02 - Lean Manufacturing - China Vs USA

The International Journal of Logistics Management
An institutional theoretic perspective on forces driving adoption of lean production

globally : China vis-à-vis the USA
Adriana Rossiter Hofer Christian Hofer Cuneyt Eroglu Matthew A. Waller
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IJLM
22,2
An institutional theoretic
perspective on forces
driving adoption of lean
148 production globally

China vis-a-vis the USA
Adriana Rossiter Hofer and Christian Hofer
Department of Marketing and Logistics, Sam M. Walton College of Business,
University of Arkansas, Fayetteville, Arkansas, USA
Cuneyt Eroglu
Information, Operations & Analysis Group, College of Business Administration,
Northeastern University, Boston, Massachusetts, USA, and
Matthew A. Waller
Department of Marketing and Logistics, Sam M. Walton College of Business,
University of Arkansas, Fayetteville, Arkansas, USA
Abstract
Purpose – The purpose of this paper is to assess the current state of implementation of lean
production practices in China as compared to the USA. Moreover, an institutional-theoretic framework
is developed that explores the interplay among economic, socio-cultural and regulative forces that may
shape the adoption process of lean production practices in China.
Design/methodology/approach – The paper draws its conclusions from an analysis of survey data
from samples of Chinese and US manufacturing executives. Lean production implementation is
measured via a survey instrument, and the data are analyzed via regression analysis.
Findings – The results suggest that the degree of implementation of lean production in China is equal
to, if not greater than lean production implementation in the USA. While the results are fairly
consistent across industries, they vary across different lean production practice bundles. In light of
these findings, an institutional theory perspective is adopted to develop further insight into the
potential drivers of and barriers to lean production implementation in China. It is argued that, while
several economic factors function as enablers for the implementation of these practices, various social
processes and cultural traits in China still hinder the full adoption of lean production.
Research limitations/implications – Larger-scale empirical studies are required for further
hypothesis testing and enhanced validity. In particular, the explicit measurement of institutional forces and
the statistical analysis of their effects on lean production adoption are recommended for future research.
Originality/value – This is the first study to systematically compare the adoption of lean practices in
China and the USA. The analyses and discussions provide a basis for further theory building and hypothesis
testing research. In addition, the insights offered in this study may help firms gain a better understanding of
the unique opportunities and challenges associated with adoption of lean production in China.
Keywords Lean production, Institutional theory, China, United States of America
Paper type Research paper
The International Journal of Logistics 1. Introduction

Management
Vol. 22 No. 2, 2011
China has earned the epithet “the world factory” (Zhang, 2006). While the country has
pp. 148-178 transformed itself into a global manufacturing hub, empirical studies have shown that
r Emerald Group Publishing Limited
0957-4093
manufacturing and competitive strategies pursued by Chinese manufacturers can be
DOI 10.1108/09574091111156532 substantially different from their western counterparts (Zhao et al., 2006b, 2002). As a
result, there have been calls for more in-depth and empirical research into topics Adoption of lean
related to, for example, employee relationships, supply chains, cultural differences, production
manufacturing processes, and service logistics in China (Jiang et al., 2007).
In this context, a relevant research endeavor is the exploration of the extent of
implementation of lean production within the Chinese manufacturing industry (Qi et al.,
2009) and how it is affected by China’s particular institutional environment. As a logistics
management strategy (McGinnis et al., 2010), lean production[1] advocates the use of 149
various tools and techniques, such as kanban and setup time reduction, to minimize
waste and improve efficiency in production and logistics (Womack et al., 1990).
Although there is some evidence that certain lean production practices have been
widely adopted in China (Kadipasoglu et al., 1999; Chen and Shang, 2008; Taj, 2008), little
is known about how China’s unique economic, socio-cultural, and regulatory
characteristics affect the rate of lean production adoption. While prior research has
provided a broad overview of the Chinese institutional environment (Zhao et al., 2006a;
Flynn et al., 2007), its specific implications for the practice of logistics management in
China have not yet been explored. Moreover, we lack a descriptive understanding of the
degree of lean production adoption in China relative to post-industrialized countries like
the USA[2]. Some studies have assessed the use of certain lean practices in China
(Kadipasoglu et al., 1999; Chen and Shang, 2008; Taj, 2008), whereas other studies
have collected information on lean production implementation in the USA (e.g. White
et al., 1999). Variations in measurement, sampling, and methodology, however, make
comparisons across these studies difficult. Yet, without any current and systematic
observation of the differences in lean production implementation between China and the
USA, we cannot offer any explanations for the causes of such (presumed) differences.
This study attempts to address these gaps in the existing literature. To that end, a
previously validated survey instrument (i.e. Shah and Ward, 2007) is administered
among Chinese and US manufacturers. Upon observing the degree of lean production
implementation in China relative to the USA, an institutional theoretic framework is
applied to lean production, and the effects of various institutional forces on a firm’s
ability and willingness to implement lean production practices are discussed. Thus, our
study represents a first foray into this important area of research. Based on the insights
gained in this study, an agenda for future research, including hypothesis testing, is
proposed, thus completing the theory building and testing cycle outlined in Figure 1
(Meredith, 1993; Filippini, 1997; Roth, 2007). As pointed out by Flynn et al. (1990,
p. 250), exploratory empirical research “can be used to document the state of the art in
da
2. Explanation en
h ag
How can we explain the rc
ea
observed differences?
e res
tur
Fu
1. Description
What is the status 3. Hypothesis testing
of lean production Can we empirically explain
implementation in China and predict the degree of
relative to the USA? lean production adoption
based on the factors
rch
ea identified in step 2?
r es 4. Refinement
i s Figure 1.
f th Is there a need to revisit
so Scope of this study in the
o cu or refine the theory?
F theory building and
testing cycle
Source: Roth (2007)
IJLM operations management, as well as provide a baseline for longitudinal studies”.
22,2 Indeed, time series data will be required to empirically discern the effects of various
institutional forces on lean production adoption.
The remainder of this paper is organized as follows: Section 2 provides background
information on institutional theory as a lens to explore the nature and impacts of a
firm’s institutional environment. Section 3 describes the data collection procedures, and
150 Section 4 summarizes the survey results and provides a comparative discussion. In
Section 5, the institutional theoretic perspective on lean production diffusion is offered.
The article’s contributions are summarized and directions for future research are
provided in Section 6.
2. Theoretical background
The unique economic, cultural, and political characteristics in China have a significant
impact on manufacturing operations (Flynn et al., 2007). Institutional theory provides a
theoretical basis that is commonly used to study management phenomena in the

Chinese context. Issues that have been investigated using an institutional lens include,
among others, institutional influence on technology adoption for logistics and supply
chain management (Zhang and Dhaliwal, 2009), firm commitment and job satisfaction
(Lau et al., 2002), market orientation (Kshetri, 2009), and joint venture behavior and
performance (Li et al., 2001). As such, institutional theory is well-suited to investigate
how economic, socio-cultural, and regulative forces affect the implementation of lean
production in China relative to the USA.
2.1 Institutional theory

According to institutional theory, the institutional environment exerts strong influence
on firms’ strategies and logistics. As Oliver (1997) points out, “firms operate within a
social framework of norms, values and taken-for-granted assumptions about what
constitutes appropriate and acceptable economic behavior” (p. 699). Likewise, Zukin
and DiMaggio (1990) note that institutional forces affect human behavior above and
beyond the principle of economic optimization that remains a central motive in
managerial decision making. Thus, institutional theorists assume that managers
commonly make economically non-rational choices bounded by “social judgment,
historical limitations and the inertial force of habit” (Oliver, 1997).
Institutional forces include formal constraints such as rules, laws, constitutions, and
informal constraints such as social norms, conventions, and self-imposed codes of
conduct (North, 1996). Collectively, such constraints explain three distinct processes
of assimilation among individuals and organizations in a system subject to these
institutional forces (DiMaggio and Powell, 1983): coercive, normative, and mimetic
legitimization (or isomorphism). Coercive isomorphism refers to the convergence of
agents’ behaviors in response to explicit regulative processes formulated by coercive
authorities (Zhang and Dhaliwal, 2009). Normative legitimization refers to agents’
adoption of behaviors because they are deemed superior by influential individuals or
organizations. Mimetic (or imitative) legitimization processes, finally, refer to agents’
mimicking of behaviors of superior models. In uncertain environments, for example,
firms tend to imitate other firms that are perceived to be more successful.
2.2 The institutional environment in China

