Business Innovation for the Post-pandemic Era in Vietnam 9789819915446, 9789819915453

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Nguyen Hoang Thuan Hung Nguyen Hiep Cong Pham Alrence Halibas   Editors

Business Innovation for the Post-pandemic Era in Vietnam

Business Innovation for the Post-pandemic Era in Vietnam

Nguyen Hoang Thuan · Hung Nguyen · Hiep Cong Pham · Alrence Halibas Editors

Business Innovation for the Post-pandemic Era in Vietnam

Editors Nguyen Hoang Thuan The Business School RMIT University Vietnam Ho Chi Minh City, Vietnam

Hung Nguyen The Business School RMIT University Vietnam Ho Chi Minh City, Vietnam

Hiep Cong Pham The Business School RMIT University Vietnam Ho Chi Minh City, Vietnam

Alrence Halibas The Business School RMIT University Vietnam Ho Chi Minh City, Vietnam

ISBN 978-981-99-1544-6 ISBN 978-981-99-1545-3 (eBook) https://doi.org/10.1007/978-981-99-1545-3 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Editorial Board

Editors Nguyen Hoang Thuan, RMIT University Vietnam, Vietnam Hung Nguyen, RMIT University Vietnam, Vietnam Hiep Cong Pham, RMIT University Vietnam, Vietnam Alrence Halibas, RMIT University Vietnam, Vietnam

Editorial Review Board Bob Baulch, RMIT University, Vietnam David Johnstone, Victoria University of Wellington, New Zealand Duy Dang, RMIT University, Vietnam Ho Trung-Thanh, University of Economics and Law-VNUHCM, Vietnam Hoang Ai Phuong, RMIT University, Vietnam Hoan-Su Le, University of Economics and Law, Vietnam Huy Truong, RMIT University, Vietnam Jerry Watkins, RMIT University, Vietnam Khanh Nguyen, RMIT University, Vietnam Khoa Bui Thanh, Industrial University of Ho Chi Minh City, Vietnam Mahabubur Rahman, Rennes School of Business, France Maria do Sameiro Carvalho, University of Minho, Portugal Nguyen Thi Thu An, RMIT University, Vietnam Paul Yeow, Sunway University Business School, Singapore Paulo Alexandre Sampaio, University of Minho, Portugal Pedro Antunes, University of Lisbon, Portugal Pham Nguyen Anh Huy, RMIT University, Vietnam Pradeepa Jayaratne, RMIT University, Vietnam Prasanta Bhattachara, National University of Singapore, Singapore

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Robert McClelland, RMIT University, Vietnam Sapumal Ahangama, Moratuwa University, Sri Lanka Thai Nguyen, RMIT University, Vietnam Tho Le Viet, Van Lang University, Vietnam Thu Nguyen, RMIT University, Vietnam Tram T. B. Nguyen, Ho Chi Minh City Open University, Vietnam Tuan Anh Hoang, FPT University, Vietnam Tuan Phan, Hong Kong University, Hong Kong Umair Akram, RMIT University, Vietnam Vicki Little, RMIT University, Vietnam Viet Tho Le, Edith Cowan University, Australia

Editorial Board

Preface

In Vietnam, business innovation comprising digital technologies, innovation strategies and new business models plays a vital role in enhancing business continuity and growth. This role is further highlighted during the COVID-19 pandemic, which has ignited changes in many areas of the economy which forces organisations to innovate their way of doing business. However, there is a lack of collected literature on business innovation research and practice in Vietnam. This remains problematic to organisations that want to thrive in business innovation in the post-pandemic era. At this juncture, this book aims to illustrate the current frontiers of business innovation in Vietnam across different areas such as digitalisation, smart logistics and so on. The book provides a comprehensive reference for business innovation challenges and promotes approaches to tackle them. The book also offers not only a shared understanding to help coordinate future research in the field but also practical implications for business leaders, practitioners, and researchers to materialise new business practices. This edited book presents 17 chapters that are selected from the “2022 International Conference on Business Innovation” at RMIT University in Vietnam. These chapters cover a wide range of topics in business innovation including entrepreneurship, digital supply chain transformation, e-government services, blockchain technology, chatbot marketing, personalization-privacy paradox in marketing, supply chain, sustainable manufacturing, logistics and food safety management. Each book chapter went through a rigorous review process. This review process received help from expert reviewers, knowledgeable academics and researchers from Vietnam, New Zealand, France, Portugal, Singapore, Sri Lanka, Hong Kong, and Australia. In general, this book has shed light on current business innovation in Vietnam across areas of digitalization and smart logistics to enhance business performance and promote new business practices. The business leaders, practitioners, and researchers in Vietnam can use this book as a reference to materialise new business practices and drive innovation within the organisation and explore new research capabilities. We acknowledge the valuable contribution of all authors who submitted their chapters and the editorial review board who provided important feedback to help

