The Impact of Organizational and Environmental Factors on the Industry 4.0 Adoption Among Malaysian Manufacturing SMEs
Abstract
The role of organizational and environmental factors in Industry 4.0 adoption is of utmost significance. These factors are at the core of shaping how businesses adopt advanced technologies and practices, ultimately defining the success and efficiency of the Industry 4.0 implementation. Therefore, the aim of this study is to investigate the impact of organizational and environmental factors on the adoption of Industry 4.0 among Malaysian manufacturing SMEs. The survey gathered responses from 157 managerial staff members in Malaysian manufacturing SMEs. The data underwent analysis with SPSS Statistics version 26. Quantitative analysis techniques, including validity test, reliability test, classic assumptions test, and hypothesis test, were employed in the data analysis process. Organizational and environmental factors are the independent variables, meanwhile Industry 4.0 adoption is the dependent variable in this study. The results of this study demonstrate that organizational and environmental factors have a significant impact on Industry 4.0 adoption among Malaysian manufacturing SMEs. Which means the internal organization of these businesses and the external factors in their operating environment are essential in determining how ready and capable they are to adopt Industry 4.0.
References
Abed, S. S. (2020). Social commerce adoption using TOE framework: An empirical investigation of Saudi Arabian SMEs. International Journal of Information Management, 53(March), 102118. https://doi.org/10.1016/j.ijinfomgt.2020.102118
Agostini, L., & Nosella, A. (2019). The adoption of Industry 4 . 0 technologies in SMEs : results of an international study. November. https://doi.org/10.1108/MD-09-2018-0973
Arnold, C., Veile, J. W., & Voigt, K.-I. (2018). What Drives Industry 4.0 Adoption ? An Examination of Technological, Organizational, and Environmental Determinants. International Association for Management of Technology IAMOT 2018 Conference Proceedings.
Cevik Onar, S., Ustundag, A., Kadaifci, Ç., & Oztaysi, B. (2017). The Changing Role of Engineering Education in Industry 4.0 Era. In Industry 4.0: Managing The Digital Transformation (pp. 137–151). https://doi.org/10.1007/978-3-319-57870-5_8
Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences.
Cooksey, R. W. (2020). Illustrating Statistical Procedures: Finding Meaning in Quantitative Data, Third Edition. In Illustrating Statistical Procedures: Finding Meaning in Quantitative Data, Third Edition. https://doi.org/10.1007/978-981-15-2537-7
Flatten, T. C., Engelen, A., Zahra, S. A., & Brettel, M. (2011). A measure of absorptive capacity: Scale development and validation. European Management Journal, 29(2), 98–116. https://doi.org/10.1016/j.emj.2010.11.002
FMM Calls on SMEs to Adopt Industry 4.0 to Everage Global Market. (2022). https://www.bernama.com/en/business/news.php?id=2143908
Frank, A. G., Dalenogare, L. S., & Ayala, N. F. (2019). Industry 4.0 technologies: Implementation patterns in manufacturing companies. International Journal of Production Economics, 210(September 2018), 15–26. https://doi.org/10.1016/j.ijpe. 2019.01.004
Gangwar, H., Date, H., & Ramaswamy, R. (2015). Understanding determinants of cloud computing adoption using an integrated TAM-TOE model. Journal of Enterprise Information Management, 28(1), 107–130.
Hair, J. F., C. Black, W., J. Babin, B., & E. Anderson, R. (2010). Multivariate Data Analysis (7th Edition).
Ifinedo, P. (2011). An empirical analysis of factors influencing internet/e-business technologies adoption by SMEs in Canada. International Journal of Information Technology and Decision Making, 10(4), 731–766. https://doi.org/10.1142/S02196 22011004543
Industry 4 .0 In Malaysia: Opportunities behind the Challenges. (2020).
