Operational coordination and mass customization capability: the double-edged sword effect of customer need diversity

Abstract

PurposeThis study aims to explore how operational coordination affects mass customization capability (MCC) via organizational agility, the double-edged sword effect of customer need diversity and the moderating effect of competitive intensity based on dynamic capabilities perspective.Design/methodology/approachThis study examines the research hypotheses using hierarchical regression analysis by collecting data from 277 Chinese firms.FindingsThe results reveal that organizational agility partially mediates the impacts of operational coordination on product-oriented and service-oriented MCC. Customer need diversity is positively related to operational coordination, whereas negatively moderates the relationship between operational coordination and organizational agility. Moreover, competitive intensity negatively moderates the relationship between organizational agility and service-oriented MCC.Research limitations/implicationsThis study mainly used perceptual scales to measure organizational agility. There is a need to measure agility through Agility Index which consists of features' combination that enables agility.Practical implicationsManagers would thus do well to integrate business activities with supply chain partners and strive to foster an agile organization. Additionally, managers should take the leadership to assess the customer need and invest time and resources to respond to it when needed even though the response may be difficult.Originality/valueAlthough the importance of MCC in meeting personalized customer needs has been recognized, whether and how customer need diversity affects MCC remains unclear. This study provides a framework to study the relationships between customer need diversity and MCC, which deepens our understanding of how to enhance MCC to respond to diverse customer needs.