Manufacturing Strategy-Environmental Dynamism-Performance Relationship: An Empirical Amongst Indonesian Large Manufacturers.

This research was conducted to identify the strategies adopted by Indonesian large manufacturing firms as well as to examine the relationship between manufacturing strategy, business environment, and firms’ performance (in term of financial performance and manufacturing performance). Companies listed in the statistic of centre bureau were used as the sampling frame in this study. The companies selected from the list are those that are involved in manufacturing activities and run their operation in East Java. A Total of 500 manufacturing firms fulfilled the criteria. The questionnaires were sent to the chief executive officer of each firm requesting them to respond to the questionnaire. Out of 500 questionnaires sent out, 104 usable responses were received giving approximately a return rate 21%. It was found that the Indonesian manufacturing firm that adopts flexibility and delivery strategies can achieve better performance (financial and manufacturing) than the other two strategies. This finding does confirm the fact that manufacturing firms that practice flexibility and delivery strategy, can compete successfully. The findings of the study support the fact that the manufacturing strategy developed in the west can be practiced by firms in developing countries such as Indonesian. The finding of this study also implies that a proper fit between strategy and environment is required to ensure high performance