Industry 4WRD: National Policy on Industry 4.0. (2018). https://www.miti.gov.my/miti/resources/National Policy on Industry 4.0/Industry4WRD_Final.pdf
Insight Report: Readiness for the Future of Production Report 2018. (2018). In World Economic Forum. http://www3.weforum.org/docs/FOP_Readiness_Report_2018.pdf
Kaur, B. (2019). Malaysia falls behind in IR4.0 migration. New Straits Times. https://www.nst.com.my/news/nation/2019/08/514242/malaysia-falls-behind-ir40-migration
Kearns, G. S., & Lederer, A. L. (2004). The impact of industry contextual factors on IT focus and the use of IT for competitive advantage. Information and Management, 41(7), 899–919. https://doi.org/10.1016/j.im.2003.08.018
Lertwongsatien, C., & Wongpinunwatana, N. (2003). E-commerce Adoption in Thailand: An Empirical Study of Small and Medium Enterprises (SMEs). Journal of Global Information Technology Management, 6(3), 67–83. https://doi.org/10.1080/10 97198X.2003.10856356
Lin, D., Lee, C. K. M., Lau, H., & Yang, Y. (2018). Strategic response to Industry 4.0: an empirical investigation on The Chinese automotive industry Article information. Industrial Management & Data Systems, 118(3), 0–18.
Lin, H. F. (2013). Understanding the determinants of electronic supply chain management system adoption: Using the technology-organization-environment framework. Technological Forecasting and Social Change, 86, 80–92. https://doi.org/10.1016/j.techfore.2013.09.001
Masood, T., & Sonntag, P. (2020). Industry 4 . 0 : Adoption challenges and benefits for SMEs. Computers in Industry, 121, 103261. https://doi.org/10.1016/j.compind.2020.103261
Mohamed, M. (2018). Challenges and benefits of industry 4.0: An overview. International Journal of Supply and Operations Management, 5(3), 256–265.
Paydar, S., Endut, I. R., Yahya, S., & Rahman, S. H. A. (2014). Environmental Factors Influencing the Intention to Adopt RFID Technology in Retail Industry: An Empirical Study. Asia-Pacific Journal of Management Research and Innovation, 10(1), 13–26. https://doi.org/10.1177/2319510x14529490
Premkumar, G., & Roberts, M. (1999). Adoption of new information technologies in small businesses. Omega, International Journal Management Science, 27, 467–484.
Rai, A., & Patnayakuni, R. (1996). A Structural Model for CASE Adoption Behavior. Journal of Management Information Systems, 13(2), 205–234. https://doi.org/10.1080/0742 1222.1996.11518129
Rojko, A. (2017). Industry 4.0 concept: Background and overview. International Journal of Interactive Mobile Technologies, 11(5), 77–90. https://doi.org/10.3991/ijim.v11i5 .7072
Schroeck, M., Gill, J., Kwan, A., & Sharma, D. (2020). Evolving partner ecosystems in Industry 4.0 | Deloitte Insights. https://www2.deloitte.com/za/en/insights/focus/ industry-4-0/partner-ecosystem-industry-4-0.html
Seyal, A., Awais, M. M., Shamail, S., & Abbas, A. (2004). Determinants of Electronic Commerce in Pakistan: Preliminary Evidence from Small and Medium Enterprises. Electronic Markets, 14(4), 372–387. https://doi.org/10.1080/10196780412331311801
Sivathanu, B., & Pillai, R. (2018). Smart HR 4.0 - – how industry 4.0 is disrupting HR. Human Resource Management International Digest, 26(4), 7–11. https://doi.org/10.1108/ HRMID-04-2018-0059
Teo, T. S. H., Lin, S., & Lai, K. hung. (2009). Adopters and non-adopters of e-procurement in Singapore: An empirical study. Omega, 37(5), 972–987. https://doi.org/10.1016/ j.omega.2008.11.001
Thong, J. Y. L. (1999). An Integrated Model of Information Systems Adoption in Small Businesses. Journal of Management Information Systems, 15(4), 187–214. https://doi.org/10.1080/07421222.1999.11518227
Tortorella, G. L., Cawley Vergara, A. Mac, Garza-Reyes, J. A., & Sawhney, R. (2020). Organizational learning paths based upon industry 4.0 adoption: An empirical study with Brazilian manufacturers. International Journal of Production Economics, 219(June 2019), 284–294. https://doi.org/10.1016/j.ijpe.2019.06.023
Uglovskaia, E. (2017). The New Industrial era. In SMT Surface Mount Technology Magazine (Issue January). https://www.theseus.fi/handle/10024/123113
Wong, L. W., Leong, L. Y., Hew, J. J., Tan, G. W. H., & Ooi, K. B. (2019). Time to seize the digital evolution: Adoption of blockchain in operations and supply chain management among Malaysian SMEs. International Journal of Information Management, 52(June), 1–19. https://doi.org/10.1016/j.ijinfomgt.2019.08.005
Yang, F., & Gu, S. (2021). Industry 4.0, a revolution that requires technology and national strategies. Complex and Intelligent Systems, 7(3), 1311–1325. https://doi.org/10.1007/s40747-020-00267-9
Yap, C. S. (1990). Distinguishing Characteristics of Organizations Using Computers. Information and Management, 18(2), 97–107. https://doi.org/10.1016/0378-7206(90)90056-N
Agostini, L., & Nosella, A. (2019). The adoption of Industry 4 . 0 technologies in SMEs : results of an international study. November. https://doi.org/10.1108/MD-09-2018-0973
Arnold, C., Veile, J. W., & Voigt, K.-I. (2018). What Drives Industry 4.0 Adoption ? An Examination of Technological, Organizational, and Environmental Determinants. International Association for Management of Technology IAMOT 2018 Conference Proceedings.
