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Examining the Effects of Industry 4.0 Adoption, Information Acquisition Capability, and Organizational Ambidexterity on Innovation and Circular Economy Performance

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Abstract

Regulatory authorities are putting a lot of pressure on manufacturers to devise strategies to boost their contribution to the circular economy. The limited comprehension surrounding the complex interplay that exists between the deployment of Industry 4.0 (I4.0) strategies, the capability to acquire information, and the ability to balance exploration and exploitation activities within an organization acts as a barrier for manufacturers to attain the optimal levels of organizational performance. As a result, the purpose of the current investigation is to investigate the strategic execution of I4.0 on manufacturers' information acquisition capability in order to foster the ambidexterity required to flourish in the innovation‐driven high‐performance ecosystem for attaining circular economy performance. In this study, data from a cross‐sectional survey that included responses from a sample of 238 Indian manufacturers were assessed using structural equation modeling. According to the results, I4.0 technologies assist organizations in strengthening their exploitative and explorative capabilities, allowing them to achieve success in innovation, which is directly related to their performance in circular economy activities. Unexpectedly, the association between an organization's information acquisition capability and its innovation performance is not substantial, but it is completely mediated by both exploitative and explorative capabilities, which are characterized as organizational ambidexterity.

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To contribute to a growing global research interest that has evolved toward augmenting the economic, environmental, and societal values of Industry 4.0 in the manufacturing context, this study is intended to (1) survey the applicability of Industry 4.0 technologies in each of the triple bottom lines at the product level and (2) scrutinize the technologies based on product sustainability criteria using the application of the fuzzy Technique for Order of Preference by Similarity to Ideal Solution. Yet, there is a significant paucity of knowledge and uncertainty about the applicability of these technologies to developing sustainable products, hence providing an opportunity for innovative research. To be a sound assessment, this study investigates the perceptions of professional technologists, who play an important role as both internal and external stakeholders in addressing technological issues within organizations including multinationals. The findings obtained by the survey indicated the applicability level of six major technologies in contributing to product-level sustainability. The findings obtained by the fuzzy-based application revealed that ‘Big Data Analytics’ has the highest performance for developing sustainable products. Such an assessment, which is of critical importance to sustainable development, would be beneficial to policy-and decision-makers seeking to get a better understanding of the technologies and their applicability to sustainable products development.
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Purpose This study examines the relationship between knowledge management (KM) capability and innovation ambidexterity, and their subsequent influence on firm performance. It also investigates whether organizational structure – in terms of connectedness and centralization – helps to develop a suitable context that either hinders or catalyzes the effectiveness of KM capability in predicting innovation ambidexterity. Design/methodology/approach Data were collected from 336 manufacturing organizations in Pakistan using a random sampling technique. Partial least square-based structural equation modelling (PLS–SEM) was employed to analyze the data. Findings Results reveal that KM capability is positively linked with innovation ambidexterity and firm performance. Innovation ambidexterity positively mediates the link between KM capability and firm performance. Connectedness positively moderates the association between KM capability and innovation ambidexterity. However, centralization negatively moderates the link between KM capability and innovation ambidexterity. Research limitations/implications This research offers theoretical insights into when and how KM capability is effective in prompting performance through innovation ambidexterity by creating a suitable context. Practical implications The study indicates that innovation may develop in an ambidextrous manner in an organization as long as the organization is proficient in creating a suitable context, i.e. structure to support it. Organizations should strive to develop sustained KM capabilities because these are seminal for enabling the challenging task of exploiting existing resources for innovation while also tapping on new opportunities for explorative breakthroughs. Originality/value This research contributes to a novel understanding regarding the importance of KM capability in fostering manufacturing organizations to engage in ambidexterity by creating a suitable context where optimal amount of each form of innovation activities is calibrated using KM capability. Highlights Knowledge management capability is crucial for simultaneous exploitation and exploration of innovation Innovation ambidexterity (i.e. simultaneous exploitation and exploration of innovation) fosters firm performance Innovation ambidexterity mediates the positive effect of knowledge management capability on firm performance Connectedness strengthens the relationship between knowledge management capability and innovation ambidexterity Centralization weakens the effect of knowledge management capability on innovation ambidexterity Innovation can be developed in an ambidextrous way in organizations as long as organizations have knowledge-based competencies and proficient in creating suitable context