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improve the quality of the chapters. We hope you find useful and relevant knowledge in your field of innovation. Ho Chi Minh City, Vietnam

Nguyen Hoang Thuan Hung Nguyen Hiep Cong Pham Alrence Halibas

Contents

Introduction to Business Innovation in the Post-pandemic Era in Vietnam: Digitalization and Smart Logistics . . . . . . . . . . . . . . . . . . . . . . . Nguyen Hoang Thuan, Hung Nguyen, Hiep Cong Pham, Alrence Halibas, and Sandip Rakshit

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Important Negotiation Behaviours in Entrepreneurs’ New Product Launching Stage During Post-Covid-19 Era . . . . . . . . . . . . . . . . . . . . . . . . . . Nhat Minh Nguyen, Nhan Truong Thanh Dang, and Hiep Cong Pham

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Does Digital Transformation Increase Efficiency in Business? Evidence from Vietnam During the COVID-19 Pandemic . . . . . . . . . . . . . Le Thanh Tung and Le Anh Duc

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COVID-19 Disruption Risk—A Game-Changing Factor for SMEs Digital Supply Chain Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vu Minh Ngo, Hiep Cong Pham, and Huan Huu Nguyen

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Enhancing Citizen Willingness to Use E-Government: The Case of Ho Chi Minh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Linh Nguyen Duy Yen and Huan Nguyen Hong

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Business Use of Blockchain in New Zealand Organisations an Exploratory Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Michael Wang and Geoffrey Chow

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Understanding the Impact of Low Personalization on Customers’ Prior Negative Experience with Virtual Conversational Agents: A Conceptual Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Huu Trong Nguyen Personalisation-Privacy Paradox from Marketing Perspectives: Literature Review and Future Research Directions . . . . . . . . . . . . . . . . . . . Hanh Thi Hong Hoang, Lam Son Nguyen, Chinh Hong Nguyen, Nga Viet Le, Nhung Thi Nguyen, and Len Thi Dinh

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Applying Theory of Constraints in Food Safety Management Across Supply Chains: The Viewpoints of Chinese and Vietnamese Fishery Exporters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Tram T. B. Nguyen, Thang Ta Duc, Scott McDonald, and An Duong Thi Binh Vendor Certification Program and Performance: Mediating Role of Absorptive Capability in Agricultural Food Processing Firms . . . . . . . 119 Pradeepa Jayaratne, Hung Nguyen, Huy Truong, Tram Nguyen, Duy Tran, and Ha Lam Bich Balancing Supply and Demand: The Impact of Consumer Anxiety and Social Contagion on Willingness to Pay More for Food During the COVID-19 Pandemic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 Luc Phan Tan, Thu-Hang Hoang, Majo George, and Hang Nguyen Thi My Critical Success Factors for Food Safety Management and Their Impact on Business Performance: Empirical Evidence from China and Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 An Duong Thi Binh, Tram T. B. Nguyen, and Thu-Hang Hoang Green Certification Pressures and Sustainability Performance: From Environmental Symbolic Drivers to Process Innovation . . . . . . . . . . 157 Hung Nguyen, George Onofrei, Mohammadreza Akbari, Ying Yang, and Frank Wiengarten Heterogeneity in Consumers Willingness to Pay for Home Delivery Service in Grocery Retailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169 Thang Vinh Doan and Thong Le Pham Supply Chain Risks Management and Customer Service: A Moderating Role of Mitigation Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Irfan Ulhaq, Rajkishore Nayak, Kevin Nguyen, and Huy Truong Quang External Supply Chain Risk Assessment in the Covid 19 Pandemic . . . . . 191 Duy Tran Le Anh, Hiep Cong Pham, Nhu YNgoc Hoang, Hai Thanh Pham, Paulo Sampaio, Hang Nguyen Thi My, Huy Truong Quang, and Nguyễn T. Quyền Risk Identification and Its Resonant Effect in Service-Oriented Supply Chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Uyen Diep My, Thang Ta Duc, Lam Nguyen Canh, Kevin Nguyen, Irfan Ulhaq, Tho Pham, Duong Thi Binh An, and Yoshinori Hara

