Relationship between manufacturing strategy and firm performance: the empirical study of Vietnamese manufacturing plants

Economic Annals-ХХI: Volume 166, Issue 7-8, Pages: 41-45

Citation information:
Anh, Ph. Ch., Tuan, N. Ph., & Hoa, H. T. (2017). Relationship between manufacturing strategy and firm performance: the empirical study of Vietnamese manufacturing plants. Economic Annals-XXI, 166(7-8), 41-45. doi: https://doi.org/10.21003/ea.V166-08

Phan Chi Anh
PhD (Business Administration),
Center for Business Administration Studies,
VNU University of Economics and Business
Room No. 307, E4 Building, 144 Xuan Thuy road, Cau Giay District, Hanoi, Vietnam
anhpc@vnu.edu.vn
ORCID ID: http://orcid.org/0000-0002-0153-1845

Nham Phong Tuan
PhD (Business Administration),
Associate Professor,
School of Business Administration,
VNU University of Economics and Business
Room No. 307, E4 Building, 144 Xuan Thuy road, Cau Giay District, Hanoi, Vietnam
tuannp@vnu.edu.vn
ORCID ID: http://orcid.org/0000-0002-0973-3943

Hoang Trong Hoa
Researcher, Center for Business Administration Studies,
VNU University of Economics and Business
Room No. 307, E4 Building, 144 Xuan Thuy road, Cau Giay District, Hanoi, Vietnam
hoantronghoa1988@gmail.com
ORCID ID: http://orcid.org/0000-0001-6115-8686

Relationship between manufacturing strategy and firm performance: the empirical study of Vietnamese manufacturing plants

Abstract. The process of formulation and implementation of the firm’s strategy is closely linked to its performance. This article presents the results of an empirical research regarding the relationship between manufacturing strategy and performance of manufacturing plants in Vietnam. Data was collected from 25 plants as part of the High Performance Manufacturing (HPM) project and analysed by using statistical tools. The manufacturing companies are operating in three industries: transportation, electronics and machinery equiment. The respondents were mainly directors, vice directors, plant managers, upstream and downstream supply chain managers. The present research is aimed to test two hypotheses constructed. Hypothesis 1: Manufacturing strategy practices at the managerial level have a significant impact on firm performance. Hypothesis 2: Manufacturing strategy practices at the supervisory level have a significant impact on firm performance.

Notable results were found regarding the relationship between manufacturing strategy and firm performance among Vietnamese plants. The results of analysis of variance (ANOVA) and regression analysis indicate the importance of management in formulating and implementing the manufacturing strategy with regard to firm performance, whereas supervision is less significant in terms of its influence on firm performance.

Keywords: Strategy; Firm Performance; Vietnamese Plants; Manufacturer; Vietnam; High Performance Manufacturing (HPM) Project; ANOVA

JEL Classification: M10

Acknowledgements: This research is funded by Vietnam National University, Hanoi (VNU) under project number QG.16.53.

