Introduction and purpose
Entrepreneurial action should always seek to increase the value of the firm in either the short or the long term. One could argue forever about the best way to measure corporate success. No-one, however, questions that innumerable factors of influence dri
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Introduction and purpose
Entrepreneurial action should always seek to increase the value of the firm in either the short or the long term. One could argue forever about the best way to measure corporate success. No-one, however, questions that innumerable factors of influence drive this success, irrespective of how they are ultimately measured.1 This interconnected system of relevant factors seems to be growing even more sophisticated as companies and whole economies becoming increasingly integrated. Yet despite this rising complexity in manufacturing companies – the focus of this study – performance of operations are always expected to play a key role in determining success or failure.2 As a consequence defining targets in an operations context is an ambiguous game. It is not just about being the most effective, as firms also have to maximize their efficiency. This is true especially for Western-based companies, given that companies based in emerging markets today operate as their equals in terms of quality, flexibility and delivery.3 So operations finds itself having to foster sales by maintaining reasonable levels of quality, flexibility and delivery while not losing sight of the cost base. To resolve this dilemma, a detailed understanding of the main interdependencies within operations, but also at the interfaces to other disciplines, is essential. Managers must be aware of the interrelationships between a firm's key operational drivers and how they affect corporate performance. The expectation is that a firm will only be able to maximize its value if management knows exactly how the operational cogs interlock with each other – and if they have aligned operations accordingly. Astonishingly, even the pioneers struggle to master this balancing act. Toyota, the inventor of lean management, has suffered from recalls and quality problems, while experts even question whether its legendary manufacturing model is at fault.4 Apple, the dethroned master of controlling the entire supply chain with supposedly maximum transparency, has struggled recently as e.g. its main supplier Foxconn reported serious industrial accidents, leading to a bad press.5 In the wake of the tragic earthquake in Japan in March 2011, Apple's supply chain in general then faced serious problems.6 These examples
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Hansen/Wernerfelt (1989), p. 400. Cole (2011), p. 33. 3 Hitt/Dacin/Levitas/Arregle/Borza (2000), p. 452. 4 Cole (2011), p. 29. 5 Plambeck/Lee/Yatsko (2012), p. 43. 6 Sternberg (26 May 2011). 2
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C. Faden, Optimizing Firm Performance, DOI 10.1007/978-3-658-02746-9_1, © Springer Fachmedien Wiesbaden 2014
emphasize the considerable relevance of this topic to practitioners, as firms constantly need to enhance their operational alignment even if they view themselves in a pioneering role. Provided its relevance academic literature has identified and operationalized constructs that are expected to drive operations effectiveness and efficiency in theoretical discourses and empirical studies. As a result, four drivers that directly affect a f
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