Are smart manufacturing systems beneficial for all SMEs? Evidence from Korea

PurposeThrough the resource-based view (RBV) and contingency theory, this study empirically investigates the impacts of smart manufacturing systems' maturity levels on the performance of small and medium-sized enterprises (SMEs). Moreover, it aims to examine how industry types (i.e. high- and low-tech industries) and human-resource factors (i.e. the proportion of production workers to total workers) as contingency factors influence the effects of smart manufacturing systems.Design/methodology/approachThe study conducted an empirical investigation of a sample of 163 Korean manufacturing SMEs. This study used an ordinary least squares regression to examine the impacts of the maturity levels of smart manufacturing systems on financial performance. Moreover, the impacts on operational efficiency were analysed using data envelopment analysis based on bootstrap methods and Tobit regression.FindingsThe RBV results indicate that the higher the maturity levels of smart manufacturing systems, the higher the financial performance and operational efficiency. Moreover, based on contingency theory, this study reveals that the effect of the maturity levels of smart manufacturing systems on financial performance and operational efficiency depends on firms' industry types and the proportion of production workers.Research limitations/implicationsThis study shows that the introduction of smart manufacturing systems can help SMEs achieve better financial performance and operational efficiency. However, their effectiveness is contingent on firms' industry types and the characteristics of their human resources.Practical implicationsSince the effects of the maturity levels of smart manufacturing systems on SME performance differ depending on their industries and the characteristics of human resources, managers need to consider them when introducing or investing in smart manufacturing systems.Originality/valueBased on the RBV and contingency theory, this is the first empirical study to examine the moderating effects of industry types and the proportion of production workers on the impacts of the maturity levels of smart manufacturing systems on the financial performance and operational efficiency of SMEs.

Multi-criteria decision analysis for pharmaceutical supplier selection problem using fuzzyTOPSIS

PurposeSupplier selection in the supply chain network (SCN) has strategic importance and involves multiple factors. The multi-criteria nature of the problem coupled with environmental uncertainty requires several procedures and considerations. The issue of decision-making in selecting the best among various qualified suppliers remains the major challenge in the pharmaceutical industry. This study investigated the multi-criteria multi-supplier decision-making process and proposed a model for supplier selection problems based on mixed-integer linear programming.Design/methodology/approachThe concept of principal component analysis (PCA) was used to reduce data dimensionality, and the four best criteria have been considered and selected. The result is subjected to decision-makers’ (DMs’) reliability test using the concept of a triangular fuzzy number (TFN). The importance of each supplier to each measure is established using fuzzy technique for order preference by similarity to an ideal solution approach, and the suppliers have ranked accordingly.FindingsThis study proposes a mixed integer linear programming model for supplier selection in a pharmaceutical company. The effectiveness of the proposed model has been demonstrated using a numerical example. The solution shows the model's applicability in making a sound decision in pharmaceutical companies in the space of reality. The model proposed is simple. Readily commercial packages such as LINDO/LINGO and GAMS can solve the model.Research limitations/implicationsThis research contributed to the systematic manner of supplier selection considering DMs’ value judgement under a fuzzy environment and is limited to the case study area. However, interested researchers can apply the study in other related manufacturing industries. However, the criteria have to be revisited to suit that system and might require varying ratings based on the experts' opinions in that field.Practical implicationsThis work suggests more insights practically by considering a realistic and precise investigation based on a real-life case study of pharmaceutical companies with six primary criteria and twenty-four sub-criteria. The study outcome will assist organizations and managers in conducting the best decision objectively by selecting the best suppliers with their various standards and terms among many available contenders in the manufacturing industry.Originality/valueIn this paper, the authors attempted to identify the most critical attributes to be preserved by the top managers (DMs) while selecting suppliers in pharmaceutical companies. The study proposed an MILP model for supplier selection in the pharmaceutical company using fuzzy TOPSIS.

Loyalties divided or identities as resources? The role of external relational identification in facilitating socialization

PurposeAlthough research regarding socialization processes recognizes the importance of organizational identification for newcomer adjustment outcomes, it has less frequently considered the impact of newcomer identification with targets external to the organization. This study aims to investigate whether relational identification with identities external to the organization can be beneficial for socialization outcomes, a relationship the authors describe through the conservation of resources theory. At a time when newcomers are expending resources and may not have a support system inside the organization, important identities may foster success through building a resource base of support available to the newcomer.Design/methodology/approachTwo studies were conducted with newcomers, both groups responded to multi-wave surveys. The authors conducted an initial study with undergraduate students (n = 45) in their first semester of college and a second study with working individuals employed full time in their first year in a new organization (n = 148).FindingsRelational identification with identities external to the organization is positively related to job engagement through the dual mediation of social support and psychological well-being. The results indicate that these external resources encourage well-being and free newcomers to invest in becoming physically, emotionally and cognitively engaged with their new jobs.Practical implicationsThe results suggest that organizations may wish to take care in helping newcomers maintain strong relational identities outside the organization while becoming connected with their new organization.Originality/valueThe findings suggest that external relational identities are a neglected and important element influencing the socialization process.

