Ru ainu wa, Vene anda; Mwenda, Beny; Is ael, Ba aka
A icle
ICT-enabled supply chain in eg a ion capabili ies and
i ms’ inancial pe o mance: an empi ical s udy o
Tanzania’s manu ac u ing SMEs
Cogen Business & Managemen
P o ided in Coope a ion wi h:
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Sugges ed Ci a ion: Ru ainu wa, Vene anda; Mwenda, Beny; Is ael, Ba aka (2024) : ICT-enabled
supply chain in eg a ion capabili ies and i ms’ inancial pe o mance: an empi ical s udy o
Tanzania’s manu ac u ing SMEs, Cogen Business & Managemen , ISSN 2331-1975, Taylo & F ancis,
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ICT-enabled supply chain in eg a ion capabili ies
and fi ms’ financial pe o mance: an empi ical
s udy o Tanzania’s manu ac u ing SMEs
Vene anda Ru ainu wa, Beny Mwenda & Ba aka Is ael
To ci e his a icle: Vene anda Ru ainu wa, Beny Mwenda & Ba aka Is ael (2024) ICT-enabled
supply chain in eg a ion capabili ies and fi ms’ financial pe o mance: an empi ical s udy
o Tanzania’s manu ac u ing SMEs, Cogen Business & Managemen , 11:1, 2393235, DOI:
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2024, VoL. 11, no. 1, 2393235
ICT-enabled supply chain in eg a ion capabili ies and i ms’ inancial
pe o mance: an empi ical s udy o Tanzania’s manu ac u ing SMEs
Vene anda u ainu waa, Beny mwendaa and Ba aka Is aelb
aDepa men o accoun ancy, College o Business educa ion, Mbeya, uni ed Republic o anzania; bDepa men o
P ocu emen and supplies Managemen , College o Business educa ion, Mbeya, uni ed Republic o anzania
ABSTRACT
he spec acula ad ancemen in in o ma ion and communica ion echnology (Ic ) has
shaped he way i ms conduc hei business, in e ac and communica e wi h cus ome s
and supplie s along hei supply chains (sc). ye , he e exis s limi ed knowledge o how
in es ing in Ic can be le e aged o help i ms s eamline sc in eg a ion and achie e
sus ainable inancial pe o mance ( P ). D awing on dynamic capabili y heo y, his
esea ch delinea es he dimensions o in e nal sc in eg a ion (IsI) and ex e nal sc
in eg a ion (esI) as po en ial media o s o he ela ionship be ween Ic capabili ies and
a i m’s P . a simple andom sampling app oach and c oss-sec ional ques ionnai e
su ey we e used o da a collec ion om 274 manu ac u ing smes in he mbeya
egion, anzania. subsequen ly, he collec ed da a was analysed using hayes P ocess
mac o model 4 o es he s udy hypo heses. empi ical esul s indica e an insigni ican
di ec e ec o Ic capabili ies on a i m’s P . howe e , Ic capabili ies signi ican ly
and posi i ely a ec bo h IsI and esI, which in u n play c i ical media ing oles,
posi i ely impac ing he i m’s P . essen ially, he indings imply ha he pa hway om
Ic capabili ies o P p edominan ly anspi es h ough enhanced IsI and esI. as such,
he s udy unde sco es he impo ance o sme manage s o in es in Ic capabili ies
and ha ness such capabili ies o s eng hen IsI and esI as he s a egic in e media ies
ha ansla e Ic in es men s in o angible inancial ou comes. he s udy con ibu es
o he exis ing ew empi ical s udies ha es ablish he po en ial media ing e ec o sc
in eg a ion in he link be ween Ic capabili ies and a i m’s P .
1. In oduc ion
small and medium-sized manu ac u ing en e p ises (smes) play a signi ican ole in economies. hey
c ea e alue u ili y along supply chains (sc) by con e ing inpu s and aw ma e ials in o use ul p oduc s
h ough a ious me hods, app oaches and ope a ional sys ems (Behesh i e al., 2014; Jum’a & Bushnaq,
2024). app oxima ely 25% o global businesses a e manu ac u ing smes (Wo ld ade o ganisa ion
(W o), 2020), which gene a e 50%–60% o he alue o goods along hei sc (Wo ld Bank, 2020). Beyond
hei p ima y goal o c ea ing alue u ili y, manu ac u ing smes con ibu e o os e ing inno a ions,
income gene a ion, employmen c ea ion and indus ial de elopmen . In he con ex o anzania, whe e
his s udy was conduc ed, manu ac u ing smes make up abou 14% o en e p ises and employ 7.1% o
he coun y’s wo k o ce (Uni ed na ions (Un), 2020). he sec o ’s sha e o he g oss domes ic p oduc
(gDP) is es ima ed a 8% (Uni ed na ions (Un), 2020). conside ing hei ole in he economy, he go -
e nmen o anzania has en o ced a ious measu es o s eng hen he ope a ions and sus ainabili y o
manu ac u ing smes.
among he ini ia i es, he small Indus ies De elopmen o ganiza ion (sIDo) and he anzania
chambe o comme ce, Indus y and ag icul u e ( ccIa) p o ide s a egic amewo ks o sme de elop-
men h ough imp o ed access o inance, echnical assis ance, capaci y building, s a egic pa ne ships
© 2024 he au ho (s). Published by in o ma uK Limi ed, ading as aylo & F ancis g oup
CONTACT Ba aka is ael isba [email protected] Depa men o P ocu emen and supplies Managemen , College o Business educa ion,
Pos Box 3810, Mbeya, uni ed Republic o anzania.
h ps://doi.o g/10.1080/23311975.2024.2393235
his is an open access a icle dis ibu ed unde he e ms o he C ea i e Commons a ibu ion License (h p://c ea i ecommons.o g/licenses/by/4.0/), which
pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed. he e ms on which his a icle has been
published allow he pos ing o he accep ed Manusc ip in a eposi o y by he au ho (s) o wi h hei consen .
