Designing a Bottom-up Operations Strategy

Three major trends are severely impacting and changing the work environment now and in the coming years.

Companies with high levels of bottom-up participation in operations strategy formation significantly outperform their peers in terms of productivity improvements. Unlike corporate strategy, operations strategy is influenced far more by operational employees through strategy-supportive behavior. The literature on bottom-up initiatives is vague about the antecedents of voluntary contributions to operations strategy formation; research on the possible antecedents of employee behavior more generally is inconclusive about its relation to bottom-up operations strategy formation. Survey data from 209 respondents is analyzed with structural equation modeling to test the hypothesized relationships. This paper develops the operations strategy opportunity-motivation-ability (OMA) framework. Leaders have to establish autonomy and structured idea management processes (O) top-down. Only then, employees can feel strategically aligned (A) and engage (M), and thus contribute to operations strategy bottom-up. In addition, we show that the indirect relations between top-down opportunities and behavior supporting bottom-up operations strategy formation are mediated by perceived strategic alignment and by employee engagement. Managers must first establish opportunities to behave strategy supportive. Only afterward do efforts to foster strategic alignment and employee engagement unlock the full potential of the contextual antecedents. Our findings enable operations managers to foster behavior supporting bottom-up operations strategy formation more effectively in their workforce.

Total Quality Management relies on the contributions of operational employees, but the process of motivating them to exhibit in-role and extra-role behaviors is unclear. Employees face trade-offs before adopting these behaviors based on preferred courses of action, which are seldom directly observed—and hence not well understood; moreover, it is often (yet unrealistically) assumed that workers have enough time to engage in all such behaviors. We examine the antecedents of that motivational process and then draw on self-determination theory to model the process leading to these behaviors. For these purposes, we employ a structural equation model, and the preferred behaviors in trade-off situations are elicited via a discrete choice experiment. We replicate results that have previously been reported only piecemeal. In answering calls for a broader exploration, we not only confirm “organizational justice” and “perceived strategic alignment" but also identify “quality philosophy” as critical antecedents of the motivational process. Furthermore, we establish that employees derive significantly higher utility from helping colleagues and improving operations quality than from merely focusing on their job; in fact, they seem willing to sacrifice performance and/or private time to engage in such voluntary behaviors. Hence, managers must realize that there is great potential in the employees that goes beyond the normal focus on in-role performance. Although front-line workers are often pushed by management to focus on short-term success, they are eager to devise strategies for achieving success in the long run.

The self-determination literature is inconclusive about how basic need fulfillment affects job satisfaction and how needs-based models compare with models based on desires, i.e., organizational justice which forms the basis of popular employee engagement surveys. It is unclear also how individual performance is affected by job satisfaction that results either from basic needs or from organizational justice. Based on survey data, we compare needs-based and desire-based models. We assess how well such models explain and predict job satisfaction directly and indirectly predict individual performance through job satisfaction. This paper shows that, in lean management contexts, job satisfaction due to the fulfillment of basic human needs better predicts in-role performance than does job satisfaction due to organizational justice. We also find that (1) the need for relatedness is more important than previously theorized and (2) the effect of fulfilling basic needs depends on constraints that reflect how well other needs are satisfied. In general, basic human needs have much greater explanatory power with respect to job satisfaction than does organizational justice. Finally, our paper highlights the need to distinguish clearly between explanatory and predictive models, because our results show that a given model’s performance varies considerably as a function of the particular application.

Understanding how employees contribute to bottom-up operations strategy already has been, currently is, and will even be a more differentiating competitive factor for organizations. What are the contextual and personal antecedents of behavior supporting strategy formation? How do such antecedents influence motivation and how will differently motivated employees trade-off between behavior supporting strategy formation and other behaviors? How is basic need satisfaction related to job satisfaction and to performance? To answer these questions and to enrich our understanding of bottom-up behavior in operations strategy, three research projects on these distinct yet related research topics were conducted and composed in this book.