Performance of Power Loom Textiles: A Resource-based View.

Despite increasing attention paid to the Resource-based View (RBV), there is a dearth of empirical evidence on the interactions among different RBV performance dimensions and their effect on organizational performance. This paper examines and to extend the literature, by obtaining an understanding of the link between resources, capabilities and organizational performance in terms of operational performance, financial performance and non financial performance by using a survey research in the framework of Resource-based View. The RBV involves the different performance dimensions such as tangible assets, intangible assets and capabilities. Numerous prior studies have sought to examine the links between resources and organizational performance in particular efficiency by secondary data and using quantitative methods. This paper involved a quantitative examination of the relationship between tangibles assets, intangibles assets and capabilities and organizational performance of power loom textiles of Maharashtra (India). The primary data of one hundred and sixty power loom textiles of Maharashtra is collected through questionnaire to examine the relationship between tangibles assets, intangibles assets and capabilities with the operational performance. It also examines the relationship between operational performance with the organizational performance. This study finds a positive relationship between performance dimensions and organizational performance. The hypotheses are developed in the framework of RBV and tested by using the statistical method. Among many developing countries that actively participate in textiles and apparel trade, the Indian textile industry is exhibiting significant growth potential in the global market with its advantage as low production costs, abundant resources of raw material and cheap labor forces. The textiles and apparel industry is India's second largest industry consists of spinning, apparel, garment and man-made fabrics manufacturing. The country is the largest exporter of terry towels and man-made textile products. However, with an increased level of competition from low cost manufacturers (especially China) around the world, the industry is under tremendous pressure to increase productivity, to improve performance, to improve production quality, and to advance the management systems. Furthermore, competition is much more intense in the textiles and apparel exports business after the quota cancellation as stated by Clark (2005). Therefore, it became crucial for textile product manufacturers to respond to the new challenges with new strategies and solutions. The power loom textile is one of the most important segments of the textile Industry in terms of fabric production and employment generation. It provides employment to 57.44 Lakh persons and contributes 62 percent of total cloth production in the Country. 60% of the fabrics produced in the power loom sector are of man-made. More than 60% of fabric meant for export is also sourced from power loom sector as mentioned in the Annual Report (2013), Textile Ministry, India. In the economic survey conducted by Government of India (2012-2013) states that, these power looms have flourished prominently at various centers in Maharashtra such as Bhiwandi, Ichalkaranji, Sholapur and Malegaon, these power loom centers work in decentralized sector and play an important role in the growth of power loom industry. India's textile and clothing industry contributes 4% per cent to Gross Domestic Product, 14 percent in industrial production, 18% of total industrial employment and 27% of export earnings. This power loom sector operates in Small to Medium Enterprises (SMEs) in India. However, the issue of concern here is the sustainability of this achieved competitiveness of the Indian firms. Under the changed scenario sans quota restrictions, firms in these economies are trying to expand their international market competitiveness through various strategies. These strategies involve a mix of productivity enhancing and cost minimizing activities (Zala, 2010). Bheda (2002) has stated that when the factors associated with productivity are reviewed; it becomes clear that most of the factors are of techno-managerial nature. The manufacturer can improve productivity performance substantially by implementing best practices in the area of operator and management training, industrial engineering, production planning and control, industrial relations and productivity related incentives. He further states that there are hundred percent chances for productivity performance improvement for average textile industry in India. The present research deals with effect of tangible, intangible assets and capabilities on operational performance of the power looms in Maharashtra state. It also deals with understanding the factors affecting the operational and organizational performance of power looms and attempts to use the available resources efficiently and effectively.