International Journal of Production Economics 196 (2018) 335–345

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International Journal of Production Economics

journal homepage: www.elsevier.com/locate/ijpe

Leveraging high-involvement practices to develop mass customization

capability: A contingent configurational perspective
Enrico Sandrin *, Alessio Trentin, Cipriano Forza
Department of Management and Engineering, University of Padova, Stradella San Nicola, 3, 36100 Vicenza, Italy

A R T I C L E I N F O A B S T R A C T

Keywords: This study focuses on the four human-resource-management (HRM) practices that characterize high involvement
Mass customization (HI), the most advanced approach to employee involvement. These practices push power, information, rewards,
Human resource management and knowledge down to the lowest level of an organization. The impact of these practices on a manufacturing
Employee involvement firm's mass-customization capability (MCC) is examined, along with the way this impact is influenced by the
Engineer-to-order degree of product customization (DPC) that the firm provides to its customers. Based on survey data from 195
Survey research
manufacturing plants in three industries and eight countries, the study finds empirical evidence that these
practices improve MCC when they are adopted jointly and, at the same time, DPC surpasses a certain threshold
value. The same practices, when implemented independent of one another, do not have statistically significant
effects on MCC. Furthermore, as DPC drops below the threshold, the effect of this configuration of practices
becomes non-significant at conventional p levels and gradually decreases until it turns into a negative effect,
which comes closer to statistical significance when the DPC reaches its minimum. This study is the first to examine
the effects of HRM practices on MCC by taking full advantage of the contingent configurational perspective that is
strongly advocated in the strategic HRM literature. The results of this study extend the debate on the organiza-
tional enablers of MCC and, at the same time, add to the well-established discussion on the performance outcomes
of HRM practices in general and HI practices in particular.

1. Introduction MC strategy have in common is the “focus on customer preferences”

Mass customization (MC) denotes the ability of a company to provide
customized products and services that fulfill each customer's idiosyn-
cratic needs without considerable trade-offs in cost, delivery, and quality
(Pine, 1993; Liu et al., 2006; Squire et al., 2006). The concept of MC
encompasses different MC strategies, ranging from the provision of a
catalogue of pre-engineered variants, produced and delivered using
pre-engineered processes, to the design of customer-specific products,
manufactured and distributed through processes that are modified per
customer order (MacCarthy et al., 2003). In the latter case, all stages of
the value chain––spanning from design to distribution––are performed
based on customer specifications, while in the former case, known as
catalogue MC (MacCarthy et al., 2003), no stage of the value chain is
carried out to customer specifications. The variable that captures the
scope of the value-chain activities that are performed based on customer
specifications is generally referred to in the MC literature as the degree of
product customization (DPC) that is provided to customers (e.g., Duray
et al., 2000). While differing in this variable, what these different types of
(Fogliatto et al., 2012: 16). The escalating heterogeneity of customers'
demands, along with intensifying competition, has made the develop-
ment of MC capability (MCC) an increasingly urgent challenge for a
growing number of firms (Huang et al., 2008; Markillie, 2012).
The MC literature has long acknowledged the importance of
designing specific human resource management (HRM) systems for MC
(e.g., Pine, 1993; Beaty, 1996; Kakati, 2002). In particular, the integra-
tion of thinking and doing through employee involvement has been
indicated as an important ingredient of a successful MC strategy ever
since the term “mass customization” became popular in the literature
(e.g., Pine, 1993; Lau, 1995; Tu et al., 2001; Liu et al., 2006; Leffakis and
Dwyer, 2014). However, while “the literature on MC enablers has
increased exponentially” (Fogliatto et al., 2012: 17), the research on the
HRM practices that enable MC has lagged behind (Sandrin et al., 2014).
In particular, the debate has not yet incorporated the distinction—well
acknowledged in the HRM literature (e.g., Bowen and Lawler, 1992)—
between three different, increasingly advanced approaches to employee
involvement, each appropriate for a specific context. Consequently,

* Corresponding author.
E-mail addresses: enrico.sandrin@unipd.it (E. Sandrin), alessio.trentin@unipd.it (A. Trentin), cipriano.forza@unipd.it (C. Forza).