In this study, we classify the formal and informal constraints identified by North (1996)
into three major categories: economic forces, socio-cultural forces, and regulative
forces. The central tenet of our research is that these forces collectively define the Adoption of lean
normative and coercive pressures that shape the adoption of lean production practices production
by Chinese manufacturing firms.
2.2.1 Economic forces. There are a number of relevant economic forces that may
impact the diffusion of lean practices among Chinese manufacturers. First, China has
been aggressively pursuing policies that promote technology transfer since 1978
(Tsang, 1994). In particular, China has been trying to attract foreign direct investment 151
based on the notion that joint ventures between local and international firms generate
greater transfer of knowledge and technology (Almeida and Fernandes, 2008;
Thompson, 2002). As two-thirds of FDI inflows to China went to the manufacturing
sector in 2006 (Lo and Liu, 2009), it is conceivable that Chinese manufacturing firms
have increasingly adopted efficient logistics management techniques.
Second, the labor cost advantage that China has long enjoyed is eroding (McKinsey
& Company, 2006). Lemoine and Unal-Keskinci (2008) note that China’s terms of trade
have decreased by 28 percent between 1996 and 2004. They further note that this
decrease was countered by productivity increases in the Chinese manufacturing sector.
That is, as China lost its labor cost advantage, manufacturers had to find ways to make
up for lost productivity by seeking operational efficiencies.
Third, the Chinese infrastructure has been improving, thereby facilitating
streamlined and leaner logistics. In the past, the communication and transportation
infrastructures in China have often been cited as an impediment to operational
efficiency (e.g. Chen and Chen, 1997) and economic growth. In a report published in
1998, domestic transportation and inventory costs were estimated to be nearly
three times as high in China as in the USA (Kao, 2000). Moreover, a World Bank
survey conducted in the mid-1990s estimated that “goods lost due to poor or obsolete
transportation infrastructure amounted to one percent of China’s GDP[3].”
However, both the transportation and telecommunications infrastructures have
undergone significant growth and improvements in recent years (e.g. China Logistics
Development Report). Consequently, about 80 percent of the respondents to the World
Bank’s 2007 Logistics Performance survey in China indicated that the transportation
and telecommunications infrastructure had improved significantly over the past three
years. It is also notable that only about 18 percent of the survey respondents indicated
that domestic transportation costs were “high” or “very high,” as compared to about 39
percent of the respondents in the USA[4]. As such, it appears that the infrastructural
obstacles to efficient logistics in China that were cited in the past are less severe and, in
some instances, even insignificant in modern day China.
2.2.2 Socio-cultural forces. Hofstede (1991) describes culture, or cultural
characteristics, as “an abstract construct affecting human behavior.” Indeed, there
are numerous studies that have found strong evidence that cultural traits impact
individual and firm behavior and performance. Hofstede has identified five cultural
dimensions in a multi-country study of national work-related values: long- vs short-
term orientation, individualism vs collectivism, low vs high power distance, low vs
high uncertainty avoidance, and masculinity vs femininity. Our review of the business
literature with focus on China suggests that the first four dimensions are frequently
used as basis for discussion (e.g. Li et al., 2001; Pressey and Qiu, 2007; Gebauer and von
Zedtwitz, 2007; Lin and Miller, 2003; Hirst et al., 2008; Chua et al., 2009) and are,
therefore, further discussed below.
According to Hofstede (1991), the Chinese culture is based on Confucianism and is
characterized by its long-term orientation. This trait suggests that individuals are
IJLM focussed on the long-term consequences of their actions and choices (Hofstede, 1991;
22,2 Chow et al., 2000) and are, therefore, willing to sacrifice short-term gratification for
future compensation. Individuals, thus, spend significant time and effort to develop
and nurture long-term relationships. This is closely related to the Chinese phenomenon
of guanxi (Chen et al., 2010). Guanxi is a central concept in the Chinese society and
refers to an individual’s network of personal relationships on which the individual can
152 draw to secure resources or advantages when doing business.
Guanxi networks are salient for success in China. In order to develop and maintain a
position in this personalized network of influence, it is very important to consider the
principles of renqing and mianzi. Renqing can be described as a resource that one can
present to another person as a gift in the social exchange process (Hwang, 1987), or as a
set of social norms that one should follow in order to get along well with others
(Wang et al., 2008). In sum, renqing is about performing favors and giving gifts. If the rules
of renqing are not followed, trust will not develop (Wang et al., 2008). Mianzi, in turn, refers
to the preservation of individual dignity or enhancing someone’s social status and moral
reputation in the society by whatever means possible (Gebauer and von Zedtwitz, 2007).
Renqing and mianzi are closely associated with the Chinese concept of “face.” An
individual’s “face” refers to image and credibility. It is important to protect one’s face but it
is perhaps even more important to “give face” to others. In short, it involves a reciprocal
relationship of respect and courtesy between individuals. Giving face means praising
someone’s reputation in society. To cause someone to “lose face” is to denounce status and
reputation and is indicative of a loss of confidence and lack of trust (Gebauer and von
Zedtwitz, 2007). Confucianism, therefore, proposes moderation to avoid putting others
down because it may harm their “face” and destroy harmony (Li et al., 2001).
The Chinese society has also been characterized as highly collectivistic (Hofstede,
1980). The concept of family is very important in China and the family is used as a
template for business relationships. Chinese regard harmony and relationship quality as
the foundations of society. In collectivistic societies, people are integrated into strong,
cohesive in-groups, often extended families that continue protecting them in exchange for
unquestioning loyalty. The communist system also emphasizes the focus on this “we”
identity (Hofstede, 1980). Meeting the needs and expectations of others and being a part
of the in-group shape the distinctive communication processes present in the Chinese
culture. According to Hall (1976), the Chinese use a “high-context style” of communication
in which most of the information (Haines et al., 2010) is either in the physical context or
internalized in the person, while very little is in the coded, explicit, transmitted part of the
message. Conversely, westerners employ “low-context” communication style, which
emphasizes directness, explicitness, and verbal expressiveness.
The aforementioned cultural characteristics are closely tied to the notions of
relationship closeness and trust. In this study, we will discuss how the presence or
absence of trust in interpersonal and business-to-business relationships may affect the
implementation of lean practices in China.
The Chinese society has also been characterized as power distant (Hofstede, 1980).
This implies that the Chinese culture accepts that power is unevenly distributed in
society and business. It suggests that a society’s level of inequality is accepted and
internalized by both leaders and subordinates. Moreover, the Chinese tend to be risk
averse. According to Hofstede (1980), uncertainty-avoiding cultures try to minimize the
possibility of high-risk situations by implementing strict laws and rules as well as
safety and security measures. The practical implication of these traits is that Chinese
employees tend to prefer following orders issued by hierarchical authorities rather than
make decisions autonomously (Hirst et al., 2008). Autonomous decision making is, Adoption of lean
however, a critical component of lean production approaches. production
2.2.3 Regulative forces. Governmental, judicial, and professional institutions and
regulations have important effects on business management. Rao et al. (2005), for
example, find that government facilitation style impact managers’ trust in their
business partners. They present the notion of facilitative and non-facilitative
governments. Facilitative governments are “supportive of organizations and provide 153
predictable laws and regulations that these governments are capable of enforcing, that
is, structural assurances supporting exchanges. [y] If governments are unwilling or
incapable of providing the infrastructure to support extensive impersonal exchange,
individuals have no choice but to continue to rely on the only means available to
them – the personal relationships they build themselves” (p. 106).
The Chinese government and its agencies are considered to be non-facilitative
(Rao et al., 2005) and capricious in terms of the enforcement of rules and regulations.
Most regulations are mere guidelines and do not represent formal laws (Shie, 2004).
Moreover, marked rivalries between provinces, towns, and local administrative
districts lead to further differences in rule setting and enforcement (Handfield and
McCormack, 2005).
The rather arbitrary enforcement of rules and regulations places greater emphasis
on a manager’s guanxi network. Having a government official in the guanxi network
might help secure a company preferential treatment, for example, when it comes
to overcoming logistical problems, such as allocation of space on railroads or
customs processing (Handfield and McCormack, 2005). Organizations, thus, need to
accommodate civil servants and high-ranking government officials (Kshetri, 2009). In
summary, the inconsistency of legislation and law enforcement increases the
importance of and managers’ reliance on trust and personal networks in business
relationships (Rao et al., 2005).
2.3 Institutional forces and lean production in China