ARTICLE HISTORY
ecei ed 29 may 2024
e ised 3 augus 2024
accep ed 13 augus 2024
KEYWORDS
Ic capabili ies; in e nal
sc in eg a ion; ex e nal
sc in eg a ion; inancial
pe o mance;
manu ac u ing smes
SUBJECTS
In o ma ion &
communica ion
echnology (Ic );
managemen o I ;
inance
2 V. U aInU Wa e al.
and ma ke access acili a ion (Kumbu u e al., 2021; nzumbi & misungwi, 2019). addi ionally, indus ial
pa ks and special economic zones, such as expo p ocessing zones (ePZs), p o ide smes wi h access o
essen ial in as uc u e, os e ing inno a ion, sus ainable manu ac u ing and expo ac i i ies (Wu e al.,
2020). Despi e hese ini ia i es, manu ac u ing smes encoun e se e al challenges ha ad e sely a ec
hei ope a ional pe o mance, g ow h and inancial sus ainabili y (nBs, 2020; sund am e al., 2018; Un,
2020). a su ey by he Wo ld Bank (2020) e eals ha only 40% o manu ac u ing smes a e inancially
s able in managing and mee ing hei inancial liabili ies. consequen ly, he emaining 60% ace inancial
c ises and a e unable o mee hei inancial obliga ions, o en expe iencing a decline wi hin six mon hs
o es ablishmen . Besides, he sec o ’s g ow h a e is unimp essi e, wi h an annual g ow h a e o 3%,
which is signi ican ly lowe han he 11% annual g ow h a e o la ge co po a ions (na ional Bu eau o
s a is ics (nBs), 2020). hese de iciencies esul in job losses, economic s agna ion, and pe sis en po e y.
li e a u e connec s he ope a ional and inancial de iciencies o manu ac u ing smes o se e al
dynamic o ces. empi ical s udies by ekpe and Delapo e (2019), hamisi (2011), and lelo and Is ael
(2024) iden i y he inabili y o access, e ain and sa is y po en ial cus ome s as a majo cons ain s o
achie ing sus ainable economic g ow h and inancial s abili y o manu ac u ing smes. mo eo e ,
dynamic ma ke o ces, demand ola ili y, limi ed access o luc a i e ma ke s and high ope a ional
expenses exace ba e he inancial and ope a ional challenges aced by manu ac u ing smes (asa e
e al., 2023; ga cía e al., 2021; Qiao & Zhao, 2023, mada a & chen, 2020). conside ing hese complex-
i ies, businesses ac oss he globe ha e been ansi ioning om adi ional o mode n in eg a ed busi-
ness ope a ion sys ems (holopainen e al., 2022; Usai e al., 2021). his in eg a ion has necessi a ed
i ms o in es in in o ma ion and communica ion echnology (Ic ) as an essen ial enable o acili a e
sc in eg a ion, op imize ope a ions, main ain a compe i i e posi ion and imp o e inancial pe o -
mance. his s udy is mo i a ed by hese spec acula ad ancemen s, aiming o assess whe he in es ing
in Ic capabili ies can help manu ac u ing smes achie e angible inancial ou comes h ough sc in e-
g a ion, using he amewo k o dynamic capabili y (Dc) heo y.
acco ding o he Dc heo y, i ms can demons a e s ong compe i i eness and highe pe o mance
in ola ile ma ke s when hey possess and explo e inimi able, a e, and aluable capabili ies ( eece e al.,
1997). owing o his, s udies e eals ha in es ing in Ic , coupled wi h co e abili ies o use compu e -based
sys ems and applica ions o cap u e, manage, exchange and collabo a e along sc, has he po en ial o
enhance i ms’ inancial pe o mance ( P ) (Bakan & sekkeli, 2017; chen e al., 2015). such capabili ies
op imize he low o unds, in o ma ion and goods while mee ing cus ome s’ needs on ime and
cos -e ec i ely. Besides, he abili ies o adop and use compu e -based ools, applica ions, and sys ems
such as endo -managed in en o y (VmI), en e p ise esou ce planning (e P), ma e ials esou ce planning
(m P), and elec onic da a in e change (eDI) a e essen ial o e ec i e managemen o bo h in e - i m
and in a- i m sc lows. e ec i e use o hese ools, applica ions and sys ems enables i ms o add ess
adi ional challenges o sc such as high ope a ional cos s, deli e y delays and lack o anspa ency
whils enhancing long- e m ela ionships among sc pa ne s (holopainen e al., 2022; Ja dak & hamad,
2022). concu en ly, a s udy by chin e al. (2012) e eals ha using Ic ools and applica ions in business
ansac ions can help i ms cu sc ope a ional cos s by up o 40%.