https://doi.org/10.1016/j.ijpe.2017.12.005
Received 11 April 2016; Received in revised form 12 September 2017; Accepted 6 December 2017
Available online 13 December 2017
0925-5273/© 2017 Elsevier B.V. All rights reserved.
E. Sandrin et al.
where the extant MC literature advocates employee involvement, it is
unclear whether it recommends suggestion involvement, job involve-
ment, high involvement, or each and every one of these according to the
specific type of MC strategy that is being pursued.
To contribute to clarifying this issue, the present study focuses on the
coherent set of HRM practices that characterize high involvement (HI)—
the most advanced form of employee involvement (Lawler, 1986)—and
addresses the following research questions: What is the impact of the HI
practices on MCC? Is their impact the same for different types of MC
strategy, characterized by different values of DPC? Is their impact the
same when they are implemented in isolation as when they are adopted
jointly? Theoretically, we answer these questions by adopting the
contingent configurational perspective that is strongly advocated in the
strategic HRM literature (SHRM), whereas the only previous study that
developed hypotheses concerning the effects of HRM practices on the
organizational-performance dimension of MCC implicitly adopted a
universalistic view. Empirically, we test our main hypothesis––grounded
in the abovementioned perspective––against a series of hypotheses that
reflect the universalistic view of SHRM. Survey data from 195
manufacturing plants in three industries and eight countries were
analyzed using, for triangulation purposes, two different procedures of
moderated structural equation modeling (MSEM) as well as moderated
hierarchical multiple regression analysis. The results of all these analyses
consistently support our main hypothesis and collectively suggest that HI
practices improve MCC when they are adopted jointly and, at the same
time, DPC surpasses a certain threshold value. These findings enhance
the current understanding of the conditions under which the HI practices
improve MCC. These results are of practical importance as well, since the
costs of implementing the HI practices “are not trivial” (Boxall and
Macky, 2009). Consequently, the companies that pursue an MC strategy
need to know whether these costs pay off in terms of enhanced MCC and,
if so, whether this is true for any type of MC strategy or only for certain
types, characterized by certain values of DPC. Furthermore, such com-
panies need to understand whether the HI practices should be imple-
mented jointly to improve MCC or a piecemeal approach would be
equally effective.
The remainder of this paper is organized as follows. In Section 2, we
review the relevant literature and in Section 3, we develop the competing
research hypotheses. In Section 4, we present the method we used to test
these hypotheses and, in Section 5, we report the results of the analyses
we performed. Finally, in Section 6, we discuss the theoretical
and managerial implications of the study, as well as its limitations and
directions for future research.
2. Literature review
2.1. Strategic human resource management
Strategic human resource management (SHRM) emphasizes the
importance of focusing on people as the primary source of a firm's
competitive advantage and is defined in this study as “the pattern of
planned human resource deployments and activities intended to enable
the firm to achieve its goals” (Wright and McMahan, 1992: 298). This
definition highlights two important features that distinguish SHRM from
traditional HRM. First, the expression “human resource deployments and
activities intended to enable the firm to achieve its goal” underlines the
need for alignment between HRM practices and business strategy. This
alignment is called vertical/external fit and reflects what can be called the
contingency perspective of SHRM (Huselid, 1995; Delery and Doty,
1996). Second, the expression “pattern of planned human resource
deployments and activities” underscores the need for internal consis-
tency among HRM practices. This alignment is called horizontal/internal
fit and reflects what can be called the configurational perspective of
SHRM (Huselid, 1995; Lepak and Snell, 1999). By combining these two
expressions, the SHRM definition adopted in this study emphasizes that
an HRM system should have both vertical and horizontal fit in order for a
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International Journal of Production Economics 196 (2018) 335–345
company to achieve its goals (e.g., Dyer, 1985; Schuler and Jackson,
1987; Wright and McMahan, 1992; Truss and Gratton, 1994). In other
words, this definition reflects what can be called the contingent config-
urational view of SHRM (Lepak and Snell, 1999).
2.2. High involvement: the most advanced form of employee involvement
Employee involvement is a fundamental ingredient of the HRM sys-
tems proposed in the SHRM literature. McMahan et al. (1998) stated that
“almost all authors measuring strategic HR [i.e., human resource] prac-
tices in the past few years have implicitly relied on the employee invol-
vement/empowerment concepts without explicitly acknowledging this”
(McMahan et al., 1998: 197). It is important to note that employee
involvement, as well as the HRM systems inspired by this concept, can be
conceptualized in different ways, and that the related empirical measures
show considerable variability across studies (Wood and Wall, 2007).
The conceptualization of employee involvement adopted in this study
is based on the work of Lawler and his colleagues (e.g., Lawler, 1986;
Lawler and Mohrman, 1989; Galbraith and Lawler, 1993), which has
found widespread recognition and application in subsequent studies on
employee involvement (e.g., McMahan et al., 1998; Guerrero and
Barraud-Didier, 2004; Richardson and Vandenberg, 2005). According to
this conceptualization, employee involvement is characterized by the
way the following four features are positioned in an organization: i)
power to make decisions that influence organizational direction and
performance, ii) information about business results and goals,
iii) rewards tied to performance and growth in capability, and iv) rele-
vant knowledge of the work and the business, gained from ongoing
training and development (Lawler, 1992; Richardson and Vandenberg,
2005). When these features are concentrated at the top of the organiza-
tion, traditional, control-oriented management exists (Lawler, 1988). As
additional power, information, rewards, and knowledge are pushed
down to the lowest level of an organization, three different approaches to
employee involvement can be distinguished (Lawler, 1988; Bowen and
Lawler, 1992): suggestion involvement, job involvement, and high
involvement. Suggestion involvement represents a small departure from
the traditional, control-oriented approach to HRM, as lower-level em-
ployees are encouraged to contribute ideas through formal suggestion
programs or quality circles, but managers retain the power to decide
whether or not to implement these suggestions. On the other hand, job
involvement gives lower-level employees considerable freedom in
deciding how to do their work. Accordingly, they receive information
and rewards focused on and based on job and/or team goals and per-
formance. Finally, with HI, lower-level employees are encouraged not
only to make decisions concerning how to conduct their jobs, but also to
participate in the business as a whole. Accordingly, they receive infor-
mation and rewards focused on and based on the goals and performance
of the organization as a whole. With HI, people at the lowest level of the
hierarchy are expected to take responsibility for the performance of the
organization as a whole, not just for how they do their jobs or how
effectively their team performs. Consequently, this approach to employee
involvement is also referred to in the literature as organization-level
involvement (Wood and Wall, 2007).
In the employee involvement literature, the HRM practices through
which a certain approach to employee involvement is put into practice
are usually referred to as power, information, rewards, and knowledge,
and are, therefore, collectively denoted by the PIRK acronym. Accord-
ingly, we will designate the four HRM practices that characterize HI as
power-HI, information-HI, rewards-HI, and knowledge-HI, and we will
refer to them collectively as the PIRK-HI practices.
2.3. Mass customization and high-involvement practices
The literature on the development of MCC has grown considerably
during the last two decades (Da Silveira et al., 2001; Fogliatto et al.,
2012). The interested reader is referred to Fogliatto et al.’s (2012)
E. Sandrin et al.
comprehensive literature review for a detailed discussion of MC enablers.
However, only one study has explicitly developed and tested hy-
potheses on the effects of HRM practices on MCC.1 Liu et al. (2006)
considered ten work-design practices grounded in socio-technical
