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When to Mass Customize: The Impact of Environmental Uncertainty *
Author(s) -
Liu Gensheng Jason,
Shah Rachna,
Babakus Emin
Publication year - 2012
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.2012.00374.x
Subject(s) - moderation , mass customization , customer satisfaction , supply chain , personalization , customer relationship management , business , marketing , competitive advantage , industrial organization , computer science , machine learning
Previous research on mass customization (MC) has focused on what it is and how it is implemented. In this study we examine when MC is an appropriate strategy for firms to follow by scrutinizing the effects of three environmental uncertainty variables (demand uncertainty, competitive intensity, and supply chain complexity) on the MC–performance relationship. Specifically, we distinguish the direct effect of environmental uncertainty on MC ability and the moderation effect of environmental uncertainty on MC ability's impact on customer satisfaction. We examine six competing hypotheses using data collected from 266 manufacturing plants. Our results show that competitive intensity has a direct positive impact on MC ability. However, demand uncertainty moderates the relationship between MC ability and customer satisfaction, and the direct and positive relationship between MC ability and customer satisfaction holds only when customer demand is highly uncertain. Supply chain complexity neither has a direct relationship with MC, nor moderates the MC–performance relationship. Implications of these research findings are discussed and future research directions are identified.