Manufacturing Strategy and Business Strategy in Medium-Sized Enterprises: Performance Effects of Strategic Alignment

TLDR: Results indicate that each type of business strategy deploys advanced manufacturing systems (AMS) differently by assimilating and integrating various types of manufacturing technologies and suggest that ME owner-managers must assess their firm's level of AMS assimilation in light of their strategic objectives.

Abstract: It is generally recognized that a firm's manufacturing strategy is effective to the extent that it is ldquoalignedrdquo with the business strategy and provides the firm with a competitive advantage. Given a conceptualization of business strategy through Miles and Snow's typology (prospectors, analyzers, and defenders), the aim of this research is threefold. First, one seeks to identify the performance outcomes of strategic alignment in terms of the productivity and profitability of medium-sized enterprises (ME). Second, this research aims to verify if these outcomes are valid for all strategic types or only for some. Third, to find out what manufacturing strategy is the most appropriate for each business strategy type. A research model and hypothesis are tested with survey data obtained from 150 Canadian MEs. Significant performance outcomes of alignment are found, thus validating the research model and confirming the main research proposition. Differences between strategic types are also found in terms of performance outcomes. Results indicate that each type of business strategy deploys advanced manufacturing systems (AMS) differently by assimilating and integrating various types of manufacturing technologies. Results suggest that ME owner-managers must assess their firm's level of AMS assimilation in light of their strategic objectives.