Examining cumulative capabilities in a developing economy

Abstract

PurposeThe purpose of this paper is to test the cumulative capabilities theory of manufacturing strategy against the capabilities tradeoffs theory in a less‐developed economy. It also aims to test whether the sequential development of capabilities follows the same order prescribed in the sand cone model.Design/methodology/approachSpecific hypotheses on the relationships among the four manufacturing strategy components of cost, delivery, flexibility, and quality were stated. Data were collected from 126 manufacturing firms in Ghana. Statistical analyses included correlation, factor analysis, and multiple regression analysis.FindingsAs with previous studies, the evidence here supports the cumulative capabilities theory. However, tradeoffs between the capabilities of quality, cost, delivery, and flexibility were not found. In addition, the sequence of capability development was found to be different from that in developed economies, with cost being second in importance after quality. This is postulated to be due to the substantially different economic conditions in Ghana.Practical implicationsThe findings of this research provide guidelines to managers, particularly in developing economies, on the sequence of manufacturing capability development that is most likely to occur as they seek lasting improvements in manufacturing performance.Originality/valueThis paper provides findings from a less‐developed economic environment that is typically not included in manufacturing strategy research – Ghana. The consistency of the results with those obtained in more advanced economies provides additional evidence for the cumulative capability model.