Assessing Operational Performance of Manufacturing Companies in the Context of Environmental Dynamism, and Competitive Strategy

Abstract

Today's global and competitive environment forces companies to revise their competitive strategies and assess their operations' performance. Customers are demanding new products and services, and organizations should adapt to the changing requirements of the customers. Companies may achieve excellence in their operations with cost reduction, by reducing time-to-market, and through improvements in delivery and quality. The main contribution of this study is assessing the linkages among operational performance (OP), environmental dynamism (ED), and competitive strategy (CS) in an emerging economy, Turkey. This study also aims to define the dimensions used to assess the operational performance, which are called the competitive manufacturing priorities in the operations management literature. To test the linkages between environmental dynamism, operational performance, and competitive strategy, a structural model is proposed. Analyses are conducted in SPSS 28.0 and AMOS 24.0 programs using the data gathered from Turkish manufacturing companies. Since 99.8% of firms operating in T & uuml;rkiye are SMEs, most of the companies participating in this study (124 of 211) are also SMEs, and another contribution of this study is understanding the dimensions affecting the operational performance of SMEs According to the results, environmental dynamism has a significant relation to operational performance, and operational performance has a positive linkage with competitive strategy as well. The results also indicate that the most important dimensions used in assessing operational performance are customer satisfaction and supplier performance, as expected for manufacturing companies. Furthermore, the results of this study are expected to support organizations in developing and implementing effective strategies that integrate new capabilities and environmental considerations into their competitive strategy. As expected in SMEs, the most used competitive strategy is found to be cost leadership, because they can achieve operational performance by efficiently using resources, and by minimizing the production and transaction costs, they can enhance their competitiveness in the market.