DOI: https://doi.org/10.21003/ea.V166-08

References

1. Athukorala, P. C. (2009). Economic transition and export performance in Vietnam. ASEAN Economic Bulletin, 26(1), 96-114.
   Retrieved from https://www.jstor.org/stable/41317021
2. Beer, M., & Eisenstat, R. A. (2000). The silent killers of strategy implementation and learning. MIT Sloan Management Review, 41(4), 29.
   Retrieved from http://sloanreview.mit.edu/article/the-silent-killers-of-strategy-implementation-and-learning
3. Bui Thi Quynh Trang (2017, May 25). Opportunities and challenges for the firms with Industry 4.0 ahead. The Journal of Finance. Vietnam Ministry of Finance.
   Retrieved from http://tapchitaichinh.vn/nghien-cuu–trao-doi/trao-doi-binh-luan/co-hoi-va-thach-thuc-cua-doanh-nghiep-truoc-cuoc-cach-mang-cong-nghiep-40-114346.html (in Vietnamese)
4. De Meyer, A., Nakane, J., Miller, J. G., & Ferdows, K. (1989). Flexibility: the next competitive battle the manufacturing futures survey. Strategic Management Journal, 10(2), 135-144.
   doi: https://doi.org/10.1002/smj.4250100204
5. Dombrowski, U., Intra, C., Zahn, T., & Krenkel, P. (2016). Manufacturing Strategy – A Neglected Success Factor for Improving Competitiveness. Procedia CIRP, 41, 9-14.
   doi: https://doi.org/10.1016/j.procir.2015.12.118
6. Flynn, B. B., Schroeder, R. G., Flynn, E. J., Sakakibara, S., & Bates, K. A. (1997). World-class manufacturing project: Overview and selected results. International Journal of Operations and Production Management, 17(7), 671-685.
   doi: https://doi.org/10.1108/01443579710175592
7. General Statistics Office of Vietnam (2017). Industrial manufacturing 12 months of 2016. The Journal of Finance. Vietnam Minitry of Finance.
   Retrieved from http://tapchitaichinh.vn/bao-cao-va-thong-ke-tai-chinh/san-xuat-cong-nghiep-12-thang-nam-2016-100141.html (in Vietnamese)
8. Hallgren, M. (2007). Manufacturing strategy, capabilities and performance. Division of Production Economics, Department of Management and Engineering. UniTryck, Linköping.
   Retrieved from http://www.diva-portal.org/smash/get/diva2:23684/FULLTEXT01.pdf
9. Anwar, J., & Hasnu, S. A. F. (2016). Strategy-performance linkage: methodological refinements and empirical analysis. Journal of Asia Business Studies, 10(3), 303-317.
   doi: https://doi.org/10.1108/JABS-07-2015-0096
10. Lowe, J. (1993). Manufacturing reform and the changing role of the production supervisor: The case of the automobile industry. Journal of Management Studies, 30(5), 739-758.
    doi: https://doi.org/10.1111/j.1467-6486.1993.tb00324.x
11. McCaig, B., & Pavcnik, N. (2013). Moving out of agriculture: structural change in Vietnam. National Bureau of Economic Research. Working Paper No. 19616.
    Retrieved from http://www.nber.org/papers/w19616
12. Nikkei (2016). PMI Vietnam’s manufacturing sector by Nikkei.
    Retrieved from https://www.markiteconomics.com/Survey/PressRelease.mvc/
    53904cd147c44d6982fe2ce0efed5b60 (in Vietnamese)
13. Nikkei (2017). PMI Vietnam’s manufacturing sector by Nikkei.
    Retrieved from https://www.markiteconomics.com/Survey/PressRelease.mvc/
    9e0c2189da3a4e5787be9ba601ce34c5 (in Vietnamese)
14. Nguyen, T. V., Le, N. T., & Bryant, S. E. (2013). Sub-national institutions, firm strategies, and firm performance: A multilevel study of private manufacturing firms in Vietnam. Journal of World Business, 48(1), 68-76.
    doi: https://doi.org/10.1016/j.jwb.2012.06.008
15. Platts, K. W., Mills, J. F., Bourne, M. C., Neely, A. D., Richards, A. H., & Gregory, M. J. (1998). Testing manufacturing strategy formulation processes. International Journal of Production Economics, 56-57, 517-523.
    Retrieved from https://ac.els-cdn.com/S0925527397001345/1-s2.0-S0925527397001345-main.pdf?_tid=5a8f3e48-c3c9-11e7-b17a-00000aacb35e&acdnat=1510065704_9be675e5450f8bda469ab1be86ce6752
16. Rho, B.-H., Park, K., & Yu, Y.-M. (2001). An international comparison of the effect of manufacturing strategy-implementation gap on business performance. International Journal of Production Economics, 70(1), 89-97.
    doi: https://doi.org/10.1016/S0925-5273(00)00049-9
17. Schroeder, R. G., & Flynn, B. B. (Eds.). (2002). High performance manufacturing: Global perspectives. New York: John Wiley & Sons.
18. Skinner, W. (1969). Manufacturing – the missing link in corporate strategy. Harvard Business Review, May-June, 136-145.
    Retrieved from http://vnpi.vn/bao-cao-nang-suat-viet-nam-2014.htm
19. Swamidass, P. M., & Newell, W. T. (1987). Manufacturing strategy, environmental uncertainty and performance: a path analytic model. Management Science, 33(4), 509-524.
    doi: https://doi.org/10.1287/mnsc.33.4.509
20. Vietnam National Productivity Institute (2014). Vietnam productivity report.
    Retrieved from http://vnpi.vn/bao-cao-nang-suat-viet-nam-2014.htm (in Vietnamese)
21. VNA (2016). Vietnam’s manufacturing sector resilienct: HSBC.
    Retrieved from http://english.vietnamnet.vn/fms/business/152063/vietnam-s-manufacturing-sector-resilient–hsbc.html
22. Yuliansyah, Yu., Rammal, H. G., & Rose, E. (2016). Business strategy and performance in Indonesia’s service sector. Journal of Asia Business Studies, 10(2), 164-182.
    doi: https://doi.org/10.1108/JABS-07-2015-0094

Received 20.05.2017