Lean production and operational performance: The influence of organizational culture

Abstract

The use of lean production methods to drive sustainable competitive advantage has been a cornerstone of worldwide manufacturing strategy since the early 1980's. Unfortunately, success from using lean has been mixed. Some researchers suggest that contextual variables play a central role in explaining the inconsistent results. This study evaluates the role of one critical contextual variable, organizational culture, in realizing operational improvements from lean. We investigate the influence of four distinct organizational cultures, as well as a hybrid culture and a firm's ability to be culturally ambidextrous, on the relationship between lean and operational performance, as measured by cost, quality, delivery and flexibility. We find that lean is able to maximize cost reduction in any organizational culture setting, but requires a supportive organizational culture to maximize quality, delivery, and flexibility improvements. Further, realizing quality improvements from lean is particularly sensitive to organizational culture. We also find that a developmental culture is the most supportive of lean; it outperforms all other individual cultures and performs as well as more complex cultural arrangements, such as a hybrid culture or a firm's ability to be culturally ambidextrous. Since a developmental culture is characterized by flexibility and an ability to embrace change, we propose that these organizational attributes unleash an advanced implementation of lean which results in superior operational performance.