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 critical to its success well into the future. Operations managers constantly struggle to seek answers to the right set of managerial actions that can be 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 within manufacturing firms. In particular, the level of functionality and sophistication of the CAD system are examined with respect to the use of several 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 levers upon the CAD system performance is analyzed through the use of moderated regression analysis conducted on a cross-sectional data of 143 firms representing the vehicular industry in the USA. Our findings indicate that CAD functionality and sophistication are positively related to product design quality, 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 effects, and the use of teams is helpful only in moderating the influence of sophistication on overall performance. Equity of incentives enhances design quality, while training is very important in improving performance across the board. In general, sophisticated “state of the art” CAD systems require much more proactive management than highly functional ones. Recommendations emerging from this study hopefully provide insights into a better management of not only CAD systems, but other process level technologies as well that are relevant to firms in the manufacturing sector. We also discuss implications of technology management provided by this research for creating leading edge enterprises. © 2001 Elsevier Science B.V. All rights reserved.