The relationships among functional integration, mass customisation, and firm performance

Previous literature has extensively investigated the impact of supply chain integration on mass customisation and plant performance, but little research has been conducted to examine the impact of functional integration within the focal firm on mass customisation and plant performance. This article seeks to demonstrate this impact theoretically and empirically. Organisational information processing theory and the resource-based view of the firm are used to relate functional integration, mass customisation, and plant performance. Structural equation modelling is applied to analyse a conceptual model with survey data collected from 266 manufacturing plants. The results indicate that functional integration has a significant positive impact on mass customisation and operational performance. Mass customisation partially mediates functional integration's impact on operational performance. Results also indicate that mass customisation's impact on customer satisfaction is not direct. Rather, the relationship is fully mediated by operational performance. Managerial implications of these research findings are discussed.