Leagile manufacturing system adoption in an emerging economy: an examination of technological, organizational and environmental drivers

Abstract

PurposeRapid changes in the global environment and the effects of existing economic issues triggered by COVID-19 and the war in Ukraine have posed several challenges for manufacturing firms. A hybrid strategy integrating lean and agile (leagile) systems is viable for firms to enhance their capabilities in such dynamic contexts. This paper examines the critical drivers of leagile manufacturing system adoption in an emerging economy from the technological, organizational and environmental (TOE) perspective.Design/methodology/approachA cross-sectional survey is carried out to obtain data from 438 managers working in 219 manufacturing firms. Multiple regression analysis is applied to test the effect of technological, organizational and environmental drivers on the adoption of leagile systems.FindingsThe results show that organization capacity, environmental uncertainty and relative advantage demonstrate the most significant positive relationships with the leagile systems adoption wherein complexity and resistance to change appear to exhibit significant negative associations. Unexpectedly, firm size unveils no significant effect on the adoption of leagile systems.Practical implicationsTo deal effectively with critical challenges triggered by ever-changing environment, firms have sought to adopt innovative systems for achieving products' availability in the markets at the right quality and price. A hybrid strategy integrating lean and agile (leagile) systems is viable to enhance a firm's capabilities in such dynamic contexts. The findings of our study help top management and policymakers identify and assess the critical drivers that may facilitate or hinder the successful adoption of leagile systems.Originality/valueA major trend of studies in the field of manufacturing systems has focused on the critical success factors of adopting either lean or agile systems. Furthermore, research work concerning leagile as a hybrid system focuses primarily on the conceptual development rather than empirical grounds of leagile systems. Given the lack of empirical research in this field, this study offers an early attempt to predict leagile system adoption in an emerging economy. It also contributes to the manufacturing systems research by extending the extant knowledge about the role of firm-level drivers in leagile system adoption from the TOE perspective.