Firm performance and the strategic fit of manufacturing technology

Abstract

Scholars have widely asserted that a firm's manufacturing technologies must be aligned with its competitive strategy. This study tests the existence of such a strategy-technology “fit”, determines whether good fit results in better performance, and examines the nature of fit in light of computer controlled or “advanced manufacturing technologies.” For a sample of 399 metal machining firms, a strategytechnology alignment was found to exist and relate to higher financial performance. Advanced manufacturing technologies were found to both reinforce and alter conventional thinking about the flexibility-efficiency tradeoff. Specific technologies were found to be uniquely bundled or combined to support specific competitive requirements.