systems theory, including three of the four practices that characterize
HI, that is, power-HI, rewards-HI, and knowledge-HI.2 Liu et al. (2006)
implicitly adopted a universalistic perspective, as their theoretical
arguments imply that the individual practices of power-HI, rewards-HI,
and knowledge-HI, independent of one another, have a positive effect on
MCC, and that this effect is universal across the reference population. In
contrast to this view, Liu et al. (2006) found no significant relationship
between power-HI and MCC and, consequently, called for the inclusion of
contingency factors in subsequent studies on the topic.
In line with this call, Leffakis and Dwyer (2014) introduced, in the MC
literature, the contingent configurational perspective of SHRM. Consis-
tent with the contingency argument, they hypothesized that a high per-
formance work system (Appelbaum et al., 2000) leads to greater
operational-performance improvements when a firm's MC strategy
involves providing an unlimited amount of unique product solutions to
customer specifications, whereas an MC strategy that involves the pro-
vision of a finite set of product variants fits well with a traditional HRM
system. However, Leffakis and Dwyer (2014: 1228) admittedly did
not test the configuration argument according to which performance
improvements also require the joint implementation of all the practices
that characterize either the high performance work system or the tradi-
tional HRM system. More importantly, Leffakis and Dwyer (2014) did not
use MCC as outcome variable, nor did they focus on HI as independent
variable: The high performance work system, one of the two independent
variables in their study, is a broader concept than that of employee
involvement (Benson et al., 2013), which, in turn, is a wider notion than
that of HI (Lawler, 1986). This means that Leffakis and Dwyer (2014)
results cannot be applied to the relationships between the four PIRK-HI
practices and MCC, thus leaving the following questions unanswered:
What is the impact of the four PIRK-HI practices on MCC? Is their impact
the same for different types of MC strategy, characterized by different
values of DPC? Is their impact the same when they are implemented in
isolation as when they are adopted jointly?
3. Hypotheses development
Our main research hypothesis is logically entailed in five premises,
grounded in the extant literature. Premise 1 is the basic principle of the
contingent configurational view of SHRM, presented in Section 2.1: In
order for a company to achieve its goals, its HRM practices should
demonstrate both horizontal/internal fit with each other, and vertical/
external fit with the organization's strategy (e.g., Dyer, 1985; Schuler and
Jackson, 1987; Wright and McMahan, 1992; Truss and Gratton, 1994).
Stated otherwise, the impact of an organization's HRM practices on
organizational performance is dependent on both the degree of hori-
zontal/internal fit among these practices and the degree of vertical/
external fit between the organization's system of HRM practices and
organizational strategy (Huselid, 1995). To the purposes of our study, the
organizational strategy of interest is a manufacturing firm's MC strategy,
characterized by a certain DPC; the organizational performance of
interest is, accordingly, the firm's MCC (Huang et al., 2010; Trentin et al.,
1
Other theory-testing studies, that is, Huang et al. (2010), Kristal et al. (2010), and
Trentin et al. (2012), did use, inter alia, HRM practices to characterize higher-order con-
structs such as organic organizational structure and quality management, but did not
develop hypotheses directly linking HRM practices to MCC.
2
Liu et al. (2006) also included feedback to shop-floor employees, but this practice
cannot be considered the same as the HI practice called “information.” This is because the
former consists in providing employees with information about the variance that occurs
within the scope of their responsibility (e.g., defect rates, schedule compliance, etc.), while
the latter involves communicating the long-run competitive strategy of the organization to
which they belong.
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International Journal of Production Economics 196 (2018) 335–345
2015); and the HRM practices of interest are the four that the firm must
implement to achieve HI.
When defining its MC strategy, a firm must decide the DPC to be
provided to its customers. This idea, widely shared in the MC literature
(e.g., MacCarthy et al., 2003; Sandrin et al., 2014), that the choice of the
DPC is a fundamental element of an MC strategy, constitutes Premise 2.
Typically, the literature (e.g., Duray et al., 2000; Squire et al., 2006;
Huang et al., 2010; Wong and Lesmono, 2013) provides an implicit
definition of DPC by claiming that this variable is determined by the
point of initial customer involvement along the sequence of design,
fabrication, assembly, and distribution activities that comprise a generic
manufacturing firm's value chain: The earlier the stage at which cus-
tomers get involved along this chain, the higher the DPC, where customer
involvement at a certain stage means that the activities from that stage
onward are performed based on customer specifications (e.g., Duray
et al., 2000). Stepping customer involvement back one notch at a time
along the value chain gives rise to four different product customization
strategies, ranging from customized distribution to customized design
through customized assembly and customized fabrication (Lampel and
Mintzberg, 1996), with increasing values of DPC. Based on the above,
one could define DPC as the number of stages in the value chain that are
performed to customer specifications. Yet, not all of the customer orders
a company fulfills in a certain period must necessarily follow the same
product customization strategy. As a matter of fact (e.g., Huang et al.,
2010), some companies pursue hybrid product customization strategies
that combine, for instance, customized assembly for 90% of their
customer orders and customized design for the remaining 10%. In this
case, the number of customized stages would be two for 90% of customer
orders and four for the remaining 10%. To capture hybrid strategies such
as this one, Liu et al. (2010) implicitly proposed that to measure DPC,
which they called “degree of make-to-order”, the figures that reflect the
number of customized stages for each of the four strategies mentioned
above are weighed with the percentages of customer orders falling into
the respective strategies.3 Drawing upon Liu et al. (2010), we define DPC
as the weighted average of the number of stages in the value chain that
are performed to customer specifications, where the weights are the
percentages of customer orders respectively falling into the strategies of
customized design, customized fabrication, customized assembly, and
customized distribution in a certain period.
Premise 3 is the assumption that the higher the DPC a firm provides to
its customers, the more unpredictable the firm's environment. This
assumption logically flows from the definition of DPC. High DPC means
that the company is willing to create a new product design, or to modify
an existing one, to meet the unique needs of one individual customer, and
that it does so for a large share of, if not for all of its customers. A mass
customizer with a high DPC does not know what it will have to provide to
whom (Pine et al., 1993: 109) and is involved in a never-ending
campaign to expand the number of ways it can satisfy its customers
(Pine et al., 1993: 109). This is in stark contrast to what happens when
the DPC is low. Low DPC means that product customization is mainly
restricted to the distribution process of a fully pre-defined variety of
make-to-stock products (Lampel and Mintzberg, 1996). Customers are
allowed to decide, for example, when and where it would be more
convenient for them to receive the products they have chosen, but they
typically have no direct influence over production or design decisions
(Lampel and Mintzberg, 1996) and, consequently, the predictability of
work situations is higher.
3
Liu et al.'s (2010) choice of terming the measure of DPC as “degree of make-to-order” is
justified by the fact that if a stage of a value chain is customized, then it cannot be initiated
without a customer order. While other scholars have used the term “make-to-order” as a
synonym of product customization (e.g., Akinc and Meredith, 2015), it must be acknowl-
edged that there may be situations in which what is produced only after a customer order
is, in fact, a standard product with no variations, for example due to the combination of
infrequency of demand and expensive finished product inventory (Waller et al., 2000;
Akinc and Meredith, 2015).
E. Sandrin et al.
Premise 4 concerns the four PIRK-HI practices. According to Lawler
and his colleagues' widely recognized conceptualization of HI, these