Despi e he pe cei ed bene i s o Ic capabili ies, howe e , some empi ical e idence asse s ha
me ely in es ing in Ic does no au oma ically ansla e in o supe io P (Kyagan e e al., 2024; hussein
& song, 2024; sund am e al., 2018; Usai e al., 2021). he indings o hese s udies sugges ha i ms’
P is no me ely a esul o Ic capabili ies bu a he how e ec i ely i ms u ilize Ic capabili ies o
le e age sc in eg a ion and inno a ion. his highligh s he necessi y o examine he ole o in e nal sc
in eg a ion (IsI) and ex e nal sc in eg a ion (esI) as po en ial media o s o he ela ionship be ween Ic
capabili ies and i ms’ P . essen ially, IsI and esI, enabled by Ic capabili ies, can help i ms s eamline
sc p ocesses by acili a ing eal- ime in o ma ion sha ing, au oma ing p ocesses and enhancing coo di-
na ion among sc pa ne s such as supplie s and cus ome s (chiang & huang, 2021; hu e al., 2023; I an
& Wang, 2019). acco ding o song e al. (2016) and hendijani and no ouzi (2023), such in eg a ions lead
o be e in en o y managemen , collabo a i e planning and enhanced ope a ional ine iciencies, such as
sho e lead imes and cos sa ings. his esul s in mo e accu a e demand o ecas ing, enhanced supplie
eliabili y, inc eased cus ome sa is ac ion, and imp o ed ma ke esponsi eness and agili y.
cogen BUsIness & managemen 3
hence, IsI and esI a e ega ded as key enable s o con e ing Ic capabili ies in o angible inancial
bene i s, such as inc eased e enue, cos sa ings, and imp o ed p o i abili y. his is a ibu ed o be e
in en o y managemen , enhanced cus ome sa is ac ion, eliable supplies, collabo a i e decision-making,
and he isk-sha ing bene i s o IsI and esI. mo e impo an ly, i should be no ed ha building IsI and
esI equi es compe en and skilled I pe sonnel, s eamlined I in as uc u e and an inno a i e cul u e
( ekpe & Delapo e, 2019; ai e al., 2006). o example, he use o collabo a ion sys ems, ools and
applica ions such as supplie ela ionship managemen (s m) o cus ome ela ionship managemen
(c m), VmI, e P and eDI equi e adequa ely skilled I pe sonnel, p o iciency in da a analy ics and obus
Ic in as uc u e, including physical de ices, so wa e and in e ne se ices. Wi h comp ehensi e Ic
capabili ies, i ms can op imize and imp o e IsI and esI p ocesses h ough digi al ools, pla o ms, and
applica ions, which a e in eg al o nu u ing a i m’s ope a ional and P ( ajala & hau ala-Kankaanpää,
2023; sousa-Zome e al., 2020).
essen ially, he e exis limi ed s udies ha examine he combined e ec o Ic capabili ies and sc
in eg a ion on he sus ainable inancial pe o mance ( P ) o disad an aged manu ac u ing smes, pa ic-
ula ly in eme ging economies like anzania. much o he a ailable s udies in his con ex ocus solely on
he di ec impac o Ic capabili ies (chen e al., 2015; hau ala-Kankaanpää, 2022; nasi i e al., 2022; ai
e al., 2006) and sc in eg a ion ( ekpe & Delapo e, 2019; e a is e al., 2019; Jum’a & Bushnaq, 2024)
on i ms’ ope a ional and P . hese s udies, howe e , epo con adic o y esul s in his esea ch domain.
While ai e al. (2006), no ais e al. (2020), and Jum’a and Bushnaq (2024) epo signi ican posi i e
e ec s o Ic and sc in eg a ion on i ms’ P , Usai e al. (2021) and Behesh i e al. (2014) e eal insig-
ni ican in luences o Ic and sc in eg a ion on P . ew s udies in de eloped economies examine he
e ec o Ic capabili ies on i ms’ P h ough he media ion analysis o sc in eg a ion (hu e al., 2023;
Kyagan e e al., 2024; sund am e al., 2018), p edominan ly ocusing on la ge and non-manu ac u ing
en e p ises. Unlike p e ious s udies, his esea ch uniquely examines he combined e ec o Ic capabil-
i ies and sc in eg a ion (IsI and esI) on i ms’ P . he s udy di es deepe , in es iga ing he media ing
e ec o IsI and esI in he link be ween Ic capabili ies and i ms’ P in he con ex o anzanian man-
u ac u ing smes, a de eloping economy.
he con ibu ion o his s udy is h ee old. i s ly, i adds o he b oade body o knowledge in supply
chain managemen , Ic , and i ms’ pe o mance by highligh ing he in e ac ion e ec o Ic capabili ies,
sc in eg a ion, and P o disad an aged anzanian manu ac u ing smes, an eme ging economy. I con-
ibu es o he ongoing deba e and academic unde s anding o how Ic capabili ies can d i e IsI, esI,
and he P o smes, p o iding a basis o u u e s udies o explo e simila dynamics in o he eme ging
economies. secondly, he s udy ex ends Dc heo y ( eece e al., 1997) by in eg a ing he cons uc s o
Ic capabili ies and sc in eg a ion, es ing i s ele ance in in luencing he P o disad an aged manu-
ac u ing smes in eme ging economies, he app oach ha has been o e looked in p e ious s udies.
las ly, policymake s, sme manage s, and indus y s akeholde s can use he s udy’s insigh s o design
ac ionable policies, p io i ize esou ce alloca ion, and make in o med decisions abou in es ing in Ic
capabili ies o sc in eg a ion o boos smes’ P . o he pu pose o his s udy, manu ac u ing smes a e
de ined based on anzania’s smes de elopmen policy. acco ding o he policy, smes a e en e p ises
engaged in p oduc ion ac i i ies and employing be ween 1 and 99 employees (Uni ed epublic o
anzania (U ), 2003).
