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What Are Integration’s Performance Implications?

The preponderance of the integration literature has sought to establish its performance benefits. Flynn succinctly paraphrased the basic theoretical argument underlying these studies:

  • [I]nternal integration recognizes that different departments and functional areas within a firm should operate as part of an integrated process. Because internal integration breaks down functional barriers and engenders cooperation in order to meet the requirements of customers, rather than operating within the functional silos associated with traditional departmentalization and specialization, it is expected to be related to performance.6

Scholars have related different forms of integration to improvements in operational effectiveness and efficiency, financial performance (particularly return on assets), successful new product development, customer satisfaction, and market share. Additionally, a growing stream of research also looks at the role of integration in achieving social, environmental, and ethical goals.

Studies on integration have been carried out in a variety of interfunctional contexts. For instance, studies have assessed the integration of purchasing and operations, operations and marketing, and logistics and marketing. These studies have also been carried out across different industries and countries. Positive outcomes discovered across these different contexts bolster the view that integration is indeed linked to performance, and Leuschner7 and Mackelprang’s8 recent meta-analytic reviews of the empirical evidence support a transcendent linkage.

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