Linking operations strategy, environmental dynamism and firm performance

Abstract

Purpose – The purpose of this paper is to examine empirically the causal links among operations strategy (OS), environmental dynamism (ED) and firm performance (FP) within the context of a key emerging economy, Turkey. Design/methodology/approach – Drawing on a structured questionnaire, data for the study was collected from a sample of 211 firms that are listed in the database of the Turkey’s largest 1,000 manufacturing firms. The research framework was tested using partial least squares method, which is a variance-based structural equation modeling approach. Findings – The results indicate that ED is positively and significantly related to OS dimensions. ED is also found to have a strong and positive influence on FP. Some strong support has also been found regarding the effect of OS on FP. Research limitations/implications – The study’s narrow focus on Turkish companies precludes the generalization of findings to other emerging countries as well as other sectors that may benefit from OS. Also, the collection of data from a single respondent in each firm might be a cause for possible response bias. Practical implications – This study provides managers with a useful tool for evaluating the efficiency of their OS relative to their competitors in dynamic business environments. Moreover, the findings of this study are envisaged to aid company managers in their endeavors to craft and execute successful strategies where appropriate environmental considerations and new operations capabilities should be incorporated to their broader strategic plans. Originality/value – The main contribution of this study stems from its examination of the causal links among OS, ED and FP within the context of a key emerging economy, Turkey.