2.Theo e ical li e a u e and hypo hesis de elopmen
2.1. The dynamic capabili y (DC) heo y
We employ dynamic capabili y (Dc) heo y o examine how manu ac u ing smes can le e age Ic capabil-
i ies o os e sc in eg a ion and achie e sus ainable P . Dc heo y was p oposed by eece in he 1990s
o explain how i ms can achie e supe io pe o mance and sus ain hemsel es in compe i i e business
en i onmen s. he heo y sugges s ha i ms can achie e a compe i i e posi ion and achie e supe io pe -
o mance by dynamically econ igu ing, enewing, and in eg a ing hei in e nal and ex e nal capabili ies
and esou ces ( eece, 2016). I conside s bo h in e nal and ex e nal esou ces and capabili ies as he basis
4 V. U aInU Wa e al.
o i ms’ long- e m success and imp o ed compe i i e ad an age (lü jen e al., 2019). such esou ces and
capabili ies, whe he in e nal o ex e nal, include, bu a e no limi ed o b and epu a ion, echnological
capabili ies, so skills, and human and capi al esou ces (Ba ney, 2001; Kha ak e al., 2022). Based on he
heo e ical p oposi ions o Dc, he cu en s udy in e p e s Ic capabili ies as aluable i m’s in e nal
esou ces essen ial o a aining compe i i e ad an ages and supe io P . We analyse how Ic can be
applied o access ex e nal esou ces and capabili ies, econ igu e hem wi h in e nal ones h ough IsI and
esI, and i s subsequen impac on he P o manu ac u ing smes. simila o hau ala-Kankaanpää (2022)
and Khin and ho (2020), his s udy ega ds skilled Ic pe sonnel, p o iciency in da a analy ics and obus
Ic in as uc u e as essen ial capabili ies o op imizing IsI and esI. hese capabili ies acili a e eal- ime
in o ma ion sha ing, au oma e sc p ocesses, and imp o e coo dina ion wi h supplie s and cus ome s. We
hypo hesize ha he e ec i e use o Ic can enable manu ac u ing smes o econ igu e hei in e nal and
ex e nal esou ces h ough sc in eg a ion, s eamline hei ope a ions and enhance hei P .
2.2. Hypo hesis de elopmen
2.2.1. ICT capabili ies and i ms’ inancial pe o mance
Ic capabili ies en ail a ange o a i m’s echnological in as uc u e, ools and indi idual echnical
know-how ha enable i ms o s eamline ope a ions and sus ain hemsel es in digi al en i onmen s
( onseca & Pico o, 2020; Khin & ho, 2020). I includes he abili y o in e ac and manage he exchange
o in o ma ion using compu e -based de ices, so wa e and applica ions. aligned wi h he assump ions
o he Dc heo y, s udies e eal ha Ic capabili ies se e as he basis o enhanced i ms’ inno a i e
p ac ices, ope a ional e iciency, and inancial sus ainabili y (nasi i e al., 2022; sousa-Zome e al., 2020;
Wang, 2020). Wi h e ec i e Ic - ela ed skills, ools and in as uc u e, i ms can de elop cos -e ec i e sc
p ocesses, s uc u es, p oduc s and ma ke ing s a egies which enhance i ms’ P . o example, unde -
aking digi al ma ke ing, one o he mos cos -e ec i e ma ke ing s a egies in he 21s cen u y ( o oudi
e al., 2017; Zhu e al., 2022), hinges on he e icacy o Ic capabili ies. Besides, he use o echnology-based
ools like eDI, e P, and VmI helps i ms au oma e ou ine asks, whils bols e ing P h ough imp o ed
ope a ional e iciency and minimising anspo a ion and in en o y holding cos s (nasi i e al., 2022;
ajala & hau ala-Kankaanpää, 2023). howe e , hei adop ion equi es s eamlined in e ne se ices,
s ong se e s, applica ions, ha dwa e and echnical skills (al-Busaidi & al-muha ami, 2021; azam, 2015).
om he heo e ical pe spec i e o Dc heo y, i can be a gued ha s eamlined Ic capabili ies enhance
he e icien low o goods, unds and in o ma ion along he i m’s sc. hey acili a e p oduc i i y gains
and cos sa ings while mee ing cus ome demand on ime and a a cos -e ec i e a e, which a e essen-
ial d i e s o i ms’ P ( ekpe & Delapo e, 2019; mwenda e al., 2023). Based on hese empi ical iews,
we hypo hesise ha :
H1. Ic capabili ies posi i ely in luence i ms’ P
2.2.2. ICT capabili ies and SC in eg a ion
he ex en o which i ms can e ec i ely in eg a e hei sc ope a ions, ei he in e nal o ex e nal is con in-
gen upon hei Ic capabili ies (Kyagan e e al., 2024; sund am e al., 2018). IsI pe ains o he alignmen
and synch oniza ion o in a-o ganiza ional p ocesses and unc ions, om p ocu emen and p oduc ion o
dis ibu ion. esI, on he o he hand, in ol es he in eg a ion o p ocesses and in o ma ion wi h ex e nal
pa ne s such as supplie s and cus ome s. P e ious s udies ha e epo ed a posi i e and signi ican ole o
Ic capabili ies in suppo ing bo h IsI and esI (Bakan & sekkeli, 2017; chen e al., 2015; Zhu e al., 2022).
