External and internal alignment influence on the performance of SMEs in the Philippine furniture industry

• Main Author: Bolinao, Edgardo N.
• Format: text
• Language: English
• Published: Animo Repository 2006
• Subjects: Furniture industry and trade > Philippines; Small business > Philippines; Business; Entrepreneurial and Small Business Operations
• Online Access: https://animorepository.dlsu.edu.ph/etd_doctoral/329
• Institution: De La Salle University

Using data on a sample of 214 SMEs (76 from Manila, 48 from Pampanga and 90 from Cebu) this study on the furniture firms of the Philippine Furniture industry, developed an interactive model to test contingency theories that link environmental conditions (industries life cycle stages), competitive strategy (a modified version of Porters generic strategy framework), owner-manager characteristics (functional experience), with scanning (frequency and scope of scanning) and organizational performance. This study of SMEs competing in the Philippine furniture industry examined the effect of the frequency and scope of scanning on environment-competitive strategy alignment and the results suggested that frequent monitoring of information on several (scope) aspects of specific environmental sectors (e.g competitors, customers, suppliers, etc.) facilitate alignment between some competitive strategies and environment which in this study, refers to maturity stage of the industry life cycle. Likewise, this study examined the performance consequences of aligning managerial functional experiences Research and Development (R&D), marketing, engineering, sales, and accounting with generic competitive strategies involving low-cot leadership and several differentiations based strategies. Using the same data from the sample SMEs, the findings indicated that superior performance results in conditions where managerial functional experiences are congruent with the requirements of particular generic strategies for Cebu. Most of the data for the study were obtained from members of Chamber of Furniture Industries of the Philippines (CFIP), both for Manila and Pampanga Chapters, and from Cebu Furniture Foundation Inc. (CFIFI). Non-members in the three locations were also included. The descriptive and casual designs were employed with the following statistical tools: frequency and percentage distributions, summary statistics (mean, median, standard deviations), t-tests for the mean differences, multiple linear regressions and confidence band for the partial derivatives of the interaction graphs.