Manufacturing Strategy, environmental uncertainty and performance

Background
Strategy refers to the goals. In any organization, the term strategy means not only to achieve the goals, but also include the sequence of decision which shows a consistency in decisional behavior (Mintzberg 1978, p.935), developing strategy refers to some questions like should a manufacture choose a product strategy that emphasis flexibility, customer choice, and one that emphasis cost(Buffa 1980). As the definition of strategy, manufacturing strategy use the manufacturing strength as a comparative source to achieve the organizational goal. Manufacturing strategy refers to the goals and strategy of organization and makes able the operational functions add longterm competitiveness and also increase the performance of the organization (Skinner 1985, wheelwright and Hayes 1985).Developing strategy is a element of hierarchy of strategy, which was developed by Hofer (1975) and Hofer and Schendes (1978). This hierarchy describes the three levels of strategy. First, in a large organization, organization strategy includes the selection of market for product and also identification of required resources. Second, every business should have its own business strategy, which is developed to use it own competitiveness as a weapon. Third, developing strategy develops a form of operational area which include such as financial strategy, marketing strategy etc set higher level of organizational strategy. In developing strategy, some components, variable, theories and determinants are developed by Skinner (1969,1978), wheelwright (1978,1989), Miller (1981).

Objective
The purpose of this study is to determine the impact of environmental uncertainty on developing strategy content and processes, and developing strategy impacts on organizational performance. The main purpose of this study is to clarify, review, define, classify and integrate concepts and ideas which are related to the study of developing strategy.

Manufacturing Strategy Literature

It is compulsory to define the term manufacturing strategy clarify because it is used to determine the context and also used to determine the process of developing strategy. In previous developing strategy literature, we can call dimensions of manufacturing strategy instead of calling manufacturing strategy context. There are 1 Quality 2. Cost 3. Dependability and 4.flexibility (Buffa 1989, Wheelwright 1984). In POM literature, another term of manufacturing strategy is used which refers that implementation and formulation of manufacturing strategy is depend upon focusing on the process of developing and implementing the manufacturing strategy (Skinner 1969, 1978 and 1985). Skinners model of manufacturing strategy presents the top-down view of developing strategy. Other writers are Miller (1981) and wheelwright (1978). The top-down model include major elements which are : 1.determing the manufacturing task 2. Integration of actions and policies of developing infrastructure and 3. in strategic decision process, the involvement of executives. In the development of manufacturing strategy theory, wheelwright (1978) and VanDierdonk and Miller (1980) does not include their work. The central role is played by case histories, conjectural writings and anecdotal.

The Models
Through literature we can conclude that for organizations performance, strategy is a determinant of strategy. (Jemison 1981 a ; white and Hamermesh 1981). So, between the external environments, variables, business performance relationship.

Figure 2 percent that this study shows the sequential relationship between environment, performance, variables and strategy it term of uncertainty of environment, performance and developing strategy. In figure 2, environmental uncertainty influences the process and context of developing strategy. For the objective of this study, developing strategy was developed through two variables which are the role of manufacturing manager (used synonymously with the word executive) and flexibility (content variable) in process variable (strategic decision making.) In figure 3, which shows the resulting model, using perceptual measures in this study, the environmental uncertainty was assessed and the environmental uncertainty is labeled as perceived environmental uncertainty to recognize this fact. In the model, the manufacturing flexibility variable is content of manufacturing strategy which helps to coping with environmental uncertainty. From literature, the role of manufacturing managers in Strategic decision making is an important variable whose link is with performance and environment (Hambrick 1981, Jemison 1981, Skinner 1978, and Wheelwrigh 1978). According to the figure 3rd, the variable perceived environmental uncertainty is an exogenous variable according to the conventions of path analysis which is presumed to cause variation in the dependent variable (endogenous variables). In the model, the disturbance created by three dependent variable is denoted as D1, D2 and D3. The disturbance term is used a variations in dependent variables. In figure 3 of path analytic model, this model does not accept the effects of variables like competitive imperative, industry, competitive context, organizational context, size technology, structure etc, which may be connected with performance and developing strategy, but this is not include in this model. Some disadvantages are also distanced by this path analysis like, the convenience with which intervening variables and the identification of direct as well as indirect effects in a complex system of variables could be included in this variable. To test the causal relationship between the set of variables path analysis used ordinary least squares regression to test proposed (Billing and Wroten 1978).

Two methodologies should be keep in mind to adopt the path analytic approach which are, first the relationship which have theoretical or logical support and injection was to include in the model only those variables (Asher 1981, Heise 1975) and second to minimum no. of variables should be keep in this model.

Environmental Uncertainty:
External environment of the organization create opportunities and threats for the organization and it also change the trends of the economy (Lenz 1980). There are two factors which effect the organization: First factor is flow of information which affects the decision making ability of the organization (Aldrich 1979, p.110). Second factor is resources of the organization which are affected by external environment (Pefeffer and Salancik 1977). In the recent work of the Lawrence and Dyer (1983) proposed a concept of adaptation which is a process in which organization maintain a equilibrium with the environment to survive. There are two kinds of environmental uncertainty first one is resource scarcity and the second one is information complexity. (Lawrence and Dyer 1983,p.300).

