MODERN MANAGEMENT PRACTICES AND FIRM’S PERFORMANCE

Abstract

To date, the role of technology as factors of success in competitive arena has become a subject
of significant interest amongst practitioners and academicians. This paper is based on a field
investigation via mailed questionnaire that was sent to CEOs (Chief Executive Officer) of
manufacturing firms Indonesia that involved small and medium companies (SMEs). This
research is an exploratory one that was conducted to invetigate the extent of soft technology
adoption and to examine the relationship between the level of soft technological adoption on
firm performance, in term of financial and manufacturing performance. The significant
relationship was found between the level of soft technological adoption (TQM, MRP2 and
Benchmarking) and performance implies the fact that adoption of TQM, MRP2, and
benchmarking can improve the performance of an organization. TQM has an important role for
improving manufacturing performance, while MRP2 plays an important role for enhancing
financial and manufacturing performance. Further, benchmarking is very importance to be done
for increasing financial performance. This study also indicates that Indonesian manufacturing
SMEs that success in adopting TQM, MRP2 and Benchmarking can compete successfully. In
addition, JIT and TPM seem to be left out by Indonesian manufacturing SMEs. The effect of JIT
and TPM on financial and manufacturing performance is not significant.