensions on buyers' operational outcomes and profitability. The findings indicate that buyers who delay supplier payables by abruptly lengthening payables tend to subsequently increase investments in accounts receivable, inventory, and capital expenditures. Contrary to popular expectations, however, these buyers financially underperform when compared with similar (matched) firms that do not raise payables. Further analysis indicates that these buyers also experience greater supplier turnover and increases in indirect costs. These results are consistent with the expectation of retaliatory supplier responses to payable extensions. It is also revealed that the detrimental effects of delaying supplier payments by payable extensions are significantly smaller for more powerful and financially stronger firms. However, the relationships between payable extensions and capital-based benefits do not appear to be contingent on buyer power or financial strength. This study extends SET by applying it as a lens through which researchers can examine shifts in trade credit terms. The findings suggest a broadened scope of factors to be considered in social exchange and offer new operationalizations of power and trust factors often addressed in SET studies. The study ends with a discussion of the implications of these findings for practice and future research.

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