Operations strategy and its development have received a lot of attention in the operations management literature. However, as noted by Ward et al. (1995), an understanding of the factors that influence operations strategy development has not been widely studied. Further, how managers of firms in underdeveloped countries develop operations strategy has yet to receive any significant attention among researchers. This paper takes a look at the development of operations strategy in an underdeveloped economy, Ghana. Specifically, the paper examines the relationships between the business environment and the operations strategy choices made by firms in Ghana. The paper seeks to understand the influence that specific business environmental factors have on the operations strategy choices of low cost, quality, flexibility, and delivery dependability.
Operations strategy is generally defined as the development of specific competitive strengths based on the operations function that is aimed at helping an organization achieve its long-term competitive goals. The concept of operations strategy began to receive some coverage in the operations management literature following the seminal work of Skinner (1969) in which he delineated the role that manufacturing strategy can play in the formulation and implementation of corporate strategy. The thrust of Skinner’s article was that management needed to recognize the tradeoffs involved in the development of an appropriate operations strategy. Skinner postulated a model in which the business environment drives the content of operations strategy through the latter’s linkage with the business strategy. In other words, an understanding of the business environment is important in understanding the formulation of manufacturing strategy.
Since Skinner’s work there have been several different papers on different aspects of operations strategy. Some of these studies have sought to argue for the need to recognize the competitive advantages that operations strategy provides (Buffa, 1984, Hayes and Wheelwright, 1984 and Prahalad and Hamel, 1990). Other studies have sought to identify, understand and/or clarify the content of operations strategy (Hayes and Wheelwright, 1984, Leong et al., 1990, Roth and van der Velde, 1991, Vickery et al., 1993, Miller and Roth, 1994, Ward et al., 1994 and Ward et al., 1996). Yet others have looked at specific approaches for building manufacturing competence such as flexible manufacturing, just-in-time manufacturing, total quality management, lean production and agile manufacturing (Schonberger, 1982, Garvin, 1988, Womack et al., 1990, Upton, 1995 and Duguay et al., 1997). Some of these studies have been conceptual in nature while others have been empirically based.
This paper has presented findings on the study on the effects that environmental factors have on operations strategy choices for firms in Ghana. In general the results confirm the findings of Ward et al. (1995) who looked at the relationship between environmental factors and operations strategy among firms in Singapore. That is, business environmental factors do affect the degree of emphasis placed on operations strategy choices. The important lesson here is that environmental considerations appear to play a significant role in the determination of the content of operations strategy, even for firms in an emerging economy. Thus, operations strategy researchers should not ignore the effect of the environment in their studies.
At the same time this study has pointed out that the nature of the specific business environment is very important. For example, whereas environmental dynamism played a larger role in operations strategy content in Singapore, our results show that the perceived competitive hostility appears to have the most influence on the degree of emphasis placed on various operations strategy choices for firms in Ghana. Environmental dynamism does not appear to have any effect on operations strategy choices among Ghanaian firms. We have explained these differences by highlighting some of the general macro economic data in the manufacturing environment in Ghana.
