A contingency theoretical model of manufacturing strategy

Manufacturing strategy has gained increasing attention in recent years. However, the development of theory is inadequate. In addition, there has been insufficient development and validation of operational measures for theoretical constructs derived from a particular conceptualization of strategy. Makes a contribution to theory development of manufacturing strategy by presenting a path analytic model which describes a sequential relationship between uncertainty, risk, manufacturing strategy and performance constructs. The manufacturing strategy constructs include both strategic content and strategic process, in which the content is specified by manufacturing flexibility and the process is specified by four organizational process variables. Using data from three types of industries with 25 manufacturers in each, it was found that both environmental uncertainty and risk taking influenced manufacturing strategy constructs, e.g. the role of the manufacturing function, manufacturing planning activities, environmental interaction and flexibility. A low level of risk taking was facilitative in the formulation of manufacturing strategy constructs. Consequently, the manufacturing strategy constructs influenced business performance.

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