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Purpose Although the circular economy is widely regarded as an essential strategy for firms, the present understanding of the drivers and outcomes of circular economy implementation is underdeveloped. In this paper, the authors draw on the natural resource-based view and information processing theory to explore how an environmental orientation and digital supply chain platforms promote circular economy implementation, and increase the impact of circular economy implementation on financial performance. Design/methodology/approach The authors surveyed 249 Chinese firms and used hierarchical regression analysis to test hypotheses. Findings The empirical results reveal that three primary modes of circular economy implementation—reinvent and rethink (INV), restore, reduce and avoid (RRA), and recirculate (REC)—are all driven by environmental orientation and digital supply chain platforms. More interestingly, digital supply chain platforms have an inverted U-shaped moderating effect on the relationships between environmental orientation and INV and between environmental orientation and RRA. Most importantly, INV and RRA are positively related to financial performance, whereas REC does not have a significant relationship with financial performance. Originality/value The authors contribute to the literature on the circular economy by revealing new drivers and outcomes of different modes of its implementation. Additionally, the findings have implications for how firms should frame their circular economy initiatives in the context of the digital revolution.
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Sustainability is the core feature of 21st-century businesses—the management approach can be a lever. The 4th Generation Management arises as a systems-based approach to managing contemporary businesses before the advent of Industry 4.0 and during a low awareness of the Circular Economy. While the 4th Generation Management provides value to business by considering several resources, stakeholders, and interactions, making businesses customer-oriented, it fails to address the sustainability issue for contemporary businesses in the current context of Industry 4.0, Circular Economy, Competitiveness, and Stakeholders. Indeed, it fails to make businesses more contemporary (i.e., more open and sustainable) to adapt to their context. Moreover, in the literature, there is no work discussing how Sustainability, Industry 4.0, Circular Economy, Competitiveness, and diverse Stakeholders as contemporary issues are accounted for in business management. The main aim of this study is to propose a Re-engineered 4th Generation Management as a systems-based approach, enabling today's business to be oriented toward customer and sustainability. We have reviewed 181 articles published between 2005 and 2022 from Scopus, Web of Science, and Science Direct databases to pursue such a goal. The novelty of this work relies on presenting a systems-based approach, which is best suited for sustainable businesses in the context of Industry 4.0 digitalization technologies (e.g., Artificial intelligence, Blockchain, Cloud computing, and Big data analytics), Circular Economy, Stakeholders, and Competitiveness. Furthermore, propositions are formulated to reflect on the suggested framework based on recent literature. At the end of this work, research implications and future directions are provided.
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The transformations generated by Industry 4.0 (I4.0) are interwoven with digitalization. I4.0 involves the digital turn of manufacturing companies, changing the way they operate, their business models, and by extension, their interaction with digital players. Nonetheless, the future of I4.0 regarding its interaction with digital players and the phenomenon of uberization has scarcely been examined. Thus, this research adopts a participatory and systemic foresight approach to explore the trajectories of I4.0 in the face of uberization. The study was conducted with a working group of 22 members from academia and practice. Four scenarios and related action plans were produced. The results emphasize that uberization is not necessarily a process to be endured by manufacturers, but it could be chosen or even co-constructed with different actors if manufacturers address key challenges such as rethinking their business models and adapting their factors of production. The scenarios indicate the dynamics of uberization as contingent on technological developments and on industrial policy choices, changes in consumer behavior, and access to multiple funding sources. Finally, the study provides practical implications regarding the dynamics of collaboration between SMEs and large groups, on one hand, and between manufacturing companies and digital players, on the other hand.
