Manufacturing flexibility (MF) becomes an important requirement for an effective response to market uncertainty. However, the outcomes of this relationship on financial performance often show mixed results. Identifying factors facilitating this relationship is crucial for maintaining financial performance. Drawing from social cognitive capital and uncertainty reduction theories, this study argues that cultural compatibility (CC) can mediate this relationship. A structural equation analysis of 150 Vietnamese manufacturers strongly supports this hypothesis. This study showed that a strong association exists between a manufacturing firm’s CC and its MF and financial performances. Besides, CC acts as a mediator to enhance MF on financial performance. Manufacturers can leverage MF to capture more market share and profits when developing a good working culture with their supply chain partners. For supply chain managers, these findings indicate that a strategy for achieving supply chain-based performance requires a dual-pronged approach that aligns manufacturers’ operations with extensive organizational capabilities with external partners.

@inproceedings{oscm-2019-481,
  title={Enhancing Manufacturing Flexibility for Financial Performance: The Mediating Role of Cultural Compatibility},
  year={2019},
  author={Hung Nguyen and Norma Harrison and Dothang Truong and George Onofrei},
  booktitle={Proceedings of the 9th International Conference on Operations and Supply Chain Management, Vietnam, 2019},
  doi={10.31387/oscm410060}
}

Hung Nguyen, Norma Harrison, Dothang Truong, George Onofrei (2019). Enhancing Manufacturing Flexibility for Financial Performance: The Mediating Role of Cultural Compatibility. In Proceedings of the 9th International Conference on Operations and Supply Chain Management, Vietnam, 2019. https://doi.org/10.31387/oscm410060