Synergy of interfunctional cooperation and services in companies producing electrical equipment and electronic components in the Czech Republic: pilot study
DOI:
https://doi.org/10.24136/oc.2018.022Keywords:
interfunctional coordination, services in productoriented companies, business performance, synergy, manufacturing companiesAbstract
Research background: Interfunctional coordination (IFC) is a part of market orientation and at the same time an approach which helps to improve cooperation between different departments or functions in a company. Market orientation is an approach aimed at external and internal elements and activities leading to performance increase. Services offered by a manufacturer are activities complementing their products. Manufacturers can benefit from the service differentiation and use it to design alternative marketing strategies. Generally, IFC and services ? contributes to higher positive effect on business performance. For this reason, it is interesting to know if synergy of IFC and services have a higher positive effect on business performance.
Purpose of the article: This article aims to determine how IFC and services at manufacturing companies in the Czech Republic influence business performance. The research question is as follows: Does the synergy of IFC and services in companies producing electrical equipment and electronic components have a higher positive effect on business performance?
Methods: Sixty SME?s filled in a questionnaire to gather information about IFC and services. For measurement of correlation for two variables, Spearman's rank correlation coefficient was chosen. Regression analysis was used for measuring the synergy.
Findings & Value added: The main finding shows that the synergy of the quantities observed has not been confirmed, although some of the following relations were approved such as a positive relationship between: a) some items of IFC and items of business performance, b) some items of services and items of business performance and c) items of IFC and items of services. The result of the paper shows further consequences of IFC and services in today?s manufacturing companies.
Downloads
References
Akimova, I. (2000). Development of market orientation and competitiveness of Ukrainian firms. European Journal of Marketing, 34(9/10). doi: 10.1108/ 03090560010342511. DOI: https://doi.org/10.1108/03090560010342511
View in Google Scholar
Argenti, P. A. (1994). The portable MBA desk reference, an essential business companion. New York: John Wiley.
View in Google Scholar
Baines, T., & Lightfoot, H. (2013). Made to serve: a model of the operations prac-tices and technologies that deliver servitization. In Proceedings of the 11th in-ternational conference on manufacturing research (ICMR2013). Cranfield University, UK, 19th – 20th September 2013.
View in Google Scholar
Bartošek, V., & Tomášková, E. (2013). Interfunctional coordination from company functions point of view. Acta Academica Karviniensis, 13(3). DOI: https://doi.org/10.25142/aak.2013.038
View in Google Scholar
Benecke, G., Schurink, W., & Roodt, G. (2007). Towards a substantive theory of synergy. SA Journal of Human Resource Management, 5(2). doi: 10.4102/ sajhrm.v5i2.115. DOI: https://doi.org/10.4102/sajhrm.v5i2.115
View in Google Scholar
Brentani, U. (2001). Innovative versus incremental new business services: different keys for achieving success. Journal of Product Innovation Management, 18(3). doi: 10.1108/08876041011017853. DOI: https://doi.org/10.1111/1540-5885.1830169
View in Google Scholar
Brax, S. (2005). A manufacturer becoming service provider–challenges and a paradox. Managing Service Quality: An International Journal, 15(2). doi: 10.1108/09604520510585334. DOI: https://doi.org/10.1108/09604520510585334
View in Google Scholar
Cheng, H.-C., Chen, M.-C., & Mao, C.-K. (2010). The evolutionary process and collaboration in supply chains. Industrial Management & Data Systems, 110(3). doi: 10.1108/02635571011030079. DOI: https://doi.org/10.1108/02635571011030079
View in Google Scholar
Chang, Y. M. (1990). Synergy, relatedness, and organization form in the strategic management of diversification. Unpublished doctoral dissertation, University of Illinois at UrbanaChampaign.
View in Google Scholar
Deng, S., & Dart, J. (1999). The market orientation of Chinese enterprises during a time of transition. European Journal of Marketing, 33(5/6). doi: 10.1108/ 03090569910262279. DOI: https://doi.org/10.1108/03090569910262279
View in Google Scholar
Ensign, P. C. (1998). Interrelationships and horizontal strategy to achieve synergy and competitive advantage in the diversified firm. Management Decision, 36(10). doi: 10.1002/jsc.669. DOI: https://doi.org/10.1108/00251749810245318
View in Google Scholar
Fang, E., Palmatier, R. W., & Steenkamp, J. B. E. (2008). Effect of service transi-tion strategies on firm value. Journal of Marketing, 72(5). doi: 10.1509/ jmkg.72.5.1. DOI: https://doi.org/10.1509/jmkg.72.5.1
View in Google Scholar
Gebauer, H., Joncourt, S., & Saul, C. (2016). Services in product-oriented compa-nies: past, present, and future. Universia Business Review, 49.