A two-phase approach to efficiently support product recovery systems in a circular economy context

PurposeThe execution of product recovery strategies and the definition of an adequate system to manage its performance are crucial to move toward the employment of a successful circular economy (CE) concept. Defining strategies for the efficient management of product recovery requires product data that is difficult to obtain, making it harder to handle. However, efficient product recovery management can play a key role in shifting companies from a linear economy model to a more sustainable CE model, providing economic benefits and increasing customer satisfaction by recovering and adding value to the discarded product. Therefore, this study aims to provide better models to support decision-making and to evaluate product recovery performance.Design/methodology/approachThe present study highlights a comprehensive two-stage decision approach to identify and examine the relevant key performance indicators (KPIs) for performance improvement of an information facilitated product recovery system (IFPRS) in a CE context. In the first phase, a structural equation modeling (SEM) methodology is adopted to categorize the KPIs by employing exploratory factor analysis and measurement of the model fit is obtained using the confirmatory factor analysis. Further, in the second phase, the KPIs are ranked and prioritized on the basis of expert’s recommendations adopting fuzzy-technique for order of preference by similarity to ideal solution (FTOPSIS).FindingsEmpirical investigation is conducted by compiling data from an association of six decision-makers (DMs) and two DMs from a respective prospect. The results highlight that “Technology Capacity” is ranked as the highest and is the most prominent KPI for successful employment of IFPRS practices. The results of the study would benefit policy makers and company directors in the selection of KPIs based on their importance in a context of high competition and greater pressure to adopt sustainable practices in the management of their companies.Originality/valueAs far as the authors know, no study has been performed till date to identify and construct a structural KPIs model for IFPRS performance improvement in the context of CE. The paper, therefore, proposes a two-phase SEM-TOPSIS technique to measure the impact of KPIs which is a new integration in the existing literature. The results of the study would benefit policy makers and company directors in the selection of KPIs based on their importance in a context of high competition and greater pressure to adopt sustainable practices in managing their organizations.

How big data alters value creation: through the lens of big data competency

PurposeAs various different and even contradictory concepts are proposed to depict a firm's capabilities related to big data, and extant relevant research is fragmented and scattered in several disciplines, there is currently a lack of holistic and comprehensive understanding of how big data alters value creation by facilitating firm capabilities. To narrow this gap, this study aims to synthesize current knowledge on the firm capabilities and transformation of value creation facilitated by big data.Design/methodology/approachThe authors adopt an inductive and rigorous approach to conduct a systematic review of 185 works, following the “Grounded Theory Literature-Review Method”.FindingsThe authors introduce and develop the concept of big data competency, present an inductive framework to open the black box of big data competency following the logic of virtual value chain, provide a structure of big data competency that consists of two dimensions, namely, big data capitalization and big data exploitation, and further explain the evolution of value creation structure from value chain to value network by connecting the attributes of big data competency (i.e. connectivity and complementarity) with the transformation of value creation (i.e. optimizing and pioneering).Originality/valueThe big data competency, an inclusive concept of firm capabilities to deal with big data, is proposed. Based on this concept, the authors highlight the significant contributions that extant research has made toward our understanding of how big data alters value creation by facilitating firm capabilities. Besides, the authors provide a future research agenda that academics can rely on to study the strategic management of big data.

Uncovering the worth of the past: the relationship between corporate museums' strategic orientation and dual performance

PurposeThe main aim of the study is to empirically investigate the relationship between strategic orientation and a dual conceptualization of performance (i.e. non-economic performance and economic performance) in the research context of corporate museums, which are owned and run by private companies. Furthermore, the study aims to explore the nature of the relationship between the dual performance, shedding light on the relevance of non-economic results for this peculiar category of museums.Design/methodology/approachThe study is based on survey data from 105 Italian corporate museums, which represent almost the entire population in the country (91%). A structural model was estimated using SmartPLS software in order to examine the direct and indirect effects of strategic orientation on corporate museums' non-economic and economic performance.FindingsThe findings show that only if corporate museums are able to achieve non-economic performance, creating value for the owning company and the local community, they can also have good results in economic terms. Thus, the non-economic performance acts as a mediator into the relationship between strategic orientation and economic performance.Originality/valueThe current work is a pioneer study for the empirical investigation of performance within corporate museums. The empirical model of the study, based on a dual conceptualization of performance and a mediation analysis, is completely innovative in this research context.