Cevik Onar, S., Ustundag, A., Kadaifci, Ç., & Oztaysi, B. (2017). The Changing Role of Engineering Education in Industry 4.0 Era. In Industry 4.0: Managing The Digital Transformation (pp. 137–151). https://doi.org/10.1007/978-3-319-57870-5_8
Cohen, J. (1988). Statistical Power Analysis for the Behavioral Sciences.
Cooksey, R. W. (2020). Illustrating Statistical Procedures: Finding Meaning in Quantitative Data, Third Edition. In Illustrating Statistical Procedures: Finding Meaning in Quantitative Data, Third Edition. https://doi.org/10.1007/978-981-15-2537-7
Flatten, T. C., Engelen, A., Zahra, S. A., & Brettel, M. (2011). A measure of absorptive capacity: Scale development and validation. European Management Journal, 29(2), 98–116. https://doi.org/10.1016/j.emj.2010.11.002
FMM Calls on SMEs to Adopt Industry 4.0 to Everage Global Market. (2022). https://www.bernama.com/en/business/news.php?id=2143908
Frank, A. G., Dalenogare, L. S., & Ayala, N. F. (2019). Industry 4.0 technologies: Implementation patterns in manufacturing companies. International Journal of Production Economics, 210(September 2018), 15–26. https://doi.org/10.1016/j.ijpe. 2019.01.004
Gangwar, H., Date, H., & Ramaswamy, R. (2015). Understanding determinants of cloud computing adoption using an integrated TAM-TOE model. Journal of Enterprise Information Management, 28(1), 107–130.
Hair, J. F., C. Black, W., J. Babin, B., & E. Anderson, R. (2010). Multivariate Data Analysis (7th Edition).
Ifinedo, P. (2011). An empirical analysis of factors influencing internet/e-business technologies adoption by SMEs in Canada. International Journal of Information Technology and Decision Making, 10(4), 731–766. https://doi.org/10.1142/S02196 22011004543
Industry 4 .0 In Malaysia: Opportunities behind the Challenges. (2020).
Industry 4WRD: National Policy on Industry 4.0. (2018). https://www.miti.gov.my/miti/resources/National Policy on Industry 4.0/Industry4WRD_Final.pdf
Insight Report: Readiness for the Future of Production Report 2018. (2018). In World Economic Forum. http://www3.weforum.org/docs/FOP_Readiness_Report_2018.pdf
Kaur, B. (2019). Malaysia falls behind in IR4.0 migration. New Straits Times. https://www.nst.com.my/news/nation/2019/08/514242/malaysia-falls-behind-ir40-migration
Kearns, G. S., & Lederer, A. L. (2004). The impact of industry contextual factors on IT focus and the use of IT for competitive advantage. Information and Management, 41(7), 899–919. https://doi.org/10.1016/j.im.2003.08.018
Lertwongsatien, C., & Wongpinunwatana, N. (2003). E-commerce Adoption in Thailand: An Empirical Study of Small and Medium Enterprises (SMEs). Journal of Global Information Technology Management, 6(3), 67–83. https://doi.org/10.1080/10 97198X.2003.10856356
Lin, D., Lee, C. K. M., Lau, H., & Yang, Y. (2018). Strategic response to Industry 4.0: an empirical investigation on The Chinese automotive industry Article information. Industrial Management & Data Systems, 118(3), 0–18.
