Abstract :
The literature relating to auditing the strategic role and contribution of operations has
been dominated by methodologies attuned to the predominance of the environmental
and competitive forces, and entry deterrence approaches to achieving and sustaining
competitive advantage, broadly termed the outside-in perspective. However, tools suited
to the resource-based and associated dynamic capability view to strategy formulation,
deemed the inside-out perspective, are sparse. This paper makes a contribution to furthering
understanding of the auditing of the strategic role and contribution of operations by
conducting a review and critique of established ideas, practices and approaches from both
strategy formulation perspectives. It argues that the reported methodologies reflect the
traditional outside-in perspective to strategy formulation. It highlights the limitations of the
available tools for an inside-out view and questions the suitability of the existing methods to
the more recent inside-out emphasis, also a factor vital in circumstances where a firm
typically is pursuing a combination or blend of the outside-in and inside-out approaches to
strategy formulation. Finally, it presents the outline of an additional audit tool designed to
address these limitations and describes next steps in future research.