Lean production, conceptualized as a set of distinct practices, can be affected in
different ways by the economic, socio-cultural, and regulative forces described above.
In fact, Meyer and Scott (1983) note that the institutional forces often are opposed to
each other. For example, in this context, some forces may favor the adoption of lean
practices in China, while other forces may work against it. The economic rationale to
pursue operational efficiency by implementing lean practices may be countered by
socio-cultural forces and the net effect may, in some instances, be a decision against
adopting lean practices, particularly in the absence of close and trustful relationships
within the supply chain. A study by Handfield and McCormack (2005) finds that
Chinese companies are stronger with regard to managing processes that are within
their control, such as in-house and delivery processes, but weaker with regard to
processes that require external collaboration, such as planning, sourcing, and
designing. We, therefore, expect that the degree of implementation of lean production
in China will vary across different lean practices.
Shah and Ward (2007) define ten distinct lean production practices: pull system,
production flow, setup time reduction, statistical process control, total productive
maintenance, employee involvement, supplier JIT, supplier feedback, supplier
development, and customer involvement. We categorize these lean production
practices into three groups (Table I). The first group is called “internal-technical” and
includes lean practices that are implemented within the firm and are mostly technical
IJLM Lean production practices
22,2
Internal-technical
Pull
Flow
Setup time reduction
154 Statistical process control
Total productive maintenance
Internal-relational
Employee involvement
Supply chain
Supplier JIT
Supplier feedback
Table I. Supplier development
Lean production practices Customer involvement
in nature. The second group is called “internal-relational” and includes a single lean
practice (employee involvement) that is implemented within the firm and is mostly
relational in nature. The third group is called “supply chain” and includes lean
practices that are implemented in collaboration with supply chain partners and are
relational in nature.
The degree of implementation of these lean practices in both the USA and China
was assessed via a survey study. Details on the data collection are provided in
Section 3. Following the presentation of the empirical results in Section 4, explanations
for the observed differences in lean production implementation between China and the
USA are offered from an institutional theoretic perspective.
3. Data
A survey of executives from Chinese manufacturing firms was conducted to assess the
status of lean production implementation in China. The same survey was administered
among US manufacturing executives to establish a comparison level. In fact, there is
substantial evidence that lean practices have been and continue to be widely used in
the US manufacturing sector (e.g. Montagno et al., 1995; Sriparavastu and Gupta, 1997;
White et al., 1999; Rabinovich and Evers, 2002; Fullerton et al., 2003). The USA,
therefore, provides a suitable comparison level to assess the relative degree of lean
production adoption in China.
In this study, the prevalence of lean production practices in China and the USA was
measured with a survey instrument originally developed by Shah and Ward (2007). The
degree of adoption of ten distinct practice constructs (see Table I) was assessed on a
five-point Likert scale ranging from “0” (no implementation) to “5” (full implementation).
The survey instrument was translated into Chinese by a bilingual translator. The
draft of the Chinese questionnaire was then translated back into English by another
translator for verification purposes and some minor corrections were made. The
survey was then administered online to a sample of Chinese executives enrolled in
executive education programs. A total of 10,900 individuals were invited to complete
the survey. About 2,180 of these invitations were successfully delivered to
manufacturing managers who were eligible to participate in this survey project, 185
provided complete survey responses for a response rate of 8.49 percent.
The USA sample consisted of members of the Association for Operations Adoption of lean
Management (APICS). A randomly chosen pool of APICS members (n ¼ 4,288) were production
initially contacted with an invitation email to participate in the survey, followed by a
reminder email ten days later. A total of 229 complete responses were obtained
(response rate ¼ 5.34 percent). A confirmatory factor analysis was conducted to assess
model fit separately for the USA and China samples. In both cases, the results indicate
that the measurement model reaches acceptable levels of fit (Table AI in Appendix 1). 155
Thus, the measures were deemed valid for further analysis. Descriptive statistics and
further information on the composition of the data samples by industry is provided in
Tables II and III, respectively.
Lean practice USA sample China sample

Mean SD Mean SD
Supplier feedback 4.28 0.56 4.22 0.66

Supplier JIT 3.56 0.75 3.41 0.82
Supplier development 3.35 0.61 2.92 0.63
Customer involvement 3.85 0.56 3.80 0.66
Pull 3.61 0.65 2.99 1.02
Flow 3.87 0.55 3.71 0.73
Setup time reduction 3.35 0.64 3.21 0.82
SPC 3.70 0.77 3.04 1.04
Employee involvement 3.53 0.85 3.56 0.87 Table II.
TPM 4.01 0.70 3.41 0.84 Descriptive statistics
No. China USA NAICS Industry
1 11 18 311,312 Food and beverage manufacturing

2 7 1 313,314 Textile mills and textile product mills
3 4 3 315,315 Apparel and leather product manufacturing
4 0 0 321 Wood product manufacturing
5 1 2 322 Paper manufacturing
6 0 3 323 Printing
7 4 1 324 Petroleum and coal products manufacturing
8 5 1 325 Chemical manufacturing
9 8 16 326 Plastic and rubber products manufacturing
10 3 7 327 Non-metallic mineral product manufacturing
11 3 3 331 Primary metal manufacturing
12 12 4 332 Fabricated metal product manufacturing
13 24 17 333 Machinery manufacturing
14 16 28 334 Computer and electronic product manufacturing
15 20 49 335 Electrical equipment, appliance and component manufacturing
16 17 15 336 Transportation equipment manufacturing
17 2 10 337 Furniture and related product manufacturing
18 17 8 Other manufacturing
Total 154 186 Table III.
Breakdown of responses
Note: Industry classifications were not available for 43 respondents in the USA sample and 31 by three-digit NAICS
respondents in the China sample industry classification
IJLM 4. Results
22,2 In order to assess and compare the status of implementation of lean production in
China and the USA, we estimated the regression model presented in Equation 1 for
each of the ten lean practice constructs as dependent variables.
X
n X
n
Leani ¼ a þ gk Industryik þ dk Industryik Countryi þ ei ; ð1Þ
156 k¼1 k¼1
where i ¼ 1, y, N
The regression model (Equation 1) is specified to control for industry and country fixed
effects. We control for industry in line with prior empirical studies (e.g. Bin, 2008;
Almeida and Fernandes, 2008). The reason for this is that lean practices are not
universally and uniformly applicable to all industries (Zipkin, 1991). Industry

