Manufacturing enterprises can face obstacles that make productivity improvement efforts ineffective or even prevent improvement operations. This paper reports on an investigation of the internal obstacles restraining productivity improvement programs in the manufacturing enterprises of developing countries, using Oman as a case study. Data required for this study were collected through a questionnaire given to production and operations managers at 51 manufacturing enterprises in Oman. The results of applying factor analysis to a dataset of 15 obstacles showed that these obstacles can be reduced to three major factors. Ranked according to their importance, these factors are poor management practices, employee job dissatisfaction, and poor human resource management. The findings of this research are of value to production and operations managers of manufacturing enterprises who are interested in conducting productivity improvement programs not only in Oman but also in developing countries with environments similar to that of Oman, such as the Gulf Cooperation Council (GCC) countries. 1. Introduction Productivity is one of the most widely used tools for evaluating, monitoring, and improving the performance of industries and national economies. At a national level, productivity indicates how well an economy uses its resources in producing goods and services. A decline in productivity can lead to slow economic growth and high inflation. On the other hand, improved productivity can lead to a higher rate of economic growth and higher living standards for a nation [1]. At an organizational level, productivity measures how well an organization converts input resources (labor, materials, machines, etc.) into goods and services. A decline in productivity will result in an increase in costs and therefore deterioration in the competitive position of an organization. On the other hand, an improvement in productivity can lead to a decrease in the costs and duration of production, an improvement in quality, and therefore a growth in market share. According to Kazaz and Ulubeyli [2], productivity is one of the most important factors affecting the overall performance of any organization, large or small. It is defined as a measure of the relationship between the physical volume of goods and services produced and the resources used in the production processes adopted by an economy. Productivity is also a measure of the efficiency with which employees and capital and natural resources are combined in an economy. In addition to assessing its performance, an organization can
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