About the Editors

Nguyen Hoang Thuan is a Senior lecturer and Senior program manager for the Digital business program and Senior major coordinator for Business and Technology major at the Business School of RMIT Vietnam. He has been a founder of Vietnam Association for Information Systems (VAIS). Before joining RMIT University in Vietnam, Thuan worked as Head of Software engineering department (Faculty of Information Technology) and Deputy Head of Department of Scientific Affairs at Can Tho University of Technology, Vietnam. Thuan has a Ph.D. in Information systems from Victoria University of Wellington, New Zealand. He has published 40+ papers, including journal articles in Communications of the Association for Information Systems, Information Systems Frontiers, Australasian Journal of Information Systems, Group Decision and Negotiation, Journal of Retailing and Consumer Services, The International Review of Retail, Distribution and Consumer Research, Scandinavian Journal of Information Systems, and several international refereed conferences, such as the Pacific Asia Conference on Information Systems, Australasian Conference on Information Systems, and other international conferences. Hung Nguyen holds a Ph.D. in Operations and Management and has over ten years of working experience in the field of corporate training and management consulting. His areas of expertise include operations and production management, and benchmarking manufacturing operations. He publishes in the Journal of Cleaner Production, Journal of Production Planning and Control, Supply Chain Management: International journal and others. Before joining RMIT University, Hung was a consultant for the Benchmarking for Business Competitiveness (MGSM and IBM Australia) and the Gartner Business Analysis (Ecommerce network in the Asia Pacific). In Vietnam, Hung was a trainer and consultant for more than 200 middle and top executives in HCMC and Hanoi (Diethelm, Total, Unilever, Vifon, Vietnam Airline, Novartis, Petro Vietnam, etc.). He also served as a consultant for the UNESCAP-GTZ project on export promotion and development plans for SMEs in HCMC.

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About the Editors

Hiep Cong Pham is an Associate Professor at The Business School, RMIT Vietnam. He is the Head of the Bachelor of Business program and Senior Fellow of the Higher Education Academy. His research areas are cyber security behavior, supply chain management, and educational technologies. He has published in quality journals, including Aquaculture, Aquaculture Economics and Management, Asian Journal of Shipping and Logistics, Journal of Information and Computer Security, and the Australasian Journal of Information Systems. He is the editorial board member of the Journal of Information and Computer Security. Dr. Pham received a total research and teaching grant of more than $350,000 over the last 5 years. Alrence Halibas is currently a Senior Lecturer at The Business School, RMIT Vietnam. Before joining RMIT, she held the post of Programme Leader in the Faculty of Computing Sciences at Gulf College, Oman, from July 2012 to January 2020. Furthermore, Dr. Halibas once served as the Dean of the College of Computer Studies and an Associate Dean of the School of Engineering and Information Technology at La Salle University, Philippines, for 11 years. She is a Senior Fellow of the Higher Education Academy UK. She also holds several IT certifications and is an active researcher and reviewer. She has published papers in several high-quality journals and peer-reviewed conferences, including IEEE and Informing Science Institute (ISI). Likewise, she served as a technical panel member and session chair at several international research conferences. In 2017, Dr. Halibas received a Silver Reviewer Award from ISI.

Introduction to Business Innovation in the Post-pandemic Era in Vietnam: Digitalization and Smart Logistics Nguyen Hoang Thuan, Hung Nguyen, Hiep Cong Pham, Alrence Halibas, and Sandip Rakshit

Abstract Business innovation has received much attention from Vietnamese practitioners and researchers. Yet, a collected account of studies on business innovation in Vietnam is still lacking. This introductory chapter sets a background and updates the current state of the art by introducing 16 chapters that address different aspects of business innovation in Vietnam. These chapters are selected from the “International conference on business innovation in a post-pandemic world”. The selected chapters emphasize two main themes: Digitalization and Smart logistics. As a result, the current chapter contributes an overview of business innovation in Vietnam. It also identifies various challenges and promotes approaches to address them. Keywords Business innovation · Digitalization · Smart logistics · Vietnam

