Blue ocean leadership activities improve firm performance

Abstract

Purpose

The purpose of this paper is to investigate the mediation effect of Blue Ocean Leadership (BOL) activities between lean manufacturing (LM) practices and firm performance.

Design/methodology/approach

This study applied sequential mixed method with expert opinion in the first stage and cross-sectional survey from automotive vendor companies in the second stage. The samples were drawn using random sampling procedure from automotive vendor companies in Malaysia with the final number of respondents of 64. Four main hypotheses were developed and tested statistically by applying multivariate data analysis using SmartPLS3.0 SEM software.

Findings

The results provide evidence that LM practices have positive and significant impact on firm performance. Moreover, activities of Genba-Kaizen significantly improve the firm performance by an amazing 30 per cent.

Research limitations/implications

The data used in the survey represent self-reporting by mainly the top management in operations or production. It is recommended for future study to include middle and lower management level to understand the difference of their activities. Besides, it is proposed to extent the population beyond automotive industry.

Practical implications

This study contributes to the LM body of knowledge by identifying the relationships between the LM practices, firm performance and BOL activities. Understanding these will help lean practitioners especially the leaders in making better decision in both manufacturing and service organizations. Thus, increasing the staff motivation and engagement eventually contributes to the firm performance.

Originality/value

Although there are growing numbers of anecdotal and empirical evidences in favour of LM in manufacturing environment, there has been almost no theory-building and methodologically rigorous research examining the link between the leaders’ activities with LM practices and firm performance. This study is addressing such gaps.

Citation

Loh, K.L. and Mohd Yusof, S. (2020), "Blue ocean leadership activities improve firm performance", International Journal of Lean Six Sigma, Vol. 11 No. 2, pp. 359-375. https://doi.org/10.1108/IJLSS-09-2018-0102