Auditing the Strategic Role of Operations

The literature relating to auditing the strategic role and contribution of operations has been dominated by methodologies attuned to the predominance of the environmental and competitive forces, and entry deterrence approaches to achieving and sustaining competitive advantage, broadly termed the outside-in perspective. However, tools suited to the resource-based and associated dynamic capability view to strategy formulation, deemed the inside-out perspective, are sparse. This paper makes a contribution to furthering understanding of the auditing of the strategic role and contribution of operations by conducting a review and critique of established ideas, practices and approaches from both strategy formulation perspectives. It argues that the reported methodologies reflect the traditional outside-in perspective to strategy formulation. It highlights the limitations of the available tools for an inside-out view and questions the suitability of the existing methods to the more recent inside-out emphasis, also a factor vital in circumstances where a firm typically is pursuing a combination or blend of the outside-in and inside-out approaches to strategy formulation. Finally, it presents the outline of an additional audit tool designed to address these limitations and describes next steps in future research.