Impact of Internet of Things Adoption on Organizational Performance: A Mediating Analysis of Supply Chain Integration, Performance, and Competitive Advantage

Abstract

Companies, in emerging economies and beyond, struggle to develop integration mechanisms that deliver supply chain performance and competitive advantages. Those striving for organizational performance by streamlining supply chain processes must assess the challenges and benefits of employing technologies for supply chain integration. This study’s objective is to analyze the supply chain integration antecedents required to enable supply chain performance, competitive advantages, and organization performance. Although prior research indicates that the Internet of Things (IoT), as one of the enabling technologies, plays an instrumental role in enhancing organization performance through supply chain integration, no empirical tests have been performed before. Therefore, this study examines the direct and indirect effects of the IoT’s impact on organizational performance through different mediating variables—supply chain integration, supply chain performance, and competitive advantages. This study uses survey data from Saudi Arabian companies that adopted IoT-based applications in their supply chains. The results from partial least squares structural equation modeling indicate that the benefits and challenges of IoT adoption significantly affect supply chain integration. Moreover, supply chain integration partially mediates the relationship between IoT, supply chain performance, and competitive advantages while supply chain performance and competitive advantages mediate the relationship between supply chain integration and organization performance. This study offers theoretical implications regarding how dynamic capabilities are associated with supply chain integration and how they influence organizational performance; it also reveals valuable managerial insights.