Relating practice to performance : a study of investment and technology in UK manufacturing industry
SubjectsN220 Institutional Management
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AbstractThis study has quantitatively explored the relationships between investment, the use oftechnology and manufacturing perfonnance in UK manufacturing industry from 1979 to 1995. The exploration ofthe relationships is based on the review and the meta-analysis ofmanufacturing practice and performance relationships in the past along with the related theories and economic factors. The review of the operational management theory and the economic factors, which may influence manufacturing performance and practice relationship, helps to establish the wide context for this research and also contributes to the identified gaps. The meta-analysis ofthe relationships between practice and performance in the published studies has also contributed to the identified gaps in this research area. After the consideration ofthe discovered gaps and the availability of the database, the relationship between investment, the use oftechnology and manufacturing performance has been explored in this research. In order to quantitatively evaluate the relationships between investment, the use of technology, their interaction and manufacturing perfonnance, econometric modelling techniques have been used as methodological approaches. Two types ofmethods have been developed based on the review ofthe econometric techniques used in the past and the exploration of relevant econometric literature. The first method uses multiplicative interaction regression models combined with the centralisation method and ordinary least square estimation technique to investigate the relationship between investment, technology usage and their interaction and one dimensional perfonnance. The second method employs multiple-output models using the maximum correlation estimation technique to investigate the relationships between investment, technology usage and their interaction and two dimensional performance measures. A UK manufacturing database including two time periods, the 1980s and the early 1990s, covering seventeen years has been used to test the hypothesised relationships between investment in several forms, technology usage, their interaction and financial performance. The research discovers that it was difficult for investment to bring benefits for performance improvement at the year ofinvestment. The results support the hypotheses that a long-term planned investment brought benefits for manufacturing companies in the 1980s, however was not the case in the early 1990s. Technology usage was very important for performance improvement in the 1980s but the benefits brought by technology were diminishing as the mature stage ofsome key technologies was reached in the early 1990s. The analysis of the data suggests that the economic recession in the early 1990s was an important factor in explaining the phenomena and other economic factors might playa role as well. Investment and technology did interact with each other to contribute to performance improvement but it was not always the case. The results of the multiple-outputs model support the hypothesis that profitability and growth were two joint products of investment, the use oftechnology and their interaction in the immediate year or two after investment. This research also demonstrates the values of mUltiplicative interaction regression modelling and multiple-outputs modelling for manufacturing relationship studies.
CitationLi, X. (2000) 'Relating practice to performance : a study of investment and technology in UK manufacturing industry'. PhD thesis. University of Luton.
PublisherUniversity of Bedfordshire
TypeThesis or dissertation
DescriptionA thesis submitted for the degree of Doctor of Philosophy of the University of Luton
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