When to Mass Customize: The Impact of Environmental Uncertainty

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  • 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.

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ABSTRACT

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.

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