IDEAS home Printed from https://ideas.repec.org/a/blg/journl/v15y2020i1p55-67.html
   My bibliography  Save this article

Operational Perspective Of Smes Performance And Competitive Priorities Practices: Path Analytic Approach

Author

Listed:
  • HALEEM Fazal

    (Abdul Wali Khan University Mardan, Pakistan)

  • JEHANGIR Muhammad

    (Abdul Wali Khan University Mardan, Pakistan)

  • UL HAQ Zahoor

    (Abdul Wali Khan University Mardan, Pakistan)

Abstract

Literature review suggests a close link between operations strategies and organizational performance. Nevertheless, there is dearth of research investigating the association between operations strategies and SMEs performance in a developing country, Pakistan, context. Thus, the paper attempts to fill this gap by finding out the influence of operations strategy on firms’ financial and non-financial performance. In addition, it digs out what predicts the financial and non-financial performance of the firms. Sample data is drawn from 244 manufacturing SMEs and is analyzed by Path Analytical Model of Structural Equation Modeling (SEM). The results reveal an overall positive and significant influence of competitive priorities on firm performance. However, there is no direct effect of Delivery priority on Financial, and Cost and Flexibility priority on Non-Financial Performance of the firms respectively. Moreover, the financial performance is predicted by focus on Cost, Flexibility, and Quality priorities respectively. By the same token, the predictors of Non-Financial performance are Delivery and Quality strategies in order of importance. The paper is not without limitations and acknowledges the constraints of access to data, time, finance, non-inclusion of important mediating/moderating variables. Practically, it offers implications to managers and policy makers to employ a set of competitive priorities that drives enhanced firm performance in this business setting, and to devise policies in accordance with market demands that lead to improved overall productivity respectively. Theoretically, the paper contributes to a richer and finer understanding on the connection between operations strategy and SMEs performance in a developing country context.

Suggested Citation

  • HALEEM Fazal & JEHANGIR Muhammad & UL HAQ Zahoor, 2020. "Operational Perspective Of Smes Performance And Competitive Priorities Practices: Path Analytic Approach," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 15(1), pages 55-67, April.
    • Handle: RePEc:blg:journl:v:15:y:2020:i:1:p:55-67
    as

