Can organizational legitimacy stimulate digitalization and affect operational performance? The impact of COVID-19 on uncertainty in supply management

Abstract

This study investigates the impact of organizational legitimacy on digitalization and operational performance in the context of COVID-19 pandemic considered as a ‘black-swan’ event due to its unparalleled extreme levels of supply uncertainty. Drawing on the institutional isomorphism theory, the authors provide a theoretical model that they assess empirically using structural equation modelling on a survey data from 204 firms. The findings reveal that COVID-19 supply uncertainty did not lead to a wave of digitalization and that organizational legitimacy can strongly affect digitalization and operational performance. This article contributes to purchasing and supply management literature by mobilizing a novel theoretical framework in this field. In addition, this paper highlights the benefits of adopting a corporate strategy based on cost domination to increase the positive impact of organizational legitimacy on operational performance.