In modern corporations, the Operations Manager’s role in defining of firm’s strategy is
becoming more important. In this paper we describe how firms can use this tendency for
Operations Managers to make strategic decisions as a mechanism to prevent inventory
mismanagement. These managers have incentives to speculate with inventory cost
reductions, thereby avoiding sharp reductions in a single period, because it would hinder
further reductions in the future. Remarkably, firms may prevent such behavior by stimulating
the Operations Managers’ strategic orientation, without losing sight of inventory-efficient
management
