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PurposeThe paper tests if and to what extent lean management system adoption generates abnormal profitability, and how it accrues over time. Configurational approaches to lean management systems and "S-curve" effects in lean implementation are used to ground the paper's hypotheses and interpret its findings.Design/methodology/approachUsing the emerging view of lean as enterprise-wide management systems, this quasi-experimental study uses a difference-in-differences approach to estimate the abnormal profitability (ROIC) attributable to lean management system adoption. The paper leverages a unique data set of lean adopters nested in a panel data set (19 years) of 2,088 industrial firms matched by industry and firm size. It applies a variety of regression methods (two-way fixed effect panel estimator, propensity score matching, instrumental variable two-stage-least squares) to estimate the size of the abnormal profitability attributable to lean management systems, addressing endogeneity issues related to non-random sampling, omitted variable bias and reverse causation. It also analyzes the cross-firm variability of such abnormal profitability and how it accrues over time.FindingsFor the average non-adopter in the sample (44.3 million euro revenues), lean adoption generates abnormal ROIC ranging from 1.4% to 3.9%. These results come into effect approximately three years after starting lean adoption and peak after eight years. While the average abnormal profitability attributable to lean adoption is sizable, it varies significantly across firms and over time. This significant variation is compatible with firms' diverse ability to understand the complex inner workings of lean systems, and to design and implement them so that they improve profitability.Research limitations/implicationsThe conceptualization of lean as enterprise-wide management system can be further refined to more effectively categorize the components of lean systems and investigate the nature of their relationships. Lean system adoption measurement can be fine-tuned to better capture cross-firm and longitudinal heterogeneity. Future work can explore other dependent variables of interest to different stakeholders including shareholders' value, employment and environmental and social sustainability.Practical implicationsThe financial benefits of adopting lean can be reaped to the extent to which managers embrace lean as a philosophy and implement it pervasively in the organization. A firm can use the study's estimates as a basis for making calculations about the returns of investment in lean adoption. The paper also shows that "getting the lean system right" makes a significant difference in terms of abnormal profitability, which is twice as large for the best lean adopters..Social implicationsCompared with the promises of many lean proponents and supporters, the paper provides a more realistic view of what to expect from lean adoption in terms of profitability. Adopting lean as a comprehensive, enterprise-wide management system is not a universal panacea, but a complex endeavor, characterized by multiple complex decisions that require considerable capabilities, coordinated efforts and consistency of action.Originality/valueDifferently from extant research, this study does not study the correlation between the adoption of lean operation practices and financial performance but focuses on the abnormal profitability generated by the adoption of lean as a pervasive, enterprise-wide management system. Its research design allows to identify the differential profitability attributable to lean adoption and documents that it accrues non-linearly.

PurposeThe purpose of this paper is to identify and empirically validate a repertoire of management behaviors associated with the adoption of lean systems, showing how a subset of such behaviors differentiates more advanced lean systems in a specific setting.Design/methodology/approachThe study applies regression analysis and non-parametric hypothesis testing to an original data set coming from field research of 26 cases of adoption of lean operations practices.FindingsThe study: identifies in the lean literature a repertoire of management behaviors that support lean implementations and complement the adoption of lean practices; provides a way to operationalize them; validates this repertoire of behaviors; and shows that a subset of these behaviors is associated with more advanced lean implementations, suggesting the necessity to adopt a situational approach to lean leadership.Research limitations/implicationsThe findings have boundary conditions, defined by the national, industrial, and size context in which the study was conducted.Practical implicationsThe study provides practical guidance for lean system implementation suggesting a repertoire of management behaviors within which firms can identify and validate specific, appropriate subsets of behaviors aligned with the company strategy, culture, size, environment, bundle of lean operation practices adopted, and maturity stage of lean adoption.Originality/valueThis is the first study to provide quantitative, non-anecdotal evidence of the relationship between specific management behaviors and the successful implementation of lean operations practices. It offers a novel method to operationalize and measure lean management behaviors.

