Strategic orientation and dual innovative operation strategies: implications for performance of manufacturing SMEs

Abstract

Purpose - The purpose of this paper is twofold. First, to address a key but neglected area of research in operation and strategy that is the association between strategic orientation of the firm and its innovation emphasis on the current and future operation initiatives. Second, to explore and examine respective performance implications of these two kinds of operation strategies. Design/methodology/approach - Data from a carefully designed and conducted survey of Malaysia manufacturing SMEs were analysed using a structural equation modelling approach. Findings - Findings suggest that strategic innovation is strongly associated with both types of innovative operation strategies and they bring about different operational and market performance outcomes for the firm. This sheds light on a new framework for understanding the strategic architecture of innovation in operation strategies. Research limitations/implications - This study was limited to the small manufacturing firms in Malaysia. As a result, to assess its generalizability it can be replicated in other sectors and also other countries. Practical implications - Several managerial implications emanate from this research. Most notably is the notion that strategic orientation is a key antecedent of innovation in operation strategies and in particular, it affects both current and future related innovative initiatives. This indicates that executives of manufacturing firms must align their innovative moves with their strategic mind-set to achieve their desired outcomes both operationally and financially. Originality/value - To the best of knowledge of the author and based on a comprehensive review of past research, this study is original in two ways: first it is the first research that links strategic orientation with dual innovative operation strategies and second it is the first attempt to investigate respective operational and financial outcomes of these associations separately. This framework adds new insights and original value to several bodies of knowledge.