Competitive Priorities, Plant Improvement and Innovation Capabilities, and Operational Performance : A Test of Two Forms of Fit

Purpose – Examining the strategic contingency of plant improvement capability and innovation capability. Two forms of fit between the two capabilities and competitive priorities were empirically tested. Design/Methodology/Approach – Data collected from a sample of 238 manufacturing plants were used to test the hypotheses using regression. Findings – The results provide partial support for fit as mediation. However, there was no evidence supporting fit as moderation. We found that improvement capability and innovation capability are associated with different competitive priorities and also have varying impact on different operational performance dimensions. Research limitations/implications – There are two limitations to this research: only three operations management (OM) practices are included in each capability examined; somewhat limited measures of competitive priorities and operational performance.Originality/value – This study examines multiple forms of fit between competitive priorities and operations capabilities. The findings can inform managers to selectively implement OM practices for developing the needed operations capabilities given the chosen competitive priorities