THE PERFORMANCE EFFECTS OF PROCESS MANAGEMENT-TECHNIQUES

This paper provides exploratory evidence on the cross-sectional associ ation between process management techniques and two profit measures: r eturn on assets and return on sales. Using a sample of firms in two in dustries (automotive and computer) and four countries (Canada, Germany , Japan, and the United States), we find that certain process manageme nt techniques improve profitability while others have little effect on financial performance; In particular, long-term partnerships with sup pliers and customers are associated with higher performance in both in dustries. The value of other techniques such as statistical process co ntrol, process capability studies, and cycle time analysis, on the oth er hand, appears to vary by industry, reflecting differences in the st ages of the two industries' process management practices. Finally, com puter organizations following an innovation-oriented strategy earned s ignificantly higher accounting returns regardless of the process manag ement techniques employed, suggesting that these techniques have only a second-order effect on performance in this industry.