Engineering Management Research; Vol. 4, No. 2; 2015 ISSN 1927-7318 E-ISSN 1927-7326 Published by Canadian Center of Science and Education 54 Examining the Impact of Lean Practices on Flexibility Performance: The Moderating Effect of Environmental Dynamism Zu’bi M. F. Al-Zu’bi 1 1 Department of Business Management, Faculty of Business, The University of Jordan, Jordan Correspondence: Zu’bi M. F. Al-Zu’bi, Department of Business Management, Faculty of Business, The University of Jordan, Amman, ON., 11942, Jordan. Tel: 962-79-562-9397. E-mail: zoz55jo@yahoo.com Received: September 10, 2015 Accepted: October 8, 2015 Online Published: October 15, 2015 doi:10.5539/emr.v4n2p54 URL: http://dx.doi.org/10.5539/emr.v4n2p54 Abstract This paper examined the effects of four core and internal lean practices on flexibility performance in Jordanian manufacturing companies. Lean practices included setup time reduction, continuous improvement, synchronization of operations, and pull system. A survey questionnaire was used to collect data from 157 manufacturing companies from different industry types. Hierarchical regression analysis showed that lean production posively and significantly affected flexibility performance. All lean practices proved to be positively and significantly related to flexibility performance. The most contributing lean practice was synchronization of operations followed by pull system and continuous improvement. The moderating effect of environmental dynamism was also examined. The results of the interaction terms showed that environmental dynamism positively and significantly moderated the relationship between synchronization of operations and flexibility performance. The findings of this study highlighted the important role of synchronization of operations, a widely neglected lean practice in the literature, in improving flexibility performance. Additionally, we contributed to the controversial issue in the literature concerning the impact of lean production on performance in a dynamic environment. Keywords: lean production, lean practices, flexibility performance, environmental dynamism, moderating effect, synchronization of operations, Jordan, empirical study 1. Introduction The last three decades witnessed a series of new operational approaches that attemted to improve quality, reduce cost, enhance productivity, and improve competitive position of manfufacturing companies. Such approaches included, but not limited to, total quality management, just in time production, total productive maintenance, and lean production. Although those approaches were initiated in Japan, they received a considerable attention by manufacturing companies in Western contries. As for developing countries, total quality management still the most popular and well known Japanese management approach. The other operational approaches started getting popularity in developing countries in the last years (Abdallah, 2013). The severe competitive situation that shifted towards a global basis has forced many manufacturing companies in the developing contries to adopt innovative operational practices to remain competitive. Some of the factors that led to such a competitive situation include globalization, free trade agreements, and World Trade Organization (WTO) membership. Jordan is a country that suffers a lack of natural and economic resources. Manufacturing companies in Jordan have been struggling due to several reasons. Such reasons include the unrecovered effects of the 2008 global economic crisis, free trade agreements, membership in the WTO, and instability in the Middle East. Lean production has been regarded as an ideal response to the current challenges that Jordanian manufacturers face, so that to remain competitive in the local market and to attempt to compete in the regional and global markets. Lean production focuses on improving process efficiency and effectiveness, which were referred to as the most important benefits of lean production (Ohno, 1988; Womack et al., 1990; Liker, 2004). A successful process strategy should be evaluated based on company’s flexibility to respond to business and market changes (Abdallah & Matsui, 2007b; Abdallah et al., 2009). Published literature demonstrated various benefits of lean production including waste elimination, cost reduction, performance improvement, quality improvements, inventory reduction, lead time reduction, and productivity improvements (Abdallah & Matsui, 2007a; Phan et al., 2011; Abdallah, 2013; Al Hasan & Al-Zu’bi, 2014).