Mediating role in industry 4.0 (4IR) adoptions and sustainable corporate financial growth in developed economies

https://doi.org/10.35912/jgas.v4i2.2511
Published: Nov 29, 2024

Abstract:

Purpose: This study explores the role of Industry 4.0 maturity in enhancing corporate financial performance in developed economies. It examines how technological innovation impacts internal business process performance (IBPP), supply chain performance (SCP), and customer performance, which mediate financial outcomes.

Methods: A survey was conducted among 110 manufacturing firms in the United States, selected from a database of 834 eligible companies. The study employed AMOS software for structural equation modelling (SEM) to test hypotheses based on survey data. The maturity of Industry 4.0 technologies in these firms was measured using a comprehensive framework.

Results: The study found that Industry 4.0 maturity significantly improves IBPP and SCP, positively affecting customer performance. Notably, customer performance serves as a full mediator between SCP, IBPP, and financial performance. Firms with higher Industry 4.0 maturity show better financial results due to improved customer engagement and satisfaction.

Limitations: The study's findings are based on a sample of 110 firms, which limits generalizability. Future research with larger and more diverse samples is recommended.

Contributions: This research contributes to understanding how Industry 4.0 technologies influence financial success, providing valuable insights for policymakers and business leaders in manufacturing sectors.

Novelty: The study uniquely examines the complementary roles of IBPP, SCP, and customer performance in mediating the relationship between Industry 4.0 maturity and financial outcomes.

Keywords:
1. Industry 4.0
2. financial performance
3. technological innovation
4. supply chain performance
5. business process integration
Authors:
1 . Md Jawadur Rahim
HCS Certified Home Care NY Inc., Brooklyn, NY, USA
2 . Md. Jahidul Islam
University of Dhaka, Bangladesh
3 . Md. Nasirul Islam
University of Dhaka, Bangladesh
4 . Muhammad Ihsan Ibn Rahim
University of Louisiana at Lafayette, LA, USA
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How to Cite
Rahim, M. J., Islam , M. J., Islam, M. N., & Rahim, M. I. I. (2024). Mediating role in industry 4.0 (4IR) adoptions and sustainable corporate financial growth in developed economies. Journal of Governance and Accountability Studies, 4(2), 121–145. https://doi.org/10.35912/jgas.v4i2.2511
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Issue & Section
Vol. 4 No. 2 (2024): July
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