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Innovation in the public sector plays an important role in improving the quality of public services and addressing economic and societal challenges. Most of the previous research on innovations has focused on the private sector. How organizations may achieve ambidexterity for innovations in the public sector characterized by unique constraints has been largely underexplored. Platforms have emerged as key components in organizations’ approaches to innovation. Using an empirical study in a public sector organization, this study identifies a platform-based approach that can be used to achieve ambidexterity in balancing exploitative and exploratory innovations in the public sector. Organizations facing constraints pertaining to structure, risk, and value may benefit from considering their product/service development, process management, and value formulation through this approach. This study also identifies practices in platform development, appropriation, and control that contributed to the success of the platform-based approach.
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Following the COVID-19 outbreak, a wide range of scholars and practitioners have come to recognize the potential of Additive Manufacturing (AM) technology in building supply chain resilience and efficiency. However, it remains unclear how AM technology might be able to simultaneously build supply chain efficiency and resilience, given the often conflicting nature of these qualities. This paper employs an ambidextrous perspective on dynamic capability theory to investigate the potential of AM technology to solve this resilience-efficiency dilemma at the supply chain level. The research design involves a hybrid approach, combining focus groups and multiple case studies, with particular attention paid to the African supply chain context. The findings indicate that AM technology presents the potential to develop ambidextrous dynamic capabilities, leading to the reconciliation of resilience and efficiency at the supply chain level. Some determinants, such as data-driven systems, supply chain collaboration, innovation agility and knowledge are found to be critical to enable the development of those capabilities around AM-enabled manufacturing systems. The study contributes to the preparation of the global supply chain for the post-COVID era, where digital technologies such as AM will be fundamental for both building resilience and efficiency simultaneously. Practitioners in emerging economies may benefit directly from the outcomes of this study. Furthermore, managers and policy-makers in developed countries may be made aware of the significance of using AM technology in emerging countries to enhance the performance of the global supply chain.
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Purpose The purpose of this paper is to investigate the performance impact of supplier involvement, based on the knowing processes and contingencies of knowledge-based view. Ambidextrous innovations (i.e. exploitative innovation and exploratory innovation) are taken as intermediary processes. Furthermore, product smartness is considered to clarify boundary conditions. Design/methodology/approach The ordinary least squares regression was conducted, based on the two-source data collected from 125 high-tech firms in China. Findings Ambidextrous innovations positively mediate the relationship between supplier involvement and financial performance. Product smartness weakens the indirect impact via exploratory innovation but not exploitative innovation. Originality/value This study reveals the knowledge application and recombination mechanisms of ambidextrous innovations to mediate between supplier involvement and financial performance. It also highlights digital encapsulation function of product smartness as a contingent factor.
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Building on the resource orchestration view, we proposed a dual role of information technology (IT) in the form of IT-enabled resource acquisition (IRA) and IT-enabled resource operation (IRO) in determining innovation performance. Through analyzing the survey data from 235 organizations, we found that in a dynamic business environment, IRA assists organizations in accruing benefits from their open innovation (OI) strategies. In a less dynamic business environment, IRO enhances the impact of OI strategies on innovation performance, whereas IRA diminishes such an impact. Post-hoc interviews reveal further insights into how organizations utilize ITs (IRA and IRO) to obtain innovation benefits.
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The environmental and economic aspects of sustainability have been the most common subjects in the manufacturing industry, while the social one tends to be neglected. The process of semistructured interviews is conducted with design practitioners in the computer, communication, and consumer electronics industry in Taiwan to comprehend how the participating companies can move from a business-as-usual model to a more sustainable business by design. Results show that ecodesign and design for circular economy are commonly applied as sustainable design strategies, highlighting the concept of dematerialization. The three pragmatic tools applied alongside for balancing the three pillars of sustainability are life cycle thinking, design thinking, and business model tools. To achieve sustainable industrial ecosystems, three key actors, namely, a driver, a facilitator, and a supporter, play an important role to create stakeholder engagement and supply chain collaboration. Hence, the companies must tackle major challenges related to organizational culture, social reputation and communication, resource availability, service at the end of life, and effective waste treatment. Relying solely on product level for sustainability is insufficient; the companies need to tap into socio-technical systems by creating new partnerships, supporting multidisciplinary teams, embracing new markets, integrating emerging technologies for social sustainability, and promoting innovative and social inclusive thinking.
