The Impact of Complexity, Rate of Change and Information Availability on the Production Planning and Control Structure

Marcel van Assen and Steef van de Velde

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: The organizational theory literature argues that the more uncertain the environment, the more likely the firm’s operational decision structure is decentralized. However, it remains unclear which uncertainty dimensions (i.e. complexity, rate of change and lack of information) impacts the production planning and control structure the most given today’s turbulent manufacturing environments. Based on 206 responses from medium sized Dutch discrete parts manufacturing firms, this study retests the impact of these uncertainty dimensions. This study indicates that each dimension of uncertainty affects the production planning and control structure in a different way. In general, complexity, rate of change and lack of information result in a decentralization of the operational planning and control decision structure, but at the same time a centralization of the customer-order processing decision structure.

Keywords: empirical research method; production planning and control structure; structural equations model; uncertainty (search for similar items in EconPapers)
JEL-codes: M M11 R4 (search for similar items in EconPapers)
Date: 2003-11-11
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