Investigating the relationship among Industry 4.0 drivers, adoption, risks reduction, and sustainable organizational performance in manufacturing industries: An empirical study

Abstract

Although sustainability is the top agenda for most global organizations, the noteworthy progress in this realm is still invisible, mainly due to the absence of a robust framework and reliable empirical evidence. Higher Sustainable Organisational Performance (SOP) means the organization has attained effective and efficient control over the majority of business functions, leading to a sustainable competitive edge over the competitors and higher customer delight. Undoubtedly, Industry 4.0 (I4.0) has revolutionized the manufacturing industry and is expected to leverage SOP in times to come. In this context, the study of I4.0 risks reduction and I4.0 drivers needs urgent attention. Similarly, investigating the impact of I4.0 risks reduction and I4.0 adoption on SOP is overlooked in the current literature. Also, the mediating role of I4.0 adoption through I4.0 risks reduction on SOP is yet to be investigated, which has the potential to transform the existing business model into a progressive, viable, and sustainable model. This research has established a theoretical model grounded on Contingency and Dynamic Capability View (DCV) theory. The model has explored the scope of I4.0 adoption to SOP by considering I4.0 drivers impacting I4.0 adoption and I4.0 risks mitigations impacting I4.0 risks reduction and their influence on SOP. Total 15 hypotheses are tested using software packages SmartPLS 3.0 and SPSS v23.0 based on the 273 respondents' data from 221 manufacturing companies of India. The research found I4.0 adoption and I4.0 risks reduction positively drive SOP, and I4.0 adoption has a positive significant mediating effect on the relationship between I4.0 risks reduction and SOP. This study has the potential to support managers, decision-makers, and researchers to build, test, and validate similar models adding minor reforms and developing innovative and creative combinations of inherent capabilities and resources to realize the SOP in manufacturing companies. The study is unique as it has explored the link between I4.0 risks reduction, I4.0 adoption, SOP, I4.0 drivers, and I4.0 risks mitigations for the first time. In addition, the investigation on the mediating effect of I4.0 adoption in the relationship between I4.0 risks reduction and SOP is a pioneering contribution to the existing literature.