Bifurcating the dynamic dominant logic: technical and evolutionary patterns of action

PurposeThis study proposed the integrative model of dynamic dominant logic (DL) with exploitation (EP) and exploration (ER) as a pattern of actions in endeavoring firm performance (FP). This study also intended to explain the multiple patterns of DL in creating technical and evolutionary fitness simultaneously.Design/methodology/approachThis study used a cross-sectional quantitative analysis of the Indonesian commercial banking population facing digital transformation and was analyzed using covariance-based structural equation modeling through parceling.FindingsThe model confirmed that DL positively affects EP and ER. It also revealed that DL indirectly impacts FP through EP, indicating changes in the traditional banking business through the strong acceptance of “new realities” in adapting to the rapid growth of technology. Hence, this study discovered that during the recent banking digital transformation, the beneficial inertia of the technical pattern of action might lose effectiveness in creating superior performance.Practical implicationsDL is vital in locking short-term performance while maintaining long-term performance opportunities through EP and ER to promote digital transformation. Accordingly, it induced banks to adopt new technology for value creation and fortifying competitive advantage.Originality/valueThis study provided a theory about how DL links the firm's decision-making process by promoting multiple patterns of action in achieving technical and evolutionary fitness. It highlighted the DL as a resource conceptualization that promotes resource development through EP and ER as microfoundation of dynamic capabilities during the tension of institutionalization and digital transformation.

Effect of buyer dependency of subcontracting SMEs on R&D investment

PurposeThis study aims to focus on the subcontracting relationship between small and medium-sized enterprises (SMEs) and business group buyers and analyze the effect of the level of buyer dependency on R&D intensity. The primary prediction is that buyer dependency and R&D intensity have a non-linear relationship, showing an inverted U-shaped relationship. Furthermore, the moderating effect of founder CEOs and internationalization is explored.Design/methodology/approachA sample of 546 firm-level survey responses were collected from Korean subcontracting SMEs provided by the Ministry of SMEs and Startups and the Korea Venture Business Association.FindingsA lower level of dependency on business group buyers promotes R&D investment, while excessive dependence reduces R&D investment. Moreover, founder CEOs and internationalization decrease the effect of buyer dependency on R&D investment, implying that both firm characteristics are associated with a long-term focus and promote R&D investment.Research limitations/implicationsThis research contributes to the literature on the special form of the buyer–supplier relationship, that is, subcontracting. Subcontracting has a contradictory effect on R&D investment based on large group buyer dependency, and this relationship is moderated by the founder CEO and internationalization.Practical implicationsThis study provides insights to managers and practitioners governing SME subcontracting by showing that the level of buyer dependency is better managed in promoting innovation, and the long-term perspective allows SMEs to be less affected by buyer dependency.Originality/valueThis study extends the literature by focusing on the non-linear relationship between buyer dependency and R&D intensity of subcontracting SMEs. This approach addresses the contradicting results suggested by prior supply chain management literature and suggests that the level of buyer dependency should be considered when analyzing the subcontracting relationship.

Living up to your codes? Corporate codes of ethics and the cost of equity capital

PurposePrevious literature provides mixed evidence about the effectiveness of a code of ethics in limiting managerial opportunism. While some studies find that code of ethics is merely window-dressing, others find that they do influence managers' behavior. The present study investigates whether the quality of a code of ethics decreases the cost of equity by limiting managerial opportunism.Design/methodology/approachIn order to test the hypothesis, the authors perform an empirical analysis on a sample of US companies in the 2004–2012 period. The results are robust to a battery of robustness analyses that the authors performed in order to take care of endogeneity.FindingsEmpirical results indicate that a higher quality code of ethics is associated with a lower cost of equity. In other words, firms with a more comprehensive code of ethics and better-designed implementation procedures limit managerial opportunism and pay a lower cost of equity because they are perceived by investors to be less risky.Research limitations/implicationsPractical implicationsSocial implicationsOriginality/valueThe authors contribute to the literature in two ways. First, by looking at the market reaction to the code of ethics, thus capturing all its indirect possible benefits and second, by measuring not only the existence but also the quality of a code of ethics. Based on the results, policymakers may choose to further promote codes of ethics as an effective corporate governance mechanism.