BUSINESS BEHAVIOR

Business Behavior in a Changing World I

Business Behavior in a Changing World I

Introduction

Recent developments of the World Trade Organisation and other international trade agreements have forced industries worldwide to face a new era of intense global competition. The new manufacturing environment, characterised by intense global competition, rapid technology changes, and product variety proliferation, calls for a strategic management of the manufacturing function (Dangayach and Deshmukh, 2001; Hum and Leow, 1996; Pun et al., 2004). Manufacturing firms have to compete effectively not only in the local context, but in wider regional and global marketplaces also. They should identify competitive priorities and formulate and implement viable strategies for sustaining growth and survival.

Many scholars (Hill, 1997; Johnson and Scholes, 1997) classified strategy into three levels, namely, corporate, business, and functional strategies. Within this hierarchy, manufacturing strategy can appear in two places, first at the corporate level, taking a broad view over a set of related or separate businesses, and second, it can appear as one of the functional strategies at the business level (Mills et al., 1995). From Skinner (1969, 1978) to Hayes and Wheelwright (1984) until more recent times (Barnes, 2002; Dangayach and Deshmukh, 2001; Hayes and Upton, 1998; Swamidass et al., 2001), many strategy writers have emphasised the importance of manufacturing strategy (or operations strategy more generically) within the broader consideration of organizational level strategy.

The contributions of manufacturing are realised through the deployment of strategic decisions in a number of manufacturing areas, so as to align the company's skills and resources with its competitive strategy and enhance its ability to compete on dimensions generally classified as quality, cost, delivery and flexibility (Platts and Gregory, 1991; Pun et al., 2004). The relative importance of the competitive criteria would depend on customer demands and performance against competitors. It is the prioritising of the criteria that determines how the company would compete (Carpinetti et al., 2000).

Research into strategic planning and dynamic strategy formulation and implementation has become a major focus of academia and industry to improve manufacturing and operations (Feurer and Chaharbaghi, 1995a, b). This is because, with the accelerating dynamics of competition, the key to competitiveness no longer lies in employing strategies that have been successful in the past or emulating the strategies of successful competitors (Mintzberg et al., 1998; Pun, 2003).

Many researchers (Barnes, 2001; Dangayach and Deshmukh, 2001) have suggested various research methods for the empirical investigation of strategy formulation and implementation. Some others (Pun, 2003; Swamidass et al., 2001) also proposed different planning frameworks and methodologies pertinent to the design and management of the strategy formulation practices in manufacturing firms.

Conceptualisation of strategy

Many people use the words “strategies”, “plans”, “policies” and “objectives” interchangeably. Mintzberg (1994) defines strategy as “a plan, or something equivalent - a direction, a guide or course of action into the future, a path to get from here to there”, and as “a pattern, that is, consistency in behavior over time”. The term strategy seems to have a multitude of ...