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  1. Adekanmbi, F. P., & Ukpere, W. (2023). The impact of innovative work behavior, perceived Leadership 4.0, and corporate social responsibility on sustaining banking industry performance in Nigeria within the 4IR Era. Banks and bank systems, 18(4), 1-11.
  2. Agbehadji, I. E., Awuzie, B. O., & Ngowi, A. B. (2021). COVID-19 pandemic waves: 4IR technology utilisation in multi-sector economy. Sustainability, 13(18), 10168.
  3. Ambroise, L., Prim-Allaz, I., & Teyssier, C. (2018). Financial performance of servitized manufacturing firms: A configuration issue between servitization strategies and customer-oriented organizational design. Industrial Marketing Management, 71, 54-68.
  4. Ardito, L., Petruzzelli, A. M., Panniello, U., & Garavelli, A. C. (2018). Towards Industry 4.0: Mapping digital technologies for supply chain management-marketing integration. Business process management journal, 25(2), 323-346.
  5. Arksey, H., & O'Malley, L. (2005). Scoping studies: towards a methodological framework. International journal of social research methodology, 8(1), 19-32.
  6. Belinski, R., Peixe, A. M., Frederico, G. F., & Garza-Reyes, J. A. (2020). Organizational learning and Industry 4.0: findings from a systematic literature review and research agenda. Benchmarking: An International Journal, 27(8), 2435-2457.
  7. Binz, C., & Truffer, B. (2017). Global Innovation Systems—A conceptual framework for innovation dynamics in transnational contexts. Research policy, 46(7), 1284-1298.
  8. Brougham, D., & Haar, J. (2018). Smart technology, artificial intelligence, robotics, and algorithms (STARA): Employees’ perceptions of our future workplace. Journal of Management & Organization, 24(2), 239-257.
  9. Büchi, G., Cugno, M., & Castagnoli, R. (2020). Smart factory performance and Industry 4.0. Technological forecasting and social change, 150, 119790.
  10. Cascio, W. F., & Montealegre, R. (2016). How technology is changing work and organizations. Annual review of organizational psychology and organizational behavior, 3(1), 349-375.
  11. Chashi, K., & Mwanza, B. G. (2022). The Influence of the Fourth Industrial Revolution on Human Resource within the Zambian Banking Sector. Available at SSRN 4190617.
  12. Chike, N. K., Mbamalu, E. I., Oguanobi, C. A., & Egbunike, C. F. (2023). Big Data Analytics and market competitiveness of selected firms in Lagos State, Nigeria. Annals of Management and Organization Research, 4(4), 251-269.
  13. Choi, D., Chung, C. Y., Seyha, T., & Young, J. (2020). Factors affecting organizations’ resistance to the adoption of blockchain technology in supply networks. Sustainability, 12(21), 8882.
  14. Chow, T. W., & Singh, H. (2022). Cultivating emerging leadership competencies for individual and organizational success. Annals of Management and Organization Research, 4(2), 129-145.
  15. Dagada, R. (2024). The advancement of 4IR technologies and increasing cyberattacks in South Africa. Southern African Journal of Security, 27 pages-27 pages.
  16. Gereffi, G. (2017). Global value chains in a post-Washington Consensus world Global Value Chains and Global Production Networks (pp. 9-37): Routledge.
  17. Hoosain, M. S., Paul, B. S., & Ramakrishna, S. (2020). The impact of 4IR digital technologies and circular thinking on the United Nations sustainable development goals. Sustainability, 12(23), 10143.
  18. Ivanov, D., Dolgui, A., & Sokolov, B. (2019). The impact of digital technology and Industry 4.0 on the ripple effect and supply chain risk analytics. International journal of production research, 57(3), 829-846.
  19. Jaiyeoba, O. O., & Iloanya, J. (2019). E-learning in tertiary institutions in Botswana: apathy to adoption. The International Journal of Information and Learning Technology, 36(2), 157-168.
  20. Lee, J., Bagheri, B., & Kao, H.-A. (2015). A cyber-physical systems architecture for industry 4.0-based manufacturing systems. Manufacturing letters, 3, 18-23.
  21. Liu, H., Wei, S., Ke, W., Wei, K. K., & Hua, Z. (2016). The configuration between supply chain integration and information technology competency: A resource orchestration perspective. Journal of Operations Management, 44, 13-29.
  22. Mahmod, S. (2022). Demystifying work-related outcomes and life satisfaction of Bangladeshi working women during the COVID-19 pandemic. Annals of Management and Organization Research, 4(2), 109-127.
  23. Makwinja, V. M. (2020). Inclusive and multicultural education: The dynamics of higher education institutions in Botswana–Inequality and exclusion of students Developing and Supporting Multiculturalism and Leadership Development: International Perspectives on Humanizing Higher Education (pp. 85-99): Emerald Publishing Limited.
  24. Marcucci, G., Antomarioni, S., Ciarapica, F., & Bevilacqua, M. (2021). The impact of Operations and IT-related Industry 4.0 key technologies on organizational resilience. PRODUCTION PLANNING & CONTROL.
  25. Mashizha, M., Gumbo, L., & Chimwe, E. (2023). Addressing Barriers to entry into international trade by SMEs in Zimbabwe. Annals of Management and Organization Research, 4(4), 309-323.
  26. Mhlanga, D. (2020). Artificial Intelligence (AI) and poverty reduction in the Fourth Industrial Revolution (4IR).
  27. Mhlanga, D. (2022). Stakeholder capitalism, the fourth industrial revolution (4IR), and sustainable development: Issues to be resolved. Sustainability, 14(7), 3902.
  28. Mkansi, M., & Landman, N. (2021). The future of work in Africa in the era of 4IR–The South African perspective. Africa Journal of Management, 7(sup1), 17-30.
  29. Moll, I. (2021). The myth of the fourth industrial revolution. Theoria, 68(167), 1-38.
  30. Neumann, W. P., Winkelhaus, S., Grosse, E. H., & Glock, C. H. (2021). Industry 4.0 and the human factor–A systems framework and analysis methodology for successful development. International journal of production economics, 233, 107992.
  31. Rajapathirana, R. J., & Hui, Y. (2018). Relationship between innovation capability, innovation type, and firm performance. Journal of Innovation & Knowledge, 3(1), 44-55.
  32. Ralston, P. M., Blackhurst, J., Cantor, D. E., & Crum, M. R. (2015). A structure–conduct–performance perspective of how strategic supply chain integration affects firm performance. Journal of supply chain management, 51(2), 47-64.
  33. Rozanna, M., & Ahadiat, A. (2023). What is strategic management research? Annals of Management and Organization Research, 4(4), 271-280.
  34. Su, C.-W., Cai, X.-Y., Qin, M., Tao, R., & Umar, M. (2021). Can bank credit withstand falling house price in China? International Review of Economics & Finance, 71, 257-267.
  35. Su, C.-W., Qin, M., Tao, R., & Umar, M. (2020). Does oil price really matter for the wage arrears in Russia? Energy, 208, 118350.
  36. Tanha, M., Fahim, A. Y., Tasnim, S., Raju, M. A. R., Islam, W., Shawn, F., . . . Islam, M. J. (2022). Different dimensions of conspicuous consumption in the emerging market of Bangladesh. Annals of Management and Organization Research, 4(1), 65-87.
  37. Zahedi, M. R., & Piri, M. (2023). Evaluation chain management model with emphasis on intellectual capital using blockchain technology. Annals of Management and Organization Research, 4(4), 281-295.