Antecedents and Impacts of Service Operations Flexibility

A Multiple Regression Approach

Abstract

This study investigates the antecedents of service operations flexibility (SOF) in the forms of structural and infrastructural elements. Additionally, it examines the SOF’s impacts on company performances. Structural elements decisions are grouped as capacity, location, integration/networking, and technology while infrastructural elements decisions encompass worker empowerment, quality leadership, and team management. Service operations flexibility is divided into internal robustness and external flexibility while company performances are categorized as financial and non-financial. An instrument to measure all the factors was designed and pre-tested on 30 MBA students. Subsequently, a pilot study was conducted to check the reliability of the instrument. The exercise involved 23 Malaysian service organizations. Respondents were operations managers involved in the decision making process. All items used to measure the studied factors were found to be reliable. The preliminary study was followed by a large scale survey that involved architect and accountant firms, considered as professional groups in Schmenner’s service typology.  For the international inputs, we engaged researchers who are attached to the local universities of the respected countries. A total of 224 valid responses were received from Malaysia, Indonesia, India and South Africa.  Using factor analysis, the antecedents were regrouped into quality leadership, technology, integration, training and motivation, team management, capacity, location, and worker involvement. Separate factor analysis was done on the measures associated with flexibility that resulted in external flexibility and internal robustness. The third factor analysis was done on the measures of company performances which resulted in clear distinction of financial and non-financial performance.  Finally, the relationships were tested using multiple regression analysis. The first analysis was done to test the relationship between the antecedents and the SOF. We found that all antecedents except worker involvement significantly are influencing the external flexibility dimension, but only two factors; technology and worker involvement affecting internal robustness. Another multiple regression test was done to test the impacts of the SOF on performances. We found that non-financial performances were affected by external flexibility.