practices are a set of internally consistent, interdependent HRM prac-
tices that are all necessary to achieve HI (e.g., Lawler, 1986; Guerrero
and Barraud-Didier, 2004; Richardson and Vandenberg, 2005; Kizilos
et al., 2013). High involvement requires that lower-level employees are
empowered to make decisions affecting organizational direction and
performance (power-HI), receive adequate information about business
goals and results (information-HI), acquire, through ongoing training
and development, the knowledge necessary to understand and act upon
such information (knowledge-HI), and are rewarded based on the
performance of the organization as a whole (reward-HI). In the absence
of any one of these practices, an organization fails to take advantage of
the entire capacity of all its human resources (Lawler, 1992; Richardson
and Vandenberg, 2005), either because lower-level employees risk
making decisions that will not contribute to organizational perfor-
mance, or because they feel frustrated and lack motivation owing to
the impossibility of using their expertise (Lawler, 1986). In summary,
the four PIRK-HI practices fit horizontally with each other, where the
functional form of fit is, in Venkatraman's (1989; 1990) words,
covariation, or coalignment, of all four variables.4 This proposition
constitutes Premise 4.
Premise 5, finally, is Bowen and Lawler's (1992) proposition that the
more unpredictable a firm's environment, the better the fit with HI,
meaning that the benefits of HI are more likely to outweigh its costs. The
logic underlying this proposition is that, in unpredictable environments,
“it is simply impossible to anticipate many of the situations that will arise
and to ‘program’ employees to respond to them” (Bowen and Lawler,
1992: 38). This is well illustrated by the case in which a customer asks for
modifying his/her original product specifications after order placement,
a very common request in high-DPC environments (Bertrand and
Muntslag, 1993; Tenhi€ al€a and Ketokivi, 2012; Uskonen and Tenhi€al€a,
2012; Kristianto et al., 2015). Responding to such a request in a way that
is satisfactory to both the customer and the supplier requires fast
and flawless inter-functional communication as well as strong
inter-functional cooperation, since possible courses of action must be
quickly explored by different functional departments (e.g., sales, engi-
neering, purchasing, and manufacturing) and mutually acceptable solu-
tions must be rapidly found (Trentin and Forza, 2010; Tenhi€al€a and
Salvador, 2014). Communication and cooperation across organizational
departments are facilitated by HI because highly involved employees,
who take part in problem solving, organizational policy setting, and work
design, are significantly more knowledgeable about the overall operation
of their organization (Lawler, 1986) and, thus, can communicate and
arrive at mutually acceptable outcomes more easily (Swink and Song,
2007). The same logic explains why HI helps cope with uncertainty on
tender acceptance, which is another characteristic of high-DPC envi-
ronments because potential customers generally ask for several tenders
from different suppliers in view of the high cost of the customized
product (Bertrand and Muntslag, 1993). Like customers' requests for
changes to product specifications, the uncertainty that surrounds tender
acceptance makes it more difficult to plan both engineering and
manufacturing capacity (Bertrand and Muntslag, 1993). For example, the
amount of capacity required for preparing quotations reduces the avail-
ability of resources for the existing orders, thus creating conflicts
4
According to Venkatraman (1989), both the “fit as covariation” and the “fit as
gestalts” perspectives conceptualize fit as internal consistency among a set of multiple
variables. The “fit as covariation” perspective, however, “requires a much greater preci-
sion” in specifying the functional form that internal consistency should take (Venkatra-
man, 1989: 436): in this case, internal consistency requires that a higher value of any one
of the considered variables is associated with higher values of all the other variables, as
happens with the four PIRK-HI practices. Accordingly, “fit as covariation is specified as a
second-order factor, and the first-order factors represent the dimensions to be coaligned”
(Venkatraman, 1989: 436). Conversely, the “fit as gestalts” perspective makes no claim
regarding the pattern of internal consistency among the variables and, accordingly,
gestalts are viewed as products of cluster analysis (Venkatraman, 1989).
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International Journal of Production Economics 196 (2018) 335–345
between the short-term objective of fulfilling already received orders and
the longer-term goal of acquiring new ones. Quickly solving such prob-
lems without sacrificing cost-effectiveness or quality necessitates intense
communication and strong cooperation between sales, engineering, and
production departments (Bertrand and Muntslag, 1993), which is facili-
tated by HI, as explained above. In fact, HI helps not only cope with this
source of uncertainty, but also reduce it. This happens because highly
involved salespersons, who are both able and empowered to adopt a
flexible, customized approach to each potential customer, often manage
to provide a reliable estimate of if and when a tender is likely to result in
the placement of an order (Bertrand and Muntslag, 1993). This lowers
both the risk that customer orders will arrive unexpectedly with com-
mitments for delivery that can no longer be realized (Bertrand and
Muntslag, 1993) and the risk of procuring long lead-time items on a
speculative basis, which is sometimes a necessity when a customer is of
strategic importance and early delivery is crucial (Hicks et al., 2001).
Taken together, these arguments suggest that, in a high-DPC environ-
ment with all its typical uncertainties, HI helps combine quick responses
to customers with cost-effective performance and quality, thus improving
MCC.
The five premises explained above can be applied to a manufacturing
firm that pursues a certain MC strategy and to the four PIRK practices that
characterize HI in order to logically derive our main research hypothesis
as follows. Premise 1, together with Premises 2 and 4, entails that to
improve the organizational-performance dimension of MCC, the com-
pany should achieve both higher levels of horizontal fit, or “coalignment
among the four PIRK-HI practices” (coHIP), and better vertical fit
between this configuration of practices and the DPC that characterizes
the firm's strategy. In turn, Premises 3 and 5 imply that this configuration
of practices fits better with higher values of DPC. Since better vertical fit
entails better organizational performance (as per Premise 1), the func-
tional form of the vertical fit between coHIP and DPC is, according to
Venkatraman (1989), the interaction of these two variables.5 We there-
fore hypothesize:
Hypothesis H1. A company's MCC is positively influenced by the
interaction of the coHIP and DPC.
Consistent with prior research on the performance outcomes of the
PIRK-HI practices (Guerrero and Barraud-Didier, 2004), we tested our
main hypothesis––grounded in the contingent configurational perspec-
tive of SHRM––against a series of hypotheses that reflect the universal-
istic view of SHRM. This latter relates individual HRM practices to
organizational performance: In Delery and Doty's (1996: 812) words,
“universalistic assertions are based on the individual HR [i.e., human
resource] practices” and “posit that certain individual HR practices are
better in all conditions.” Universalistic predictions dominated much of
the early research on the performance outcomes of the PIRK practices
(Benson et al., 2013), including those that characterize HI (e.g.,
Vandenberg et al., 1999). Applied to these practices and to the case of a
manufacturing firm that pursues an MC strategy, the universalistic
perspective leads to the following four hypotheses:
Hypotheses H2a–H2d. A company's MCC is positively influenced by
(a) power-HI, (b) information-HI, (c) rewards-HI, and (d) knowledge-HI.
In testing these competing hypotheses, we controlled for the effect of
product modularity, which is widely acknowledged in the literature as an
enabler of MCC (e.g., Liu et al., 2010; Peng et al., 2011; Zhang et al.,
2017). Product modularity refers to the extent to which the components
of a product can be separated and recombined in order to make different
variants of the same product (Schilling, 2000). Furthermore, in line with
5
This is because “the impact that a predictor variable [i.e., in our case, the coHIP] has
on a criterion variable [i.e., the organization's MCC] is dependent on the level of a third
variable [i.e., the DPC that the organization provides to its customers], termed here as the
moderator” (Venkatraman, 1989: 424).
E. Sandrin et al. International Journal of Production Economics 196 (2018) 335–345

