A Comprehensive Definition for ‘Operational Excellence’

Abstract

The study's objective was to develop a comprehensive definition for operational excellence (OE) while identifying its attributes, most suitable theoretical lens and dimensions. Attributes of OE were collected by evaluating 32 existing definitions of OE and interviewing 30 OE experts. A focus group interview with 15 OE experts was employed to consensus on the critical attributes and tentative dimensions of OE. Content analysis was employed for data analysis. Continuous improvement of sustainable operational performance, deriving sustainable competitive advantages and implementing the operation strategy consistently and reliably were determined as the critical attributes. Based on the identified critical attributes of OE, the Resource-Based Theory (RBT) was recognized as the most applicable theory for explaining OE. Based on the identified theoretical lens and identified critical attributes, the new definition of OE involves, ‘utilization of valuable, rare, costly to imitate and non-substitutable resources & capabilities to execute the operations strategy consistently and reliably as the organization can achieve: a continuous improvement of the sustainable operational performance and sustainable competitive advantages while upholding the satisfaction of employees, customers, suppliers and other important stakeholders.' Continuous improvement of sustainable operational performance and sustainable competitive advantages were determined as the possible dimensions of OE.

 Keywords: Operational Excellence; Resource-Based Theory; Construct Definition, Operational Performance, Competitive Advantages