The Influence Of Technologies, Organizational Capabilities, And People On Organizational Performance In Electronic Manufacturing Industry
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Date
2016-09
Authors
Mohd Ali, Mohamed Fadzil
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Abstract
This study employs resources-based view (RBV) and dynamic capabilities
theory to address organizational performance issues within the context of electrical
and electronic (E&E) manufacturing sector. Consistent with the theory, resources
which were based from I-TOP model are vital to the success and performance of a
firm. This study also explores beyond the significance of resources which influence
organizational performance in manufacturing sector. Managing business in a dynamic
business environment and intense competition from rival firms has often lead to
inconsistent performance especially during difficult period and unpredictable business
environment. Instituting strategic agility in manufacturing sector has been identified
as a strategy to succeed in current business trend where firms are frequently exposed
to highly competitive and uncertain business environments. This thesis seeks to
explore the influence of resources and strategic agility impact in dynamic business
environment towards firms’ performance. The survey was carried out among E&E
manufacturing firms in Malaysia. A total of 111 usable responses were received from
the respondents. The data collected were thoroughly analyzed through structural
equation modelling (SEM), including multi-group SEM analysis, as means to
investigate all variables in the proposed framework and to confirm the hypothesis of
interest. The technique used for data analysis were descriptive statistic, confirmatory
factor analysis, including three types of validity test: convergent, discriminant and
nomological test. Four broad sets of interesting findings are identified in this study.
First, organizational capabilities is the strongest predictor of organizational
performance. Second, there is a mutual relationship between technologies and
organizational performance. Third, people (human capital) has no significant
influence on the organizational performance. Finally, this study revealed that
organizational capabilities is mediated through strategic agility which helps
manufacturing firms to continue to perform in a dynamic business environment or
during unexpected changes. These findings provide important key value to
practitioner, i.e. in dynamic business environment and unpredictable change, strategic
agility is achievable and can be developed by having strong organizational
capabilities. Combination of organizational capabilities and strategic agility will help
organizations to swiftly respond and react to sudden market change and thus gain some
advantages. In a nut shell, this study highlights the contributions by expanding the
application of both the RBV and dynamic capabilities theories into manufacturing
sector in Malaysia. This study is expected to enhance the academic knowledge
particularly through: (1) the mutual effect of technologies, organizational capabilities
and organizational performance and (2) the mediating effect of strategic agility on
the relationship between organizational capabilities and organizational performance.
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Keywords
The significance of resources which influence organizational , performance in manufacturing sector.