    Download full text from publisher

    File URL: http://eccsf.ulbsibiu.ro/RePEc/blg/journl/15106hallem.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Badri, Masood A. & Davis, Donald & Davis, Donna, 2000. "Operations strategy, environmental uncertainty and performance: a path analytic model of industries in developing countries," Omega, Elsevier, vol. 28(2), pages 155-173, April.
    2. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    3. Morgan, Robert E. & Strong, Carolyn A., 2003. "Business performance and dimensions of strategic orientation," Journal of Business Research, Elsevier, vol. 56(3), pages 163-176, March.
    4. Ting Chi & Peter P.D. Kilduff & Vidyaranya B. Gargeya, 2009. "Alignment between business environment characteristics, competitive priorities, supply chain structures, and firm business performance," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 58(7), pages 645-669, September.
    5. George Halkos & Dimitrios Bousinakis, 2010. "The effect of stress and satisfaction on productivity," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 59(5), pages 415-431, June.
    6. Bill Wooldridge & Steven W. Floyd, 1990. "The strategy process, middle management involvement, and organizational performance," Strategic Management Journal, Wiley Blackwell, vol. 11(3), pages 231-241, March.
    7. Paul M. Swamidass & William T. Newell, 1987. "Manufacturing Strategy, Environmental Uncertainty and Performance: A Path Analytic Model," Management Science, INFORMS, vol. 33(4), pages 509-524, April.
    8. Aleda V. Roth & William E. Jackson, III, 1995. "Strategic Determinants of Service Quality and Performance: Evidence from the Banking Industry," Management Science, INFORMS, vol. 41(11), pages 1720-1733, November.
    9. Nancy Bouranta & Evangelos Psomas, 2017. "A comparative analysis of competitive priorities and business performance between manufacturing and service firms," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 66(7), pages 914-931, September.
    10. Sadikoglu, Esin & Zehir, Cemal, 2010. "Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance: An empirical study of Turkish firms," International Journal of Production Economics, Elsevier, vol. 127(1), pages 13-26, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miguel Afonso Sellitto & Domingos Rafael Ferla Valladares & Erica Pastore & Arianna Alfieri, 2022. "Comparing Competitive Priorities of Slow Fashion and Fast Fashion Operations of Large Retailers in an Emerging Economy," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 23(1), pages 1-19, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hansen, Eric & Nybakk, Erlend & Panwar, Rajat, 2015. "Pure versus hybrid competitive strategies in the forest sector: Performance implications," Forest Policy and Economics, Elsevier, vol. 54(C), pages 51-57.
    2. Samuel Afriyie & Jianguo Duo & Kingsley Appiah & Abdul-Aziz Ibn Musah, 2018. "The Nexus between Types of Innovation and Marketing Performance of SME in an Emerging Economy," International Review of Management and Marketing, Econjournals, vol. 8(6), pages 78-92.
    3. Merschmann, Ulf & Thonemann, Ulrich W., 2011. "Supply chain flexibility, uncertainty and firm performance: An empirical analysis of German manufacturing firms," International Journal of Production Economics, Elsevier, vol. 130(1), pages 43-53, March.
    4. Indranil R. Bardhan & Vish V. Krishnan & Shu Lin, 2007. "Project Performance and the Enabling Role of Information Technology: An Exploratory Study on the Role of Alignment," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 579-595, May.
    5. Fawcett, Stanley E. & Calantone, Roger & Smith, Sheldon R., 1997. "Delivery capability and firm performance in international operations," International Journal of Production Economics, Elsevier, vol. 51(3), pages 191-204, September.
    6. Jan Schiefer & Monika Hartmann, 2008. "Determinants of competitive advantage for German food processors," Agribusiness, John Wiley & Sons, Ltd., vol. 24(3), pages 306-319.
    7. Pradeep Kumar & Sasadhar Bera & Tanusree Dutta & Shibashish Chakraborty, 2018. "Auxiliary Flexibility in Healthcare Delivery System: An Integrative Framework and Implications," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 19(2), pages 173-186, June.
    8. Lorentz, Harri & Kittipanya-ngam, Pichawadee & Singh Srai, Jagjit, 2013. "Emerging market characteristics and supply network adjustments in internationalising food supply chains," International Journal of Production Economics, Elsevier, vol. 145(1), pages 220-232.
    9. Linus Chesoli Wekesa & Jackson Maalu & James Gathungu & Gituro Wainaina, 2023. "Mediating Effect of Competitive Strategy Between Entrepreneur Characteristics and the Performance of Non-timber Forest Product SMEs in Kenya," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4293-4317, December.
    10. Aleda V. Roth, 2007. "Applications of Empirical Science in Manufacturing and Service Operations," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 353-367.
    11. C. Chet Miller & Nathan T. Washburn & William H. Glick, 2013. "PERSPECTIVE—The Myth of Firm Performance," Organization Science, INFORMS, vol. 24(3), pages 948-964, June.
    12. Tobias Kollmann & Christoph Stöckmann, 2014. "Filling the Entrepreneurial Orientation–Performance Gap: The Mediating Effects of Exploratory and Exploitative Innovations," Entrepreneurship Theory and Practice, , vol. 38(5), pages 1001-1026, September.
    13. Moses Acquaah, 2005. "Enterprise Ownership, Market Competition and Manufacturing Priorities in a Sub-Saharan African Emerging Economy: Evidence from Ghana," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 9(3), pages 205-235, September.
    14. Gerschewski, Stephan & Rose, Elizabeth L. & Lindsay, Valerie J., 2015. "Understanding the drivers of international performance for born global firms: An integrated perspective," Journal of World Business, Elsevier, vol. 50(3), pages 558-575.
    15. Gupta, A. & Chen, I. J. & Chiang, D., 1997. "Determining organizational structure choices in advanced manufacturing technology management," Omega, Elsevier, vol. 25(5), pages 511-521, October.
    16. Rudd, John M. & Greenley, Gordon E. & Beatson, Amanda T. & Lings, Ian N., 2008. "Strategic planning and performance: Extending the debate," Journal of Business Research, Elsevier, vol. 61(2), pages 99-108, February.
    17. Rajat Panwar & Erlend Nybakk & Eric Hansen & Jonatan Pinkse, 2017. "Does the Business Case Matter? The Effect of a Perceived Business Case on Small Firms’ Social Engagement," Journal of Business Ethics, Springer, vol. 144(3), pages 597-608, September.
    18. Amoako-Gyampah, Kwasi, 2003. "The relationships among selected business environment factors and manufacturing strategy: insights from an emerging economy," Omega, Elsevier, vol. 31(4), pages 287-301, August.
    19. Eric Hansen & Erlend Nybakk, 2018. "Response to the global financial crisis: a follow-up study," Journal of Innovation and Entrepreneurship, Springer, vol. 7(1), pages 1-12, December.
    20. Cai, Shaohan & Yang, Zhilin, 2014. "On the relationship between business environment and competitive priorities: The role of performance frontiers," International Journal of Production Economics, Elsevier, vol. 151(C), pages 131-145.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:blg:journl:v:15:y:2020:i:1:p:55-67. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mihaela Herciu (email available below). General contact details of provider: https://edirc.repec.org/data/feulbro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.