The impact of strategic orientations on development of manufacturing strategy and firm's performance

This study empirically tests a comprehensive set of strategic orientations that influence the development of manufacturing strategy, and examines manufacturing capability to show the impact of manufacturing strategy on a firm's financial and non-financial performance. The manufacturing strategy is posited to be influenced by customer orientation, competitor orientation, resource orientation, and innovation orientation. The findings of this study are based on a sample of the top management of 194 manufacturing concerns from the Canadian technology sector. The analysis using structural equal modelling informs that customer orientation impacts quality and flexibility strategies while competitor orientation influences cost and delivery strategies. Innovation strategy is impacted by innovation orientation. Resource orientation did not significantly impact manufacturing strategy. Quality strategy has the strongest influence on manufacturing capability, followed by cost, innovation and flexibility strategies. Manufacturing capability, in turn, influences both financial and non-financial performance.