Direct and Indirect Impact of Operations Strategy on Management Consulting Firm Profitability

Abstract

This dissertation examined the direct and indirect effects of firm operations strategy’s determinants, including two mediating variables, on firm performance. Data collected under this quantitively driven research focuses on top management of 146 consulting firms in the U.S. We employed regression analyses and used Hayes Macros tests to determine the relationships amongst operations strategy determinants – cost, service quality, differentiation, and flexibility, our mediators – advertising and employee turnover, and performance. This dissertation’s findings are aligned with other empirical works suggesting that performance is significantly and positively influenced by operations strategy determinants. The study results also show the significant mediating effect of adverting on the relationship between cost, quality, and performance. No mediating effect of advertising is found between flexibility, differentiation, and performance. Employee turnover mediating relationship between operations strategy determinants and performance emerged as insignificant. We contended that management must adopt strategic approach regarding operations strategy determinants as the means to enhance and sustain firm performance