characteristics such as production processes, product attributes, and market
competition determine the economic value of lean practices. Differences between
China and the USA are measured by the interaction term “Country Industry”. The
reason for the use of this interaction term (rather than a traditional country dummy
variable only) is that, as stated above, the adoption of lean practices is moderated by
industry. Hence, it is more appropriate to compare adoption differences between
countries within a given industry as opposed to assessing an overall adoption
differential across all industries in a given sample. Detailed estimation results are
reported in Table AII (Appendix 2).
Given the limited sample size for various industries and potential power and
heteroskedasticity issues, the estimation was limited to industries that had at least ten
observations in both countries. These were industry 1 (food and beverage
manufacturing), industry 13 (machinery manufacturing), industry 14 (computer and
electronic product manufacturing), industry 15 (electrical equipment manufacturing),
and industry 16 (transportation equipment manufacturing). In addition, the regression
model was estimated with bootstrapping. Bootstrapping is a resampling procedure
that is commonly used in the management literature (e.g. Crystal Queenan et al., 2007;
Fullerton and Wempe, 2009, Johnston and Kristal, 2008; Vastag et al., 2004). Table IV
summarizes the bootstrap results while Table AII (Appendix 2) reports detailed
estimation results from both estimation methods. It should be noted that the OLS and
bootstrap parameter estimates are virtually identical. Thus, there is no evidence of bias
and we focus our subsequent discussion on the bootstrap results reported in Table IV.
To further assess the robustness of our results, we add control variables for firm
size (number of employees) and ownership status[5] as has been done in prior research
(Whitaker et al., 2007; Qi et al., 2009). While the results are not shown here due to space
constraints, we note that the general conclusions remain unchanged.
5. Discussion
In the subsequent paragraphs we discuss how the institutional forces outlined in
Section 3 may shape the implementation of internal-technical, internal-relational, and
supply chain lean practice bundles in China.
5.1.1 Internal-technical lean practices. Internal-technical lean practices include pull

system, production flow, setup time reduction, statistical process control, and total
productive maintenance. The empirical results indicate that internal-technical
Internal technical
lean practices Supply chain lean practices
Employee Supplier Supplier Customer
Pull Flow Setup time reduction SPC TPM involvement Supplier JIT feedback development involvement
Intercept 2.99 3.93 3.31 2.95 3.35 3.63 3.29 4.24 3.05 3.68
Industry 1 0.35 0.16 0.15 0.17 0.23 0.02 0.27 0.07 0.02 0.22
Industry 13 0.08 0.12 0.25 0.04 0.10 0.13 0.29 0.11 0.02 0.33
Industry 14 0.23 0.20 0.21 0.25 0.10 0.09 0.12 0.11 0.16 0.09
Industry 15 0.00 0.38 0.07 0.07 0.10 0.17 0.01 0.04 0.17 0.10
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Country Industry 1 0.87 0.09 0.14 0.27 0.28 0.18 0.05 0.02 0.02 0.11
Notes: Country is coded as USA ¼ 0 (baseline) and China ¼ 1. Industry 16 is used as the reference industry (hence, all coefficient estimates are 0). All
coefficient estimates are statistically significant at po0.05 except for those estimates printed in italic
Summary of bootstrap
production
Table IV.
Adoption of lean
157
estimation results
IJLM practices are implemented to a greater extent in Chinese manufacturing firms than in
22,2 US firms. The “Country Industry” interaction terms carry positive and significant
coefficient estimates in almost all instances.
Internal-technical lean practices are related to the management of manufacturing,
quality assurance and maintenance activities. In an overview of research on quality
management (QM) practices in China, Zhao et al. (2006a) conclude that the
158 implementation of QM practices in China has lagged relative to western countries.
Rao et al. (1999) attribute this lag to, among other factors, a lack of training in
statistical tools. Lee and Leung (1999) also note that Chinese firms, while aware of
customer satisfaction and quality concerns, are not ready for a TQM approach. Lau
et al. (2004) classify 452 firms according to the stage of their QM system development
and find that most Chinese firms lack a complete understanding of strategic QM.
With the large cumulative foreign direct investment in the Chinese manufacturing
sector (Lo and Liu, 2009) and the associated knowledge transfer (Almeida and
Fernandes, 2008; Thompson, 2002; Shi, 2007), however, this gap appears to have been
closed. As lean production practices are widely and successfully implemented around
the globe, Chinese executives might feel increasing pressure to aggressively implement
lean practices, particularly, those that are within the realm of their direct control. The
principle of normative isomorphism suggests that Chinese manufacturers may adopt
lean practices to meet investors’ expectations and, thus, gain legitimacy. Moreover, the
principle of mimetic isomorphism suggests that managers may implement proven
methods to increase efficiency in an effort to reduce the degree of uncertainty that is
associated with the increasing competition faced by Chinese manufacturers.
As such, it seems that a large number of Chinese manufacturing establishments
have not only overcome the hurdles that have long hindered the implementation of
modern manufacturing and QM practices, but have also surpassed their US
competitors in their quest for operational efficiency and competitive advantage.
5.1.2 Internal-relational lean practices. In this study, employee involvement is
considered an internal-relational lean practice. For this dependent variable, a negative
interaction coefficient estimate is found in three out of five industries. In other words,
Chinese firms appear to implement employee involvement activities to a lesser extent
than US firms in three out of the five industries studied here. As discussed below,
China’s unique socio-cultural characteristics may hinder autonomous and flexible
decision making by workers and employees.
As noted previously, the Chinese culture can be characterized as highly power
distant. Zhao et al. (2006a), for example, note that “Chinese people [y] naturally defer
to those they perceive to be their superiors [y]” (p. 467). As a result, employees feel
more comfortable following instructions from their supervisors rather than pointing
out inefficiencies or suggesting potential improvements (Brown and O’Rourke, 2007).
In addition, uncertainty avoidance suggests that employees will tend to prefer
following hierarchical directions rather than making decisions independently and
flexibly. In this vein, Rao et al. (1999) find that Chinese firms tend to score low in terms
of employee involvement and participation.
High employee turnover is another impediment to relationship development and
employee involvement (Lawrence and Lewis, 1993). Young migrant workers from rural
areas, known as liudong renkou (or the “floating population”), have traditionally made
up the majority of the workforce in Chinese manufacturing facilities. In the past, these
workers had to accept lower pay and fewer benefits (Handfield and McCormack, 2005)
given the paucity of employment options. With the rapid growth of the manufacturing
sector, however, inexpensive labor is no longer in abundant supply such that the Adoption of lean
workers’ demands and expectations have increased significantly. As a result, workers production
as well as salaried employees are more mobile and employee turnover rates have
increased (Handfield and McCormack, 2005).
These arguments and the empirical results shown in Table IV suggest that
employee involvement in the Chinese manufacturing industry, a critical component of
successful lean production implementation, continues to lag behind its Japanese and 159
western counterparts.
5.1.3 Supply chain lean practices. Supply chain lean practices include activities
related to supplier JIT, supplier feedback, supplier development, and customer
involvement. All supply chain lean practices appear to be implemented to a greater
extent in China relative to the US baseline in nearly all industries as evidenced by the
positive coefficients of the “Country Industry” interaction terms. Negative coefficient
estimates for the interaction term are found in only two instances, that is, supplier
JIT in industry 1 and customer involvement in industry 13.

