The relative influence of external versus internal integration on plant performance in China

In this study, we first examine the relative impact of integration (both internal integration and external integration) on plant performance. Internal integration is operationalized as process integration which includes both information management and statistical process control. External integration is operationalized as firm processes that are aligned with those of customers and suppliers. Next, we show that by including the key contextual variables of firm size, clockspeed and TQM maturity, some of the relationships between integration and plant performance are modified suggesting that contingencies matter. Plant data from China are used to test our hypotheses. The results provide interesting insights of how plant level capabilities in the areas of information management, process management, and aligning with external entities enhance different dimensions of plant performance. Also, the contingency analyses results show that consideration of key contexts in China inform the extent to which external and internal integration mechanisms are effective. Implications for academic literature and policy making in China are offered.