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To complete or terminate smart manufacturing projects: a prospect theory perspective

Xueshu Shan (School of Management, Zhejiang University, Hangzhou, China)
Jinan Shao (Nottingham University Business School China, University of Nottingham Ningbo China, Ningbo, China)
Xinyu Zhao (School of Management, Zhejiang University, Hangzhou, China)
Yongyi Shou (School of Management, Zhejiang University, Hangzhou, China) (School of Management, Hangzhou Dianzi University, Hangzhou, China)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 27 September 2024

176

Abstract

Purpose

Despite the increasingly salient role of smart manufacturing (SM) in revolutionizing operational processes, little research has explored the dynamics of corporate executives’ decision-making on SM projects after their initiation. To fill this research gap, this study examines the configurations of project complexities (i.e. technological breadth and organizational breadth) and industry conditions (i.e. industry growth and industry competition) that shape managerial decisions to complete or terminate SM projects.

Design/methodology/approach

Using secondary data of 125 SM projects implemented in 106 manufacturers during the 2011–2020 period, we conduct a fuzzy-set qualitative comparative analysis to empirically derive equifinal configurations that lead to the completion or termination of SM projects.

Findings

The results reveal that project complexities and industry conditions work together in configurations where manufacturers will complete or terminate SM projects. We employ prospect theory to elucidate the findings and offer propositions.

Originality/value

Our study extends the extant SM literature by revealing the configurations of project complexities and industry conditions that shape managerial decisions on the completion or termination of SM projects after their initiation. It contributes to the prospect theory literature by accounting for the roles of both decision content and decision context and providing empirical evidence on their joint effects on managerial risk-taking decisions that alter the subjective value and probability weight of decision outcomes.

Keywords

Acknowledgements

This work was supported by National Natural Science Foundation of China under Grant No. 72010107002, 71821002, and 72202112.

Corrigendum: It has come to the attention of the publisher that the article: Shan, X., Shao, J., Zhao, X. and Shou, Y. (2024), “To complete or terminate smart manufacturing projects: a prospect theory perspective”, International Journal of Operations & Production Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOPM-03-2024-0225 included an error in the following sentence ‘For a high-risk-high-benefit SM project, which has high levels of both technological breadth and organizational breadth, when the level of industry competition is high, the manufacturer tends to terminate the project.’ The sentence has now been corrected to ‘For a high-risk-high-benefit SM project, which has high levels of both technological breadth and organizational breadth, when the level of industry competition is low, the manufacturer tends to terminate the project.’ The authors sincerely apologise for this error.

Citation

Shan, X., Shao, J., Zhao, X. and Shou, Y. (2024), "To complete or terminate smart manufacturing projects: a prospect theory perspective", International Journal of Operations & Production Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOPM-03-2024-0225

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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