Development path of manufacturing firms: an empirical study

Abstract

Manufacturing industry has its path of development. This paper identifies those stages from the viewpoint of management functions. The idea is to assess the achievement of manufacturing firms in four management functions, viz., production, marketing, finance, and human resource. Based on the achievement of the four functions, management patterns are identified via a cluster analysis. From the relationship between the organizational performance and the four management functions, the management development path of manufacturing firms can be traced. An empirical study of the manufacturing industry in Taiwan reveals that its development path comprises four stages. The first stage begins at low production management–low marketing management, and is characterized by low performance. This stage develops into the stage of high production management–low marketing management, which has higher performance. The next is high production management–high marketing management, with a further increase in performance. Finally, it reaches the stage of very high production management–high marketing management. This stage is characterized by the highest performance. Being aware of the development path and the current management status, a firm is able to determine what to do in order to achieve better performance.