IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v28y2000i2p155-173.html
   My bibliography  Save this article

Operations strategy, environmental uncertainty and performance: a path analytic model of industries in developing countries

Author

Listed:
  • Badri, Masood A.
  • Davis, Donald
  • Davis, Donna

Abstract

We extend the research of Ward et al. [Ward P, Duray R, Leong G, Sum C. Business environment, operations strategy and performance: an empirical study of Singapore manufacturers. Journal of Operations Management 1995;25 99-115] to the business environment of developing industries by adding two neglected environment variables: 'government laws and regulations' and 'political consideration'. We use a path analytic framework to study the effects of environment on the choice of operations strategy (low cost, quality, flexibility and delivery) and performance (self-reported change in profits) for a sample of United Arab Emirates manufacturers. We test the model suggested by Ward et al. and then test the extended model suggested for developing industries. For industries that are described as 'small business' and 'developing' rather than 'mature', we identify strong relationships between environmental factors such as labor availability, competitive hostility, government laws and regulations, political concerns and market dynamism and the operations strategy choices encompassed by competitive priorities. The data also indicates, that successful organizations (high performers), adopt competitive priorities that best fits the conditions of the environment, notably stability and dynamism. Results show that most firms accept their environment as given and install the mechanism to react to its forces. High performers match the complexity of their external environment by utilizing environmental variables as sources for effective controls within their organizations.

