The Impact of Operations Capability on Firm Performance

K. C. Tan
V. R. Kannan, Utah State University
R. Narasimhan


We propose that a firm's operations capability is manifested through its new product design and development, just-in-time, and quality-management efforts. Moreover, we propose that operations capability, so defined, directly and positively impacts firm performance. Survey data were used to independently calibrate and validate a structural equation model linking operations capability, a second-order construct, to firm performance. Results provide support for the model and demonstrate a positive relationship between operations capability and firm performance.