Exploring the direct versus indirect linkages among operations practices, operations capabilities and operations performance: Does competitive context moderate the key relationships

Past research in operations strategy has identified several elements when establishing the linkages between operations decisions and business performance. However, the nature of the relationships among these elements has not been fully understood. This dissertation research focuses on exploring the impact of two inter-related but different elements---operations practice initiatives (i.e., operations practices viewed at the middle level of aggregation) and operations capabilities---on operations performance. The goal is to find out the foci of practice initiatives implementation and operations capabilities development, and the focus of operations strategy under different business environments. The overall objective of this study is accomplished through the exploration of four primary research questions. (1) What are operations practices and operations capabilities? What are the critical differentiators? (2) Are operations practices initiatives compensatory or additive in enhancing operations performance? Are operations capabilities compensatory or additive in enhancing operations performance? (3) What are the relationships between operations practice initiatives, operations capabilities, and operations performance? (4) To what extent are the key relationships among operations practice initiatives, operations capabilities, and operations performance influenced by competitive environment?; This is primarily a theory building research that follows Wacker's (1998) procedure. In stead of separating theory building with theory validation, the study integrated both activities in one cycle. At the first stage, the grounded theory method was used to derive and extract theory from a focus group study. At the end of this stage a tentative model was proposed for validation. The second stage was to collect data from a large professional organization, test the tentative model, and further refine the model based on the feedback of the data.; After analyzing the data, the study came to the following conclusions. First, with refined definitions, operations practice initiatives and operations capabilities can be clearly distinguished from one another and their validities were confirmed. Second, the nature of the intra-relationships among operations practices was quite different from that among operations capabilities. Third, the importance of operations practice initiatives and operations capabilities in improving operations performance depended on the performance goals. Lastly, the findings established the moderating roles of market competitiveness and market dynamism in the relationships among operations practices, operations capabilities, and operations performance.; Overall, the results emphasized the value of cultivating operations capabilities in the process of implementing operations practices initiatives, and the significant influence of the business environment on choosing the focus of operations strategy. In addition, it showed that firms should be more focused on strategic decisions, on what practices initiatives to implement, and on what operations capabilities to develop since they exhibit a more compensatory than additive nature. The research is one of the few to explore these issues. The findings of this study not only enriched theory of operations strategy, but also motivated future research by proposing, testing and refining general hypotheses.