Customizing Customization

The history of U.S. business during the past 100 years has been a story of mass production and mass distribution of standardized goods. Scholars and practitioners who examined the economic landscape have generally been drawn to large corporations that built their fortunes by transforming fragmented and heterogeneous markets into unified industries.1 At the heart of this transformation were strategies based on standardization: standardization of taste that allowed for standardized design, standardization of design that allowed for mechanized mass production, and a resulting standardization of products that allowed for mass distribution.

Recently, a growing number of economists and management scholars have declared that this era is over.2 Numerous books and articles have posited that we are witnessing the dawn of a new age of customization, an age in which new technologies, increased competition, and more assertive customers are leading firms toward customization of their products and services.3 Not surprisingly, firms that have adopted customization strategies have attracted considerable attention as models of what is expected to become commonplace in the near future.4

We begin by describing these two logics. We then argue that this conceptual polarization, which took firm root in the theory and practice of management, led management thinkers to ignore strategies that combine these logics. Put simply, this view itself represents an inappropriate standardization of management theory — or, more exactly, continuation of the standardization mentality that has long pervaded such theory. Since the days of Frederick Taylor, the notion that managers should single-mindedly pursue the “one best way” has led management writers to seize on one solution or another (or, more often, one solution and then another) as the best practice. Indeed, the enthusiasm for customization today was paralleled by an even greater enthusiasm for standardization many years ago.

What has been ignored in all this is that customization and standardization do not define alternative models of strategic action but, rather, poles of a continuum of real-world strategies. By promoting customization as the answer to what ails many organizations, we may be replacing one extreme with another. Managers need to locate their strategies along the continuum, and the role of management writers is to provide the conceptual tools to make this easier.

It is not an accident of history that customization is now promoted with the same enthusiasm with which standardization was promoted almost a century ago.

Read the Full Article:

Sign in, buy as a PDF or create an account.

References

1. A.D. Chandler, Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge, Massachusetts: MIT Press, 1962); and

A.D. Chandler, The Visible Hand: The Managerial Revolution in American Business (Cambridge, Massachusetts: Harvard University Press, 1977).

2. B.J. Pine, Mass Customization: The New Frontiers in Business Competition (Boston: Harvard Business School Press, 1993);

J.P. Womack, book review of Mass Customization by B.J. Pine, Sloan Management Review, volume 34, Spring 1993, pp. 121–122; and

B.G. Yovovich, “Mass Customization Sparks Sea Change,” Business Marketing, volume 78, November 1993, p. 43.

3. J.F. Coates, “Customization Promises Sharp Competitive Edge,” Research-Technology Management, volume 38, November–December 1995, pp. 6–7; and

S. Kotha, “Mass Customization: Implementing the Emerging Paradigm for Competitive Advantage,” Strategic Management Journal, volume 16, Summer 1995, pp. 21–42.

4. M.J. Kay, “Making Mass Customization Happen: Lessons for Implementation,” Planning Review, volume 21, July–August 1993, pp. 14–18.

5. P.W.S. Andrews and E. Brunner, “Industrial Analysis Revisited,” in P.W.S. Andrews, Studies in Pricing (London: Macmillan, 1975, pp. 35–46; and

J. Nightingale, “On the Definition of ‘Industry’ and ‘Market,’” Journal of Industrial Economics, volume 27, 1978, pp. 31–40.

6. For example, see:

R.P. Rumelt, “Towards a Strategic Theory of the Firm,” in R.B. Lamb, ed., Competitive Strategic Management (Englewood Cliffs, New Jersey: Prentice Hall, 1984), pp. 556–570;

M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competition (New York: Free Press, 1980); and

M.E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985).

7. Porter (1980).

8. D.F. Noble, America by Design (New York: Oxford University Press, 1977).

9. L.P. Alford, “Technical Changes in Manufacturing Industries,” in Recent Economic Changes in the United States (New York: McGraw-Hill, 1929), pp. 96–166.

10. Ibid.

11. R.C. Davis, The Principles of Factory Organization and Management (New York: Harper & Brothers, 1928).

12. E.F. Gay, “Recent Economic Changes: Introduction,” in Recent Economic Changes in the United States (New York: McGraw-Hill, 1929), pp. 1–13.

13. S. Giedion, Mechanization Takes Command: A Contribution to Anonymous History (New York: Oxford University Press, 1948), p. 704.

14. D.S. Kimball, “Changes in New and Old Industries,” in Recent Economic Changes in the United States (New York: McGraw-Hill, 1929), pp. 79–95.

15. D.A. Whitsett and L. Yorks, “The Legacy of Scientific Management,” in From Management Theory to Business Sense (New York: American Management Association, 1983); and

J. Galaskiewicz, “Professional Networks and the Institutionalization of a Single Mind Set,” American Sociological Review, volume 50, 1985, pp. 639–658.

16. L. Urwick, Elements of Administration (London: Pitman, 1943), p. 29.

17. W.R. Smith, “Product Differentiation and Market Segmentation as Alternative Marketing Strategies,” Journal of Marketing, volume 20, July 1956, pp. 3–8.

18. G.C. Norwood, “The Catalyst — Trend 1: Fragmentation Leading to Customization,” Managers Magazine, volume 67, November 1992, pp. 31–32.

19. M. Selz, “Small Manufacturers Display the Nimbleness the Times Require,” Wall Street Journal, 29 December 1993, pp. 1–2.

20. J. Holusha, “Producing Custom-Made Clothes for the Masses,” New York Times, 19 February 1996, p. D3.

21. B.J. Pine, B. Victor, and A.C. Boynton, “Making Mass Customization Work,” Harvard Business Review, volume 71, September–October 1993, pp. 108–111; and

J. Teresko, “Mass Customization or Mass Confusion?,” Industry Week, volume 243, 20 June 1994, pp. 45–48.

22. J. Utterback and W.J. Abernathy, “A Dynamic Model of Process and Product Innovation,” Omega, volume 3, 1975, pp. 639–656; and

J. Utterback, Mastering the Dynamics of Innovation (Boston: Harvard Business School Press, 1994).

23. J. Lampel, “Strategy in Thin Industries: Essays in the Social Organization of Industries” (Montreal, Canada: McGill University, PhD dissertation, June 1990).

24. J. Woodward, Industrial Organization: Theory and Practice (New York: Oxford University Press, 1965).

25. For example, see:

T. Forester, ed., The Microelectronics Revolution (Cambridge, Massachusetts: MIT Press, 1980);

W. Skinner, “Operations Technology: Blind Spot in Strategic Management,” Interfaces, volume 14, 1984, pp. 116–125;

J. Diebold, “Information Technology as a Competitive Weapon,” International Journal of Technology Management, volume 1, 1986, pp. 85–99;

P.G.W. Keen, Competing in Time: Using Telecommunications for Competitive Advantage (Cambridge, Massachusetts: Ballinger, 1986);

M. Warner, W. Wobbe, and P. Broadner, eds., New Technology and Manufacturing Management: Strategic Choices for Flexible Production Systems (New York: Wiley, 1990); and

M.S. Scott Morton, Corporation of the 1990s: Information Technology and Organizational Transformation (New York: Oxford University Press, 1991).

26. Authors’ survey of ABI/INFORM.

27. C.A. Lengnick-Hall, “Technology Advances in Batch Production and Improved Competitive Position,” Journal of Management, volume 12, 1986, pp. 75–90; and

Pine (1993).

28. J. Holusha, “Software for Design Engineering,” New York Times, 25 November 1987, p. D4.

29. E. McDowell, “Facts to Fit Every Fancy: Custom Textbooks Are Here,” New York Times, 23 October 1989, p. D1.