| Environmental uncertainties in customer requirements, competition, and technology create an urgent need for a firm to achieve flexibility across the value chain: (1) product development flexibility, (2) manufacturing flexibility, (3) logistics flexibility, and (4) spanning flexibility. Flexibility is the ability of a firm to meet a variety of customer needs without excessive cost, time, organizational disruption, or loss of performance. Infusion of technology (i.e., technology is fully understood, appreciated, and put to its best use) is a useful concept to explain the attainment of flexibility across the value chain. Value chain flexibility enables firms to respond quickly to specific customer expectation because resources can be rapidly shifted to develop, produce, and deliver various products.; Although manufacturing flexibility is widely studied, the concept and dimension of flexibility are unclear. Little is ever mentioned about flexibility at product development, logistics, or spanning activities. This research is to conceptualize value chain flexibility anchored in a comprehensive understanding of flexibility concept, develop a nomological network that explains the relationship among environmental uncertainty, use of technology, infusion of technology, value chain flexibility, and competitive advantage grounded on a learning and capability theory, and provide and validate instruments to support organizational and resource level research on flexibility. The new lenses of value chain flexibility bring a systematic, resource-based view of firms' competitive advantage.; The methodology used to define constructs and derive measures includes a literature review, interviews with four practitioners, Q-sort, and expert evaluation with ten professors. A pilot study is conducted with 33 firms to purify the items and evaluate unidimensionality, reliability, and validity. Where appropriate, items are deleted, modified, or added. An exploratory large-scale data analysis with 273 firms follows. The factor matrix exhibits an easily interpretable structure. All the scales show good convergent and discriminant validity and have Crobach's alpha greater than 0.82 except competition uncertainty with an alpha of 0.79.; The hypothesized structure (i.e., direct and indirect paths) is tested using LISREL. The results confirm that a strong causal chain exists from environmental uncertainty, through use of technology, infusion of technology, value chain flexibility, and competitive advantage, to customer satisfaction and financial performance. Contradictory to previous literature, environmental uncertainty is not significantly, positively related to value chain flexibility. A new finding is that use of technology and infusion of technology are two strong intervening variables of this relationship. Infusion of technology is a dominant determinant to attaining value chain flexibility. The directions for future research are discussed. |