Supply chain lean practices specifically target the minimization or elimination of
waste and variability on the inbound and outbound sides of the manufacturing process.
These practices, thus, are mechanisms through which a focal firm coordinates and
aligns its operational activities with its suppliers and customers. Supply chain
lean practices include supplier feedback, supplier JIT, supplier development, and
customer involvement. Extensive tactical and strategic information sharing between
manufacturers and their suppliers and customers is required to successfully implement
this set of lean practices.
Due to China’s unique cultural characteristics, its dynamically changing environment
and underdeveloped legal systems, collaborating with supply chain partners can be
challenging (Zhao et al., 2006a). Relationship closeness with both suppliers and
customers helps mitigate these challenges and achieve operational efficiency (Bowersox
et al., 1999).
A Chinese manufacturer’s relationship with its suppliers and customers may be
affected by a number of unique characteristics of the Chinese culture. First,
collectivism and guanxi can positively influence buyer-seller relationships through a
shared vision (Wong et al., 2005) and similarity in values (Armstrong and Ye, 2001).
Second, the cultural trait of long-term orientation increases Chinese firms’ willingness
to invest in long-term relationships even in the absence of clearly defined contracts
(Li et al., 2001; Gebauer and von Zedtwitz, 2007). However, high levels of trust are
needed for such close relationships to develop over time. A study by Rao et al. (2005)
finds that Chinese managers generally have lower levels of trust than their American
counterparts. The absence of trust in buyer-supplier relationships (particularly
in the early stages of industrial development in China) may have meliorated the
implementation of lean practices that require frequent communication and coordination
(such as supplier feedback, supplier development, customer involvement). The findings
of Chow et al. (2000) support this contention. Using experiments with US and Chinese
managers, they found that Chinese respondents shared significantly less information
with potential respondents who were not members of their in-group.
Moreover, Kshetri (2009) notes that the involvement of Chinese governmental
institutions in Chinese businesses tends to work against firms’ market-orientation
practices. More specifically, when the interests of consumers and government are in
conflict, the strong involvement and power of the government within the business
community tends to favor decisions in the interest of the government (Kshetri, 2009).
IJLM Together, the aforementioned arguments might suggest that lean practices, which
22,2 require coordination and collaboration with external supply chain partners, have not
yet reached the level of implementation that might be observed in other highly
industrialized nations. Surprisingly, our empirical results suggest that lean practices
that require close relationships and collaboration with suppliers and customers are
implemented to an even greater extent in China than in the USA. This result is broadly
160 consistent with Young et al. (2009) who investigated cultural and role differences in
relational functioning between suppliers and customers in China and Europe, and
found that the differences between Chinese and European samples are smaller than
expected.
6. Concluding remarks
In this study, we have explored the diffusion of lean production practices in the Chinese
manufacturing industry. Based on the analysis of a survey of Chinese and US
manufacturing executives, differences in the level of adoption of lean production

practices were analysed. Our results point to a number of interesting findings. First,
lean production practices have been adopted in China to a great extent. Second, the rate
of adoption seems to be fairly comparable across different industries. And third,
the level of adoption of lean practices is driven by the net effect of various economic,
socio-cultural, and regulative forces. These findings have interesting theoretical and
managerial implications, which are discussed in further detail below.
6.1 Theoretical contribution and research agenda

As the first study to systematically compare the adoption of lean practices in China
and the USA, our research has important theoretical contributions. Drawing upon
institutional theory, we describe how various institutional forces interact to facilitate or
hinder the adoption of lean production practices. It is suggested that the interplay
among various institutional forces is complex and that different lean production
practices are adopted at different rates in line with the evolution of a firm’s institutional
environment. Future research should, therefore, carefully consider these forces and
how they interact to affect practices in China.
The second major theoretical contribution of our research is that it can form the
basis for a research agenda on lean production diffusion in China and other newly
industrialized countries. To the best of our knowledge, this study is the most detailed of
its kind. The detailed (item-level) assessment of lean practices presented in Table AIII
can provide guidance for researchers. Below, we outline some opportunities for future
research on the adoption processes of state-of-the-art management methods in
emerging economies.
6.1.1 Institutional drivers of lean production adoption. This study provides a
conceptual discussion of the effects of various institutional forces on the adoption
of a variety of lean production practices in China. Testing associated hypotheses,
however, will require longitudinal data that track changes in both the institutional
environment and the rate of lean production implementation in China. While such
a data collection exercise is challenging, it is apparent that empirical research on
the specific effects of socio-cultural, economic, and regulatory characteristics on
the practice of management in China, and lean production in particular, will be of
great academic and managerial importance. We believe that the observations and
explanations offered in this study provide a solid basis for future hypothesis testing
research in this area.
6.1.2 Firm ownership status and lean production adoption. Lean production has Adoption of lean
been a very effective management strategy in the West, where competition typically production
takes place among private enterprises. Yet, China offers a much greater diversity in
terms of the types of firms competing in its markets. WOFEs and IJVs compete with
SOEs that date back to the era of a collectivist economy in the not-so-distant past.
Given the heterogeneity in firm ownership, it is plausible that different types of firms
may pursue different objectives and competitive strategies. As such, management 161
theory may be greatly expanded by observing ownership-specific firm behavior in
China as it relates to the adoption of lean practices. This study presents evidence
suggesting that the adoption of lean practices does in fact vary by a firm’s ownership
status[6] (the implementation levels of lean practices were generally highest among
IJVs and WOFEs compared to SOEs and others). However, the data come from various
industries and are cross-sectional. As such, potential industry effects may be masking
effects of firm ownership status. Furthermore, lacking a longitudinal view is restrictive
in observing the dynamic nature of competition. Therefore, future research should