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The aggravation of environmental pollution and resource depletion has urged the international community to seek viable solutions. As the damage caused by the manufacturing industry is particularly destructive to the environment, finding an effective governance model is imperative. This study draws upon the organizational capability view to investigate the impact of circular economy practices (ecological design and investment recovery) on financial performance through environmental and innovation performance. Using structural equation modeling analyzing the data from 308 manufacturers in China by AMOS 21.0 software, we find that ecological design and investment recovery can directly enhance companies’ performance. Also, environmental and innovation performances mediate the positive effects of circular economy practices on financial performance. Meanwhile, implementing ecological design contributes to investment recovery. Our study identifies the new path of circular economy practices in promoting financial performance through environmental and innovation improvement. The findings also guide managers to effectively implement ecological design and investment recovery to maximize company benefits.
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Using a longitudinal multisite case study research design, this study demonstrates how cloud computing helps to build knowledge ambidexterity (K-AMB) capabilities in small- and medium-sized enterprises (SMEs). A cross-theory approach is used to highlight the connections between ambidexterity and knowledge management theories as a basis to explore the benefits of K-AMB capabilities for SMEs. The study investigates how the focus on knowledge exploitation by SMEs limits innovation which can be reconciled using cloud computing by creating multiple ambidextrous knowledge opportunities. In relation to cloud computing and knowledge ambidexterity, the study is the first to measure the effects of a temporal lag in the K-AMB processes resulting in enhanced employee-driven innovation. The results showed that over a 12-month period, employee-driven innovation was significantly amplified from the application of cloud computing that supported more sophisticated ambidextrous processes of knowledge management. The results significantly shift mindsets about the revelatory value of cloud computing to promote K-AMB in SMEs. We draw novel insights to the theory of ambidexterity by proposing that digital technologies and employee innovation contexts lie side-by-side and play an important role in building K-AMB capabilities in SMEs.
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Innovations and advancements in technology create new opportunities to run and maintain manufacturing plants, which we refer to as digitalised manufacturing. This development is recognised as a socio-technical system (STS) change, where a change in the production system’s goals, technology, processes, people, or environment may lead to ripple effects between those sub-systems. Despite this, technology development and technology use cases account for most of the research within digitalised manufacturing, while little attention has been devoted to leadership practices considering digitalised manufacturing from a socio-technical perspective. This paper focuses on the maintenance organisation, whose mission in a company is to keep production systems functional. We aim to describe leadership in industrial maintenance from an STS perspective. This is a unique interview study where twenty maintenance managers from Swedish manufacturing industry offer their perspective on the changing leadership within maintenance, providing a unique insight into the challenges facing leaders of maintenance in digitalised manufacturing. We frame the empirical findings using an STS framework and propose an overall consideration model for leadership that supports the development of a functional maintenance organisation in the face of pervasive digitalisation.
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This paper aims at examining the role played by Industry 4.0 (I4.0) on the relationship between knowledge management (KM) practices (i.e., knowledge acquisition, knowledge dissemination, and responsiveness to knowledge) and innovation performance (represented by process and product innovation). For that, 153 practitioners from manufacturing firms in India and Brazil were surveyed. The data were analyzed through multivariate data techniques. This study was grounded on the concepts from the socio-technical systems theory. Our findings indicated that I4.0 design principles positively moderate the relationship between KM practices and innovation performance. In particular, this moderation seems to be more prominent for product innovation performance, although it was also found for process innovation performance. I4.0 design principles determine the expected mindset and behaviors in companies undergoing digital transformation. Our research showed that the effect of KM practices on innovation performance may be boosted when I4.0 design principles are extensively integrated into organizations. Although the separate implementation of I4.0 design principles and KM practices may yield improvements in the innovation performance, we evidenced that their joint implementation is likely to offer a balanced combination between socio and technical elements.
