The contingency role of business strategy on the relationship between operations practices and performance

Abstract

Purpose – The purpose of this paper is to examine the direct influence of three types of operations management practices, namely total quality management (TQM), lean manufacturing (LEAN), and supply chain management (SCM) on operational performance. Design/methodology/approach – Cluster analysis is used to classify data collected from Thai manufacturing firms into three business strategy clusters of cost leadership, differentiation, and focussed strategy. Next, multiple-regression analysis was used to test the relationships between operations management practices and performance in each of the three strategy clusters. Findings – Results show that all three operations management practices were significantly associated with performance including the interaction of TQM and SCM. Also, the interaction of LEAN and SCM significantly affected performance for firms pursuing focussed business strategy. Practical implications – Manufacturers in developing nations can use this result to deploy appropriate operations management practices to enhance their competitive edge. Originality/value – This study explores the cross-functional alignment between strategies and practices, which have been transferred from developed to developing countries.