Asian Research Thesis Index

Abstract

Manufacturing play a significant role in the uplift of a country by creating jobs, increasing exports, and boosting Gross Domestic Product (GDP). On a firm level, firms need to have a well thought out operations strategy for improved manufacturing. Each dimension of operations strategy can be turned into competitive advantages that help in achieving goals and objectives of the firm. Firms operate in an open environment which requires it to respond to its forces. The environmental forces that make a firm to respond to its environment include ever increasing competition, changes in the market needs, and advances in technology. Owing to the importance of business environment, strategic planning, and operations strategy, the research aims to develop a conceptual model and test the inter-relationship among these constructs for enhancing our understanding of the mutual relationships. Through survey/questionnaire, usable data has been collected from 244 manufacturing SMEs operating in KP, Pakistan. The questionnaire consists of measuring constructs namely business environment (dynamism and complexity), strategic planning, operations strategy (cost, quality, delivery, and flexibility), and firm performance (financial and non-financial performance). Data screening were done prior to conducting statistical analysis. For reliability check, exploratory factor analysis (EFA), alpha values, and composite reliability were conducted. For ascertaining the validity of the constructs, confirmatory factor analysis (CFA), average variance extracted, maximum shared variance were calculated. Similarly, for testing any relationship among constructs, path analyses were conducted. In addition, multi group analyses were carried out to find out if high performers and low performers differ in attaching importance to a particular variable. The results generated from both descriptive as well as multivariate analysis indicate strong significant relationship among business environment, strategic planning, operations strategy, and firm performance. These results reinforce the theory of alignment, contingency, and dynamic capabilities for attaining business performance. The contribution of the study is manifold, that is, to practitioners, managers, policy makers, government, theoretical and conceptual. Study limitations include availability of funds (self-financed), time (cross sectional), availability of data (perceptual), lack of trust and complaining nature of respondents, and data limited only to SMEs manufacturing operating in Khyber Pakhtunkhwa, Pakistan.

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