1 Introduction Business innovation has become popular in emerging markets, where organizations apply innovative technologies, procedures, and services to change different aspects of their business [1]. In Vietnam, business innovation can be seen from both new technologies and innovative strategies. From the technology aspect, the advent of digital transformation, artificial intelligence (AI), and blockchain provide momentum N. H. Thuan (B) · H. Nguyen · H. C. Pham · A. Halibas · S. Rakshit The Business School, RMIT University Vietnam, Ho Chi Minh City, Vietnam e-mail: [email protected] H. Nguyen e-mail: [email protected] H. C. Pham e-mail: [email protected] A. Halibas e-mail: [email protected] S. Rakshit e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_1

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for business growth. From the strategy aspect, new business models like Axie Infinity have been successfully launched in Vietnam. All of these highlight the important roles of business innovation in Vietnam. We further note the importance of business innovation in the post-Covid-19 pandemic. In particular, the Covid-19 pandemic has disrupted the ways organizations do business. This has pushed organizations to accelerate innovation and innovation applications in all aspects of their business [2, 3]. Similar pushes can be found in Vietnam, where innovation and digital innovations have been documented as one of the key strategies to respond to the Covid-19 pandemic disruption [4, 5]. While all of these indicate the important roles of business innovation in Vietnam, it is hard to identify a comprehensive book presenting Vietnam’s business innovation research and practice. Indeed, we can find individual studies on new technologies and innovative models in the context of Vietnam [4–6]. Yet, a collected account of studies on business innovation in Vietnam is still lacking. With this lacking, practitioners may find it difficult to be innovative in their businesses without context-specific guidance. In fact, business innovation is not one-size-fits-all solution, but it varies across business industries and operating countries. The inadequacy of context-specific and high-quality research on business innovation in Vietnam remains problematic to organizations that want to thrive in the post-pandemic era. Addressing this gap, we propose an edited book entitled “Business Innovations for the Post-pandemic Era in Vietnam”. The book collects recent studies from the “2022 International Conference on Business Innovation” at RMIT University in Vietnam, whose main theme is “Business innovation in a post-pandemic world”. In particular, the book collects and presents 16 chapters across different topics of business innovation in Vietnam, which by and large can be grouped into two distinct areas, namely Digitalization and Smart logistics. The book contributes to the body of knowledge in several ways. It provides a comprehensive reference for business innovation research and promotes recent progress in business innovation applications in Vietnam. It identifies different business challenges and promotes innovative approaches to tackle them. As so, it offers a shared understanding to help coordinate future research in the field. Further, it provides an overview of new business innovation practices in the post-Covid-19 pandemic. Indeed, eight chapters of the book take the post-Covid-19 pandemic as their research context. From a practical point of view, the book helps companies in Vietnam to keep up with recent advances in digitalization and smart logistics. Following the current introduction chapter, the remainder is structured as follows. As the book is organized into two main areas of business innovation in Vietnam: Digitalization and smart logistics, Sects. 2 and 3 introduce the related chapters regarding these two areas. Finally, Sect. 4 provides some concluding remarks.