observe a greater number of firms (SOE, IJV, WOFE, and others) within targeted
industries over several time periods.
6.1.3 Performance outcomes of lean production adoption. As previously mentioned,
lean production can be an effective management strategy to increase efficiency and
effectiveness. In other words, firms employ lean production in order to enhance firm
performance. Given the unique mix of firms that operate and compete in China, the
performance effects of lean production may vary across firms and markets. For
example, the efficacy of lean production may vary with a firm’s ownership status and
the market competition it faces. Moreover, the effects of lean production adoption may
be realized over time. As a firm increases its proficiency and gains experience in
implementing lean production practices, the performance effects of lean production
may increase over time. Thus, management theory may be expanded by identifying
and testing variables that moderate the effects of lean production adoption on firm
performance.
Regarding the implementation of lean production in China, case studies and
in-depth interviews should be conducted in order to shed light on specific activities
that compose lean logistics and to guide current and future managers toward
successfully implementing this technology. Finally, a very interesting study would
conduct a longitudinal investigation of the implementation and performance impacts
of lean practices in China. Issues to be investigated include changes (Greer and Ford,
2009) in the rate of implementation over time and differences in implementation across
industries.
6.1.4 Employee involvement in China. Our survey results indicate that employee
involvement has not been as extensively embraced by Chinese manufacturers as other
lean practices. Although the economic forces may favor adoption of western-style
employee-employer relationships and similar levels of organizational communication,
employee involvement seems to be impeded by social, cultural, and historical
characteristics in China. More specifically, power distance and risk aversion can
be seen as potential barriers to employee involvement. A closer look at employee-
employer relations in China and how they shape employee involvement in lean
production may provide interesting theoretical insights. Furthermore, the level of
employee involvement may possibly impact the adoption of other lean practices. Thus,
it might be interesting to explore any synergies that may be gained from enhanced
employee involvement.
IJLM 6.2 Managerial implications
22,2 The empirical results presented in this study provide evidence that the Chinese
manufacturing sector has evolved and matured. China no longer is a mere low-cost
manufacturing destination but a modern industrial nation whose advanced
manufacturing capabilities closely match or even exceed those of other
industrialized nations. As China’s labor and land cost advantages erode, managers
162 seek operational efficiencies by deploying modern logistics management techniques
such as lean production. Nu-kote remanufactures printer cartridges in China because of
low-cost labor (LeBlanc et al., 2009) when they have advanced demand information,
otherwise they remanufacture in the USA. As the Chinese labor cost advantages erode,
Chinese manufacturers were faced with the need for strategic change. It is not enough
to be faced with the need for strategic change (Richey et al., 2010); many other variables
must be in place (Atwater et al., 2010).
Although the concept of lean production is well established and widely published in
the literature, many firms have found its implementation challenging. Difficulties arise
first and foremost from the need to customize processes to the particular nature
of the business and align these new processes with suppliers and customers.
However, institutional forces will play a role in hindering or sometimes fostering the
implementation of a new (lean production) technology. When implementing lean
production practices in a new context, managers cannot underestimate the effects of
local economic, cultural, social, and political landscapes. This is the main focus of this
paper: to outline these forces and shed some light on how these forces may interact and
impact the effort of implementing lean production practices in the Chinese context.
The generally poor quality of the regulative environment in China increases the
importance of trust and personal networks in business relations both within and
between firms. The need to build and nurture trust within and across organizations,
thus, is one of the most immediate managerial implications with respect to lean
production success in China. Foreign firms wanting to establish manufacturing
facilities in China must, thus, be aware that lean production practices cannot be
implemented the same way they are implemented in countries such as the USA. The
implementation of activities requiring employee involvement, in particular, appears to
be challenging given China’s unique socio-cultural characteristics.
6.3 Limitations
Like much other survey-based research in operations management, we use relatively
small samples for the empirical analyses (Dow et al., 1999; Rothenberg et al., 2001).
This limitation is further compounded by our effort to control for inter-industry
differences which led to the elimination of a total of 125 observations from the US and
Chinese data samples. While we employ bootstrap techniques to overcome this
limitation, we suggest further large-scale survey studies for future research.
Another potential drawback of this study is the response set bias since the USA and
China samples come from two distinct populations, where respondents self-report
various measures of interest (Fischer, 2004). Cross-cultural differences between US and
Chinese respondents in interpreting and responding to the scale items may be potential
cause for bias. Hence, a direct comparison between the two samples might not be
justified. As a result, we have used the US sample as a benchmark for the Chinese
sample rather than for direct comparison purposes.
One other limitation of this research is that it treats China as a single cultural entity
whereas we know that there are significant differences across regions. However, since
we focus on comparing lean production in China to the USA, those regional differences Adoption of lean
are small in comparison to the differences with the USA. production
Notes
1. Sometimes referred to as Toyota Production Systems, lean production practices include
internal operational activities, as well as activities involving coordination with suppliers and
customers (Shah and Ward, 2007). 163
2. A notable exception to this are studies using data collected by the GMRG (Vastag and
Whybark, 1993, 1994; Kadipasoglu et al., 1999; Vastag and Montabon, 2001). The GMRG
surveys, however, focus on a limited number of industries only, i.e. non-fashion textile and
small machine tools (Whybark, 1997) and only a few questions specifically refer to lean
practices (Corbett and Whybark, 2001).
3. Source: www.buyusa.gov/china/en/transportation.html
4. Source: http://info.worldbank.org/etools/tradesurvey/mode2c.asp
5. Firm ownership status was operationalized as a categorical variable identifying state-owned
enterprises (SOE), international joint-ventures (IJV), wholly owned foreign enterprises
(WOFE) and “other”. This latter category includes, for example, Chinese private enterprises.
6. The detailed results are not reported due to space constraints.
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22,2
168
IJLM
weights
Table AI.
Fit statistics and
standardized regression
Appendix 1. Confirmatory factor analysis results
USA: w2 ¼ 38.3356; p ¼ 0.1710; CFI ¼ 0.9873; RMSEA ¼ 0.0329; SRMR ¼ 0.0415

China: w2 ¼ 39.8686; p ¼ 0.0861; CFI ¼ 0.9671; RMSEA ¼ 0.0451; SRMR ¼ 0.0553
Supplier JIT USA China
SupJIT1 Suppliers are directly involved in the new product development process 0.5191 0.5376
SupJIT2 Our key suppliers deliver to our plants on JIT basis 0.5164 0.4428
SupJIT3 We have a formal supplier certification program 0.3649 0.5129
Supplier feedback
SupFeed1 We frequently are in close contact with our suppliers 0.5840 0.4931
SupFeed4 We give our suppliers feedback on quality and delivery performance 0.6033 0.5717
SupFeed5 We strive to establish long-term relationships with our suppliers 0.7444 0.7915
Flow
Flow1 Products are classified into groups with similar processing requirements 0.5443 0.6929
Flow2 Products are classified into groups with similar routing requirements 0.5802 0.6646
Flow3 Equipment is grouped to produce a continuous flow of families of products 0.8317 0.6250
Flow4 Families of products determine our factory layout 0.6210 0.5552

China: w2 ¼ 4.0408; p ¼ 0.5436; CFI40.9999; RMSEAo0.0001; SRMR ¼ 0.0318
Supplier development USA China
SupDev1 Our suppliers are contractually committed to annual cost reductions 0.4464 0.5871
SupDev2 Our key suppliers are located in close proximity to our plants 0.2942 0.5235
SupDev3 We have corporate level communication on important issues with key suppliers XXX XXX
SupDev4 We take active steps to reduce the number of suppliers in each category 0.5128 0.3293
SupDev5 Our key suppliers manage our inventory 0.5984 0.5668
SupDev6 We evaluate suppliers on the basis of total cost and not per unit price 0.4958 0.4054
(continued)

Customer involvement USA China
CusInv1 We frequently are in close contact with our customers 0.6413 0.6603
CusInv3 Our customers give us feedback on quality and delivery performance 0.7704 0.5513
CusInv4 Our customers are actively involved in current and future product offerings 0.5773 0.6754
CusInv5 Our customers are directly involved in current and future product offerings 0.5434 0.5103
CusInv6 Our customers frequently share current/future demand info with marketing department 0.6762 0.6563

Pull USA China
Pull1 Production is “pulled” by the shipment of finished goods 0.7822 0.6494
Pull2 Production at stations is “pulled” by the current demand of the next station 0.7930 0.8810
Pull3 We use a “pull” production system 0.9608 0.7634
Pull4 We use kanban, squares, or containers of signals for production control 0.6393 0.3677

Setup USA China
Setup1 Our employees practice setups to reduce the time required 0.8206 0.3516
Setup2 We are working to reduce the setup times in our plants 0.6568 0.8459
Setup3 We have low setup times in our plants 0.5258 0.4189
SPC
SPC1 Large number of equipment/processes on shop floor are currently under SPC 0.7946 0.7521
SPC2 We make extensive use of statistical techniques to reduce process variance 0.9481 0.9286
SPC3 Charts showing defect rates are used as tools on the shop floor 0.6655 0.6609
SPC4 We use fishbone type diagrams to identify causes of quality problems XXX XXX
(continued)
production
Adoption of lean
169
Table AI.
22,2
170
IJLM
Table AI.
SPC4 We conduct process capability studies before product launch XXX XXX
USA: w2 ¼ 0.0948; p ¼ 0.7581; CFI40.9999; RMSEAo0.0001; SRMR ¼ 0.0030

Employee involvement USA China
EmpInv1 Shop-floor employees are key to problem solving teams 0.7938 0.8038
EmpInv2 Shop-floor employees drive suggestion programs 0.8221 0.8296
EmpInv3 Shop-floor employees lead product/process improvement efforts 0.8063 0.8139
EmpInv4 Shop-floor employees undergo cross-functional training 0.6855 0.6251
USA: w2 ¼ 0.8974; p ¼ 0.3435; CFI40.9999; RMSEAo0.0001; SRMR ¼ 0.0085

