The impact of functional and business strategies on organizational performance of automobile manufacturers in Thailand | |
| Author | Vichak Phongpetra |
| Call Number | AIT Diss. no.SM-07-05 |
| Subject(s) | Strategic planning--Thailand Automobiles--Thailand--Marketing |
| Note | A dissertation submitted in partial fulfillment of the requirements of the degree of Doctor of Philosophy in Management of Technology |
| Publisher | Asian Institute of Technology |
| Abstract | The uses of multiple theories of strategic management are developed for a more comprehensive analysis of strategic competitiveness and organizational performance. Strategic management in an Asian context has posed a great challenge for research, especially for the automobile industry of Thailand due to its significant contributions to Thai economic development. Moreover, the strategic management theories related to the integration of industrial environment, business strategies, functional strategies for automobile manufacturers have never empirically assessed their effects and relationship in a Thai perspective. To this end, this study sought to analyze the industrial environment of the Thai automobile industry and the effects on organizational performance of automobile manufacturers in Thailand. This study determined the difference between business and functional strategies affecting organizational performance, and also the dimensions of functional strategies that influence the dimensions of business strategies. The literature reviews suggested that the industrial environment based on industrial organizational theory identified the opportunities and threats affecting organizational performance of automobile manufacturers in Thailand. The industrial environment relates five competitive forces: the threat of new entrants, bargaining power of buyers, bargaining power of suppliers, threat of substitute products and services, and intensity of rivalry among competitors in an industry. These were evaluated in order to formulate strategic choices to alter the strength of one or more forces. Business strategies are the core strategies to describe how a firm will compete to gain competitive advantage over its rivals. The different business strategies of automobile manufacturers in Thailand are cost leadership, differentiation, cost focus, differentiation focus, and integrated cost and differentiation. Resource based view theory asserts that unique resources and the capability of firms are the most important factors affecting organizational performance. The capabilities are developed in particular functional areas and discovered by value chain activities. The functional strategies of the automobile manufacturers examined in this study were marketing, human resource, finance, manufacturing strategies including supply chain, new product development, research and development, procurement and assembly. Organizational performance of automobile manufacturers was measure in term of fmancial and marketing performance. A field survey of twelve automobile manufacturers in Thailand was conducted not only structured questionnaire but also face-to-face interviews. The 254 completed and usable questionnaires were analyzed for the investigation of testing the hypotheses The questionnaire was developed by conducting expert opinion surveys, and pretests were performed to ensure its reliability and validity. The confirmatory factor analysis (CF A) used of structural equation modeling (SEM) analysis validated and generalized the research model and results. With respect to SEM analysis, Linear Structural Modeling statistical package was used while path analysis technique and path diagram were conduct. The empirical fmdings of this study suggested that all the different business strategies oj automobile manufacturers in Thailand significantly influence both financial ane marketing performance. The three significant business strategies are cost focus, COS1 leadership, and integrated cost and differentiation that prioritized respectively, while les~ significant business strategies were the different focus and the differentiation. The priority of functional strategies affecting fmancial and marketing performance wen classified subsequently as follows: a) manufacturing strategy (the most significance) b: human resource strategy (the second significance) c) marketing strategy (the thirc significance) d) the finance strategy (the least significance). The fmancial organizationa performances were return on investment, economic value added, market value added return on equity, and return on invested capital. The marketing organizationa performance was measured by market share and growth in total sales. The results of the study also showed that the industrial environment of automobile manufacturers in Thailand was related to five marketing forces which affectee organizational performance. The threat of new entrants, substitution of products ane services, and bargaining power of suppliers had positive opportunities. The bargaining power of buyers was related the threat, while the intensity of rivalry among competiton was composed of both the threat and the opportunity. Finally, implications of the findings were provided that the implementation of the mos high priority functional strategies of automobile manufacturers in Thailand influencin~ the most important business strategies as proposed business model enable to contribut( meaningfully defend or influence the industrial environment to enrich strategi, competitiveness leading to the firm success. These business and functional strategie: affected the fmancial organizational performance more than marketing organizationa performance. The most high priority of various functional strategies categorized as research an< development, supply chain (Manufacturing), human resource objectives, labor relations training and development (Human Resource), after sales service, promotion, bran' position (Marketing), finance objective, working capital (Finance), influencing focu: cost, cost leadership, and integrated cost and differentiation which positively affecte' both financial and marketing performance |
| Year | 2007 |
| Type | Dissertation |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Johri, Lalit M. ;Johri, Lalit M. ; |
| Examination Committee(s) | Swieczek, Fredric William ;Dimmitt, Nicholas J. ;Ahmed, Kazi M.; |
| Scholarship Donor(s) | Boonchai and Orawan Foundation; |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology, 2007 |