Suggested Citation

  • Badri, Masood A. & Davis, Donald & Davis, Donna, 2000. "Operations strategy, environmental uncertainty and performance: a path analytic model of industries in developing countries," Omega, Elsevier, vol. 28(2), pages 155-173, April.
    • Handle: RePEc:eee:jomega:v:28:y:2000:i:2:p:155-173
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(99)00041-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Claudio Carpano & James J Chrisman & Kendall Roth, 1994. "International Strategy and Environment: An Assessment of the Performance Relationship," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(3), pages 639-656, September.
    2. George A. Marcoulides & Ronald H. Heck, 1993. "Organizational Culture and Performance: Proposing and Testing a Model," Organization Science, INFORMS, vol. 4(2), pages 209-225, May.
    3. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    4. Robert Cudeck & Kelli Klebe & Susan Henly, 1993. "A simple Gauss-Newton procedure for covariance structure analysis with high-level computer languages," Psychometrika, Springer;The Psychometric Society, vol. 58(2), pages 211-232, June.
    5. Achibat, T. & Boukenter, A. & Duval, E. & Frick, B. & Garcia, N. & Serughetti, J., 1993. "Comparison between light and neutron inelastic scatterings. The frequency linear behaviour of the light-vibration coupling coefficient," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 201(1), pages 257-262.
    6. Schul, Patrick L. & Davis, Peter S. & Hartline, Michael D., 1995. "Strategic adaptation to extended rivalry : Effects on organizational performance," Journal of Business Research, Elsevier, vol. 33(2), pages 129-142, June.
    7. Leong, G. K. & Snyder, D. L. & Ward, P. T., 1990. "Research in the process and content of manufacturing strategy," Omega, Elsevier, vol. 18(2), pages 109-122.
    8. Jeffrey G. Miller & Aleda V. Roth, 1994. "A Taxonomy of Manufacturing Strategies," Management Science, INFORMS, vol. 40(3), pages 285-304, March.
    9. P. R. Richardson & A. J. Taylor & J. R. M. Gordon, 1985. "A Strategic Approach to Evaluating Manufacturing Performance," Interfaces, INFORMS, vol. 15(6), pages 15-27, December.
    10. Steven C. Wheelwright, 1984. "Strategy, Management, and Strategic Planning Approaches," Interfaces, INFORMS, vol. 14(1), pages 19-33, February.
    11. Bill Schroder & Felix Mavondo, 1994. "Strategy|performance|environmental linkages in agribusiness: Conceptual issues and a developing country example," Agribusiness, John Wiley & Sons, Ltd., vol. 10(5), pages 419-429.
    12. Paul M. Swamidass & William T. Newell, 1987. "Manufacturing Strategy, Environmental Uncertainty and Performance: A Path Analytic Model," Management Science, INFORMS, vol. 33(4), pages 509-524, April.
    13. Charles H. Fine & Arnoldo C. Hax, 1985. "Manufacturing Strategy: A Methodology and an Illustration," Interfaces, INFORMS, vol. 15(6), pages 28-46, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vanita Bhoola, 2015. "Impact of Project Success Factors in Managing Software Projects in India: An Empirical Analysis," Business Perspectives and Research, , vol. 3(2), pages 109-125, July.
    2. Lucianetti, Lorenzo & Chiappetta Jabbour, Charbel Jose & Gunasekaran, Angappa & Latan, Hengky, 2018. "Contingency factors and complementary effects of adopting advanced manufacturing tools and managerial practices: Effects on organizational measurement systems and firms' performance," International Journal of Production Economics, Elsevier, vol. 200(C), pages 318-328.
    3. Vicente Fruet & Daniel Campos & Lorena Caridad, 2023. "Itaipu Binational Dam: A Quantitative Analysis of the Economic and Social Impacts in Paraguay. Successful or not?," SAGE Open, , vol. 13(4), pages 21582440231, December.
    4. Cao, Qing & Baker, Jeff & Schniederjans, Dara, 2014. "Bullwhip effect reduction and improved business performance through guanxi: An empirical study," International Journal of Production Economics, Elsevier, vol. 158(C), pages 217-230.
    5. James Weber & Virginia Gerde, 2011. "Organizational Role and Environmental Uncertainty as Influences on Ethical Work Climate in Military Units," Journal of Business Ethics, Springer, vol. 100(4), pages 595-612, June.
    6. Thuzar Linn & Broos Maenhout, 2019. "The impact of environmental uncertainty on the performance of the rice supply chain in the Ayeyarwaddy Region, Myanmar," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 7(1), pages 1-29, December.
    7. Maynard, M. Travis & Falcone, Ellie C. & Petersen, Kenneth J. & Fugate, Brian S. & Bonney, Leff, 2020. "Conflicting paradigms in manufacturing and marketing decisions: The effects of situational awareness on team performance," International Journal of Production Economics, Elsevier, vol. 230(C).
    8. Morni Hayati Jaafar Sidik & Winwin Yadiati & Hoyoung Lee & Nadeem Khalid, 2019. "The Dynamic association of Energy, Environmental Management Accounting and Green Intellectual Capital with Corporate Environmental Performance and Competitive," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 379-386.
    9. Amoako-Gyampah, Kwasi & Acquaah, Moses, 2008. "Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment," International Journal of Production Economics, Elsevier, vol. 111(2), pages 575-592, February.
    10. Lorentz, Harri & Kittipanya-ngam, Pichawadee & Singh Srai, Jagjit, 2013. "Emerging market characteristics and supply network adjustments in internationalising food supply chains," International Journal of Production Economics, Elsevier, vol. 145(1), pages 220-232.
    11. Gillani, Fatima & Chatha, Kamran Ali & Sadiq Jajja, Muhammad Shakeel & Farooq, Sami, 2020. "Implementation of digital manufacturing technologies: Antecedents and consequences," International Journal of Production Economics, Elsevier, vol. 229(C).
    12. Sounderpandian, Jayavel & Prasad, Sameer & Madan, Manu, 2008. "Supplies from developing countries: Optimal order quantities under loss risks," Omega, Elsevier, vol. 36(1), pages 122-130, February.
    13. Fazal Haleem & Muhammad Jehangir & Asia Baig, 2017. "Operations Strategy Practices of SMEs," Global Economics Review, Humanity Only, vol. 2(1), pages 12-23, December.
    14. Ailton Batista de Albuquerque Junior & Andréia Nunes de Sousa & Annalies Barbosa Borges & Oliveira Cristiane Simões & Edinilza Maria Anastácio Feitosa & Edite Batista de Albuquerque, 2021. "Evaluation of School Learning in Preceptoral Training: Checks and Reverberations," European Journal of Social Sciences Education and Research Articles, Revistia Research and Publishing, vol. 8, May - Aug.
