Lean practices and operational performance: the role of organizational culture

Abstract

There is a scarcity of research about cultural aspects of organization related to lean implementation. The purpose of this research is to investigate the effects of lean practices and organizational culture on the operational performance of small- and medium-sized manufacturing enterprises. The study is based on a survey conducted and data collected from 215 manufacturing SMEs in India. The hypothesized relationships are then analyzed with structural equation modeling. The results showed that the constructs of lean practices and organizational culture have significant and direct effects on the operational performance of Indian manufacturing SMEs. Further, this research shows the mediating effect of organizational culture on sustaining lean processes within small-medium manufacturing business setups. Future research is required in a more diverse context to confirm the generalization of the results. Future research may be extended to investigate the effects of lean and organization cultural aspects on measures of financial, social and environmental performance. The results obtained would help managers of manufacturing SMEs to better understand the linkage between lean and operational performance, considering the aspect of cultural change management in an organization. The outcome of this research provides useful indications of how organizations can work to sustain the philosophy of lean manufacturing within their workplace. There is a lack of research at the critical intersection of organizational culture and sustainability of lean implementation. Culture is key to making changes required for lean implementation and in sustaining the drive toward lean production and management. This research is an attempt to fill that gap.