The Relationship Between Alignment Of Strategic Priorities (Between Functional Level And Business Level) And The Impact On Manufacturing Performance (Data From Indonesia)
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The study examines the perceptions of general managers (GMs) and manufacturing managers (MMs) regarding manufacturing priorities of their business units (alignment)and the impact on manufacturing performance in Indonesia. Specifically, this study tests whether the performance of the manufacturing unit is enhanced when GMs and MMs agree on what are the most important strategic priorities. Further, this study tests the alignment effects on performance under high and low levels of decentralization. A sample of matched pairs of GMs and MMs is surveyed from 84 manufacturing plants. The hypotheses regarding the alignment–performance relationship is tested. This study finds that alignment of priorities is positively related to manufacturing performance. Furthermore, high levels of decentralization strengthen the positive alignment-performance relationship. Implications of the results and suggestions for future research are discussed.