Digitalization & Covid-19: An institutional-contingency theoretic analysis of supply chain digitalization

Black Swan external contingencies like the COVID-19 pandemic or Suez Canal blockage have a significant impact on the technology adoption decisions in firms. At a firm level, supply chains are the segments that are most prone to disruption due to these shocks. Hence the need to study the role of these contingencies in enabling digitalization in supply chains. Modern supply chains operate in a strong institutional environment that influences various aspects like technology adoption and digitalization. In this study, we bring these two aspects together by applying an institutional and contingency theory perspective. We investigate the institutional forces and the effect of environmental contingencies on the digitalization of supply chains. We propose a generalizable model to investigate digitalization readiness independent of the technological artefact being implemented. To achieve the same, we identify the forces of digitalization in the supply chains from the review of the extant literature. We then model the forces of digitalization into a Bayesian Belief Network (BBN). The study finds that organizational readiness and people readiness are critical elements of digitalization readiness. Our study reports the importance of top management's involvement and employees' training as the critical forces aiding digitalization.

Automated summary

Black Swan events such as the COVID-19 pandemic and the Suez Canal blockage have a significant impact on firms' technology adoption decisions, especially in terms of disruptions and digitalization in the supply chains. This study investigates the influence of institutional forces and environmental contingencies on supply chain digitalization from an institutional and contingency theory perspective. The findings emphasize the importance of organizational readiness and people readiness, including top management involvement and employee training, in facilitating digitalization.