View in Google Scholar
Gebauer, H., Gustafsson, A., & Witell, L. (2011). Competitive advantage through service differentiation by manufacturing companies. Journal of Business Research, 64(12). Doi: 10.1016/j.jbusres.2011.01.015. DOI: https://doi.org/10.1016/j.jbusres.2011.01.015
View in Google Scholar
Gebauer, H., Edvardsson, B., Gustafsson, A., & Witell, L. (2010). Match or mis-match: strategy-structure configurations in the service business of manufactur-ing companies. Journal of Service Research, 13(2). doi: 10.1177/1094670509353933. DOI: https://doi.org/10.1177/1094670509353933
View in Google Scholar
Gebauer, H., Ren, G. J., Valtakoski, A., & Reynoso, J. (2012). Service-driven manufacturing: provision, evolution and financial impact of services in industrial firms. Journal of Service Management, 23(1). doi: 10.1108/0956 4231211209005. DOI: https://doi.org/10.1108/09564231211209005
View in Google Scholar
Gebauer, H., & Fleisch, E. (2007). An investigation of the relationship between behavioral processes, motivation, investments in the service business and ser-vice revenue. Industrial Marketing Management, 36(3). doi: 10.1016/j. indmarman.2005.09.005. DOI: https://doi.org/10.1016/j.indmarman.2005.09.005
View in Google Scholar
Gray, B., Matear, S., Boshoff, C., & Matheson, P. (1998). Developing a better measure of market orientation. European journal of marketing, 32(9/10). doi: 10.1108/03090569810232327. DOI: https://doi.org/10.1108/03090569810232327
View in Google Scholar
Harris, P. H. (2004). European leadership in cultural synergy. European Business Review, 16(4). doi: 10.1108/09555340410546991. DOI: https://doi.org/10.1108/09555340410546991
View in Google Scholar
Homburg, Ch., & Pflesser, Ch. (2000). A multiple-layer model of market-oriented organizational culture: measurement issues and performance outcomes. Journal of Marketing Research, 37(4). doi: 10.1509/jmkr.37.4.449 .18786. DOI: https://doi.org/10.1509/jmkr.37.4.449.18786
View in Google Scholar
Hooley, G., Fahy, J., Greenley, G., Beracs, J., Fonfara, K., & Snoj, B. (2003). Market orientation in the service sector of the transition economies of central Europe. European Journal of Marketing, 37(1/2). doi: 10.1108/030905603 10453975. DOI: https://doi.org/10.1108/03090560310453975
View in Google Scholar
Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: antecedents and consequences. Journal of Marketing, 57(3). doi: 10.2307/1251854. DOI: https://doi.org/10.2307/1251854
View in Google Scholar
John, C. H. St., & Harrison, J. S. (1999). Manufacturing‐based relatedness, synergy, and coordination. Strategic Management Journal, 20(2). DOI: https://doi.org/10.1002/(SICI)1097-0266(199902)20:2<129::AID-SMJ16>3.0.CO;2-F
View in Google Scholar
Juga, J. (1996). Organising for network synergy in logistics. International Journal of Physical Distribution and Logistics Management, 26(2). DOI: https://doi.org/10.1108/09600039610113209
View in Google Scholar
Julian, C. C., Mohamad, O., Ahmed, Z. U., & Sefnedi, S. (2014). The market orientation–performance relationship: the empirical link in export ventures. Thunderbird Int'l Bus Rev, 56(1). doi: 10.1002/tie.21598. DOI: https://doi.org/10.1002/tie.21598
View in Google Scholar
Kanovska, L. (2005). Customer services and their importance for company prosperity. Brno: Vutium.
