Meeting quality and cost imperatives in a global market

The complexity, uncertainty, and diminished control found in global operations hinder the development of world‐class competencies. For example, as a firm rationalizes manufacturing, logistical challenges increase. As a result, cost advantages achieved through production sharing are often offset by higher logistics costs. This multi‐method explores the cross‐functional development of quality and cost competencies in an international production sharing setting. Overall, the study found that information and planning capabilities are vital antecedants to cost and quality competencies. The impact of cost on a firm’s performance is direct, while the impact of quality is indirect, through productivity enhancements.

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