Production functions or governance structures : operations strategy within the firm

Since the early work of Skinner, much has been written on operations strategy; but managers still do not appear to carry out the actions in the practice of operations management. This paper is motivated by this issue, and in order to respond to this issue we will first decide how we will conceptualise the organization in which operations function performs. It is possible to think of the organization as a productive function, and this may ground one approach to strategizing within the operations function. An alternative perspective conceptualises the firm as a governance structure, and in this form, the process of strategizing within the operations function is problematic. This paper reviews the alternative perspective, based heavily on the resource based view of the firm, and uses material based on the experiences of an Australian company to illustrate aspects of strategizing within the operations function.