Environment and Strategy:

To maintain the organization it is necessary to adopt the external environmental forces (Emery and Trist 1965; Lawrence and Lorsch 1969, Terreberry 1968; Thomson 1967). Strategic decision making used to adopt the external environmental forces Van Dierdorick and Millers (1980). Work defines the influence of environmental uncertainty on production planning and control system of the organization. Stochastic, chance constrained and other these types of model use to sustain in uncertain environment. There are so many exist to measure the environmental uncertainty. This research focuses on perceptual vs objective measures for environmental uncertainty. Many researcher like Downey and Slocum (19750, miles et al. (1974), and Tosi, Aldag and Storey (1973)

explain that through managerial perception an organization overcome the environmental uncertainty. The main focus of these researchers is perceptual measures of environmental uncertainty. Some researcher like (Lawrence and Lorsch 1969, Duncan 1972), totally focus on perceptual data to measure the environmental uncertainty. The perceptual measure is defined later. Manufacturing Flexibility: In POM literature manufacturing flexibility is a new trend. (Buffa 1984; Schonberger 1982; Wheelwright 1984). In early Japanese researchers take advantage for exploring and achieving it for gaining competitive advantage. Through different actions and policies manufacturing flexibility can be attain and maintain. Here schonberger provide a description about manufacturing flexibility. Western production lines are unlikely to be flexible because they are planned, using cumbersome analysis, labor and equipment inflexibility, line shape, quality and inventory policies and because of basic stratigies, agains these Japanese strategies are flexible in making polices and strategies. In the above statement Schonberger explain about the production line. The manufacturing flexibility can get through different policies and activities. Halls (1983) define flexibility. Flexibility means the tendency of a plant to switch form one procut to another or form one form to another form. (p.2). the four dimensions of manufacturing flexibility which is discussed earlier helps to cope environmental uncertainty. Coping with environmental uncertainty mean the performance of organization is unaffected by the environmental uncertainty. Manufacturing flexibility helps manufacturing firm to corporate with the environmental uncertainty.

Role of Manufacturing Managers in Strategic Decision Making (RMMSDM):

Manufacturing strategy is important for manufacturing managers in strategic Decision Making (Rafii 1984a,b; Raffii and Miller 1983; Skinner 1978; and Wheel-wright 1978). Rafii (1984), explain when he studying a research data of Boston University Manufacturing some negative factors influence on manufacturing strategic planning, and also Skinner (1978) and wheelwright (1978) explain these types of results. RMMSDM is a function of these important factors which are size, intra organization power and influence, environmental factors, strategic planning system, top management coalition, resources and information constraints, formalization and strategic planning.

Business performance:
The performance of an organization is influenced by different variables, this paper shows that, on the performance of an organization there is a great impact of manufacturing strategy. In strategy, the inclusion of performance describes, that in empirical issues, the measurement of performance is a thorny issue. Bourgeois (1980), says that it is difficult to select the performance measures. For this study, as a measure of performance by use of growth has a special appeal. When data was collected in the year 1982 for this study, the organizations which are presented in this research was facing competition as well as facing several recessions. Due to following reasons, return on assets was not used as a measure of performance in this study. The organizations which are presented in this study are very mature generally. Much organization which takes participation in this study tended to new investment in preferred and facilities to operate with a very small asset base. The organizations which are presented in this research are publicly-held organizations, mostly are privately-held and the rest were business units of multi-business.

Methods:
Sample:
Descriptive values taken from uncontrolled environment. Information is taken from combination of top level executives of organization. Preplanned questions are asked in test. If test is not applied then they send all these questions to applicant ID addresses. Your criteria must be realistic. In choosing the applicants in case of any mistake other variables create an impact on it. In this way the performance can be decreases. During this process there are two unchanged values that create an impact on production process. These value connectively creating impact on production process, if they make controllable these unchanged values then it would may be move you toward achievement. Its a big procedure in production having duplicate goods like short or large single or bulk manufacturing of goods. The core ideology that develops by the company is to obtain profit after over all functioning like different categories, features of goods, or certainty of market. To finish the other companies impact by draw a specific segment of different organizations. If decision has taken that just to finish other companies impact that take controlled on change values. Now in the 2nd step you have to select among different companies. The direct interviews already developed this implemented by combination of top level executives in the organization. Specific segment must be selected from where the research is been developed. Now quantitative techniques are developed to select minimum or more than 29 applicant organizations were conducted. We must select the planned specify from whole segment. In a specific target area your workers with different technological equipments must be more than 49 per equipment. More than seventy six organizations agree on these criteria. Especially the organization from north areas has been presented to do their involvement in this whole study during the hot season in 1982. in overall 35 organization in which 27 were involved in direct communication or rest of these involve in indirectly communication. The aggregate of this organization who involved in this study is 210 in 1982.