TPM USA China
TPM1 We dedicate a portion of everyday to planned equipment maintenance related activities 0.5925 0.5047
TPM2 We maintain all our equipment regularly 0.8188 0.8120
TPM3 We maintain excellent records of all equipment maintenance-related activities 0.8303 0.9480
TPM4 We post equipment maintenance records on shop floor for active sharing with employees 0.5365 0.6537
Note: All standardized regression weights are significant at po0.01 level
Appendix 2. Detailed regression results Adoption of lean
production
Leani ¼ a þ bCountryi þ ei ; ðA:1Þ
where i ¼ 1, y, N
171
X
n
Leani ¼ a þ bCountryi þ gk Industryik þ ei ; ðA:2Þ
k¼1
where i ¼ 1, y, N
X
n X
n
Leani ¼ a þ bCountryi þ gk Industryik þ dk Industryik Countryi þ ei ; ðA:3Þ

k¼1 k¼1
where i ¼ 1, y, N
X
n X
n
Leani ¼ a þ gk Industryik þ dk Industryik Countryi þ ei ; ðA:4Þ
k¼1 k¼1
where i ¼ 1, y, N
In these models, “Lean” denotes a lean practice as defined by Shah and Ward (2007).
“Country” is a binary variable that takes on the value of 0 for the USA (baseline) and
1 for China. “Industry” is an indicator variable denoting industries.
Model (1) uses “Country” as the sole explanatory factor for the degree of
implementation of lean practices. In addition to country effects, inter-industry
differences are controlled for in Model (2). Model (3), finally, allows the country-specific
effect on the adoption of lean practices to vary by industry. Model (4), finally, presents a
simplified version of Model (3). Since all explanatory variables are binary, the
coefficient estimate of the “Industry Country” interaction term in Model (4) is simply
equal to the sum of the coefficient estimates of the “Country” direct effect and the
“Industry Country” interaction effect in Model (3). For the ease of presentation and
discussion, we only report the results of Model (4) in the body of the article. The full
results are shown in Tables AII and AIII.
22,2
results
172
IJLM
Table AII.
bootstrap regression
Summary of OLS and
bÔLSb b^Bb bÔLS b^B bÔLS b^B bÔLS b^B
Pull system
Intercept 3.01* 3.01* 3.19* 3.19* 3.00* 2.99* 3.00* 2.99*
Countrya 0.65* 0.64* 0.61* 0.60* 0.97* 0.97*
Industry 1 0.45* 0.45* 0.37 0.35* 0.37 0.35*
Industry 13 0.07 0.06* 0.09 0.08* 0.09 0.08*
Industry 14 0.11 0.10* 0.21 0.23* 0.21 0.23*
Industry 15 0.24 0.23* 0.01 0.00 0.01 0.00
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Country Industry 1 0.08 0.10* 0.89* 0.87*
Country Industry 14 0.72* 0.74* 0.25 0.23*
Country Industry 16 0.00 0.00 0.97* 0.97*
Flow
Intercept 3.70* 3.71* 3.90* 3.90* 3.93* 3.93* 3.93* 3.93*
Countrya 0.19* 0.18* 0.13 0.13* 0.07 0.06*
Industry 1 0.20 0.20* 0.16 0.16* 0.16 0.16*
Industry 13 0.05 0.05* 0.11 0.12* 0.11 0.12*
Industry 14 0.16 0.15* 0.20 0.20* 0.20 0.20*
Industry 15 0.32* 0.32* 0.38* 0.38* 0.38* 0.38*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Country Industry 1 0.15 0.15* 0.08 0.09*
Country Industry 16 0.00 0.00 0.07 0.06*
(continued)
Setup time reduction

Intercept 3.22* 3.22* 3.32* 3.32* 3.31* 3.31* 3.31* 3.31*
Countrya 0.17 0.17* 0.16 0.16* 0.18 0.18*
Industry 1 0.03 0.03* 0.15 0.15* 0.15 0.15*
Industry 13 0.10 0.10* 0.25 0.25* 0.25 0.25*
Industry 14 0.18 0.18* 0.22 0.21* 0.22 0.21
Industry 15 0.13 0.12* 0.07 0.07* 0.07 0.07*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Statistical process control
Intercept 3.01* 3.00* 3.07* 3.07* 2.96* 2.95* 2.96* 2.95*
Countrya 0.77* 0.77* 0.75* 0.76* 0.98* 0.98*
Industry 1 0.13 0.14* 0.17 0.17* 0.17 0.17*
Industry 13 0.08 0.07* 0.02 0.04* 0.02 0.04*
Industry 14 0.10 0.10* 0.25 0.25* 0.25 0.25*
Industry 15 0.16 0.16* 0.07 0.07* 0.07 0.07*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
(continued)
production
Adoption of lean
Table AII.
173
22,2
174
IJLM
Table AII.
Total productive maintenance

Intercept 3.38* 3.38* 3.44* 3.44* 3.35* 3.35* 3.35* 3.35*
Countrya 0.68* 0.68* 0.64 0.64* 0.81 0.82*
Industry 1 0.00 0.00 0.23 0.23* 0.23 0.23*
Industry 13 0.07 0.07* 0.11 0.10* 0.11 0.10*
Industry 14 0.06 0.05* 0.09 0.10* 0.09 0.10*
Industry 15 0.17 0.17* 0.11 0.10* 0.11 0.10*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Employee involvement
Intercept 3.56* 3.56* 3.72* 3.72* 3.63* 3.63* 3.63* 3.63*
Countrya 0.04 0.05* 0.02 0.02* 0.15 0.15*
Industry 1 0.15 0.17* 0.01 0.02 0.01 0.02
Industry 13 0.10 0.09* 0.15 0.13* 0.15 0.13*
Industry 14 0.22 0.22* 0.10 0.09* 0.10 0.09*
Industry 15 0.26 0.26* 0.17 0.17* 0.17 0.17*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
(continued)
Supplier JIT
Intercept 3.40* 3.40* 3.38* 3.37* 3.29* 3.29* 3.29* 3.29*
Countrya 0.17 0.18* 0.13 0.14* 0.30 0.29*
Industry 1 0.12 0.12* 0.29 0.27* 0.29 0.27*
Industry 13 0.21 0.21* 0.30 0.29* 0.30 0.29*
Industry 14 0.06 0.06* 0.13 0.12* 0.13 0.12*
Industry 15 0.08 0.08* 0.02 0.01 0.02 0.01
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Supplier feedback
Intercept 4.23* 4.23* 4.27* 4.27* 4.24* 4.24* 4.24* 4.24*
Countrya 0.13 0.13* 0.10 0.10* 0.15 0.15*
Industry 1 0.01 0.01 0.07 0.07* 0.07 0.07*
Industry 13 0.06 0.06* 0.11 0.11* 0.11 0.11*
Industry 14 0.06 0.07* 0.11 0.11* 0.11 0.11*
Industry 15 0.10 0.10* 0.04 0.04* 0.04 0.04*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Country Industry 15 0.15 0.16* 0.00 0.00
(continued)
production
Adoption of lean
Table AII.
175
22,2
176
IJLM
Table AII.
Supplier development
Intercept 2.95* 2.95* 3.07* 3.06* 3.05* 3.05* 3.05* 3.05*
Countrya 0.39* 0.39* 0.37* 0.37* 0.39 0.40*
Industry 1 0.13 0.13* 0.02 0.02* 0.02 0.02*
Industry 13 0.04 0.04* 0.03 0.02* 0.03 0.02*
Industry 14 0.19 0.19* 0.17 0.16* 0.17 0.16*
Industry 15 0.15 0.14* 0.18 0.17* 0.18 0.17*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Customer involvement
Intercept 3.77* 3.77* 3.85* 3.85* 3.68* 3.68* 3.68* 3.68*
Countrya 0.09 0.10* 0.08 0.09* 0.40 0.41*
Industry 1 0.06 0.06* 0.23 0.22* 0.23 0.22*
Industry 13 0.06 0.06* 0.33 0.33* 0.33 0.33*
Industry 14 0.19 0.19* 0.10 0.09* 0.10 0.09*
Industry 15 0.09 0.09* 0.10 0.10* 0.10 0.10*
Industry 16 0.00 0.00 0.00 0.00 0.00 0.00
Country Industry 13 0.70* 0.69* 0.30 0.29*
Notes: aCountry is coded as USA ¼ 0 (baseline) and China ¼ 1; bbÔLS and b^B denote coefficient estimates obtained by OLS and bootstrapping, respectively.
*Significant at po0.05 level
Lean practice scale item USA China
Adoption of lean
production
Supfeed01: We frequently are in close contact with our suppliers 4.37(0.05) 4.24(0.06)
Supfeed02: Our suppliers seldom visit our plants 2.68(0.07) 2.75(0.08)
Supfeed03: We seldom visit our suppliers’ plants 2.90(0.08) 2.44(0.08)
Supfeed04: We give our suppliers feedback on quality and delivery
performance 4.14(0.06) 4.28(0.05) 177
Supfeed05: We strive to establish long-term relationships with our
suppliers 4.12(0.06) 4.32(0.05)
SupJIT01: Suppliers are directly involved in the new product
development process 3.44(0.07) 3.26(0.07)
SupJIT02: Our key suppliers deliver to our plants on JIT basis 3.16(0.08) 3.59(0.07)
SupJIT03: We have a formal supplier certification program 3.53(0.08) 3.91(0.07)
SupDev01: Our suppliers are contractually committed to annual cost
reductions 2.75(0.07) 3.38(0.07)