several previous studies on MCC (e.g., Liu et al., 2006; Huang et al., 2008; Table 2
Zhang et al., 2014), we also controlled for the effects of industry, country, Measurement items and CFA results for the measurement model.

and organization size. Measurement item Standardized path

loading

4. Methods Power-HI (DL, HR, SP, PS)a - Huang et al. (2010)

α ¼ 0.87, CR ¼ 0.88, AVE ¼ 0.70, IRAC ¼ 0.801
P1: Even small matters have to be referred to someone higher up 0.89
4.1. Data description
for a final answer. (reverse coded)
P2: Any decision I make has to have my boss's approval. (reverse 0.86
The data used for the empirical analyses are part of the third round of coded)
the High Performance Manufacturing (HPM) project, a research project P3: There can be little action taken here until a supervisor 0.76
aimed to investigate manufacturing practices, processes, and perfor- approves a decision. (reverse coded)
Information-HI (DL, IM, SP)a - adapted from Ahmad and Schroeder (2003)
mance (Schroeder and Flynn, 2001). The sample used in this paper α ¼ 0.80, CR ¼ 0.80, AVE ¼ 0.66, IRAC ¼ 0.848
includes 238 mid- to large-sized manufacturing plants from three I1: In our plant, goals, objectives, and strategies are 0.86
industries (machinery, electronics, and automobile supplier) and eight communicated to me.
countries (The US, Japan, South Korea, Austria, Finland, Germany, Italy, I2: I understand the long-run competitive strategy of this plant. 0.77
Rewards-HI (HR, SP, PS)a - adapted from Ahmad and Schroeder (2003)
and Sweden) representing North America, Asia, and Europe.
α ¼ 0.93, CR ¼ 0.93, AVE ¼ 0.83, IRAC ¼ 0.793
As described by Liu et al. (2012a), the data were collected by one R1: Our incentive system encourages us to vigorously pursue 0.93
research team in each of the above-mentioned countries using mailed plant objectives.
surveys. In each country, the research team first randomly selected a list R2: The incentive system at this plant is fair at rewarding people 0.88
of manufacturing plants in each industry and, to maximize response rate, who accomplish plant objectives.
R3: The incentive system at this plant encourages us to reach 0.92
contacted the manager of each plant to solicit the plant's participation.
plant goals.
Each of the plant managers who agreed to participate was then asked to Knowledge-HI (HR, SP, PS)a - adapted from Zhang et al. (2012)
appoint a survey coordinator in the plant to work with the research team. α ¼ 0.89, CR ¼ 0.90, AVE ¼ 0.75, IRAC ¼ 0.870
In return for participation, each plant received a detailed report K1: Our plant employees receive training and development in 0.90
workplace skills on a regular basis.
comparing its manufacturing operations profile to those of other plants in
K2: Management at this plant believes that continual training 0.78
its industry. With this approach, the response rate was approximately and upgrading of employee skills is important.
65% in each country, thus reducing the need to check for non-response K3: Our employees regularly receive training to improve their 0.90
bias (Flynn et al., 1990; Liu et al., 2006; Zhang et al., 2014). skills.
Owing to missing responses to the survey items necessary to deter- MCC (PE, PD, PS)a - adapted from Tu et al. (2001)
α ¼ 0.75, CR ¼ 0.76, AVE ¼ 0.45, IRAC ¼ 0.842
mine the DPC, 43 plants were removed from this study. Little's test was
MCC1: We can easily add significant product variety without 0.72
performed to check if those responses were missing completely at increasing cost.
random (MCAR). The resulting p-value was non-significant at the 0.10 MCC2: We can customize products while maintaining high 0.63
level, indicating that the responses were MCAR. The profile of the sample volume.
MCC3: We can add product variety without sacrificing quality. 0.80
suitable for this study is reported in Table 1.
MCC4: Our capability for responding quickly to customization 0.48
requirements is very high.
4.2. Measures Product modularity (IM, PD, PE)a - adapted from Forza et al. (2000)
α ¼ 0.75, CR ¼ 0.76, AVE ¼ 0.52, IRAC ¼ 0.755
PM1: Our products are modularly designed, so they can be 0.71
Mass-customization capability and the four PIRK-HI practices were rapidly built by assembling modules.
measured using multi-item scales (Table 2). For each item, respondents PM2: We have defined product platforms as a basis for future 0.57
indicated the extent to which they agreed or disagreed with the corre- product variety and options.
sponding statement on a seven-point Likert scale anchored by “strongly PM3: Our products are designed to use many common modules. 0.85

