What impacts do behaviour-based and buffer-based management mechanisms have on enterprise agility?

Purpose The purpose of this paper is to investigate the impact of behaviour-based and buffer-based management mechanisms on enterprise agility using the lens of the agency theory. Design/methodology/approach This study is based on data collected from 185 manufacturing enterprises using a survey inst...

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Bibliographic Details
Published in:Journal of manufacturing technology management 2020-01, Vol.31 (1), p.169-192
Main Authors: Fayezi, Sajad, O’Loughlin, Andrew, Zutshi, Ambika, Sohal, Amrik, Das, Ajay
Format: Article
Language:English
Subjects:
Advanced manufacturing technologies
Adverse selection
Buffers
Data analysis
Hypotheses
Knowledge management
Lenses
Literature reviews
Market positioning
Moral hazard
Multivariate statistical analysis
Suppliers
Uncertainty
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Summary:Purpose The purpose of this paper is to investigate the impact of behaviour-based and buffer-based management mechanisms on enterprise agility using the lens of the agency theory. Design/methodology/approach This study is based on data collected from 185 manufacturing enterprises using a survey instrument. The authors employ structural equation modelling for data analysis. Findings The results of this study show that buffer-based mechanisms used for dealing with agency uncertainty of supplier/buyer not only have a positive impact on agility of enterprises, but are also contingent on the behavioural interventions used in the relationship with a supplier/buyer. Behaviour-based mechanisms also positively impact enterprise agility through mitigating the likelihood of supplier/buyer opportunism. Practical implications This study demonstrates that buffer- and behaviour-based management mechanisms can be used as complementary approaches against agency uncertainties for enhancing enterprise agility. Therefore, for enterprises to boost their agility, it is vital that their resources and capabilities are fairly distributed across entities responsible for creating buffers through functional flexibility, as well as individuals and teams dealing with stakeholder engagement, in particular, suppliers and buyers. Originality/value The authors use the lens of the agency theory to assimilate and model characteristic agency uncertainties and management mechanisms that enhance enterprise agility.
ISSN:1741-038X
1758-7786
DOI:10.1108/JMTM-05-2018-0160