The Influence of Intangible Factors in the Strategic Network Configuration on Operations Performance

The configuration of global production networks is influenced by numerous tangibles (e.g. wage and transportation costs) as well as intangibles (e.g. employee qualification and political stability). However, due to the difficulty of quantifying intangibles, they are often neglected in decision-making resulting in not optimal configuration decisions. For this reason, this paper examines the role of intangibles in strategic network configuration in relation to corporate performance. 13 influencing factors are analyzed regarding their perceived relevance and consideration as well as the corporate network and competitive capabilities. The results show statistically significant relationships between intangibles and performance

A Fuzzy Inference System-Based Approach For Assessing Strategic Capabilities In Global Production Networks

Intangible factors, e.g. the availability of infrastructure at a production site, and implicit knowledge, have an essential influence on the decision-making in global production networks. However, the consideration of intangible factors and implicit knowledge, especially in planning the production network configuration and determining the production network strategy, is usually done implicitly or only based on qualitative and subjective estimations. This can cause biased decisions and miscalculations that make additional and expensive adaptions in the global production network necessary. In order to address this challenge, this paper develops a methodology based on fuzzy inference systems (FIS) to enable a more quantitative and objective consideration of strategic network capabilities influenced by intangible factors and implicit knowledge. For this, the strategic network capabilities are described by several criteria aggregated through one or multiple cascading fuzzy inference systems. The resulting metrics for strategic network capabilities as well as intangible factors are normalized and comparable. Transparency about strategic network capabilities allows a focused discussion about the strategic configuration of the production network. Moreover, the metrics can also be used in other quantitative approaches such as mathematical optimization. The proposed methodology is demonstrated with 70 intangible factors, six strategic network capabilities, and 21 sub-capabilities from academic literature. It can be shown that the developed methodology can map intangible factors and implicit knowledge in a very flexible and detailed manner by selecting and weighting the describing criteria within the FIS in order to quantify strategic network capabilities

The Role of Intangible Influencing Factors in Strategic Network Decision-Making [in press]

The strategic configuration of global production networks is shaped by a variety of influencing factors and strategic motives. In addition to cost factors, intangible factors such as employee qualification and supplier reliability in particular influence the network configuration. This paper examines the relevance of 30 influencing factors on network configuration as well as their consideration in decision-making. The study shows that intangible factors are often only included through managers’ gut feelings, although they have a significant influence on network performance. However, it can be shown that with increasing perceived relevance, intangible factors are included more systematically in the decision-making process