The authors thank two anonymous reviewers, the associate editor, and the senior editor for their comments and suggestions, which have greatly improved the quality of the article. We also acknowledge the help of George Deitz and James Jared Oakley in preparing this article. This work was supported in part by a grant from the Fogelman College of Business & Economics at the University of Memphis.
When to Mass Customize: The Impact of Environmental Uncertainty*
Article first published online: 20 SEP 2012
© 2012 The Authors Decision Sciences Journal © 2012 Decision Sciences Institute
Volume 43, Issue 5, pages 851–887, October 2012
How to Cite
Liu, G., Shah, R. and Babakus, E. (2012), When to Mass Customize: The Impact of Environmental Uncertainty. Decision Sciences, 43: 851–887. doi: 10.1111/j.1540-5915.2012.00374.x
- Issue published online: 20 SEP 2012
- Article first published online: 20 SEP 2012
- [Submitted: December 2, 2010. Revised: June 14, 2011; February 20, 2012; April 25, 2012. Accepted: April 27, 2012.]
- Customer Satisfaction;
- Environmental Uncertainty;
- Mass Customization;
- Moderated Structural Equation Modeling;
- and Survey Research
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.