disagree” (1) and “strongly agree” (7). a

Respondent code (DL: direct labor; HR: human resources manager; IM: inventory
As regards the four PIRK-HI practices, power-HI was measured by manager; PD: member of product development team; PE: process engineer; SP: supervisor;
PS: plant superintendent).
three reverse-coded items reflecting the centralization of decision-
making authority (Huang et al., 2010). Information-HI was measured
with two items capturing management efforts to clearly communicate the
To measure MCC, we used a four-item scale adapted from Tu et al.
plant's competitive strategy to all employees (Ahmad and Schroeder,
(2001). This scale reflects an organization's ability to offer product
2003). Rewards-HI was measured by means of three items covering the
variety and product customization without substantial trade-offs in cost,
alignment between the reward system and plant objectives (Ahmad and
delivery, and quality.
Schroeder, 2003). Finally, knowledge-HI was measured using Zhang
To measure DPC, we used the percentages of customer orders that, at
et al.'s (2012) three-item scale capturing management efforts to contin-
a given plant, fall into the strategies of customized design (CDE%),
uously upgrade employees' skills and knowledge.
customized fabrication (CF%), customized assembly (CA%), customized
distribution (CDI%), and no customization (NC%), as reported by the
Table 1
Sample profile. plant's process engineer. For each of these strategies, the percentage of
customer order was multiplied by the number of stages that are
Country Industry Total
customized according to that strategy along a four-stage value chain
Electronics Machinery Auto suppliers comprising design, fabrication, assembly, and distribution. To have a
Austria 9 5 2 16 measure ranging between zero and one, the sum of these products was
Finland 13 4 10 27 divided by 400, as shown in Equation (1).
Germany 7 9 16 32
Italy 10 10 7 27 CDE%  4 þ CF%  3 þ CA%  2 þ CDI%  1 þ NC%  0
Japan 9 11 6 26 DPC ¼ (1)
400
South Korea 6 8 8 22
Sweden 7 8 7 22 As for the control variables, product modularity was measured by
USA 8 8 7 23 means of the three-item scale adapted from Forza et al. (2000) and
Total 69 63 63 195
validated by Liu et al. (2010) and Zhang et al. (2014). The items of this

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scale cover the application of product platforms, which often rely on Table 3
modular architectures (Jiao et al., 2007), and the use of common, Discriminant validity.

re-combinable modules in product design (Liu et al., 2010; Zhang et al., Square root Correlations (CFA results)
2014). For each item, respondents indicated the extent to which they of AVE
1 2 3 4 5 6
agreed or disagreed with the corresponding statement on a seven-point
1 - MCC 0.67 1.00
Likert scale anchored by “strongly disagree” (1) and “strongly agree” 2 – Power-HI 0.84 0.11 1.00
(7). Organization size was measured as the natural log of the number of 3– 0.81 0.17 0.44 1.00
hourly and regular employees in the plant (e.g., Huang et al., 2008; Liu Information-
et al., 2017). Industry and country, finally, were measured using nine HI
4 – Rewards-HI 0.91 0.22 0.12 0.53 1.00
dummy variables. These nine variables were included, along with
5 – Knowledge- 0.87 0.22 0.36 0.63 0.62 1.00
product modularity and organization size, in the moderated hierarchical HI
multiple regression analysis, but they were not modeled in SEM analyses 6 – Product 0.72 0.28 0.08 0.11 0.11 0.14 1.00
due to sample size limitations (Hair et al., 2010). To control for potential modularity
effects of industry or country in all SEM analyses, we therefore followed
Liu et al. (2006) and performed such analyses using the standardized
model (Table 3), thus indicating good discriminant validity for our
residuals from a linear, ordinary least square regression of MCC on the
measurement scales.
nine dummy variables.
Besides assessing the psychometric properties of our latent constructs,
we also evaluated common method bias, which is often mentioned as a
4.3. Measurement quality
major source of concern in studies involving self-report measures
(Spector, 2006). As pointed out by Salvador et al. (2015), common
Whenever possible, we used multiple informants for each construct at
method bias was minimized in the HPM project by adopting the
the same plant. For all multiple-respondent measurement scales, inter-
following procedural remedies suggested by Podsakoff et al. (2003): 1)
rater agreement was assessed using the ratio method developed by
ensuring informant confidentiality to increase the accuracy of responses;
James et al. (1984). All inter-rater agreement coefficients (IRACs) were
2) pilot testing the questionnaire to avoid ambiguities in the survey
either above or slightly below 0.8 (Table 2), indicating good, or at least
questions; and 3) distributing items for the same measurement scale in
acceptable, agreement among respondents (Boyer and Verma, 2000;
different parts of the questionnaire. Furthermore, with reference to this
Liu et al., 2006; Huang et al., 2010). Accordingly, we aggregated the
specific study, common method bias concerns are also mitigated by the
responses for each item across all respondents, thus obtaining a single
fact that 1) the set of respondents to the measurement scale of the
value for each plant.
criterion variable is partially different from the set of respondents to
The psychometric properties of the measurement scales of the six
the measurement scales of the predictor variables, and 2) the response
latent constructs were assessed by performing confirmatory factor anal-
scale of one predictor variable (i.e., DPC) is different from the response
ysis (CFA) (Gerbing and Anderson, 1988) using LISREL 8.80.
scale of the criterion variable (Podsakoff et al., 2003). Nonetheless, we
Unidimensionality and convergent validity were evaluated by esti-
also applied statistical controls for common method bias by performing
mating an a priori measurement model in which each of the measure-
Harman's single-factor test through both exploratory factor analysis and
ment scale items was restricted to loading on the construct it was
CFA. First, we examined the unrotated factor solution and found that i)
intended to measure, and the six latent constructs were free to corre-
the exploratory factor analysis did not produce a single general factor and
late. This model showed a good fit with the data, as indicated by the
ii) the first factor did not account for the majority of the covariance
values of the typical fit indices: χ2(df) ¼ 192.31 (120), χ2/df ¼ 1.60;
among the measures (Podsakoff et al., 2003). Secondly, we used CFA to
non-normed fit index (NNFI) ¼ 0.97, comparative fit index
test the hypothesis that a single factor accounts for all of the variance in
(CFI) ¼ 0.97, incremental fit index (IFI) ¼ 0.97, root mean square error
our data (Podsakoff et al., 2003), and we found a very poor fit of the
of approximation (RMSEA) ¼ 0.051. Furthermore, all items loaded on
model with our data (RMSEA ¼ 0.224, χ2/df (df) ¼ 8.54 (135),
the hypothesized latent constructs, as all standardized factor loadings
CFI ¼ 0.63). Collectively, these results suggest that common method bias
were positive, significant at p < .001, and >0.50 (Gerbing and Ander-
does not appear to be a concern in our study.
son, 1988; Bollen, 1989), with the exception of one item of the MCC
scale, whose standardized factor loading was slightly below 0.50
5. Results
(0.48). Since this item had a loading very close to the recommended
threshold of 0.50 and its content captures an essential aspect of the
For triangulation purposes, Hypothesis H1 was tested using two
underlying construct, we decided to retain it, just as Peng et al. (2011)
different procedures of moderated structural equation modeling (MSEM)
did with their “supplier collaboration IT” scale. Altogether, these re-
as well as moderated hierarchical multiple regression analysis. Consis-
sults suggested that, for each scale, the items measured a single
tent with Venkatraman (1989), indications on how to model “fit as
construct (unidimensionality), and that the various items, regarded as
covariation,” we formally specified coHIP as a reflective, second-order,
different methods of measuring the same construct, provided the same
latent factor, with the first-order factors representing the four PIRK-HI
results (convergent validity) (Anderson and Gerbing, 1988; Gerbing
practices to be coaligned (Fig. 1).6 Thus, before conducting MSEM, we
and Anderson, 1988; Menor and Roth, 2007).
estimated the theoretical model that specifies coHIP in this manner. The
Reliability was assessed using Cronbach's alpha (α), composite reli-
various fit indices showed acceptable fit between this model and the
ability (CR), and average variance extracted (AVE). As reported in
observed data: χ2(df) ¼ 83.61 (40), χ2/df ¼ 2.09, NNFI ¼ 0.97,
Table 2, all alpha values and CR values were greater than 0.70, and all
CFI ¼ 0.98, IFI ¼ 0.98, RMSEA ¼ 0.075. In addition, the standardized
AVE scores exceeded 0.50, with the exception of the MCC scale, whose
path coefficients from the second-order construct to the four first-order
AVE score (0.45) was, however, higher than those reported in previous
constructs were significant at p < .001. Collectively, these results sup-
studies on MCC: namely, 0.40 (Kristal et al., 2010) and 0.42 (Huang et al.,
ported the conceptualization of HI as the result of joint implementation
2010; Salvador et al., 2015). Overall, these results indicated acceptable
of the four PIRK-HI practices.
reliability levels (Fornell and Larcker, 1981; O'Leary-Kelly and Vokurka,
1998).
Finally, discriminant validity was assessed using Fornell and Larcker's 6
A reflective, second-order, latent factor is an unobserved factor that manifests itself
(1981) procedure. For each of the six latent constructs, the square root of through some first-order factors and captures an underlying phenomenon that explains
the AVE exceeded the correlations with the other latent constructs in the why the first-order factors co-vary (Jarvis et al., 2003; Tanriverdi, 2006).

