When to mass customize: The impact of environmental uncertainty

Gensheng Jason Liu, Rachna Shah, Emin Babakus

Research output: Contribution to journalArticlepeer-review

25 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)851-887
Number of pages37
JournalDecision Sciences
Volume43
Issue number5
DOIs
StatePublished - Oct 1 2012

Keywords

  • Customer Satisfaction
  • Environmental Uncertainty
  • Mass Customization
  • Moderated Structural Equation Modeling, and Survey Research

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