Impact of technical and social lean practices on SMEs’ performance in automobile industry: a structural equation modelling (SEM) analysis

Abstract

The successful utilisation of organisational resources and adopting the best practices are essential to attain the level of excellence in all process. Prior studies revealed that several firms discontinued lean initiatives due to various causes. In the perspective of socio-technical system theory, a comprehensive conceptual model was framed to verify the significance of lean social practices and importance of human aspects in the execution of lean practices to increase the success rate of lean transformation. To validate the theoretical model, partial least square-structural equation modelling (PLS-SEM) was used with a sample of 132 responses from auto components manufacturing small and medium enterprise (SMEs) in India. Utilising the application of PLS-SEM modelling, the study constructed three higher-order constructs, namely lean social practice (LSP), lean technical practices (LTP) and organisational performance (ORP). The study also analysed the direct and indirect effects applying the procedure of the bootstrapping approach to test if any mediation effect exists. The results explained that LSP, LTP positively influences ORP. The connection among LTP, LSP and ORP is found to be significant and also LSP mediates the established link between lean technical practices and organisational performance.

Keywords:

• lean
• small and medium enterprises
• socio-technical system
• partial least square–structural equation modelling
• performance

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by University Grants Commission [1571/(NET-DEC.2013), Junior Research Fellowship].