Performance assessment process model for international manufacturing networks

Abstract

Purpose Multinational companies have manufacturing operations in various countries; however, there is scarce evidence on how they assess performance of the network-based operations of their factories, called international manufacturing networks (IMN). The purpose of this paper is to propose a process model for the performance assessment of IMNs. Design/methodology/approach The IMN performance assessment process model was developed from the extant literature and was empirically verified in its congruency and usefulness via a multiple case research. For that, in each case the general process model was derived into a specific application that fit the type of IMN on focus. Qualitative and quantitative data were collected from the case companies’ reports, profiling forms and interviews, followed by within-case and cross-case analyses. Findings Evidence suggest that the process model, along with its derivations, is a valuable tool to describe and explain how IMN performance assessment unfolds in real organizational environments. Additionally, three propositions emerged: IMN performance assessment has distinct characteristics depending on the type of IMN adopted, which in turn depends on the company’s internationalization strategy; IMN performance assessment has more strategic value and importance for companies that are globally coordinated and adopt “rooted” manufacturing strategies; and companies design their IMN performance assessment on a trial-and-error basis. Research limitations/implications As all case-based research, this paper has generalizability limitations. Thus, next steps may include a large-scale survey and an action research that will develop and implement a full-fledged IMN performance assessment. Practical implications The process model and descriptive insights provide a diagnostic tool and subsidies that may encourage managers to review and improve their current IMN performance assessment. Originality/value The process model contributes to addressing a 20-year gap concerning how to approach IMN performance assessment in a holistic and systematic manner.