A Study on the Relationship Between Manufacturing–R&D Integration and the Customer Satisfaction: Focusing on the Role of a Cross-Functional Team and Manufacturing Flexibility

Abstract

Given that the small and medium-sized enterprises (SMEs) are working in an increasingly competitive business environment with limited resources, manufacturing flexibility can be a vital source of a competitive advantage. Thus, having strong attention to manufacturing flexibility as a good means for improving the competitiveness of SMEs in the Korean manufacturing industry, this study investigates 1) the relationship between cross-functional integration (CFI), manufacturing flexibility, and customer satisfaction and 2) the role of a cross-functional team (CFT) made up of employees from different functional departments. From a large-scale sample of 504 SME data, this study empirically confirms that a higher level of integration between manufacturing and R&D tends to improve manufacturing flexibility, which ultimately increases customer satisfaction. Moreover, even when manufacturing-R&D integration is insufficient, forming a CFT secures a high level of manufacturing flexibility, which implies that a CFT officializes the need for the concentration and orchestration of a firm's diverse competence and helps to cultivate capabilities for enhancing the organizational performance.