Introduction to Business Innovation in the Post-pandemic Era …

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2 Introduction to Chapters in Digitalization Section Digitalization helps companies to deal with the impact of the Covid-19 pandemic. At the same time, companies have invested in innovative technologies and digital infrastructure to remain competitive. More than ever, the world sees the importance of digitalization for business continuity. In this regard, companies have faced numerous challenges including new shifts in consumer behaviours and declining sales in brickand-mortar stores, among others [7–9]. Contrastingly, recent global statistics report an increasing usage of digital channels and platforms including e-commerce, mobile commerce, social commerce, and social media platforms [10]. These digitalization trends are seen to further grow in the post-pandemic [11, 12]. Addressing these trends, we now introduce seven chapters in the book that address various phenomena of digitalization, including entrepreneurship, digital supply chain transformation, e-government services, blockchain technology, chatbot marketing, and personalization-privacy paradox in marketing. Following the current introduction chapter, Chap. 2 recognizes that start-up enterprises with limited resources and capacity must withstand the impact of the postpandemic-related crisis. One of the challenges is the negotiation phase in the new product launching stage with the shift in consumer demands, and market stagnation. In this regard, Chap. 2 notes that concerns about personal and others’ outcomes, relationship building, emotional expression and risk-taking are the key behaviours of entrepreneurs. In the post-COVID-19 era, entrepreneurs should balance the interest of the firm and consumer benefits, and establish a relationship with trust, sympathy, and mutual benefits to reach a win–win agreement with the customers, alternatively, risk-taking needs to be carefully reassessed. In Chap. 3, the authors witness businesses turning to digital technologies to enhance efficiency during the pandemic. 82 Vietnamese enterprises have demonstrated the impact of digital transformation on their business operation outcomes in the domestic market. Digital transformation increases efficiency in advertising and logistics but demonstrates its adverse effects on business performance in aftersale and human resource management. Chapter 3 also provides several practical implications focusing on policy, integration of business internal operations, cultural adaptation, and corrective measures. In a similar vein, Chap. 4 asserts that digitization of supply chains is an effective way to minimize supply chain disruption risks. Given the unprecedented impact of the COVID-19 pandemic on global supply chains, this study examines interactivities between environmental dynamism, technology, and organizational capabilities during the pandemic era. Notably, small and medium enterprises (SMEs) are found to adopt faster technology deployment rates than large enterprises. Chapter 5 examines the application of E-Government in Vietnam. In particular, Vietnamese citizen is quite resistant to using E-Government services regardless of their convenience, simplification, and efficiency. Chapter 5 discovers that personal innovativeness, online experience, perceived ease of use, and behavioural control are important factors that positively influence the willingness to adopt E-Government

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of the citizen. Thus, the chapter suggests to improve the User experience (UX) of E-Government websites, identify and eliminate financial fraud and theft, and build a user-friendly environment. Blockchain technology is well-known for its application in record-keeping, registrations, documentation, and transactions. With the emerging blockchain technologies, Chap. 6 surveys organizations in New Zealand to further explore the current potential applications, future development, motivations, and barriers to investment in blockchain technology. The findings are smart contracts, payments, transparency, visibility, and open communities as the current blockchain applications in these organizations. Firms adopt blockchain technology as it may improve their competitive advantages and facilitate innovation, while regulatory issues and inadequate internal skills and understandings are great barriers that hinder the implementation and development of blockchain technology. Chatbot marketing is an AI-powered automation strategy used to guide customers in their customer journey. It uses virtual conversational agents (VCA) in responding to customer service requests. Chapter 7 provides a conceptual framework that reviews potential factors of negative prior experiences of customers with VCAs to understand their avoidance behaviour and switching intentions. The chapter contributes to the literature on avoidance behaviour research in the context of VCA which can set the direction for future research and marketing practice. Chapter 8 concerns the personalization-privacy paradox. On the one hand, firms need to collect relevant customer information for marketing purposes. On the other hand, firms face this stumbling block as most customers are hesitant to disclose personal information about themselves. Likewise, there are legislations protecting customers’ data privacy and security. Chapter 8 provides a review of the empirical literature about the personalization-privacy paradox. It reveals relevant factors that drive or inhibit self-disclosure behaviours. The findings provide insights for future scholars and firms regarding marketing strategies addressing personalization-privacy trade-offs. Table 1 provides an overview of the themes, methodological approaches and key contributions from these chapters.

3 Introduction to Chapters in Smart Logistics Section Smart logistics introduces digitalization and automation in manufacturing and logistics, which facilitates interaction among all stakeholders in supply chains. Besides, the increasing trend of deploying sustainable practices along all phases of the supply chain [13, 14] and the disruption of the Covid-19 pandemic have opened new avenues for smart logistics. Responding to ever-increasing pressures and disrupted risks, businesses have integrated different digital tools and adopted various smart-logistics

Methodology Semi-structured interviews

Ordinary least square (OLS) regression

Technology-organization-environment (TOE) framework and surveys

Non-probability convenient sampling and surveys

Survey

Theme/sub-theme

Entrepreneurship

Digital transformation

Digital supply chain transformation

E-government services

Blockchain technology

Chapter

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4

5

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None

None

Effects of COVID-19 supply chain disruption risk on SMEs’ digital transformation

Impact of digital transformation during the COVID-19 pandemic

Negotiation phase in the new product launching stage in the post-COVID-19 context

