Effect of investments in manufacturing practices on process efficiency and organizational performance

The purpose of this study is to examine the role of two factors: process efficiency as a mediator of investments in manufacturing practices and organizational performance and nation׳s economic status as a moderator between investment in manufacturing practices and process efficiency. A research model is proposed that describes the influence of investments in manufacturing practices on organizational performance through process efficiency. This study also calculates differences between investments in manufacturing practices and process efficiency on the basis of the economic status of the country. Using data from the fourth round of the Global Manufacturing Research Group (GMRG) 4.0 survey, the model and hypotheses were tested using structural equation modeling techniques leveraged upon data from 1074 firms in 22 countries. Results suggest that investments in manufacturing practices increase process efficiency, which in turn, improve organizational performance, although this relationship was moderated by the economic status of the country.