Based on he Dc heo y, Ic capabili ies ac as an enable , p o iding echnological in as uc u e and ools
like e P necessa y o s eamline coo dina ion, collabo a ion and in o ma ion sha ing among a ious s ake-
holde s ac oss he sc ne wo k. I has been a gued ha i ms wi h s ong Ic in as uc u e, echnical skills
and applica ions pe o m p o ound synch oniza ion o in e nal unc ions and deepe connec ions wi h cus-
ome s and supplie s (al-Busaidi & al-muha ami, 2021; ekpe & Delapo e, 2019; Kha ak e al., 2022). his,
in u n, os e s long- e m ela ionships among sc pa ne s, which a e essen ial aspec s o sc in eg a ion.
In addi ion, Ic -enabled capabili ies os e digi al ac i i ies, join p oblem-sol ing, da a-d i en decision-making
cogen BUsIness & managemen 5
and eDI wi hin and ac oss o ganiza ional bounda ies, all o which a e in eg al o IsI and esI. Based on hese
empi ical insigh s, we o mula e he hypo hesis ha :
H2. Ic -enabled capabili ies posi i ely in luence IsI
H3. Ic -enabled capabili ies posi i ely in luence esI
2.2.3. SC in eg a ion and i ms’ inancial pe o mance
In a dynamic and compe i i e business landscape whe e businesses a e becoming au oma ed, in eg a ing a
i m’s sc ac i i ies is c ucial o achie ing ope a ional and inancial sus ainabili y (Ja dak & hamad, 2022; ai
e al., 2006). sc in eg a ion e e s o he deg ee o which a i m’s in e nal and ex e nal pa ne s join ly plan,
collabo a e and moni o he lows o in o ma ion, unds and ma e ials using he in e ne and compu e -based
sys ems. he empi ical li e a u e has e ealed a posi i e and signi ican ela ionship be ween sc in eg a ion
and i ms’ ope a ional and inancial pe o mance ( ekpe & Delapo e, 2019; nasi i e al., 2022; no h e al.,
2020). Building on he Dc heo y, a i m’s abili y o in eg a e i s ope a ions, ei he h ough IsI o esI, p omo es
join planning, da a moni o ing, and p oblem-sol ing, he eby op imizing e icien p oduc de elopmen , dis-
ibu ion, and cash low. o example, e P and c m based on IsI help i ms imp o e demand planning, o e-
cas ing and o de eplenishmen o c i ical sc ac i i ies ( ajala & hau ala-Kankaanpää, 2023; song e al., 2016;
yu e al., 2023). esI sys ems such as s m and VmI help i ms sha e in en o y in o ma ion wi h supplie s,
emphasizing jus - in- ime deli e ies, hus minimizing in en o y cos s and cycle ime (Is ael, 2022). addi ionally,
enhanced ela ionships wi h supplie s help i ms p ocu e aw ma e ials cos -e ec i ely, which, acco ding o
hendijani and no ouzi (2023) and yu e al. (2021), a e impo an d i e s o i ms’ P . D awing on Dc heo y,
i is heo ized ha IsI and esI can help i ms c ea e bonds and long- e m loyal y wi h supplie s, e ain po en-
ial cus ome s, minimize ope a ional cos s, and gene a e high sales e enues and p o i ma gin. Based on he
analysed impo ance o in eg a ed sc capabili ies, we hypo hesize ha :
H4. IsI posi i ely in luence i ms’ P .
H5. esI posi i ely in luence i ms’ P .
2.2.4. The media ing ole o SC in eg a ion
In oday’s dynamic and compe i i e business en i onmen , i ms ecognize he impo ance o sc in eg a ion,
bo h IsI and esI, as po en d i e s ha maximize hei ope a ional e iciency and inancial ou comes (hussein
& song, 2024; Qiao & Zhao, 2023; yu e al., 2021). howe e , i should be no ed ha he success ul in eg a ion
o a i m’s in e nal and ex e nal sc ope a ions is con ingen on Ic capabili ies. simila o heo e ical assump-
ions o Dc heo y, s udies sugges ha Ic capabili ies, suppo ed by s eamlined in e ne se ices, ools,
so wa e and skilled pe sonnel, p o ide pla o ms ha acili a e he in eg a ion o in e nal and ex e nal sc
p ocesses (Bag e al., 2021; Zhu e al., 2022). o ins ance, he use o Ic ools such as e P, VmI and manu-
ac u ing execu ion sys ems (mes) makes he in eg a ion o p ocu emen , p oduc ion and dis ibu ion o
p oduc s much easie h ough enhanced ope a ional e iciency and isibili y. simila ly, eDI, s m and c m
so wa e enable i ms o sha e in o ma ion, coo dina e ac i i ies and synch onize sc p ocesses wi h ex e nal
s akeholde s e icien ly. such e iciency and isibili y, acco ding o lelo and Is ael (2024) and ajala and
hau ala-Kankaanpää (2023), lead o g ea e esponsi eness o cus ome and ma ke demand, educed ope a-
ional cos s, sho e lead imes, imp o ed p oduc i i y and inc eased cus ome sa is ac ion. hese me ics, in
u n, ansla e in o a i m’s P h ough inc eased sales, ma ke sha e and p o i abili y. In addi ion, enhanced
IsI and esI capabili ies os e sc esilience and educe isk, which, om he pe spec i e o Dc heo y, a e
deemed essen ial o main aining i ms’ inancial sus ainabili y (chiang & huang, 2021; Jum’a & Bushnaq, 2024.
