Manufacturing capability and organizational performance: The role of entrepreneurial orientation

To date there have been mixed findings about the impact of various manufacturing capabilities on organizational performance. This study investigates entrepreneurial orientation (EO) from the perspective of the Contingency Theory as a potential explanatory variable. The findings are that EO moderates the relationship between capabilities in flexibility and cost and organizational performance. Further, without a sufficient level of EO, there are no benefits to organizational performance and as such EO is positioned as a strategic resource to cultivate and nurture. This study provides insight into the connection between operational capabilities and firm level strategy. Specifically, it appears that EO may be the mechanism whereby manufacturing capabilities are linked to market needs.