Disentangling the link between ICT and Industry 4.0: impacts on knowledge-related performance

PurposeIndustry 4.0 technologies are promising to increase manufacturing companies' performance through the new knowledge that such digital technologies allow to create and manage within the firm boundaries and through customer interactions. Despite the great attention on the Industry 4.0 adoption paths, little is known about the relationships with previous waves of digital technologies, namely, information and communication technologies (ICTs), and how different groups of both types of technologies link to knowledge and its related performances.Design/methodology/approachThe study employed a quantitative research design using a survey method. Submitting the questionnaire to entrepreneurs, chief operation officers or managers in charge of the operational and technological processes of Italian manufacturing firms, 206 respondents stated that their firm has adopted at least one of the seven Industry 4.0 technologies investigated.FindingsThe findings of the study highlight the positive relationship between ICT and Industry 4.0 technologies in terms of both intensity and groups of technologies (Web-based, Management and Manufacturing ICT; Operation, Customization and Data-processing 4.0), and how technologies affect knowledge-related performances in terms of products and processes, job-learning, product-related services and customer involvement.Originality/valueThis study is one of the first attempts to link groups of ICT to groups of Industry 4.0 technologies and to explore the effects in terms of knowledge-related performances as a measure of technology use. The study shows strong path dependency among ICT, Industry 4.0 and knowledge performance, enriching the literature on technological innovation and knowledge management.

The road towards industry 4.0: a comparative study of the state-of-the-art in the Italian manufacturing industry

PurposeThis paper has two objectives: first, to investigate the state-of-the-art of Industry 4.0 (I4.0) adoption in Italian manufacturing firms and, second, to understand variations in technologies implemented and business functions involved, benefits perceived, and obstacles encountered in I4.0 implementation over a three-year period.Design/methodology/approachThe approach adopted in this research is descriptive, nesting longitudinal features. The paper presents a descriptive survey of 102 Italian manufacturing companies. The authors also evaluated non-response biases. The longitudinal approach was achieved by comparing the responses of the 40 sub-samples in common with a second similar survey launched three years prior, which aimed to identify patterns of evolution in the adoption of the I4.0 paradigm.FindingsSurvey findings demonstrate that Italian manufacturing companies still have limited awareness of I4.0 technologies, and the adoption of I4.0 technologies differs per technology. Company size and information system coverage level are the two factors that impact the company's technology adoption level. The comparative study shows that knowledge and adoption increase in a three-year interval with an unbalanced involvement of business functions regarding the I4.0 transformation. Indeed, companies are still seeking I4.0 solutions to reduce costs and lead times primarily, and the benefits perceived by companies are shown to be related to the number of I4.0 technologies in use. Finally, when companies put the I4.0 technologies into practice, competence is constantly considered the most significant barrier.Research limitations/implicationsThis paper aims at conducting a thorough investigation into the development of I4.0 adoption in manufacturing companies. The main limitation of this study concerns the limited number of subjects involved in the longitudinal study (40) and the focus on a limited geographical area (Italy). In addition, more I4.0 technologies could also be incorporated into the survey protocol to gain further insight into I4.0 development.Originality/valueThe authors provide one of the first attempts to assess the variations of I4.0 implementation concerning technology adoption, business function involvement, and the alteration of benefits and obstacles. Several studies presented in the literature highlight the lack of longitudinal studies investigating the development of the I4.0 paradigm in a specific manufacturing context: this paper is the attempt at filling this gap.

The Behavioral Agency Model and Innovation Investment: Examining the Combined Effects of CEO and Board Ownership

The Behavioral Agency Model (BAM) offers a behavioral account of executive incentives, according to which the perceived threats to CEO wealth, that is, CEO risk bearing, influence a CEO’s propensity to undertake innovation investments. While examining stock options extensively, the extant BAM research devotes relatively scant attention to other forms of incentives, such as stock ownership, that are conducive to one source of risk bearing, that is, employment risk. Furthermore, with an emphasis placed on the CEO, much BAM research neglects the interactive risk preferences of the CEO and the board. This study refines the BAM and empirically explores the countervailing forces exerted by the CEO and board ownership. It elucidates that while CEO ownership exhibits an inverted U-shaped relationship with innovation investment, board ownership weakens that relationship. An exploratory test on a sample of 108 Italian manufacturing firms provides support for the hypothesized effects. The refined BAM sheds further light on executive incentives through a behavioral lens, by elucidating the role of stock ownership and the interactive risk preferences of the CEO and the board.

