Abstract
While many firms aspire to develop a mass customization capability (MCC) and much is known about the antecedents of MCC, the structural links between different levels of operational capabilities and MCC are underexamined. From a capability hierarchy perspective, we propose a three-order capability hierarchy in which engineering and processing capabilities, along with decision-making norms, act as foundations for operational innovation capability and MCC. We test the proposed model with survey data from 498 firms worldwide using structural equation modeling and bootstrapping mediation analysis. Our results support a hierarchical structure of capabilities for MCC, which categorizes capabilities at different levels and disentangles their capability creation mechanisms in the operational process. Our research enriches the current mass customization research stream by examining the social microfoundations of MCC and addresses the theoretical and empirical relationships among MCC, innovation, and other operational capabilities from a capability hierarchy perspective. This article also underscores the importance of managing capability links for competitive advantages.
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