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E. Sandrin et al.
Fig. 1. Second-order model of the coalignment of the PIRK-HI practices (***p < .001).
When using MSEM, researchers need to select a procedure to analyze
the data from among the various MSEM approaches available in the
literature (Cortina et al., 2001). Like Liu et al. (2012b), we decided to use
both Ping's (1995) and Mathieu et al.'s (1992) procedures because these
two are more straightforward, both conceptually and operationally, and
because the results from Mathieu et al.'s (1992) procedure differed the
most from those from the other five procedures examined by Cortina
et al. (2001).
Since coHIP was a second-order latent factor, and its first-order latent
factors were psychometrically unidimensional (Nasser-Abu Alhija and
Wisenbaker, 2006), we created summated scales (Little et al., 2002) for
the first-order factors before applying Ping's (1995) and Mathieu et al.'s
(1992) procedures. Furthermore, we mean-centered all continuous var-
iables, as suggested by Cortina et al. (2001).
Ping's (1995) procedure consisted of two steps. In the first one, a
linear model without the interaction term is estimated. In our case, the
first-step model included the following variables: coHIP, DPC, MCC,
product modularity, and organization size. In the second step, the
interaction latent variable is added to the first-step model (Fig. 2). In our
case, the item for the interaction latent variable coHIP x DPC was
computed by multiplying the sum of the indicators of the independent
variable coHIP by the single indicator of the moderator variable DPC. The
values of the factor loading and of the error variance for the interaction
item were calculated based on the first-step results using equations (4)
and (5) from Ping (1995: 338) and were fixed in the second-step
model. Since the inclusion of the interaction term violates the
multivariate-normality assumption of the maximum likelihood param-
eter estimation adopted by SEM (Cortina et al., 2001), we employed the
Satorra-Bentler correction (Satorra and Bentler, 1988) to produce robust
maximum likelihood estimates of standard errors and χ2 values when the
multiplicative term is included into the model. The various fit indices
showed acceptable fit between the moderation model and the observed
Fig. 2. Moderation model using Ping's (1995) approach (*p < .05; **p < .01).
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International Journal of Production Economics 196 (2018) 335–345
data: (χ2(df) ¼ 117.90 (65), χ2/df ¼ 1.81, NNFI ¼ 0.90, CFI ¼ 0.93,
IFI ¼ 0.93, RMSEA ¼ 0.065). This model explained 20% of the variance
in MCC.
The procedure developed by Mathieu et al. (1992) is similar to the
one by Ping (1995) in that it adopts a single indicator for the interaction
term, is composed of two steps, and uses the results of the first step to
constrain the parameters in the structural model estimated in the second
step (Liu et al., 2012b). Unlike Ping's (1995) approach, however, Mathieu
et al.'s (1992) procedure requires also using a single indicator for the
independent variable and for the moderating one. A second difference
lies in the fact that, for each variable, the single indicator is computed as
the standardized transformation of the sum of the indicators of that
variable (Fig. 3). While the details of the application of Mathieu et al.'s
(1992) approach are available upon request from the authors, what is
worth noting here is that the various fit indices showed acceptable fit
between the moderation model and the observed data: (χ2(df) ¼ 48.88
(35), χ2/df ¼ 1.40, NNFI ¼ 0.95, CFI ¼ 0.97, IFI ¼ 0.97, and
RMSEA ¼ 0.045). This model explained 24% of the variance in MCC.
All of these results suggest that the moderation model has acceptable
fit with the data. The standardized path coefficients for both Ping's
(1995) and Mathieu et al.'s (1992) procedures were similar in algebraic
sign, magnitude, and significance. With both approaches, the path
coefficient from coHIP to MCC was positive and significant (p < .05 for
Ping's (1995) procedure and p < .01 for Mathieu et al.'s (1992) proced-
ure), the path coefficient from product modularity to MCC was also
positive and significant (p < .05), and the path coefficients from DPC to
MCC and from organization size to MCC were non-significant. Finally,
the path coefficient for the interaction term was positive and significant
(p < .01). On the whole, these results support Hypothesis H1.
Hypothesis H1 was also tested using moderated hierarchical multiple
regression analysis. The regression results confirmed the MSEM results
and are available upon request from the authors. In particular, the
regression coefficient for the interaction term was positive and statisti-
cally significant at p < .01, thus supporting Hypothesis H1.
The nature of the interaction between coHIP and DPC was further
investigated using the procedure suggested by Aiken and West (1991):
The regression of MCC on HI was examined at each of three particular
values of DPC (i.e., its mean score; one standard deviation below its
mean, denoted as “Low DPC” in Fig. 4; and one standard deviation
above its mean, denoted as “High DPC” in Fig. 4), while keeping the
control variable fixed at its mean value. The corresponding three
simple-regression lines are depicted in Fig. 4, which also reports their
slopes and the related p-values. As the DPC moves from low to high, both
slope and statistical significance increase, showing that the positive effect
of coHIP on MCC is positively moderated by DPC.
To further probe how the impact of coHIP on MCC changes as DPC
increases, we constructed the marginal effects plot for the relationship
between coHIP and MCC using STATA 14.0 (Fig. 5). For each given value
of DPC on the x axis, this plot shows, on the y axis, the estimated slope for
Fig. 3. Moderation model using Mathieu et al.'s (1992) approach (*p < .05; **p < .01).
E. Sandrin et al.
Fig. 4. Interaction plot (*p < .05; ***p < .001).
Fig. 5. Marginal effects plots for the relationship between coHIP and MCC.
the relationship between coHIP and MCC (BtotcoHIP-MCC), as well as the
related 90% and 95% confidence intervals (Kam and Franzese, 2007).
The marginal effects plot shows that the estimated slope for the
relationship between coHIP and MCC is increasingly positive and sig-
nificant when DPC surpasses 0.43 (with a 90% confidence interval) or
0.46 (with a 95% confidence interval). As DPC drops below this threshold
value, the estimated slope becomes non-significant at conventional p
levels and gradually decreases and turns into a negative value, though
remaining non-significant at conventional p levels. However, if we accept
a narrower confidence interval (i.e., 84%), the negative slope becomes
significant when DPC hits zero. Consistent with Saghiri and Barnes
(2016), we conclude that there is some very weak evidence that coHIP
impairs MCC when DPC reaches its minimum.
Finally, Hypotheses H2a–H2d were tested using SEM by estimating
the theoretical model of the independent effects of the four PIRK-HI
practices on MCC (Fig. 6). The various fit indices consistently demon-
strated that this theoretical model fits the data well: χ2(df) ¼ 191.86
(132), χ2/df ¼ 1.45, NNFI ¼ 0.97, CFI ¼ 0.98, IFI ¼ 0.98,
RMSEA ¼ 0.045. However, only the standardized path coefficient from
product modularity to MCC was positive and significant (p < .05).
Conversely, all path coefficients from the four individual PIRK-HI
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International Journal of Production Economics 196 (2018) 335–345
Fig. 6. Independent effects of the four PIRK-HI practices on MCC (*p < .05).
practices to MCC, as well as the one from organization size to MCC, were
non-significant (p > .10). In addition, this model explained only 11% of
the variance in MCC, much less than the variance explained by the two
MSEM models (20% and 24%, respectively). On the whole, these results
suggest rejection of Hypotheses H2a–H2d.
6. Discussion and conclusion
6.1. Theoretical implications
By examining the impact of the PIRK-HI practices on MCC through
the lens of the contingent configurational perspective of SHRM, this
paper improves the understanding of the organizational enablers of MC
and, at the same time, adds to the HRM literature. As regards the orga-
nizational enablers of MC, the debate has thus far mainly concentrated on
the organizational capabilities/practices that support this strategy, such
as absorptive capacity (Zhang et al., 2015b), organizational-learning
practices (Wang et al., 2014, 2015; Fang et al., 2016), and standardiza-
tion and innovation capabilities (Wang et al., 2016), to mention but a
few––for additional results on the topic, we refer to Trentin et al. (2015).
In particular, the literature has recently begun to examine the
inter-relationships among some of these capabilities/practices, finding
complementarities in some cases, but also cancellation effects under
specific circumstances (e.g., Salvador et al., 2015; Zhang et al., 2015a). A
common result across several studies is that MCC is enhanced by the use
of coordination mechanisms that facilitate joint decision making among
different functions (Ahmad et al., 2010; Lai et al., 2012; Trentin et al.,
2012; Zhang et al., 2014), while less agreement seems to exist in the
literature as to the effects of organizational-structure variables on MCC
(cf. Huang et al., 2010; Zhang et al., 2014). If we focus on HRM practices
for MC, however, the research has lagged behind (Sandrin et al., 2014).
In particular, our literature review (see Section 2.3) has shown that it is
still unanswered whether the impact of the four PIRK-HI practices on
MCC is the same when they are implemented in isolation as when they
are adopted jointly, and whether their impact is the same for different
types of MC strategy, characterized by different values of DPC. By
answering these questions, the present study enhances the current
understanding of the conditions under which the four PIRK-HI practices
improve MCC.
On the HRM front, our data corroborate Lawler and his colleagues'
conceptualization of HI, regarded as the result of the joint implementa-
tion of four internally consistent HRM practices that push power, infor-
mation, rewards, and knowledge down to the lowest level of an
organization. Although Lawler and his colleagues' model of HI has
received extensive attention in the literature, empirical tests of the model
are still in a preliminary stage (Kizilos et al., 2013). In particular, few
works have compared the isolated and joint impacts of the four PIRK-HI
practices on organizational performance (Guerrero and Barraud-Didier,
2004). The results obtained in this study echo those of Guerrero and
E. Sandrin et al.
Barraud-Didier (2004) by showing that the four PIRK-HI practices,
when implemented in isolation, are not sufficient to improve the
organizational-performance dimension of MCC.
The coalignment of the PIRK-HI practices, however, is not sufficient
to improve MCC. This is because the impact of coHIP on MCC is positive
and significant only when DPC surpasses a certain threshold value. As