Post-pandemic related content

Table 1 Overview of the book chapters in Digitalization section (refer to the book for the detailed chapter)

(continued)

An exploratory study that touches on the application of blockchain and barriers to blockchain development

An analysis of factors influencing the willingness to use e-government service among citizens and how to address these resistances

Examine key drivers of digital transformation among firms focusing on the disruptions caused by the COVID-19 pandemic

Explore the impact of digital transformation on different business areas and outcomes based on business performance of labour productivity, revenue, and profit

Examine key behaviours of entrepreneurs that affect the negotiation outcome of start-up businesses in the new product launching stage

Main contributions

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Methodology Conceptual framework

Theme/sub-theme

Chatbot marketing

Personalization-privacy paradox in Literature review marketing

Chapter

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Table 1 (continued)

None

None

Post-pandemic related content

A review to enhance the understanding of the personalization-privacy paradox

Propose a conceptual framework that examines factors of negative prior experience with VCA and how they influence the avoidance behaviour and switching intention of customers

Main contributions

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initiatives in supporting the manufacturers and consumers working toward implementing sustainable environmental strategies. These trends open avenues for smartlogistic innovation to play a critical role in adapting existing production processes, technologies and services to global market requirements. This section highlights nine studies regarding smart logistics. Several chapters in this section also examine the influence of customer behaviour and interaction during Covid-19 pandemic on the delivery modes and logistics systems. In Chap. 9, companies must foster an understanding of constraints in food safety management implementation to enhance procedures and higher efficiency, especially in export operations. Chapter 9 identifies potential constraints that could limit fish and fishery manufacturers’ food safety management system (FSMS) in global trading. The findings are physical, behavioural, management policy, supply chain relationships, and standards constraints in fishery manufacturers’ food safety management system. In a similar topic, Chap. 12 uses empirical data and compare between Vietnam and China for highlighting critical factors in developing food safety governance and collaborating with stakeholders in global supply chains. Chapter 10 addresses quality management in the Vietnamese food supply chains. Using empirical surveys in food processing firms, the authors confirm the important role of absorptive capability in realizing vendor certification programs in improving quality and the operational and financial outcomes in food supply chains. Chapter 11 explores the influence of psychological factors on panic buying and willingness to pay more (WTPM) for food during the COVID-19 pandemic. From the sample size of 408 consumers, the findings indicate that consumer anxiety was positively associated with panic buying, but the relationship between consumers’ anxiety and WTPM was insignificant. Meanwhile, social contagion has a direct effect on both panic buying and willingness to pay more. The consumers are willing to pay to get higher attention during Covid-19, which highlights serious disruption to normal life. In Chap. 13, the authors highlight the importance of process innovation in absorbing external pressures on sustainable manufacturing. Using empirical data, the results emphasize the importance of learning from external supply chain partners to redesign the existing processes in meeting higher green certification pressures. Chapter 14 examines logistics in the grocery and retail industry with a choicebased experiment. The findings show significant differences in delivery mode and the timeliness of delivery, but consumers are quite homogenous in willingness to pay (WTP) for faster and more convenient time-based delivery service. The findings indicate that the customization strategy may be used to deal with heterogeneity in consumers’ preferences and WTP when designing and pricing the added-value service. To improve our understanding of the potential risk involved in supply chains in a developing country, Chap. 15 examines supply chain risk management and mitigation strategies in the Vietnamese garment industry. Using empirical and modelling techniques, this study emphasizes customer services and supply chain risk management in light of supply chain mitigation strategies using a quantitative survey approach.