View in Google Scholar
Kanovska, L., & Tomaskova, E. (2012). Interfunctional coordination at hi-tech firms. Inzinerine Ekonomika – Engineering Economics, 23(1). doi: 10.5755/j01.ee.23.1.1224. DOI: https://doi.org/10.5755/j01.ee.23.1.1224
View in Google Scholar
Kindström, D., & Kowalkowski, C. (2014). Service innovation in product-centric firms: A multidimensional business model perspective. Journal of Business & Industrial Marketing, 29(2). doi: 10.1108/JBIM-08-2013-0165. DOI: https://doi.org/10.1108/JBIM-08-2013-0165
View in Google Scholar
Kirca, A., H., Jayachandran, S., & Bearden, W., O. (2005). Market orientation: a meta-analytic review and assessment of its antecedents and impact on performance. Journal of Marketing, 69(2). doi: 10.1509/jmkg.69.2.24.60761. DOI: https://doi.org/10.1509/jmkg.69.2.24.60761
View in Google Scholar
Langerak, F. (2001). The relationship between customer and supplier perceptions of the manufacturer's market orientation and its business performance. International Journal of Market Research, 43(1). doi: 10.1177/147078530104300106. DOI: https://doi.org/10.1177/147078530104300106
View in Google Scholar
Martín-Peña, M. L., & Ziaee Bigdeli, A. (2016). Servitization: academic research and business practice. Universia Business Review, 49.
View in Google Scholar
Matsuno, K., & Mentzer, J. (1995). Market orientation: reconciliation of two conceptualizations. Developments in Marketing Science, 18. doi: 10.1007/978-3-319-13147-4_17. DOI: https://doi.org/10.1007/978-3-319-13147-4_17
View in Google Scholar
Menguc, B., Auh, S., & Shih, E. (2007). Transformational leadership and market orientation: implications for the implementation of competitive strategies and business unit performance. Journal of Business Research, 60(4). doi: 10.1016/j.jbusres.2006.12.008. DOI: https://doi.org/10.1016/j.jbusres.2006.12.008
View in Google Scholar
Mentzer J. T., Dewitt, W., Keeber, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining the supply chain management. Journal of Business Logistics, 4(2). DOI: https://doi.org/10.1002/j.2158-1592.2001.tb00001.x
View in Google Scholar
Metzer, J. T. (2004). Fundamentals of supply chain management: twelve drivers of competitive advantage. Thousand Oaks: Sage Publications. DOI: https://doi.org/10.4135/9781452204604
View in Google Scholar
Milichovsky, F. (2017) Effectiveness of marketing mix activities in engineering companeis in the Czech Republic. DANUBE: Law and Economics Review, 8(1). doi: 10.1515/danb-2017-0004. DOI: https://doi.org/10.1515/danb-2017-0004
View in Google Scholar
Min, H. (2015). The essentials of supply chain management – new business concepts and applications. Pearson FT Press.
View in Google Scholar
Narver, J. C., & Slater, S.F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(5). doi: 10.2307/1251757. DOI: https://doi.org/10.2307/1251757
View in Google Scholar
Naudé, A., Heyns, D., Bester, C., Puig, J., & Tucker, G. (2002). Synergies within Barloworld. Unpublished manuscript, Barloworld Executive Development Programme, Gordon Institute of Business Science, Johannesburg.
View in Google Scholar
Neu, W. A., & Brown, S. W. (2005). Forming successful business-to-business services in goods-dominant firms. Journal of Service Research, 8(1). doi: 10.1177/1094670505276619. DOI: https://doi.org/10.1177/1094670505276619
View in Google Scholar
Oliva, R., & Kallenberg, R. (2003). Managing the transition from products to ser-vices. International Journal of Service Industry Management, 14(2). doi: 10.1108/09564230310474138. DOI: https://doi.org/10.1108/09564230310474138
View in Google Scholar
Ordanini, A., & Maglio, P. P. (2009). Market orientation, internal process, and external network: a qualitative comparative analysis of key decisional alterna-tives in the new service development. Decision Sciences, 40(3). doi: 10.1111/j.1540-5915.2009.00238.x. DOI: https://doi.org/10.1111/j.1540-5915.2009.00238.x
View in Google Scholar
Peña, A. I. P., Dolores, M. F. J., & Molina, M. A. R. (2011). Impact of market orientation and ICT on the performance of rural smaller service enterprises. Journal of Small Business Management, 49(3). doi: 10.1111/j.1540-627X.2011.00332.x. DOI: https://doi.org/10.1111/j.1540-627X.2011.00332.x
View in Google Scholar
Ramayah, T., Samat, N., & Lo, M. C. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1). doi: 10.1108/1757432 1111116379. DOI: https://doi.org/10.1108/17574321111116379
View in Google Scholar
Reinartz, W., & Ulaga, W. (2008). How to sell services more profitably. Harvard business review, 86(5).
