Insights into the digitalization-performance relationship: the role of flexibility and quality enhancing organizational practices

Abstract

Although still in its early stages for the average manufacturing firm, the adoption of digital technologies has arrived in production systems. In response to these changes, firms are transforming their production systems and processes to accommodate this trend towards digitalization, constituting Industry 4.0. To make change effective, manufacturing firms are implementing advance production technologies and complement these with the necessary organizational changes in the production processes. Building on the premises of diffusion of innovation theory, the resource-based view and socio-technical systems theory, the present study examines whether the relation between the implementation of digital technologies and flexibility- and quality-enhancing organizational practices have a direct and moderating effect on the operational efficiency of manufacturing firms. The data come from a questionnaire-survey among 502 Spanish and Dutch organizations that responded to the European Manufacturing Survey in 2015 and 2018. Using a concatenated and multi-country dataset, the results reveal that both digitalization and organizational practices affect operational efficiency positively, but the impacts are mostly on different efficiencies, i.e. digitalization results in more efficiency regarding quality aspects (scrap rate, quality complaints), while organizational practices impact lead time and not-on-time-delivery efficiencies, and quality complaints. Both technologies and flexibility- and quality-enhancing organizational practices are seemingly needed, and sometimes even complement each other, but they do not provide synergy effects in combination. Last, early adoption of the digital technologies can help to further improve operational efficiencies.

Keywords:

• Digitalization
• European Manufacturing Survey
• production processes
• organizational practices
• firm performances

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The Digital Decade is a comprehensive framework that will guide all actions relating to digitalization. The aim of the Digital Decade is to ensure all aspects of technology and innovation work for people.

Additional information

Notes on contributors

Alba Manresa

Alba Manresa is an Associate Professor and teaching and research staff with the Faculty of Economic and Social Sciences at the Universitat Internacional de Catalunya (UIC Barcelona), Barcelona (Spain). Alba Manresa holds a PhD on Economics and Business Administration at the University of Girona. Teacher of People Management, Business Management and Project Management and coordinator of double degrees with Birkbeck University (UoL). Her main research interests are in the areas of artificial intelligence in workplace, employee satisfaction, entrepreneurship and digital platforms and digital business models, higher education and teaching innovation practices. She published in several international journals including Venture capital: an international journal of entrepreneurial finance, International Journal of Consumer Studies, Central European journal of operations research, among others. Her research outputs have been published in journals indexed in the JCR and SCOPUS databases.

Andrea Bikfalvi

Andrea Bikfalvi, PhD, is a ‘Serra Húnter’ associate professor and teaching and research staff in the Department of Business Administration and Product Design at the University of Girona (Spain). Teacher of strategic management and innovation management and deputy director of the Chamber of Commerce Chair of Family Business. Her main research interest is in strategy, entrepreneurship, and holistic approaches of innovation in all types of organizations. She has published in academic journals including Technovation, Management Decision, Technological Forecasting and Social Change, Journal of Cleaner Production, Journal of Business and Industrial Marketing. Since 2005, Andrea is the coordinator of the European Manufacturing Survey (EMS) in Spain.

Paul E. M. Ligthart

Paul E. M. Ligthart (1959) is Associate Professor Strategy with focus on Strategic Innovation and Participation in the Department of Business Administration of Nijmegen School of Management, Radboud University of Nijmegen. He studied (experimental) social and organizational psychology (MSc) and received his Ph.D. in theoretical sociology at Interuniversity Centre of Social Science Theory and Methodology (ICS) both at the Rijksuniversiteit Groningen. His main research interest is the study of effective configurations of strategy practices in organizations regarding management of (non)-technological innovation (in particular digitalization and sustainability practices) and financial participation, employee ownership. He published in several top journals (JIBS, Industrial Relations, JBIR) as well as edited book chapters. He is the Dutch representative of the international research networks of the European Manufacturing Survey (EMS, 15+ countries) and Human Resource Management (CRANET, 35+ countries). In collaboration with biomedical research institutes of RadboudUMC, IRB Barcelona, IEO Milano and CPR Copenhagen, he participates in the H2020 project EnableCares developing and teaching courses in entrepreneurship and innovation. Member Scientific Advisory Board Horizon project Bridges 5.0.

Robert A. W. Kok

Robert A. W. Kok (1969) is associate professor of Innovation at the Responsible Innovation & Entrepreneurship Centre, Institute for Management Research, Radboud University Nijmegen, The Netherlands. Robert Kok was visiting scholar at the Institute for Technology and Management of the Technical University Berlin. He obtained his Ph.D. in business administration (2003) from the University of Groningen. His research is concentrated on radical high-tech new product development for sustainable solutions. Topics of interest include open innovation, environmental sustainability, digital transformation, adoption of digital and sustainable technology, involvement and governance of stakeholders as well as innovation in start-ups. His articles are published in journals such as Journal of Product Innovation Management, Technovation, IEEE Transactions on Engineering Management, Journal of Cleaner Production, Creativity and Innovation Management, Journal of Business Research, Scientometrics, Industrial Marketing Management, amongst others.