Abstract
The study examines the effects of environmental context (technological turbulence), industrial context (production technology routineness and product complexity), and organizational structure (formalization and decentralization) on customer involvement in product development and compares US and Chinese State-owned enterprise (SOE) manufacturers. The results show that customer involvement in product development is positively predicted by product complexity and formalization, and inversely predicted by decentralization. The results also show that the effect of formalization is stronger in China. These findings have implications for implementing customer orientation in manufacturing firms and for Chinese SOEs in transition toward market-driven economic entities.
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