Top‐down, bottom‐up, or both? Toward an integrative perspective on operations strategy formation

• Author: Yoon Hee Kim,Christoph H. Loch,Fabian J. Sting
• DOI: http://doi.org/10.1016/j.jom.2014.09.005
• Date: 01 November 2014
• Published date: 01 November 2014

Journal

of

Operations

Management

32

(2014)

462–474

Contents

lists

available

at

ScienceDirect

Journal

of

Operations

Management

jo

ur

nal

ho

me

pa

ge:

www.elsevier.com/locate/jom

Top-down,

bottom-up,

or

both?

Toward

an

integrative

perspective

on

operations

strategy

formation

Yoon

Hee

Kima,∗,

Fabian

J.

Stingb,1,

Christoph

H.

Lochc,2

aIvey

School

of

Business,

Western

University,

1255

Western

Road,

London,

ON

N6G

0N1,

Canada

bRotterdam

School

of

Management,

Erasmus

University

Rotterdam,

Burgemeester

Qudlaan

50,

3062

PA,

Rotterdam,

The

Netherlands

cCambridge

Judge

Business

School,

Trumpington

Street,

Cambridge

CB2

1AG,

UK

a

r

t

i

c

l

e

i

n

f

o

Article

history:

Available

online

16

September

2014

Keywords:

Operations

strategy

Strategy

formation

process

Top

down

Bottom-up

Integrative

perspective

Case

study

a

b

s

t

r

a

c

t

Operations

strategy

is

formed

via

complex

processes

that

transpire

in

multiple

directions

at

multiple

organizational

levels.

While

most

previous

studies

focus

on

the

“macro-level”

process

of

strategy

for-

mation

from

the

dominant

top-down

perspective,

this

study

investigates

the

“micro-level”

process

of

strategy

formation

that

governs

interactions

among

competitive

priorities,

objectives,

and

action

plans

within

operations.

Using

111

(59

top-down

and

52

bottom-up)

action

plans

collected

from

six

German

manufacturing

plants,

we

build

on

Kim

and

Arnold’s

(1996)

framework

and

propose

an

integrated

pro-

cess

model

of

operations

strategy

formation

that

encompasses

both

top-down

planning

and

bottom-up

learning.

We

also

identify

a

contingency

factor

that

affects

their

balance:

centralized

versus

decentralized

organizational

structure.

Finally,

based

on

the

analysis

of

their

respective

strategic

content,

we

provide

evidence

concerning

the

complementary

roles

of

top-down

and

bottom-up

action

plans

in

operations

strategy.

Published

by

Elsevier

B.V.

1.

Introduction

How

is

operations

strategy

formed?

The

process

of

operations

strategy

is

of

considerable

interest

to

many

scholars

but

has

received

relatively

less

attention

than

has

the

content

of

operations

strategy

(Boyer

et

al.,

2005;

Swink

and

Way,

1995).3The

process

of

operations

strategy

comprises

the

activities

and

dynamics

of

strategy

formation

and

implementation

(Boyer

et

al.,

2005;

Slack

and

Lewis,

2011;

Swink

and

Way,

1995),

whereas

the

content

of

operations

strategy

consists

of

the

particular

decisions

regarding

competitive

priorities,

objectives,

and

action

plans

that

specify

the

operation’s

strategic

direction.

Since

Skinner

(1969)

first

postulated

that

manufacturing

tasks

should

support

corporate

objectives,

operations

strategy

formation

has

been

conceptualized

as

a

top-down

process

of

“formulation

and

implementation”

within

the

guidelines

of

overall

corporate

∗Corresponding

author.

Tel.:

+1

519

933

6343;

fax:

+1

519

661

3485.

E-mail

addresses:

ykim@ivey.ca

(Y.H.

Kim),

fsting@rsm.nl

(F.J.

Sting),

c.loch@jbs.cam.ac.uk

(C.H.

Loch).

1Tel.:

+31

10

408

1869.

2Tel.:

+44

1223

339592.

3Boyer

et

al.

(2005)

report

that,

of

the

31

operations

strategy

articles

published

in

the

Production

and

Operations

Management

Society

journal

since

its

founding,

only

8

are

process

related.

strategy.

Wheelwright’s

(1984)

well-known

framework

represents

this

high-level

view

of

manufacturing

strategy

within

an

organiza-

tional

hierarchy.

He

argues

that

a

company’s

preferred

positioning

in

the

market

should

determine

the

competitive

priorities

of

opera-

tions.

Given

its

role

in

supporting

corporate

strategy,

an

operations

strategy

is

perceived

to

make

decisions

about

developing

the

struc-

ture,

infrastructure,

and

capabilities

to

support

those

competitive

priorities.

This

top-down

perspective

has

been

widely

accepted

and

dom-

inated

empirical

studies

on

the

process

of

operations

strategy

(Marucheck

et

al.,

1990;

Menda

and

Dilts,

1997;

Schroeder

et

al.,

1986;

Swamidass,

1986;

Ward

et

al.,

1996;

Ward

and

Duray,

2000).

However,

a

few

case

studies

have

documented

an

alternative

process—of

bottom-up

operations

strategy—that

emerges

in

the

absence,

or

lack,

of

a

corporate

(or

strategic

business

unit)

strat-

egy

(Barnes,

2002;

Slack

and

Lewis,

2011;

Swamidass

et

al.,

2001).

These

scholars

argue

that,

in

practice,

operations

strategy

is

formed

in

a

more

complex

process

than

the

top-down

“formulation

and

implementation”,

and

they

identify

the

need

to

document

more

real-world

processes.

This

is

the

starting

point

of

our

study.

Especially,

most

of

previous

studies

have

examined

the

process

of

operations

strategy

at

the

“macro-level”

by

focusing

on

hierarchi-

cal

relationships

and

the

external

consistency

between

operations

strategy

and

corporate

and/or

other

functional

strategies

(Barnes,

2002;

Marucheck

et

al.,

1990;

Menda

and

Dilts,

1997;

Schroeder

http://dx.doi.org/10.1016/j.jom.2014.09.005

0272-6963/Published

by

Elsevier

B.V.