Relationship lending and the use of trade credit: the role of relational capital and private information

Using a unique sample of Italian manufacturing firms, we investigate the impact of relationship lending on firms’ use of trade credit. We find that firms maintaining close and long-lasting relationships with their main banks are associated with higher amounts of trade credit extended by suppliers. This result is robust to alternative measures of trade credit and relationship lending, and to different estimation techniques. We also analyze the mechanisms driving the association between relationship lending and the use of trade credit. Regression results suggest that the positive link between accounts payable and relationship lending is especially significant for firms that use to provide soft information to their lenders and for companies with greater relational abilities.Plain English Summary The existence of close and long lasting lending relationships positively affects the amount of trade credit manufacturing firms receive from their suppliers. By relying on the Survey on Italian Manufacturing Firms, we show that the positive link between relationship lending and the use of trade credit is driven by two channels: private information and relational capital. In a policy perspective, our findings reveal a need for banking regulation and supervision to encompass banking business models in evaluating banks. The current approach might not be suitable for local banks investing in soft information acquisition and could weaken SMEs’ chances to receive both bank financing and trade credit from suppliers. Moreover, from a managerial point of view, our results uncover the relevance of firms’ ability to create strong relationships with banks, suppliers, and other companies that may help alleviating financial constraints.

Customer participation in new product development: an Industry 4.0 perspective

PurposeThe use of modern technologies of the fourth industrial revolution, commonly known as “Industry 4.0” (I4.0), is believed to have considerable potential for product customisation. In this context, this paper aims to explore whether or not using these technologies impacts customer participation (CP) in a firm's new product development (NPD) process.Design/methodology/approachTo empirically test the proposed relationships, the authors collected the North Italian manufacturing firms' data and applied regression analysis.FindingsEmpirical results indicate that, on the one hand, the technologies have their specific and individual impacts, and on the other hand, the firms which use more I4.0 technologies allow more customer participation in their product design and production process. This positive impact is more robust in product design than in the production process.Practical implicationsManagers aiming to benefit from CP should broaden the scope of adopting I4.0 technologies and consider different roles concerning the design and production phases of the new product development process. Recognising the importance and allowing CP in NPD will enable firms to meet the customised demands.Originality/valueTo the best of the authors' knowledge, the proposed relationships of this study have been extensively debated theoretically in the I4.0 context but never empirically tested before. It is one of the few studies which discusses the strategic adoption and the combined use of I4.0 technologies to create more opportunities for product customisation.

Teleworking during the Covid-19 Crisis in Italy: Evidence and Tentative Interpretations

The paper investigates the determinants and discusses the consequences of the switch towards Italian high-tech firms’ teleworking due to the COVID-19 crisis. Teleworking is important to reduce traffic congestion and increase the sustainability of cities, and as such, it is important to understand what helps the successful transition of firms to telework. COVID-19 crisis represents a natural experiment that allows studying organizational ability to adapt to unexpected environmental changes rapidly. The study is based on a survey conducted in mid-April 2020 during the COVID-19 lockdown among Italian manufacturing firms’ managers in high-tech sectors. The final sample is composed of 179 observations. Using path analysis, we model the organizational e-readiness as a mediator of the firm’s technological and organizational characteristics in the rate of adoption of teleworking. Teleworking is also modeled as dependent on human resources and from the exogenous shock represented by COVID-19 lockdown. While teleworking has been imposed by COVID-19, organizational readiness plays a key role in shaping the rate of teleworking adoption during emergencies.

“Extraordinary Administration” for Business Rescue in Italy: Admission Requirements and Value Creation

Large Italian firms in financial distress are admitted to the business rescue procedure called “Extraordinary Administration” with a view to preserving the business as a going concern when two objective requirements are met: at least two hundred employees and debts not less than two-thirds both of total assets and revenues. This study examines whether these selection criteria are adequate to identify large firms in terms of value creation. The analysis is motivated by the idea that social utility in the rescue of large firms should not be justified only by the number of employees, but also by the worth of the goods and services created by the firms. The sample is made up of 1,581 Italian manufacturing firms and four subsamples were analyzed for the three year period 2015-2017 using a set of logistic regression models. Research findings show that highly leveraged firms eligible to go into “Extraordinary Administration” do not select large firms as measured by proxy variables that take into account value creation, such as total assets and/or revenues. On the other hand, hypothetical alternative selection criteria based on total assets and revenues identify large firms in terms of value creation but no statistical evidence was found to show how these firms are leveraged.

Entry-Mode Selection and Firm’s Productivity across Market Destinations: An Empirical Investigation

This work aims at investigating the productivity premia of three alternative modes of internationalization for a panel of Italian manufacturing firms: FDI, international outsourcing, and exporting. By using simple regression tests we try to investigate whether and to what extent these modes of firm‘s entry into the foreign markets increase the productivity of firms at home. Surprisingly, our findings show that firms that self-select in engaging in exporting have the greatest productivity gains. The findings hold true even when we extend the analysis to geographical country penetrations.