SupDev02: Our key suppliers are located in close proximity to our
plants 2.67(0.07) 3.03(0.08)
SupDev03: We have corporate level communication on important
issues with key suppliers 3.56(0.07) 4.03(0.06)
SupDev04: We take active steps to reduce the number of suppliers in
each category 3.40(0.07) 3.62(0.06)
SupDev05: Our key suppliers manage our inventory 2.42(0.07) 2.97(0.08)
SupDev06: We evaluate suppliers on the basis of total cost and not per
unit price 3.25(0.07) 3.74(0.06)
Cus01: We frequently are in close contact with our customers 4.32(0.05) 4.18(0.06)
Cus02: Our customers seldom visit our plants 2.69(0.08) 2.57(0.08)
Cus03: Our customers give us feedback on quality and delivery
performance 4.23(0.05) 4.15(0.05)
Cus04: Our customers are actively involved in current and future
product offerings 3.63(0.07) 3.70(0.06)
Cus05: Our customers are directly involved in current and future
product offerings 3.44(0.07) 3.45(0.07)
Cus06: Our customers frequently share current/future demand
information with marketing department 3.36(0.06) 3.77(0.07)
Cus07: We regularly conduct customer satisfaction surveys 3.41(0.07) 4.05(0.06)
Pull01: Production is “pulled” by the shipment of finished goods 3.01(0.08) 3.66(0.06)
Pull02: Production at stations is “pulled” by the current demand of the
next station 3.02(0.08) 3.60(0.06)
Pull03: We use a “pull” production system 2.98(0.08) 3.61(0.06)
Pull04: We use kanban, squares, or containers of signals for production
control 2.99(0.08) 3.69(0.07)
Flow01: Products are classified into groups with similar processing
requirements 3.80(0.06) 3.93(0.06)
Flow02: Products are classified into groups with similar routing
requirements 3.76(0.06) 3.88(0.06)
Flow03: Equipment is grouped to produce a continuous flow of
families of products 3.70(0.06) 3.84(0.05)
Flow04: Families of products determine our factory layout 3.60(0.07) 3.91(0.06)
Flow05: Pace of production is directly linked with the rate of customer
demand 3.29(0.07) 3.88(0.07)
Setup01: Our employees practice setups to reduce the time required 2.90(0.07) 3.14(0.07)
Setup02: We are working to reduce the setup times in our plants 3.63(0.06) 3.68(0.06) Table AIII.
Sample means and SD for
the lean practice scale
(continued) items by country
IJLM Lean practice scale item USA China
22,2
Setup03: We have low setup times in our plants 3.12(0.07) 3.38(0.07)
Setup04: Long production cycle times prevent responding quickly to
customer requests 2.94(0.08) 3.99(0.06)
Setup05: Long supply lead times prevent responding quickly to
178 customer requests 3.26(0.08) 3.98(0.06)
SPC01: Large number of equipment/processes on shop floor are
currently under SPC 2.98(0.08) 3.70(0.06)
SPC02: We make extensive use of statistical techniques to reduce
process variance 3.00(0.08) 3.81(0.06)
SPC03: Charts showing defect rates are used as tools on the shop floor 3.28(0.08) 3.65(0.07)
SPC04: We use fishbone type diagrams to identify causes of quality
problems 3.30(0.08) 3.68(0.07)
SPC05: We conduct process capability studies before product launch 3.32(0.09) 3.92(0.06)
EmpInv01: Shop-floor employees are key to problem solving teams 3.76(0.07) 3.60(0.07)
EmpInv02: Shop-floor employees drive suggestion programs 3.48(0.07) 3.45(0.07)
EmpInv03: Shop-floor employees lead product/process improvement
efforts 3.21(0.07) 3.27(0.08)
EmpInv04: Shop-floor employees undergo cross-functional training 3.61(0.06) 3.74(0.07)
TPM01: We dedicate a portion of everyday to planned equipment
maintenance related activities 3.16(0.07) 3.85(0.06)
TPM02: We maintain all our equipment regularly 3.84(0.06) 4.21(0.06)
TPM03: We maintain excellent records of all equipment maintenance
related activities 3.59(0.07) 4.18(0.06)
TPM04: We post equipment maintenance records on shop floor for
active sharing with employees 2.92(0.08) 3.84(0.07)
Table AIII. Note: SD are shown in parentheses
Corresponding author
Matthew A. Waller can be contacted at: mwaller@walton.uark.edu
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02 - Lean Manufacturing - China Vs USA

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The International Journal of Logistics Management

An institutional theoretic perspective on forces driving adoption of lean production

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The International Journal of Logistics 1. Introduction

theoretical basis that is commonly used to study management phenomena in the

2.1 Institutional theory

2.2 The institutional environment in China

2.3 Institutional forces and lean production in China

Lean practice USA sample China sample

Supplier feedback 4.28 0.56 4.22 0.66

No. China USA NAICS Industry

1 11 18 311,312 Food and beverage manufacturing

universally and uniformly applicable to all industries (Zipkin, 1991). Industry

5.1.1 Internal-technical lean practices. Internal-technical lean practices include pull

JIT in industry 1 and customer involvement in industry 13.

manufacturing executives, differences in the level of adoption of lean production

6.1 Theoretical contribution and research agenda

in observing the dynamic nature of competition. Therefore, future research should

A.T. Kearney, Chicago, IL.

Rabinovich, E. and Evers, P.T. (2002), “Enterprise-wide adoption patterns of inventory

USA: w2 ¼ 38.3356; p ¼ 0.1710; CFI ¼ 0.9873; RMSEA ¼ 0.0329; SRMR ¼ 0.0415

USA: w2 ¼ 6.6174; p ¼ 0.2507; CFI ¼ 0.9808; RMSEA ¼ 0.0382; SRMR ¼ 0.0283

USA: w2 ¼ 4.7099; p ¼ 0.1943; CFI ¼ 0.9960; RMSEA ¼ 0.0507; SRMR ¼ 0.0334

USA: w2 ¼ 2.6274; p ¼ 0.2688; CFI ¼ 0.9987; RMSEA ¼ 0.0507; SRMR ¼ 0.0150

USA: w2 ¼ 14.9280; p ¼ 0.0606; CFI ¼ 0.9850; RMSEA ¼ 0.0625; SRMR ¼ 0.0448

USA: w2 ¼ 0.0948; p ¼ 0.7581; CFI40.9999; RMSEAo0.0001; SRMR ¼ 0.0030

USA: w2 ¼ 0.8974; p ¼ 0.3435; CFI40.9999; RMSEAo0.0001; SRMR ¼ 0.0085

Leani ¼ a þ bCountryi þ gk Industryik þ dk Industryik Countryi þ ei ; ðA:3Þ

bÔLSb b^Bb bÔLS b^B bÔLS b^B bÔLS b^B

Setup time reduction

Total productive maintenance

bÔLSb b^Bb bÔLS b^B bÔLS b^B bÔLS b^B

reductions 2.75(0.07) 3.38(0.07)

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