DPC drops below this threshold, the impact becomes non-significant at
conventional p levels and gradually decreases and eventually turns into a
negative impact, while remaining non-significant at conventional p
levels. In fact, when DPC hits zero, as happens with catalogue MC stra-
tegies (MacCarthy et al., 2003), the negative impact becomes significant
at p < .16. These results extend the current understanding of MC enablers
by showing that the PIRK-HI practices have the potential for improving
MCC, but do not suit all types of MC strategy. When seen in the context of
the HRM literature, these findings corroborate Bowen and Lawler's
(1992) argument that HI––the most advanced form of employee
involvement––is not appropriate for every context. Claims of the uni-
versal applicability of HI, such as that of Vandenberg et al. (1999: 327),
need therefore to be carefully reconsidered. At a higher level of
abstraction, the results of this study also corroborate the basic principle
of the contingent configurational perspective of SHRM, according to
which organizational effectiveness requires that a firm's HRM practices
demonstrate both horizontal/internal fit with each other and verti-
cal/external fit with the organization's strategy. This theoretical argu-
ment is “compelling” (Huselid, 1995: 667), but has not always found
strong empirical support, possibly because of inadequate measures of fit
(Huselid, 1995). Our findings concur with those of Michie and Sheehan
(2005) in showing that, at least for certain HRM practices and for a
certain organizational-performance dimension, the contingent configu-
rational perspective contributes to predicting and explaining the per-
formance outcomes of HRM practices.
Finally, the results of this study support the idea––widely shared in
the MC literature––that the choice of the DPC to be provided to cus-
tomers is an important decision for a firm that pursues an MC strategy. In
line with prior works on both technological (e.g., Forza and Salvador,
2007) and organizational (e.g., Huang et al., 2010) enablers of MC, this
study shows that the strategic choice on DPC is bound to influence the set
of organizational solutions a company will have to put in place to
improve its MCC. In fact, future research could extend the investigation
of the moderating role of DPC to other MC enablers. In this respect, an
additional contribution of this study to MC research lies in the use of a
continuous variable to measure DPC. Prior empirical research on MC
enablers has treated DPC as a discrete variable. Huang et al. (2010), for
example, distinguished between “full mass customizers,” which employ
customization at the design or fabrication stage of the value chain (i.e.,
higher DPC), and “partial mass customizers,” which implement custom-
ization at the assembly or delivery stages (i.e., lower DPC). The use of a
continuous variable to measure DPC, instead of a categorical one,
allowed us to employ MSEM instead of multiple-group analysis, which
has “serious limitations” (Cortina et al., 2001: 334).
6.2. Managerial implications
A first contribution of this study to MC practice is for those custom
manufacturers that aim to develop MCC while preserving their ability to
provide a high DPC to their customers. Manufacturing environments with
a high DPC, such as engineer-to-order environments, have become
increasingly important to practice (Carvalho et al., 2015; Pero et al.,
2015) and, consequently, have attracted growing interest in the aca-
demic community (e.g., Gosling and Naim, 2009; Gosling et al., 2013).
The MC literature has repeatedly recognized that the route to MC
may start not only from mass production, but also from custom
manufacturing (Duray, 2002; Squire et al., 2006; Trentin et al., 2012;
Akinc and Meredith, 2015). In fact, mass customizers that implement
customization at the design or fabrication stage of the value chain best
illustrate Pine et al.'s (1993: 110) characterization of MC as “a world
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International Journal of Production Economics 196 (2018) 335–345
in which the unpredictable nature of each customer's demands is
considered an opportunity” and, accordingly, these have been labeled in
the literature as “full” mass customizers. The MC literature, however, is
still deficient with regard to providing guidance to firms that aim to
transition from custom manufacturing to full MC. The results of this
study come to the aid of these companies by showing that
custom-manufacturing environments are exactly those where the joint
implementation of the four PIRK-HI practices is maximally effective as far
as the objective of developing MCC is concerned. This message is even
more interesting if one considers that, in this study, we controlled for the
effect of product modularity, which was indicated by Duray (2002) as a
distinguishing feature of mass customizers that closely resemble custom
manufacturers. Therefore, investing in an HI program is another step,
besides product modularization, that a traditional custom manufacturer
should take on its journey towards full MC. Indeed, the joint imple-
mentation of the four PIRK-HI practices can be a fundamental lever for
such a company to outperform other custom manufacturers pursuing the
same type of MC strategy and whose products feature the same level of
product modularity.
Conversely, our results suggest that the adoption of an HI approach to
employee involvement needs to be very carefully evaluated by mass
producers that aim to transition to MC. If they pursue a catalogue MC
strategy, which implies providing product variety without performing
any stage of the value chain according to customer specifications
(MacCarthy et al., 2003), or if they pursue an MC strategy in which
product customization is largely restricted to the downstream stages of
the value chain, then investing in the PIRK-HI practices is of little value as
far as the objective of improving MCC is concerned, and may even
backfire. Clearly, this does not mean that any approach to employee
involvement becomes useless for the purpose of enhancing MCC when
DPC is low. In fact, what Bowen and Lawler's (1992) work implies is that
other, less advanced and less costly approaches to employee involve-
ment, such as suggestion involvement, will be beneficial when DPC is
low. Similarly, Vidal (2007) made the point that to achieve a lean
manufacturing system, which is typically characterized by a low DPC
(Stump and Badurdeen, 2012), nominal empowerment (i.e., suggestion
involvement) is sufficient, while substantive empowerment (i.e., HI) is an
“over fit.”
6.3. Limitations and directions for future research
As with any other piece of research, this study is not without limi-
tations, which might be addressed in future research. First, the cross-
sectional nature of the dataset used in this study limits our ability to
explore the causal relationship between PIRK-HI practices and MCC,
whereas future longitudinal studies could overcome this limitation.
Another set of limitations derives from the use of secondary data to
test the research hypotheses, as the measures in the HPM dataset were
not designed for the present research in the first place. This implies at
least four limitations. First, we do not have enough measures for the
internally consistent sets of PIRK practices that characterize the other
two, less advanced forms of employee involvement, namely job
involvement and suggestion involvement. Consequently, we could not
test the propositions, implied in the existing literature, that these two
approaches to employee involvement are more appropriate for MC when
DPC is low. Future studies should, therefore, gather primary data that
allow for empirical scrutiny of, for example, the following hypothesis:
The lower the DPC, the more positive the impact of the coalignment of
the PIRK practices that characterize suggestion involvement on MCC.
Secondly, while our measures clearly capture the content of the
“information-HI” and “rewards-HI” practices, the measures of “power-
HI” and “knowledge-HI” are, in that respect, not as good: The “power-HI”
construct covers the fact that people at the lowest level of the hierarchy
are given decision-making power instead of only being allowed to make
suggestions that managers will decide whether or not to implement.
However, the measure of “power-HI” fails to explicitly capture the fact
E. Sandrin et al.
that lower-level employees have a voice not only in decisions concerning
how to do their work, but also in strategic decisions. As for the “knowl-
edge-HI” construct, it covers the focus on ongoing training and devel-
opment that is typical of HI, but fails to capture the fact that lower-level
employees should have knowledge not only of their own work, but also of
their organization's business as a whole. Future studies should, therefore,
utilize measures that better cover the content of these two PIRK-HI
practices.
Thirdly, respondent categories appropriately included, besides rele-
vant managers, both production workers and supervisors for the two
constructs of “power-HI” and “information-HI,” but included only
supervisors for the other two practices. While inter-rater agreement
coefficients indicate good accord between managers' and lower-level
employees' perceptions of all four practices, future studies should
include production workers among the respondent categories of
“rewards-HI” and “knowledge-HI” as well.
Fourthly, we do not have data on the individual characteristics of the
people employed in the manufacturing organizations that comprise our
sample. Prior HRM research suggests that the effectiveness of the coal-
ignment of the PIRK-HI practices in improving MCC does not depend
only on the DPC a company provides to its customers. Individual char-
acteristics, such as the need to grow and to deepen and test one's own
abilities at work, an interest in meeting one's own social needs at work,
and interpersonal skills, play a role as well (e.g., Bowen and Lawler,
1992). Future studies should, therefore, gather primary data that allow
for testing the moderating effects of these individual-level variables on
the impact of the coalignment of the PIRK-HI practices on MCC.
Finally, for the sake of conciseness, in this study we tested our main
hypothesis, relying on the contingent configurational perspective of
SHRM, against a series of hypotheses grounded in the universalistic view
that dominated much of the early research in employee involvement,
including HI. Although the theoretical arguments underlying the
contingent configurational perspective are compelling, future research
could test our main hypothesis against competing hypotheses grounded
in other theoretical perspectives, such as the solely configurational one or
the solely contingency one.
Acknowledgements
We wish to thank three anonymous reviewers of this journal for their
constructive and insightful comments, which have helped us improve an
earlier version of this paper. In addition, we acknowledge the financial
support from the University of Padova, project ID CPDA140710.
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