When to Mass Customize: The Impact of Environmental Uncertainty*

Abstract

Previous research on mass customization (MC) has focused on what it is and how it is implemented. In this study we examine when MC is an appropriate strategy for firms to follow by scrutinizing the effects of three environmental uncertainty variables (demand uncertainty, competitive intensity, and supply chain complexity) on the MC–performance relationship. Specifically, we distinguish the direct effect of environmental uncertainty on MC ability and the moderation effect of environmental uncertainty on MC ability's impact on customer satisfaction. We examine six competing hypotheses using data collected from 266 manufacturing plants. Our results show that competitive intensity has a direct positive impact on MC ability. However, demand uncertainty moderates the relationship between MC ability and customer satisfaction, and the direct and positive relationship between MC ability and customer satisfaction holds only when customer demand is highly uncertain. Supply chain complexity neither has a direct relationship with MC, nor moderates the MC–performance relationship. Implications of these research findings are discussed and future research directions are identified.

Information management for the internationalization of SMEs: An exploratory study based on a strategic alignment perspective

“…Tushman and Nadler's (1978) model indicated that the uncertainty facing organizational subunits comes from three basic sources: task environment, task complexity and inter-unit interdependence. These sources of uncertainty also vary along three dimensions, namely, the dynamism, the munificence, and the complexity of the business environment (Liu et al, 2012). Enterprises need inputs from their external as well as internal environments and therefore require information to reduce the uncertainties that emanate from these environments (Christopher and Lee, 2004).…”

“…Among other sources, the level of environment uncertainty is formed of the environmental complexity, task complexity and inter-unit task interdependence (Tushman & Nadler, 1978;Liu et al, 2012). Tushman and Nadler (1978) proposed that as work related uncertainty increases, so does the need for increased amounts of information.…”

Linking supply chain quality integration with mass customization and product modularity

“…Indeed, researchers report that the implementation of mass customization improves various performance outcomes, such as value to customers (Tu et al, 2001), customer satisfaction (Liu et al, 2012a), operational performance in terms of cost, quality, delivery, and flexibility (Kortmann et al, 2014;Liu et al, 2012b), product innovation (Zhang et al, 2015a), and firm performance (Jitpaiboon et al, 2013;Zhang et al, 2015b).…”

“…high volume customization, customization cost efficiency, customization responsiveness, and customization quality (Kristal et al, 2010;Lai et al, 2012;Liu et al, 2012a). Mass customization capability enables manufacturers to achieve multiple competitive priorities simultaneously (Da Silveira et al, 2001;Huang et al, 2008;Liu et al, 2006) and to resolve trade-offs between customization and costs (Kortmann et al, 2014;Zhang et al, 2015b).…”

Ambidextrous Strategies and Innovation Priorities: Adequately Priming the Pump for Continual Innovation

“…Such planning is necessary for firms wishing to compete within today's rapidly changing business environment. As market swings become more unpredictable, firms must make continual, timely, and appropriate changes to their products and processes (Bourgeois & Eisenhardt, 1988;Chandrasekaran et al, 2012) to combat shorter product lifecycles, unsteady consumer demand, and greater product mix (Liu et al, 2012).…”