Lin, H. F. (2013). Understanding the determinants of electronic supply chain management system adoption: Using the technology-organization-environment framework. Technological Forecasting and Social Change, 86, 80–92. https://doi.org/10.1016/j.techfore.2013.09.001
Masood, T., & Sonntag, P. (2020). Industry 4 . 0 : Adoption challenges and benefits for SMEs. Computers in Industry, 121, 103261. https://doi.org/10.1016/j.compind.2020.103261
Mohamed, M. (2018). Challenges and benefits of industry 4.0: An overview. International Journal of Supply and Operations Management, 5(3), 256–265.
Paydar, S., Endut, I. R., Yahya, S., & Rahman, S. H. A. (2014). Environmental Factors Influencing the Intention to Adopt RFID Technology in Retail Industry: An Empirical Study. Asia-Pacific Journal of Management Research and Innovation, 10(1), 13–26. https://doi.org/10.1177/2319510x14529490
Premkumar, G., & Roberts, M. (1999). Adoption of new information technologies in small businesses. Omega, International Journal Management Science, 27, 467–484.
Rai, A., & Patnayakuni, R. (1996). A Structural Model for CASE Adoption Behavior. Journal of Management Information Systems, 13(2), 205–234. https://doi.org/10.1080/0742 1222.1996.11518129
Rojko, A. (2017). Industry 4.0 concept: Background and overview. International Journal of Interactive Mobile Technologies, 11(5), 77–90. https://doi.org/10.3991/ijim.v11i5 .7072
Schroeck, M., Gill, J., Kwan, A., & Sharma, D. (2020). Evolving partner ecosystems in Industry 4.0 | Deloitte Insights. https://www2.deloitte.com/za/en/insights/focus/ industry-4-0/partner-ecosystem-industry-4-0.html
Seyal, A., Awais, M. M., Shamail, S., & Abbas, A. (2004). Determinants of Electronic Commerce in Pakistan: Preliminary Evidence from Small and Medium Enterprises. Electronic Markets, 14(4), 372–387. https://doi.org/10.1080/10196780412331311801
Sivathanu, B., & Pillai, R. (2018). Smart HR 4.0 - – how industry 4.0 is disrupting HR. Human Resource Management International Digest, 26(4), 7–11. https://doi.org/10.1108/ HRMID-04-2018-0059
Teo, T. S. H., Lin, S., & Lai, K. hung. (2009). Adopters and non-adopters of e-procurement in Singapore: An empirical study. Omega, 37(5), 972–987. https://doi.org/10.1016/ j.omega.2008.11.001
Thong, J. Y. L. (1999). An Integrated Model of Information Systems Adoption in Small Businesses. Journal of Management Information Systems, 15(4), 187–214. https://doi.org/10.1080/07421222.1999.11518227
Tortorella, G. L., Cawley Vergara, A. Mac, Garza-Reyes, J. A., & Sawhney, R. (2020). Organizational learning paths based upon industry 4.0 adoption: An empirical study with Brazilian manufacturers. International Journal of Production Economics, 219(June 2019), 284–294. https://doi.org/10.1016/j.ijpe.2019.06.023
Uglovskaia, E. (2017). The New Industrial era. In SMT Surface Mount Technology Magazine (Issue January). https://www.theseus.fi/handle/10024/123113
Wong, L. W., Leong, L. Y., Hew, J. J., Tan, G. W. H., & Ooi, K. B. (2019). Time to seize the digital evolution: Adoption of blockchain in operations and supply chain management among Malaysian SMEs. International Journal of Information Management, 52(June), 1–19. https://doi.org/10.1016/j.ijinfomgt.2019.08.005
Yang, F., & Gu, S. (2021). Industry 4.0, a revolution that requires technology and national strategies. Complex and Intelligent Systems, 7(3), 1311–1325. https://doi.org/10.1007/s40747-020-00267-9
Yap, C. S. (1990). Distinguishing Characteristics of Organizations Using Computers. Information and Management, 18(2), 97–107. https://doi.org/10.1016/0378-7206(90)90056-N
Published
2024-12-01
How to Cite
ISMAIL, Siti Nurul Aziah et al.
The Impact of Organizational and Environmental Factors on the Industry 4.0 Adoption Among Malaysian Manufacturing SMEs.
International Journal of Business and Technology Management, [S.l.], v. 6, n. 4, p. 352-363, dec. 2024.
ISSN 2682-7646.
Available at: <https://myjms.mohe.gov.my/index.php/ijbtm/article/view/28490>. Date accessed: 15 jan. 2025.
Section
English Section