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Purpose This study explores the role of external pressure, engagement capability (ENC), alliance capability (ACA), environmental sustainability commitment (ESC), and circular supply chain capability in circular economy performance. Design/methodology/approach Through a cross-sectional survey and data collected from 124 small and medium enterprises (SMEs) in Ghana, this study employs partial least square structural equation modelling (PLS-SEM) to test the proposed model. Findings The findings reveal the following; first, external pressure has a significant impact on ESC. Second, ESC positively impacts ACA, ENC and circular supply chain capability. Third, ACA and ENC mediate the relationship between ESC and circular supply chain capability. Finally, circular supply chain capability has a significant impact on circular economy performance. Originality/value The originality of this study lies in testing a novel model that confirms that SMEs respond to external pressure by enhancing ESC as well as develop engagement and alliance capabilities to improve circular supply chain capability to achieve circular economy performance goals.
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The research on how to manage the openness paradox in corporate innovation networks makes for an interesting topic in the innovation literature. This study investigates the configurational effects of innovative search, appropriability, and open network characteristics on corporate innovation performance. To this end, the study samples 593 Chinese manufacturers using the qualitative comparative analysis method. Empirical findings show that three open strategies improve innovation performance—the patent applicant-dominant, balanced, and explorative search-dominant strategies in low-level, high-level, and high- or low-level geographic and organizational research and development (R&D) networks, respectively. This study also reveals the critical role of an R&D network in open strategies. Specifically, firms with high-level geographic or organizational R&D networks tend to adopt complementary open strategies, whereas those with low-level R&D networks prefer substitutive open strategies. These findings guide firms to choose suitable open strategies in innovation networks.
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With the great opportunities created by the new advances in Industry 4.0, many manufacturers are testing and investing in new equipment and infrastructure to deploy these technologies. However, there are a huge number of small and medium-sized manufacturers (SMMs) that are lagging behind due to the lack of in-house R&D capabilities and workforce shortage and/or financial constraints to afford such investment. Additionally, application of theoretical production research in SMMs often confront challenges such as low data availability and data quality, etc. In this paper, we describe a case study at a local medium-sized manufacturer of electromechanical devices for industrial, consumer, and medical applications, who was struggling to meet ever-growing market demand, and apply a novel approach of production system modelling to overcome the challenge of unavailability of the operation up- and downtime data. Specifically, the parametric model of the production system is identified using several system performance metrics derived based on the parts flow data of the in-process buffer. With the mathematical model constructed, the system bottleneck is analysed and a number of improvement scenarios are explored that can potentially enhance the system throughput. Finally, model sensitivity is analysed by calculating the deviation of the model-predicted performance metrics to those produced by a reference nominal model. This analysis demonstrates that the model constructed using our proposed approach is robust even when the system parameters vary from the baseline ones.
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Grounded on resource-based view and dynamic capability perspectives, this research aims to explore linkages between the firm's big data management activities (BDMA), green manufacturing (GM) practices, and sustainable business performance (SBP). The research model was empirically evaluated using data collected from 248 pharmaceutical manufacturers in India during the COVID-19 pandemic. The analysis was performed using a covariance-based structural equation modeling using AMOS 20. The results indicate that GM activities impact SBP directly. Further results imply the mediating role of GM practices on the relationship between BDMA and SBP. The analysis reveals that senior management's resource commitment in pharmaceutical firms is a moderating mechanism in strengthening the association between BDMA and GM practices. This study is significant as it provides key theoretical and managerial implications for pharmaceutical sectors during emergent situations.