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Wahyu Wicaksono

122110142

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Hypothesis Development

Hypothesis 1. Firms with a nature offormalization that encourages autonomous workand learning have a locus of decision-making that

is low in the organization. Hypothesis 2. Firms with few layers in the

hierarchy have a locus of decision-making that islow in the organization.

Hypothesis 3. Firms with a high level ofhorizontal integration have a locus of decision-making that is low in the organization.

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Hypothesis Development

Hypothesis 4. Firms with a nature offormalization that encourages autonomous workand learning have a level of communication that

is fast, easy, and abundant. Hypothesis 5. Firms with few layers in the

hierarchy have a level of communication that isfast, easy, and abundant.

Hypothesis 6. Firms with a high level ofhorizontal integration have a level ofcommunication that is fast, easy, and abundant.

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Hypothesis Development

Hypothesis 7. Firms with a locus of decision-making that is low in the organization have a highlevel of time-based manufacturing practices.

Hypothesis 8. Firms with a level ofcommunication that is fast, easy, and abundanthave a high level of time-based manufacturingpractices.

Hypothesis 9. Firms with a high level of time-based manufacturing practices have high plantperformance.

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Research Methods

1. Pre-pilot stage

1.1. Item generation

1.2. Structured interviews

1.3. Q-sort method1.4. Pre-testing of questionnaire

2. Pilot study

The pilot study used 40 responses frommanufacturing executives/managers in the same SIC

codes used for the large-scale study.

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Research Methods

3. Large-scale sample characteristics and methods

The questionnaire was mailed to 3000 manufacturing

executives/managers from four industries: SIC codes 3437

fabricated metal products, industrial machinery and

equipment, electronic and other electric equipment, and

transportation equipment. Only companies with 100 or more employees were included in the

sample. The Society of Manufacturing Engineers (SME) provided the

mailing list.

Responses were received from 224 manufacturers primarily from

four SIC codes: 34 (49%), 35 (15%), 36 (17%), and 37 (16%). Two

percent did not specify an SIC code.

Respondents reported the following positions: president/CEO1%,

vice president15%, director19%, manager59%, and other or

not specified6%. Firms with 100499 employees

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Results for the measurement model

Confirmatory factor analysis was performed byapplyingLISREL to 104 responses for the purposes oftesting unidimensionality of the scales and estimatingoverall model fit (Gerbing and Anderson, 1988).

This analysis also identifies correlated error termsbetween measurement items. Model fit andsubsequently, convergent and discriminant validity wasassessed by examining various fit indices. The non-

normed fit index (NNFI) (Bentler and Bonnet, 1980),and the comparative fit index (CFI) (Bentler, 1990) wereassessed.

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Results for the structural model

The structural model was tested by applying

LISREL to the remaining 120 responses.

The results indicate that there was sufficient

model-to-data fit (2 = 696.33,452 d.f., NNFI =

0.87, CFI = 0.88, RMSEA = 0.067, with the 90%

confidence interval for RMSEA being 0.057 to

0.077, and 2/d.f. 1.54).

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Discussion

Organizational structure does affect the attainment oftime-based manufacturing practices.

Nature of formalization implies an internal environmentwith rules and procedures that encourage creative,

autonomous work and learning. The number of layers in the hierarchy should be few, not

merely to cut headcount and reduce costs but to create anenvironment where decision-making can be pushed downthe organization to the people best equipped to make themquickly and effectively.

Organizations should have a high level of horizontalintegration here workers have a broad rather than anarrow understanding of problems and issues.