Empirical study

Empirical and comparative study An empirical study using diffusion of innovation and signaling theories

Quality management in Food supply chains

Consumers in food supply chains

Critical success factors for food safety management

Sustainable manufacturing

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13

An empirical study using diffusion of innovation

Methodology Empirical with the theory of constraints

Theme/sub-theme

Barriers in food supply chains

Chapter

9

Main contributions

The empirical study confirmed the important role of absorptive capability in realizing vendor certification programs in improving the quality, and the operational and financial outcomes in food supply chains

This research identified physical, behavioural, management policy, supply chain relationships, and standards constraints in fishery manufacturers’ food safety management system

None

Critical success factors for food safety management

(continued)

This study highlighted the importance of process innovation in absorbing external pressures on sustainable manufacturing

This study identified critical success factors (CSFs) and their impact on the food safety management system

This study offers alternatives for This research explored the influence maintaining food availability during of psychological factors on panic the COVID-19 pandemic buying and willingness to pay more for food during the COVID-19 pandemic

None

None

Post-pandemic related content

Table 2 Overview of the book chapters in Smart logistic section (refer to the book for the detailed chapter)

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An empirical study with the Research models being collected theory of Resource-based view during the COVID-19 pandemic and Balanced Scorecard

An empirical study with the resonant effect and gap analysis

Supply chain risk assessment during the COVID pandemic

Risk in service-oriented supply chains

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17

An empirical study with modelling

Risks on the service-oriented supply chain in the construction sector during COVID-19

Supply chain risks and customer service: A moderating role of mitigation strategies

None

Supply chain risks management

Post-pandemic related content

15

An empirical study with a choice-based experiment in designing and pricing the added-value service

Logistics in grocery retailing

Methodology

Theme/sub-theme

Chapter

14

Table 2 (continued)

This study investigated the distinctive features of risk management in construction supply chains. It highlighted the importance of risk assessment of single and resonant effects during the pandemic period

This study provided an in-depth operationalization of the risk model including Supplier performance, Learning and Innovation, Internal business, Customer service, and Finance

This research examined the moderating role of mitigation strategies and their impact on customer service

This empirical study examined the influences of delivery modes and the timeliness of delivery on consumers’ willingness to pay in grocery retailers and logistics service

Main contributions

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Structural Equation Modelling (SEM) is used to validate this relationship with data obtained from the garment industries. Chapter 16 proposes a balance scored cards to establish a series of supply chain performance measures regarding external supply chain risk constructs, e.g., natural disasters, war & terrorism, fire accidents, political and economic fluctuation, social and cultural related issues, and disease. The empirical results highlighted multiple potential risks regarding external supply chain. Also in the risk-related topic, Chap. 17 addresses risks in service-oriented supply chains. The chapter investigates the risk management of construction supply chains using resonant and gap analysis. It highlights the importance of risk assessment of single and resonant effects during the pandemic period. Table 2 offers an overview of the themes, methodological approaches and key contributions from these chapters. As seen in Table 2, the chapters in this section have researched important and contemporary themes of smart logistics in Vietnam.

4 Conclusion In Vietnam, we believe that business innovation plays a vital role in enhancing business continuity and growth. We also note that the development of Vietnam’s business innovation and innovation systems are still in its early phases, although the country’s economy is recognized as an emerging economy that has experienced fast expansion over the course of the previous decades. Given this backdrop, we believe that there is a strong need to collect and get a shared understanding of business innovation in Vietnam. Addressing this need, we edit a book to collect current business innovation research in Vietnam. This book is among the first to examine how Vietnamese companies address and practice business innovation. Through a rigorous blind review process, we have selected 16 chapters that cover different business innovation topics including entrepreneurship, digital supply chain transformation, e-government services, blockchain technology, chatbot marketing, personalization-privacy paradox in marketing, supply chain, sustainable manufacturing, logistics and food safety management. We classify these according to the two main themes: digitalization and smart logistics. Serving as an introduction chapter in this book, the current chapter provides a reference for business innovation research. Further, we note that recent research indicates that Vietnamese companies are starting to address innovations as business strategies and practices [4, 5, 10]. This introduction chapter strengthens the indication, and further suggests that business innovation in Vietnam is emphasized in different topics of digitalization and smart logistics. It demonstrates that research on digitalization and smart logistics in Vietnam may be tackled from a variety of different viewpoints (as seen via Tables 1 and 2). Together, these viewpoints offer a shared understanding in the field.

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There are some shortcomings of the book that future research can further explore. First, as Vietnam aims to meet 2030 UN sustainable development goals, there is a need to take into account social, economic, and environmental areas. Yet, this book only covers digitalization and smart logistics and leaves other areas unexplored, including human resource management, green financing, environment, governance, and human capital. As so, there are potential opportunities for researchers to study these areas in their future works. Second, the book only considers business innovation in the Vietnam context, limiting its generalization to other country contexts. For enhancing generalization, future research could extend the research scope into multiple crossindustries and across countries.