Instruments and Measures:

The tool which these organization adopt to collect information by the combination of top level executives. It includes CEO or top level managers. These tools consist of two way function that obtain or analyze 3 or more change values which are mention in the criteria. The process to analyze the change values has mentioned after the Chief executives rated that if five point scale is used on 13 item instrument. They changing in the environment is uncertain stand able. And on a five point scale the importance of each of the 13 item in changing instrument and if we use ten point scales on three item instrument it is predictable. The instrument which is used to measure the uncertain changing in the environment was the same which is used by Duncan in (1972) and Bourgeios in (1978). The ratings which are assigned by the chief executives to the items are measure weighted by average importance given to the relating item in a separate instrument. For assessing flexibility, the relaters were asked to rate on a eleven item instrument their goal regarding to their business flexibility in previous two years. The chief executives were also asked to define their perception of their business unit goals on instrument which is suitable to their administrated chief executives. Every firm which is participating in the study, a single measure of flexibility was calculated by a average the rating by the 2 chief executives. The recommendations which Churchill is used in 1979 for developing best measures from multi item instruments were also followed in making measures for the variables in the study. According to that procedure the item which are low inter item were released from the instruments. It should be noted that the dropping of an item meant that the item which was not relevant, but it may be a useful part of measure while studying a different sample of firms. For each variable, item scores were summed and averaged to compute the measure. The advantage of Churchills procedure is that it improves the reliability of the instruments usually assessed by the reliability.

In 2nd table, three elements of indirect, direct and total effects of environmental uncertainty and two variables of performance. All three elements are comparable in the range of sampling error. In table 3, the standardized Beta coefficients and their standard errors are described. In two given examples, because of small sample size, Beto coefficient are not twice their standard errors but they are close to a value of 2; actually 1.74 and 1.72 Figure 4 describes that environmental uncertainity increase due to decrease in Tole of manufacturing managers in strategic Decision Making (RMMSDM). Figure 4 shows that performance is positively related with RMMSDM. Thus an increase in involvement of manufacturing manager in the strategic decision making process have a positive effect on performance and vice versa. Based on R2, because of two manufacturing strategy variables in the model are explained by the 36 percent of the variations in performance this finding is important in this research. The magnitude of the explanation for exceeded the expectations of the researchers.

Conclusions
In this research, the extraneous variables disturb the relationship being studied and a minimum requirement for the success of such studies. To filter-out their variables are controlled. Such control decreases the generalizability of the finding of study. In the research, by controlling the process and industry variables, on dependent variable the effects of these two variables were filtered-out. The generalize implementation of the finding are limited to the process and industries with some room for cautions generalization. To detect emerging patterns of generalizable nature, finding reported in nature. The sample size is not very large, the samples are of 35 firms, and determine statistical results. The first result or conclusion developing flexibility.. Through this research, we find that for batter performance, the greater the flexibility, and uncertainty and the literature on flexibility. In the view of fact that U.S organizations recognize the competitive value of flexibility from their counterparts in Japan (Abeggelen and Stalk 1985, Schonberger 1982). The 2nd result or conclusion of this research is related to the RMMSDM. The findings regarding flexibility are less generalizes able from the findings of RMMSDM. This research shows that RMMSDM is the function of environmental uncertainty and for better performance their should be increase in RMMSDM. (Rafi 1989a, b). And a positive relationship between performance and RMMSDM are raised by Jemison (1981b). The third conclusion from this research describes the role of environmental uncertainty in developing strategy. In coping with the high uncertainty imposed by the environment by increasing developing flexibility, an organization may find more help and by ensuring the role of developing executives in strategic decision making. This research is contributed into two categories, the general and specific. In the specific level, the research gets attention towards the importance of studying the manufacturing strategy, RMMSDM research and practice and environmental uncertainty. And in general level, this research contributes toward the developing manufacturing strategy theory by adding to the existing body of literature on the subject.

Refinances
Mintzberg 1978, p.935 Buffa 1980 Hofer (1975) and Hofer and Schendes (1978). Skinner (1969,1978), wheelwright (1978,1989), Miller (1981). Buffa 1989, Wheelwright 1984 Miller (1981) and wheelwright (1978). wheelwright (1978) VanDierdonk and Miller (1980) Jemison 1981 a ; white and Hamermesh 1981 Hambrick 1981, Jemison 1981, Skinner 1978, and Wheelwrigh 1978 Billing and Wroten 1978 Asher 1981, Heise 1975 Lenz 1980 Aldrich 1979, p.110 Pefeffer and Salancik 1977 Lawrence and Dyer (1983) Lawrence and Dyer 1983,p.300 Emery and Trist 1965; Lawrence and Lorsch 1969, Terreberry 1968; Thomson 1967 Dierdorick and Millers (1980). Downey and Slocum (19750, miles et al. (1974), and Tosi, Aldag and Storey (1973) Lawrence and Lorsch 1969, Duncan 1972 Buffa 1984; Schonberger 1982; Wheelwright 1984 Halls (1983) Rafii 1984a,b; Raffii and Miller 1983; Skinner 1978; and Wheel-wright 1978 Rafii (1984), also Skinner (1978) and wheelwright (1978) Bourgeois (1980), Duncan in (1972) and Bourgeios in (1978). Jemison (1981b). Rafi 1989a, b). Abeggelen and Stalk 1985, Schonberger 1982