A Structural Relationship Between Environmental Uncertainty, Dynamic Capability, and Business Performance in a Smart Supply Chain Environment

Abstract

E-commerce, based in the 4th industrial revolution to respond to environmental changes such as rapid technical development, increasing global competition, and diverse customer needs, is accelerating while uncertainty in the business environment grows more severe. In order to effectively respond to this uncertain business environment, individual companies and parts of supply chains need flexibility, and this need for dynamic flexibility is growing as uncertainty increases. In this study, we tested our hypothesis using structural equation model analysis to verify the structural relationship between dynamic capability and business performance in the smart supply chain environment of Korean small and medium manufacturers. We confirmed through this that dynamic capability and environmental uncertainty in a smart supply chain environment have a partially significant effect on business performance and that manufacturers must strive to implement direct, systematic policies and improve dynamic capability to respond to an uncertain business environment.KeywordsSmart supply chainDynamic capabilityEnvironmental uncertaintyBusiness performance