An evaluation of the relationship between management practices and computer aided design technology

Technology has been the engine of growth for the United States economy over the last decade, and it is reasonable to expect that appropriate selection and management of technology within the firm would continue to be highly c ritical to its success well into the future. Operations managers constantly struggle to seek answers to the right set of managerial actions that can b e used to leverage technology for process effectiveness. This study takes a step in that direction by empirically examining the management of computer aided design (CAD) technology and outcomes of the product design process w ithin manufacturing firms. In particular, the level of functionality and so phistication of the CAD system are examined with respect to the use of seve ral structural and infrastructural management levers such as the degree of a firm's formalization and decentralization, the extent of the use of teams , the extent of training of CAD designers, and the equity of the incentives within the product design process. The influence of these management lever s upon the CAD system performance is analyzed through the use of moderated regression analysis conducted on a cross-sectional data of 143 firms repres enting the vehicular industry in the USA. Our findings indicate that CAD fu nctionality and sophistication are positively related to product design qua lity, flexibility, and overall performance. The impact of management levers on this relationship is a mixed one. Decentralization has no impact on the CAD technology-performance relationship, formalization has some positive e ffects, and the use of teams is helpful only in moderating the influence of sophistication on overall performance. Equity of incentives enhances desig n quality, while training is very important in improving performance across the board. In general, sophisticated "state of the art" CAD systems requir e much more proactive management than highly functional ones. Recommendatio ns emerging from this study hopefully provide insights into a better manage ment of not only CAD systems, but other process level technologies as well that are relevant to firms in the manufacturing sector. We also discuss imp lications of technology management provided by this research for creating l eading edge enterprises. (C) 2001 Elsevier Science B.V. All rights reserved .