The integrated impact of new product and market flexibilities on operational performance

Abstract

Purpose The purpose of this paper is to investigate and test the relationship between a company’s strategic flexibility, as evidenced by new product development flexibility and market flexibility, and its operational performance (OP) in Jordanian manufacturing companies. Design/methodology/approach Using a survey questionnaire, data were collected against two strategic decisions market and new product flexibility (NPF) from 222 middle and senior managers belonging to 116 Jordanian manufacturing firms. Confirmatory factor analysis was employed to investigate the effects of these two strategic decisions on OP. Findings Results show a significant positive relationship between both NPF and market flexibility and OP. No significant differences between small and medium enterprises and large companies are found, indicating that the model is valid for both sizes. Also, the additional analyses suggest that the proposition that both NPF and market flexibility are important for OP was correct. Research limitations/implications Only two strategic flexibility decisions were considered in this paper, however, researcher could investigate other strategic flexibility decisions on OP. Practical implications The strategic flexibility level, in terms of NPF and market flexibility, that is needed for coping with uncertainty equips managers to handle challenges by enhancing the company’s controlled capacity through a considerable reduction in response time. An improvement in the company’s strategic flexibility enhances its overall performance and competitiveness and this, in turn, has a positive impact on its long-term sustainability. Originality/value The paper provides insights into the strategic flexibility decision practices in a Jordanian context. It provides further evidence that both market flexibility and NPF are significant in enhancing OP.