Congruence and its role in manufacturing strategy: an audit of goals and systems

This thesis is concerned with the realisation of manufacturing strategies. It describes the development and testing of a structured methodology which can be used to determine some of the reasons why a firm may be unable to implement its manufacturing strategy. The methodology is known as a "congruence audit". It is widely accepted that manufacturing strategies are important, but little has been written about how they should be developed and implemented. In the literature which does exist, however, a key theme is consistency, with many authors arguing that strategies can only be realised through consistency of decision making and action. Given that people are ultimately accountable for most of the decisions and actions taken in an organisation, it can be argued that consistency of decision making and action might best be achieved if; (a) there is widespread empathy with the organisation's strategic goals (goal congruence), and (b) the organisation's signalling systems - especially those concerned with goal setting, performance measurement, feedback and reward - induce decision making and action which is consistent with these goals (system congruence). This research set out to test two propositions: (a) That a process which can be used to identify areas of either goal or system incongruence (a congruence audit) can be developed. (b) That such a process can be used to identify some of the reasons why a firm may be unable to realise its manufacturing strategy. There were three main phases to the research. Phases one and two involved the development and testing of processes for identifying areas of either goal or system incongruence. Phase three involved the integration of these processes and the application of the resultant congruence audit. In total four companies participated directly in the study. Managers from a further fourteen were consulted. The key findings can be summarised under the categories of content and process. In terms of content, the data gathered during the congruence audits indicate that the level of goal congruence is highest between a firm's senior managers and those employees who work on the shop floor. Furthermore they suggest that the way in which the goal setting, performance measurement, feedback and reward systems influence employees, varies both from firm to firm and across the organisation's hierarchy. Most importantly, they imply that one of the main reasons firms are unable to realise their manufacturing strategies is that senior managers often inadvertently encourage their subordinates to pursue courses of action which are inappropriate. In terms of process, the congruence audit serves as a structured means of: - Defining what a management group believes manufacturing should be doing. Identifying what other employees think manufacturing actually is doing. Establishing whether any mismatches in perception occur. Determining whether such mismatches in perception are a function of the organisation's goal setting, performance measurement, feedback or reward systems. Provoking debate so that the issues raised can be resolved. It should be noted that as this thesis focuses on the development and testing of a process within a limited set of firms, further research is required to confirm the findings and to explore whether the congruence audit can be used more widely.