hese empi ical iews p o ide su icien e idence o heo ize ha bo h IsI and esI ac as media o s be ween
Ic capabili ies and i m P . hey enhance a i m’s isibili y, ope a ional e iciency, and cus ome sa is ac ion,
which collec i ely ansla e in o P . subsequen ly, we hypo hesize ha :
H4. IsI media es he e ec o Ic on i ms’ P .
H5. esI media es he e ec on Ic on i ms’ P .
6 V. U aInU Wa e al.
2.5. The concep ual amewo k
igu e 1 p esen s he concep ual model o his s udy, demons a ing he hypo hesized ela ionships
be ween Ic capabili ies, sc in eg a ion (IsI and esI), and i ms’ P . he concep ual model has been
de eloped based on he li e a u e e iew and he o mula ed esea ch hypo heses. he model p oposes
ha Ic capabili ies a e ounda ional o bo h in e nal and ex e nal sc in eg a ion. his is a ibu ed o
he ac ha e ec i e Ic capabili ies enhance coo dina ion, in o ma ion sha ing and p ocess in eg a ion
wi hin he i m (IsI) and wi h ex e nal pa ne s (esI). his in eg a ion, in u n, leads o imp o ed P by
s eamlining ope a ions, he eby educing ope a ional cos s and inc easing sales e enue, sales and
p o i ma gin.
3. Me hodology
3.1. Resea ch design and s udy a ea
his s udy employed a c oss-sec ional esea ch design and a quan i a i e esea ch app oach. a quan i a-
i e esea ch app oach is app op ia e when a s udy is in o med by esea ch hypo heses and aims o
es ablish s a is ical links ha equi e empi ical es ing using nume ical da a (Dominowski, 1980). a
c oss-sec ional esea ch design, on he o he hand, is used when esea che s aim o collec da a and
d aw in e ences abou a popula ion o phenomenon a a pa icula poin in ime (saunde s e al., 2019).
Da a o he s udy was collec ed om he a ge ed popula ion a a single poin in ime, hence jus i ying
he use o a c oss-sec ional esea ch design. Using a c oss-sec ional esea ch design, he au ho s col-
lec ed quan i a i e da a and es ed hypo heses ega ding he media ing ole o sc in eg a ion in he
ela ionship be ween Ic capabili ies and P o manu ac u ing smes a a single poin in ime. he s udy
was conduc ed in he mbeya egion o anzania. he egion was selec ed o he s udy because i has
been iden i ied as one o he i e anzanian egions wi h a subs an ial numbe o smes, hos ing abou
2,852 manu ac u ing smes ope a ing ac oss a ious sec o s o he economy (Un, 2020). hese include
mic o en e p ises (1,821), small-sized en e p ises (753), and medium-sized en e p ises (278). Based on
his, conduc ing he s udy in he mbeya egion p o ided be e access o da a sou ces om di e en
ypes o smes wi h a ied le el o Ic capabili ies, sc in eg a ion sys em, and P .
3.2. Measu es
he measu emen i ems o his su ey-based s udy we e adap ed om measu emen scales ha ha e
been used and alida ed in p io ela ed s udies. howe e , he adap ed i ems we e modi ied o i he
s udy con ex , o examine he media ing e ec o sc in eg a ion in he ela ionship be ween Ic capa-
bili ies and P wi hin he con ex o manu ac u ing smes in anzania. he ull measu emen i ems o
each cons uc , along wi h hei modi ica ions a e de ailed in able 1. In pa icula , he cons uc o he
independen a iable (Ic capabili ies) was assessed using ou alida ed measu emen scales adap ed
om u ulja and Bajgo ić (2015), nwankpa and oumani (2016), and awamleh and e ugan (2021). he
media o a iables (IsI and esI) we e e alua ed using i e alida ed measu emen scales each, adap ed
om I an and Wang (2019), nayal e al. (2022), abdallah e al. (2021), chiang and huang (2021), and
Figu e 1. P oposed esea ch model and hypo heses. sou ce(s): au ho ’s compila ion.
cogen BUsIness & managemen 7
Pa il e al. (2023). P oxy measu es o i ms’ P om no ais e al. (2020) and Bag e al. (2021) we e
adap ed o e alua e he s udy’s ou come a iable. each i em o he cons uc was e alua ed using a
5-poin like scale anging om 1 (s ongly disag ee) o 5 (s ongly ag ee). essen ially, he adap ed and
modi ied measu emen i ems o he ques ionnai e we e e iewed by i e independen sc p ac i ione s,
Ic and inancial expe s o assess i s app op ia eness and comple eness. changes we e made o he
inal d a o he ques ionnai e based on he expe s’ commen s be o e i was sen o esponden s o
da a collec ion.
