This paper reviews applications of structural equation modeling (SEM) in four major Operations Management journals (Management Science, Journal of Operations Management, Decision Sciences, and Journal of Production and Operations Management Society) and provides guidelines for improving the use of SEM in operations management (OM) research. We review 93 articles from the earliest application of SEM in these journals in 1984 through August 2003. We document and assess these published applications and identify methodological issues gleaned from the SEM literature. The implications of overlooking fundamental assumptions of SEM and ignoring serious methodological issues are presented along with guidelines for improving future applications of SEM in OM research. We find that while SEM is a valuable tool for testing and advancing OM theory, OM researchers need to pay greater attention to these highlighted issues to take full advantage of its potential. #

The service concept plays a key role in service design and development. But while the term is used frequently in the service design and new service development literature, surprisingly little has been written about the service concept itself and its important role in service design and development. The service concept defines the how and the what of service design, and helps mediate between customer needs and an organization’s strategic intent. We define the service concept and describe how it can be used to enhance a variety of service design processes. As illustrations here, we apply the service concept to service design planning and service recovery design processes. Employing the service concept as an important driver of service design decisions raises a number of interesting questions for research which are discussed here.

Increasingly, scholars and practitioners recognize the importance of understanding organizational culture when implementing operations management practices. This study investigates the relationships among organizational culture, infrastructure and core quality management practices, and manufacturing performance using two alternative models. Understanding these relationships is important because culture can provide insight into the context dependence of quality management practices and shed light on the mixed results of past studies concerning the link between quality management and performance. Analysis of manufacturing plants from six countries indicates that organizational culture has a stronger influence on infrastructure quality management practices than on core quality management practices, regardless of whether the plants are located in Eastern or Western countries. In addition, infrastructure quality management practices have a significant effect on manufacturing performance. These results contribute to the quality management literature by emphasizing the importance of accounting for culture when making decisions to implement quality management practices to achieve a performance advantage. Finally, we also contribute to the literature on the culture-performance linkage by finding support for a direct link between culture and manufacturing performance.

Managers constantly struggle with where to allocate their resources and efforts in managing the complex service delivery system called a hospital. In the broadest sense, their decisions and actions focus on two important aspects of health care-clinical or technical medical care that emphasizes "what" the patient receives and process performance that emphasizes "how" health care services are delivered to patients. Here, we investigate the role of leadership, clinical quality, and process quality on patient satisfaction. A causal model is hypothesized and evaluated using structural equation modeling for a sample of 202 U.S. hospitals. Statistical results support the idea that leadership is a good exogenous construct and that clinical and process quality are good intermediate outcomes in determining patient satisfaction. Statistical results also suggest that hospital leadership has more influence on process quality than on clinical quality, which is predominantly the doctors' domain. Other results are discussed, such as that hospital managers must be mindful of the fact that process quality is at least as important as clinical quality in predicting patient satisfaction. The article concludes by proposing areas for future research.