The relationship between manufacturing strategic decisions, competitive priorities and firm performance in the automotive supply industry of Iran

• Published in: Mudīrīyyat-i tawlīd va ʻamalīyyāt 2019-09, Vol.10 (2), p.17-35
• Main Authors: laya olfat, soroush ghazinoori, Mahdi Ghasemi
• Format: Article
• Language: per
• Subjects: competitive priority; manufacturing capability; manufacturing strategy; manufacturing strategy decision
• ISSN: 2251-6409; 2423-6950
• DOI: 10.22108/jpom.2019.104560.1047

Manufacturing strategic decisions and competitive priorities have effects on competitive advantage of firms. The focus of this study is on the relationship between the manufacturing strategic decisions and competitive priorities and its influence on the firm’s performance in the automotive supply industry of Iran. A survey has been conducted by the means of a questionnaire to collect data. Data was analyzed by descriptive and inferential statistics (bivariate correlation and multiple linear regression). In this study, after classifying the manufacturing strategic decisions (according to competitive priorities), its influence on the fulfillment of competitive priorities and business performance has been distinguished. Findings indicated that some of the decisions had more effects on profit, cost, quality, flexibility and delivery capabilities. Introduction: The manufacturing strategy seeks to answer the question “How to compete” (Voss, 2005). Competitive priorities and manufacturing strategic decisions are the most important components of the manufacturing strategy. The importance of making manufacturing strategic decisions should be sought in resource constraints. In other words, organizations have to choose the goals and priorities, and in order to fulfill them, they should be able to choose the most effective measures that on the one hand fulfill their priorities with least using resource, and, on the other hand, by doing so, improve their total business performance, such as profitability (Größler, 2010). In this study, after clarifying the competitive priorities in the automotive supplier industry and its relevance to the decisions made by the companies, two fundamental questions are answered. First, whether decisions made to fulfill competitive priorities have the maximum influence on generating manufacturing competence and competitive potentials, and that there is a combination of strategic manufacturing measures that if organizations pay attention to them, they will be able to better fulfill competitive capability. After answering the first question, the second question seeks to answer whether decisions that have the most influence on the fulfillment of competitive priorities have the maximum influence on total performance of companies. Literature on studies performed on manufacturing strategy can be distinguished in different categories. In the first category, the relationship between competitive priorities (or capabilities) and the importance and t