View in Google Scholar
Shaver, J. M. (2006). A paradox of synergy: contagion and capacity effects in mergers and acquisitions. Academy of Management Review, 31(4). doi: 10.5465/AMR.2006.22527468. DOI: https://doi.org/10.5465/amr.2006.22527468
View in Google Scholar
Shirokova, G., Berezinets, I., & Shatalov, A. (2014). Organisational change and firm growth in emerging economies. Journal for East European Management Studies, 19(2). DOI: https://doi.org/10.5771/0949-6181-2014-2-185
View in Google Scholar
Smirnova, M., Naudé, P., Henneberg, S. C., Mouzas, S., & Kouchtch, S. P. (2011). The impact of market orientation on the development of relational capabilities and performance outcomes: the case of Russian industrial firms. Industrial Marketing Management, 40(1). DOI: https://doi.org/10.1016/j.indmarman.2010.09.009
View in Google Scholar
Sousa, C. M. P., & Lengler, J. (2011). Examining the determinants of interfunctional coordination and export performance: an investigation of Brazilian exporters. International Marketing, 21. doi: 10.1108/S1474-7979(2011)0000021011. DOI: https://doi.org/10.1108/S1474-7979(2011)0000021011
View in Google Scholar
Tay, J. Y. W., & Tay, L. (2007). Market orientation and the property development business in Singapore. International Journal of Strategic Property Management, 11(1). doi: 10.1080/1648715X.2007.9637557. DOI: https://doi.org/10.3846/1648715X.2007.9637557
View in Google Scholar
Tomaskova, E. (2005). Measuring of market orientation and its impact on business performance. Brno: Vutium.
View in Google Scholar
Tomaskova, E., & Kanovska, L. (2016). Interfunctional coordination of service offering provided by manufacturers. Inzinerine Ekonomika – Engineering Economics, 27(5). doi: 10.5755/j01.ee.27.5.14300. DOI: https://doi.org/10.5755/j01.ee.27.5.14300
View in Google Scholar
Turunen, T. T., & Toivonen, M. (2011). Organizing customer-oriented service business in manufacturing. Operations Management Research, 4(1-2). doi: 10.1007/s12063-011-0047-5. DOI: https://doi.org/10.1007/s12063-011-0047-5
View in Google Scholar
Vázquez, R., Álvarez, L. I., & Leticia Santos, M. (2002). Market orientation and social services in private non-profit organisations. European Journal of Mar-keting, 36(9/10). doi: 10.1108/03090560210437316. DOI: https://doi.org/10.1108/03090560210437316
View in Google Scholar
Wilson, G. A., Perepelkin, J., Di Zhang, D., & Vachon, M. A. (2014). Market ori-entation, alliance orientation, and business performance in the biotechnology industry. Journal of Commercial Biotechnology, 20(2). DOI: https://doi.org/10.5912/jcb645
View in Google Scholar
Wise, R., & Baumgartner, P. (1999). Go downstream: the new profit imperative in manufacturing. Harvard business review, 77(5). doi: 10.1225/99512.
View in Google Scholar
Woodside, A. G. (2005). Firm orientations, innovativeness, and business perfor-mance: advancing a system dynamics view following a comment on Hult, Hurley, and Knight's 2004 study. Industrial marketing management, 34(3). doi: 10.1016/j.indmarman.2004.10.001. DOI: https://doi.org/10.1016/j.indmarman.2004.10.001
View in Google Scholar
Zhao, Y., & Cavusgil, T. (2006). The effect of supplier's market orientation on manufacturer's trust. Industrial Marketing Management, 35(4). doi: 10.1016/j.indmarman.2005.04.001. DOI: https://doi.org/10.1016/j.indmarman.2005.04.001
View in Google Scholar