Purpose– Adopting a knowledge-based perspective, the purpose of this paper is to investigate the roll-out process of lean production systems and explores the dimensions that might enhance or hinder its performance. It develops a framework to understand and design lean roll-out processes, identifying the research dimensions/design variables to classify and interpret such processes.Design/methodology/approach– This exploratory multiple case study analyses seven lean roll-out processes in multinational companies' plants. An original data set, developed on the basis of a purposely design research protocol, was built through two rounds of plant visits and structured interviews. The cross-case analysis compares and contrasts the lean roll-out processes according to the research dimensions constituting the framework.Findings– The effectiveness and the efficiency of the lean roll-out processes: first, negatively co-vary with the degree of lean knowledge codification; second, positively co-vary with the degree of autonomy of the plant; third, positively co-vary with the degree of contextual ambidexterity. Moreover, lean roll-out processes characterized by principles-based knowledge replication strategy, plant autonomy and contextual ambidexterity are comparatively more effective and efficient.Research limitations/implications– This is an exploratory qualitative study that develops propositions potentially testable in larger scale, more analytical research.Practical implications– This study provides a tentative roadmap to successfully approach the roll-out of lean production systems in complex organizations.Originality/value– This study challenges the current theory and practice which implicitly assumes that lean roll-outs take place linearly, cascading a set of predefined lean operations practices. Instead, the authors show that a less codified, more decentralized and contextually ambidextrous approach might be more effective.

This study explores whether, to what extent, and under which conditions modular products are associated with modular organizations (the "mirroring" hypothesis). We analyze the product and organizational architectures of three firms in the air conditioning industry through an original data set of 100 components and supply relationships. Applying a variety of regression methods, we show that, under the condition of product architecture stability at the component level, supplier relations for loosely coupled components are characterized by less information sharing, which implies that the degree of coupling of product components varies directly with the degree of coupling of organizations (the "mirroring" hypothesis). Also, the performance of supply relationships depends on the amount of buyer–supplier information sharing but not on the degree of component modularity, which supports the relational view and confirms that product modularity does not have unambiguous effects on organizational performance. Moreover, the degree of component modularity negatively moderates the impact of buyer–supplier information sharing on supplier-relationship performance, which confirms that component modularity works as an ex ante, embedded substitute for high-powered interorganizational integration mechanisms. Finally, contingent on firms' strategies, organizational structures, and capabilities, we argue that at the firm level, higher product modularity may be associated either with less information sharing with suppliers, which implies that the mirroring effect might hold also at the firm level, or with more information sharing with suppliers, which implies that there may be increasing returns to modularity in design efforts because of interorganizational integration (the "complementarity" hypothesis).

PurposeThe purpose of this paper is to explore if and to what extent the competency portfolio of entrepreneurs affects firm's performance, controlling for a set of individual and organizational variables.Design/methodology/approachApplying nonparametric statistical analysis on data from behavioral event interviews and survey questionnaires to a sample of 53 entrepreneurs (small firm owners), this study investigates: the type, scope and depth of the entrepreneurs' competence portfolio; and the relationship between the entrepreneurs' competence portfolio and their firm performance. The empirical setting is a sample of northeast Italian small family businesses.FindingsThe authors' research shows which are the functional, emotional and cross‐functional competencies that differentiate entrepreneurs' performance and identifies which are the threshold competencies (Self‐control, Information gathering and Visioning) and the distinctive competencies (Planning, Empathy, Business bargaining, Organizational awareness, Directing others and Benchmarking).Originality/valueThe existing literature on the determinants of successful entrepreneurship mostly focuses on technological, financial and institutional factors, even if entrepreneurs' skills, knowledge, creativity, imagination, and alertness to opportunities are at least as much important in shaping small firms' performance. Building on competency modeling techniques and emotional intelligence literature, this study explores the link between personal characteristics and competencies of entrepreneurs and the performance of their firms. The study offers some managerial implications, provides direction to practitioners and policy makers on how to support entrepreneurship and small business development, and suggests future research directions.