Does the Relationship Between Manufacturing Flexibility and Innovation Speed Depend on the Business Environment?

Abstract

In the current turbulent business environment, there is massive interest in increasing innovation speed. However, what has been investigated little in the literature is whether business environment moderates the relationship between manufacturing flexibility and innovation speed. As such, this paper aims at investigating this area. The cross-sectional survey method was utilized in the present study. By launching a mail questionnaire, data were collected from 180 manufacturing plants in the Thai automotive industry. According to the hierarchical moderated regression analysis, it was found that environmental dynamism positively moderates the relationship between modification flexibility and innovation speed such that the higher is dynamism, the stronger is the relationship between modification flexibility and innovation speed, but the same cannot be applied to other hypotheses. By contributing to innovation management research, this paper offers theoretical insight that supports the notion that manufacturing flexibility and innovation speed are cumulative capabilities, especially in a dynamic environment. For decision-makers, this research provides a richer understanding of the improvement of innovation speed, which will help a company gain the advantage of being the “first” in the dynamic market.