Manufacturing network integration and culture: an institution-based view

In pursuit of increased competitiveness, global manufacturers often seek tighter integration among the plants in their production networks. However, this is a challenging task because plants are dispersed across multiple institutional environments. Although the literature provides abundant evidence of how formal institutional environments affect the integration among plants, little is known about the role of the informal institutional environment – such as culture. In this study, the authors investigate the relationship between different dimensions of culture and manufacturing network integration.

The authors combine survey data from the most recent International Manufacturing Strategy Survey with secondary data that capture cultural dimensions. They then analyze the responses from 581 assembly plants in 21 countries obtained from the survey using a multilevel regression model.

The study results show that plants located in masculine and long-term-oriented national cultures are associated with lower levels of integration with other plants. The results for the other four Hofstede dimensions of national culture were not statistically significant. At the level of organizational culture, the authors found that a collaborative plant environment positively relates to higher levels of network integration. They did not find statistically significant evidence for the relationship between cultural or geographical distance and network integration.

This research provides managers with practical insights into the types and combinations of cultural environments that affect the integration of plants in a global network. This knowledge is useful for informing effective integration strategies and tactics.

The authors provide new, empirical evidence of the relation between the informal institutional environments of a plant and its integration in a manufacturing network. Drawing on an institution-based view, they contribute to the literature on manufacturing networks by discussing and testing empirically the role of national and organizational culture in network integration.