3.3. Sampling and da a collec ion
he popula ion o in e es o his s udy we e 2852 manu ac u ing smes om he s udy a ea. he com-
ple e lis o manu ac u ing smes was ob ained om he small indus ies de elopmen o ganiza ion
(sIDo), an au ho i y esponsible o p omo ing and suppo ing he business en i onmen o smes ac oss
he egion. slo in’s o mula (see equa ion 1) was used o de e mine he ini ial sample size o 351. his
o mula allows o p ecise sample size de e mina ion a speci ied con idence le els and ma gin o e o
(yamane, 1973). o accoun o he di e si y and ep esen a ion o smes based on hei sizes, a s a i ied
andom sampling echnique was employed. In essence, smes we e ca ego ized in o h ee s a a: mic o
en e p ises, small-sized en e p ises, and medium-sized en e p ises. he ini ial sample size was alloca ed
p opo ionally o each s a um. subsequen ly, a simple andom sampling echnique was used o selec
sme manage s o ep esen a i es om each s a um as he uni s o obse a ion. sme manage s o ep-
esen a i es we e chosen as uni s o obse a ion because o hei c ucial ole in planning and app o ing
he adop ion o Ic echnologies, sc in eg a ion, and e alua ing i ms’ P (he edia e al., 2022; no h
e al., 2020).
nN
Ne
1
2852
11238 005351
22
() (. ) (1)
Whe e: n is he es ima ed sample size, N popula ion unde s udy, and e signi ies he ma gin e o
es ima ed a a 95% con idence in e al. a se o sel -adminis e ed ques ionnai es con aining s uc u ed
ques ions was used o collec p ima y quan i a i e da a and es he ele ance o Dc heo y in examin-
ing he media ing ole o sc in eg a ion in he link be ween Ic capabili ies and i ms’ P . Ini ially, 351
ques ionnai es we e physically dis ibu ed o sme owne s in he mbeya egion, who had i s -hand
knowledge o Ic -enabled sc capabili ies and i ms’ P , using a d op-o and pick-up la e app oach.
Table 1. Cons uc s and measu emen i ems.
Cons uc s and i ems Re e ences
ICT-enabled capabili ies (ICT)
ic 1. iC knowledge and usage skills u ulja and Bajgo ić (2015), nwankpa and
Roumani, (2016), awamleh and e ugan (2021) ic 2. iC in as uc u e – ha dwa e, so wa e and ne wo ks
ic 3. Deg ee o in eg a ion o iC sys ems and solu ions h oughou he o ganiza ion
ic 4. iC ’s p oac i e s ance in an icipa ing and p e en ing po en ial isks
In e nal SC in eg a ion (ISI)
isi1. Deg ee o collabo a ion be ween di e en depa men s wi hin he o ganiza ion
isi2. use o in eg a ed eRP sys ems o managing in e nal p ocesses i an and Wang (2019), nayal e al. (2022),
abdallah e al. (2021). isi3. adop ion o in eg a ed in en o y managemen
isi4. Real- ime da a-sha ing p ac ices among in e nal s akeholde s
isi5. use o c oss- unc ional eams in p ocess imp o emen
Ex e nal SC In eg a ion (ESI)
esi1. C ea ing linkage wi h supplie s and cus ome s h ough io o eDi
esi2. aligned pe o mance indica o s wi h ex e nal pa ne s abdallah e al. (2021), Chiang and Huang (2021),
Pa il e al. (2023). esi3. Real- ime in o ma ion sha ing o making common demand o ecas
esi4. es ablishing s a egic pa ne ships and alliances wi h ex e nal pa ne s
esi5. Wo king wi h ex e nal pa ne s o imp o e he in e -o ganiza ional p ocess
Financial pe o mance (FPF)
Fp 1. sa is ac ion wi h g ow h in sales
Fp 2. g ow h in e u n on in es men (Roi) no ais e al. (2020), Bag e al. (2021)
Fp 3. imp o ed ne p o i ma gin
Fp 4. sa is ac ion wi h g ow h in ma ke sha e
Fp 5. Dec eased p oduc ion and logis ics cos
sou ce(s): able by au ho s.
14 V. U aInU Wa e al.
discou se (yu e al., 2021; ai e al., 2006; sund am e al., 2018), encou aging i ms o e hink how hey
in es in and manage Ic o op imize P h ough enhanced sc in eg a ion p ocesses.
6.3. Manage ial implica ions
he indings o his s udy o e s a egic and ope a ional insigh s essen ial o guiding manage ial deci-
sions ega ding Ic in es men , sc in eg a ion, and i ms’ P . gi en he ull media ion e ec o IsI and
esI in he link be ween Ic and P , sme indus ial manage s should iew Ic capabili ies as enabling
ools a he han s andalone solu ions o di ec con ibu o s o P . acco dingly, he s udy ecommends
in eg a ing Ic wi h he sc p ocesses o manu ac u ing smes o enhance hei P . his can be achie ed
by in es ing in Ic in as uc u e, designing, and adop ing echnological solu ions like e P, VmI, eDI, c m,
and s m o s eamline in e nal ope a ions and acili a e be e coo dina ion wi h supplie s and cus om-
e s. In addi ion, Ic pe sonnel should be in ol ed in he i m’s s a egic planning and decision-making,
ensu ing hei commi men aligns wi h s a egic business goals o suppo he adop ion and implemen-
a ion o eal- ime da a sha ing sys ems and echnological solu ions o be e sc in eg a ion and P .
