Information‐Processing Alternatives for Coping with Manufacturing Environment Complexity

Investment in information systems and technology is often justified as a necessary strategy for coping with the increased complexity and information needs of today/s manufacturing environments. However, the world class manufacturing paradigm suggests that increased complexity is not always necessary to meet the needs of markets and customers. Galbraith/s (1973, 1977) seminal information-processing model is applied to a manufacturing environment, supported by the world class manufacturing paradigm, to test the role of various information-processing alternatives for coping with increased environmental complexity. Moderated regression and multiple discriminant analysis are used to test hypotheses in a sample of 164 manufacturing plants. Environmental complexity was found to be related to manufacturing performance for each of the five dependent variables. This relationship was moderated by at least one information-processing alternative for each dependent variable, including self-contained tasks, lateral relations, and environmental management strategies for reducing manufacturing, supplier, and goal diversity. Investments in information systems and reduction of labor and customer diversity did not moderate this relationship. Practices that were found to be particularly effective in moderating this relationship included the use of multifunctional employees, communication of manufacturing strategy, coordination of decision making, product design simplicity, reduction of parts counts, supervisory interaction facilitation, recruiting and selection for flexible employees, JIT practices, blanket purchase orders, and strong customer relationships.