Examining the alignment relationship between business environmental characteristics, competitive priorities and supply chain structure with business performance

Management Group

Commercial Orientation - Transformation

Master Thesis

Abstract

The study of companies shows that due to the many changes in the business environment, successful companies, in addition to working better than their competitors, are also more compatible with their environmental changes and have the necessary planning in facing the changing environment. In this research, the relationship between the alignment of business environmental characteristics, competitive priorities and supply chain structure with business performance in auto parts manufacturing companies in industrial towns of Semnan province has been evaluated. Based on the existing literature about business environmental characteristics, competitive priorities, supply chain structure and business performance, a theoretical model was developed and the results of the hypotheses were evaluated experimentally.

The data of this research was collected using a questionnaire. All the automobile parts manufacturing companies located in Semnan province, which are 213 companies in total, are the scope of this research and since the most knowledgeable people about the company are the senior managers, therefore the respondents are the senior managers of these companies and therefore the level of analysis of this research is the organization. The sample number of this research was 130 companies.

Based on the average questions asked about performance, the companies were listed in order. According to this list, the first half of the companies were considered high performance companies and the second half were considered low performance companies. Then, the alignment between business environmental characteristics, competitive priorities and supply chain structure was tested for both high-performance and low-performance companies in order to investigate the main hypothesis of the research. According to the main hypothesis of the research, in high-performance companies, there is alignment between business environmental characteristics, competitive priorities and supply chain structure (the presence of strategic alignment), and in low-performance companies, this strategic alignment does not exist. The investigation of strategic alignment was done through structural equation modeling. Keywords: strategic alignment, competitive priorities, supply chain management, performance management.Introduction During the last forty years, the nature of the business environment has been transformed by a combination of changes in demand patterns, changes in technology, and globalization. Today, the needs of the market are unstable and scattered, and customers cannot be classified easily like in the past. They demand higher value, more variety, improved service in less time and acceleration in product innovation (Chemtrix, 2004). Deacon (2003) states that since the 1980s, the acceleration of progress in production, communication, information, and transportation technologies, along with attention to the idea of ??the free market, caused the gradual disruption of the business environment due to the increase in diversity, the speed of unpredictable changes, complexity, and competitive pressure (Ting Chi, Kilduff, and Gragia, 2009).

Progress in production, communication, information, and transportation Technology, along with free market thinking, has caused the geographic mobility of services and products (Deacon, 2003). Along with the liberalization of global trade and financial markets, an increasingly interconnected global economy has emerged and market boundaries have been redefined, so that the move towards outsourcing has been the result of the emergence of the global supply chain. The emergence of competition in the global arena has led to production innovation and shorter product life cycles.

With the rapid development of information technology in recent years and its wide application in supply chain management, many basic activities of chain management are being carried out with new methods. The view that an organization's success or failure is ultimately determined by its supply chain has been widely accepted (for example, Chopra & Mindel, 2001; Lambert & Cooper, 2000; Mason-Jones, Naylor & Tawill, 2000). Today, most of the successful companies are looking towards designing a suitable supply chain that is compatible with their competitive strategies and business environment, and this issue is one of the important strategies in achieving a stable competitive position in a completely competitive global market (Fredendahl and Hill, 2001; Simchi-Levi et al., 2003).

In this chapter, the generalities of the research are presented. In the second chapter, the literature and research background are given.In the third chapter, the methodology of the research is explained, and in the fourth chapter, the findings of this research are discussed. Finally, the conclusions and suggestions resulting from this research are presented in chapter five.

1-2- Statement of the problem and explanation of the issue

Handfield and Nichols (1999) state that due to the increasing challenges in the competitive environment, it is obvious that successful companies should not only operate better than their competitors, but should also constantly adapt to changes. give (cited by Ting Chi et al., 2009). In the face of changes, if the organization does not have the necessary preparation to accept the changes from within and shows resistance against it, it will inevitably go towards destruction. It should be acknowledged that the complexity of the change phenomenon is due to the fact that it is a dynamic process and arises from the mutual interaction of various factors, and all these factors and its variables in a cause and effect relationship with each other create a mechanism that makes it difficult to understand and analyze. Therefore, it becomes difficult to recognize the appropriate direction of change.

Organizations should put the principle of continuous improvement[1] at the forefront of their activities as long as they strive for survival and consider themselves in need of presence in the national and global arena. This principle will not be achieved unless the context to achieve it is made possible by improving performance management. This improvement can be created by getting the necessary feedback from the internal and external environment, analyzing the organization's strengths and weaknesses, opportunities and threats, taking responsibility and satisfying the customer, and by creating and applying a performance evaluation system with a suitable model. Therefore, getting appropriate and timely feedback from the turbulent business environment is essential to improve the performance of companies. The business environment consists of thousands of forces that are beyond the management's control in the short term and thus create threats as well as opportunities for companies. Therefore, the environment plays a decisive role in the selection of company strategies, including the selection of competitive priorities. Also, today, most of the successful companies are looking towards designing a suitable supply chain that is compatible with their competitive strategies and business environment, and this is one of the important strategies in achieving a stable competitive position in a completely competitive global market.

Changes are unique for every company and companies should adapt themselves to it according to these unique changes. In order to adapt to the environment, companies are forced to accept considerations in adopting their internal and external strategies and structures. Since the number of component companies in the industrial estates of Semnan Province is significant, and since the unprecedented entry of foreign competitors into this industry has made the competition even more intense, so that a number of these companies have been forced to close according to the statistics of the Industrial Estates Company, taking feedback from the environment and strategic alignment can improve the performance of these companies so that they can Create a competitive advantage for themselves and continue to survive. Therefore, this research aims to investigate the effect of environmental characteristics of business; of which the continuous and increasing changes of the environment are a part of it; on structures; Like the structure of the supply chain; and the strategies chosen by companies; such as choosing competitive priorities; It shows that if these components are related to each other and are aligned, the company's business performance will be at a higher level and will cause companies to survive. In other words, using the strategies of successful and even similar companies cannot be a necessary and sufficient condition for high performance, but the choice of company strategies should be made according to the environmental characteristics of the company. produce less At that time, the prevailing thinking was that strong engineering and design, as well as coherent and coordinated production operations, are prerequisites for achieving the market's demands and, as a result, gaining a larger share of the market. For this reason, organizations focused all their efforts on increasing efficiency. In the 1980s, with the increase in diversity in the expected patterns of customers, organizations became increasingly interested in increasing flexibility in production lines and developing new products to satisfy customer needs.