Besides, manu ac u ing smes should de elop me ics and key pe o mance indica o s speci ically o mea-
su e he e ec i eness o Ic in enhancing sc in eg a ion and P . his enables con inuous moni o ing
o Ic ’s impac on sc in eg a ion p ocesses and, consequen ly, on P
o he go e nmen , he s udy ecommends he need o in use pla o ms ha suppo he adop ion
o Ic and he in eg a ion o sc p ocesses ac oss manu ac u ing smes. his can include, bu is no lim-
i ed o es ablishing inno a ion hubs, echnology cen e, and os e ing in e - i m and c oss- unc ional col-
labo a ion. his app oach can help p omo e echnological adap a ions and collabo a i e sc among
manu ac u ing smes, supplie s, and cus ome s o ensu e smoo h implemen a ion and buy-in. I can lead
o mo e e ec i e adop ion o Ic solu ions, ailo ing Ic capabili ies o sc needs, and enhancing bo h
IsI and esI. mo e impo an ly, he go e nmen should o ganize egula aining and capaci y-building
p og ams o p o ide echnical suppo and consul ing se ices o smes on how o selec app op ia e Ic
solu ions and in eg a e hem wi h sc p ocesses, along wi h unde s anding hei associa ed bene i s. his
can be complemen ed by o e ing g an s, subsidies, o low-in e es loans o indus ial smes o in es ing
in Ic in as uc u e and sc in eg a ion ini ia i es.
6.4. Limi a ions and sugges ions o u he s udies
his sec ion highligh s s udy limi a ions and sugges ions o u he s udies. i s ly, he s udy employed a
c oss-sec ional esea ch design, which in ol ed cap u ing and analysing da a on he s udy a iables a a
single poin in ime. his design limi s he abili y o in e causali y be ween Ic capabili ies, sc in eg a ion
and P . gi en his limi a ion, a longi udinal-based esea ch design is equi ed o p o ide a mo e obus
unde s anding o hese ela ionships o e ime. Besides, s udies should conside de eloping and u ilizing
echnological ma u i y models o assess how a ying le els o Ic capabili ies a ec he dynamics be ween
sc in eg a ion and P . second, he s udy’s sample was limi ed o manu ac u ing smes in he mbeya
egion o anzania. his a ec s he gene alizabili y o indings ac oss di e en sec o s o egions whe e
Ic capabili ies and sc in eg a ion a y. he e o e, conduc ing s udies ac oss a ious indus ies and geo-
g aphic egions could p o ide aluable insigh s and help e i y he gene alizabili y o he indings. las ly,
while he s udy indica es ull media ion e ec s o IsI and esI, o he po en ial a iables such as o ganiza-
ional agili y, ma ke condi ion, i m size and inno a ion, which may p edic o mode a e he impac o
Ic capabili ies on P , we e no con olled. as such, u u e s udies should conside he po en ial medi-
a ing o mode a ing ole o hese ac o s in he ela ionship be ween Ic capabili ies and P .
E hical s a emen
In o med consen was ob ained om all pa icipan s p io o hei in ol emen in he s udy. Pa icipan s we e p o-
ided wi h a w i en consen o m de ailing he pu pose o he esea ch, he p ocedu es in ol ed, po en ial isks and
bene i s, con iden iali y measu es, and hei igh s as pa icipan s. hey we e assu ed ha hei pa icipa ion was
olun a y and ha hey we e ee o wi hd aw om he s udy a any ime wi hou consequence. Besides, he s udy
was conduc ed in acco dance wi h he p ocedu es s ipula ed in he college o Business educa ion’s esea ch and
Publica ion Policy o 2018, and he p o ocol was app o ed by he college’s esea ch and Publica ion commi ee ( Pc).
cogen BUsIness & managemen 15
Au ho s con ibu ions
Vene anda Ru ainu wa: concep ion, design, da a collec ion, analysis, alida ion, in e p e a ion o he da a, w i ing
o iginal d a and e iew.
Beny Mwenda: concep ion, alida ion, design, da a collec ion, in e p e a ion o he da a, w i ing o iginal d a
and e iew.
Ba aka Is ael: concep ion, design, alida ion, da a collec ion, analysis, w i ing o iginal d a and e iew.
Disclosu e s a emen
no po en ial con lic o in e es was epo ed by he au ho (s).
Funding
he au ho s acknowledge he ull inancial suppo o his s udy om he college o Business educa ion (cBe).
Abou he au ho s
Vene anda Ru ainu wa is a lec u e in he Depa men o accoun ancy and ma ke ing a he mbeya campus o he
college o Business educa ion, anzania. he esea ch in e es s include a i icial In elligence, machine lea ning, sma
a ming, and he In e ne o hings.
Beny Mwenda is a lec u e in he Depa men o accoun ancy and ma ke ing a he college o Business educa ion,
mbeya campus in anzania. his a eas o expe ise include inance, accoun ing, axa ion, inancial ma ke s, Banking,
and In es men analysis.
Ba aka Is ael is associa ed wi h he Depa men o P ocu emen and supplies managemen a he college o Business
educa ion, based a mbeya campus in anzania. his esea ch in e es s include supply chain managemen , logis ics
managemen , sus ainable Public P ocu emen , P ocu emen con ac managemen , and s a egic P ocu emen
managemen .
ORCID
Ba aka Is ael h p://o cid.o g/0000-0002-4969-3202
Da a a ailabili y s a emen
he da a ha suppo he indings o his s udy a e a ailable om he co esponding au ho upon easonable eques .
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