    15. Moses Acquaah, 2005. "Enterprise Ownership, Market Competition and Manufacturing Priorities in a Sub-Saharan African Emerging Economy: Evidence from Ghana," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 9(3), pages 205-235, September.
    16. Rohit Kumar Singh & Sudhanshu Joshi & Manu Sharma, 2023. "Modelling Supply Chain Flexibility in the Indian Personal Hygiene Industry: An ISM-Fuzzy MICMAC Approach," Global Business Review, International Management Institute, vol. 24(5), pages 1058-1075, October.
    17. Amoako-Gyampah, Kwasi, 2003. "The relationships among selected business environment factors and manufacturing strategy: insights from an emerging economy," Omega, Elsevier, vol. 31(4), pages 287-301, August.
    18. Dowlatshahi, Shad & Cao, Qing, 2006. "The relationships among virtual enterprise, information technology, and business performance in agile manufacturing: An industry perspective," European Journal of Operational Research, Elsevier, vol. 174(2), pages 835-860, October.
    19. Pradeep Kumar & Sasadhar Bera & Tanusree Dutta & Shibashish Chakraborty, 2018. "Auxiliary Flexibility in Healthcare Delivery System: An Integrative Framework and Implications," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(2), pages 173-186, June.
    20. Kinra, Aseem & Kotzab, Herbert, 2008. "A macro-institutional perspective on supply chain environmental complexity," International Journal of Production Economics, Elsevier, vol. 115(2), pages 283-295, October.
    21. HALEEM Fazal & JEHANGIR Muhammad & UL HAQ Zahoor, 2020. "Operational Perspective Of Smes Performance And Competitive Priorities Practices: Path Analytic Approach," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 15(1), pages 55-67, April.
    22. Merschmann, Ulf & Thonemann, Ulrich W., 2011. "Supply chain flexibility, uncertainty and firm performance: An empirical analysis of German manufacturing firms," International Journal of Production Economics, Elsevier, vol. 130(1), pages 43-53, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Avella, Lucía & Fernández, Esteban & Vázquez, Camilo J., 1999. "The large Spanish industrial company: strategies of the most competitive factories," Omega, Elsevier, vol. 27(5), pages 497-514, October.
    2. Hallgren, Mattias & Olhager, Jan, 2006. "Quantification in manufacturing strategy: A methodology and illustration," International Journal of Production Economics, Elsevier, vol. 104(1), pages 113-124, November.
    3. Avella, Lucia & Fernandez, Esteban & Vazquez, Camilo J., 2001. "Analysis of manufacturing strategy as an explanatory factor of competitiveness in the large Spanish industrial firm," International Journal of Production Economics, Elsevier, vol. 72(2), pages 139-157, July.
    4. Aleda V. Roth, 2007. "Applications of Empirical Science in Manufacturing and Service Operations," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 353-367.
    5. Pacheco, Diego Augusto de Jesus & Antunes Junior, José Antonio Valle & de Matos, Celso Augusto, 2021. "The constraints of theory: What is the impact of the Theory of Constraints on Operations Strategy?," International Journal of Production Economics, Elsevier, vol. 235(C).
    6. Miltenburg, John, 2008. "Setting manufacturing strategy for a factory-within-a-factory," International Journal of Production Economics, Elsevier, vol. 113(1), pages 307-323, May.
    7. Amoako-Gyampah, Kwasi, 2003. "The relationships among selected business environment factors and manufacturing strategy: insights from an emerging economy," Omega, Elsevier, vol. 31(4), pages 287-301, August.
    8. Boyer, Kenneth K. & Leong, G. Keong, 1996. "Manufacturing flexibility at the plant level," Omega, Elsevier, vol. 24(5), pages 495-510, October.
    9. Shakun Preet Kaur & Jatinder Kumar & Rakesh Kumar, 2017. "The Relationship Between Flexibility of Manufacturing System Components, Competitiveness of SMEs and Business Performance: A Study of Manufacturing SMEs in Northern India," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 18(2), pages 123-137, June.
    10. Amoako-Gyampah, Kwasi & Acquaah, Moses, 2008. "Manufacturing strategy, competitive strategy and firm performance: An empirical study in a developing economy environment," International Journal of Production Economics, Elsevier, vol. 111(2), pages 575-592, February.
    11. Demeter, Krisztina & Szász, Levente, 2013. "Towards solution based thinking: characteristics of servitization at Hungarian manufacturing companies," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(3), pages 309-335.
    12. Spanos, Yiannis E. & Voudouris, Irini, 2009. "Antecedents and trajectories of AMT adoption: The case of Greek manufacturing SMEs," Research Policy, Elsevier, vol. 38(1), pages 144-155, February.
    13. Hamblin, David & Iyer, Arun, 1996. "What difference does your industry make?," International Journal of Production Economics, Elsevier, vol. 43(2-3), pages 155-174, June.
    14. Rho, Boo-Ho & Park, Kwangtae & Yu, Yung-Mok, 2001. "An international comparison of the effect of manufacturing strategy-implementation gap on business performance," International Journal of Production Economics, Elsevier, vol. 70(1), pages 89-97, March.
    15. Platts, K. W. & Mills, J. F. & Bourne, M. C. & Neely, A. D. & Richards, A. H. & Gregory, M. J, 1998. "Testing manufacturing strategy formulation processes," International Journal of Production Economics, Elsevier, vol. 56(1), pages 517-523, September.
    16. Rudberg, Martin & Olhager, Jan, 2003. "Manufacturing networks and supply chains: an operations strategy perspective," Omega, Elsevier, vol. 31(1), pages 29-39, February.
    17. Chang, Shih-Chia & Yang, Chen-Lung & Cheng, Hsin-Chia & Sheu, Chwen, 2003. "Manufacturing flexibility and business strategy: An empirical study of small and medium sized firms," International Journal of Production Economics, Elsevier, vol. 83(1), pages 13-26, January.
    18. Tachizawa, Elcio M. & Gimenez, Cristina, 2010. "Supply flexibility strategies in Spanish firms: Results from a survey," International Journal of Production Economics, Elsevier, vol. 124(1), pages 214-224, March.
    19. Himawan Hatmanto & Agung Yuniarinto & Surachman, 2022. "The influence of resource flexibility and product complexity on operational performance moderated by employee competence in Indonesian defense industry," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(3), pages 33-43, April.
    20. Zhao, Zhen-yu & Ling, Wen-jun & Zillante, George & Zuo, Jian, 2012. "Comparative assessment of performance of foreign and local wind turbine manufacturers in China," Renewable Energy, Elsevier, vol. 39(1), pages 424-432.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:28:y:2000:i:2:p:155-173. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.