References 1. Wang, Z., et al. (2022). Business innovation based on artificial intelligence and blockchain technology. Information Processing & Management, 59(1), 102759. 2. Caballero-Morales, S.-O. (2021). Innovation as recovery strategy for SMEs in emerging economies during the COVID-19 pandemic. Research in international business and finance, 57, 101396. 3. Clauss, T., et al. (2022). Temporary business model innovation–SMEs’ innovation response to the Covid-19 crisis. R&D Management, 52(2), 294–312. 4. Tung, L. T., & Duc, L. A. (2023). Digital transformation in business during the COVID-19 pandemic: insights from a vietnamese enterprise survey. In Digital economy and the green revolution: 16th International conference on business excellence ICBE 2022. Bucharest, Romania, Springer. 5. Ly, H. T. N., Khuong, N. V., & Son, T. H. (2022). Determinants affect mobile wallet continuous usage in Covid 19 pandemic: Evidence from Vietnam. Cogent Business & Management, 9(1), 2041792. 6. Thuan, N. H., et al. (2022). Using process stories to foster process flexibility: The experts’ viewpoint. Australasian Journal of Information Systems, 26, 1–35. 7. Delasay, M., Jain, A., & Kumar, S. (2022). Impacts of the COVID-19 pandemic on grocery retail operations: An analytical model. Production and Operations Management, 31(5), 2237–2255. 8. Youn, S.-Y., Lee, J. E., & Ha-Brookshire, J. (2021). Fashion consumers’ channel switching behavior during the COVID-19: Protection motivation theory in the extended planned behavior framework. Clothing and Textiles Research Journal, 39(2), 139–156. 9. Urbach, N., et al. (2021). Digitalization Cases Vol. 2: Mastering Digital Transformation for Global Business. Springer. 10. Kemp, S. (2022). Digital 2022 Vietnam. Datareportal. 11. Chatterjee, S., Chaudhuri, R., & Vrontis, D. (2021). Examining the global retail apocalypse during the COVID-19 pandemic using strategic omnichannel management: A consumers’ data privacy and data security perspective. Journal of Strategic Marketing, 29(7), 617–632. 12. Thuan, N. H., et al. (2023). Information systems research in Vietnam: A shared vision and new Frontiers. Springer Nature. 13. de Sousa Jabbour, A. B. L., et al. (2020). Sustainability of supply chains in the wake of the coronavirus (COVID-19/SARS-CoV-2) pandemic: lessons and trends. Modern Supply Chain Research and Applications, 2(3), 117–122 14. Zhou, M., Govindan, K., & Xie, X. (2020). How fairness perceptions, embeddedness, and knowledge sharing drive green innovation in sustainable supply chains: An equity theory and network perspective to achieve sustainable development goals. Journal of Cleaner Production, 260.

Important Negotiation Behaviours in Entrepreneurs’ New Product Launching Stage During Post-Covid-19 Era Nhat Minh Nguyen, Nhan Truong Thanh Dang, and Hiep Cong Pham

Abstract Entrepreneurs’ product launching stage is subject to various difficulties related to the decline in market demand, inflation, and changes in customers’ consumption habits in the post-Covid-19 period. Negotiation is a significant phase that entrepreneurs have to go through to launch their products. However, there is still limited research, if any, which focuses on negotiation behaviours of entrepreneurs within the new product launching stage in the Vietnamese context under Covid-19’s impacts. The aim of this study is to investigate the significance of negotiation and identify the importance of negotiation behaviours. This study employed a series of semi-structured interviews with Vietnamese entrepreneurs from various industries. The research findings revealed five key behaviours, including concern for one’s own outcome, concern for others’ outcomes, relationship-building, emotional expression, and risk-taking, that have a significant impact on the negotiation outcomes of an innovative entrepreneur in the launch stage. This study reinforces the importance of showing concern on the negotiating parties’ benefits and being proactive in building relationships to generate customers’ sympathy and trust and achieve a mutual agreement. Keywords Entrepreneurship · Launching products · Innovations · Post-Covid-19 · Negotiation

1 Introduction In the entrepreneurial life, a new product launching stage has been widely acknowledged as one of the most critical stages since the result in this stage does influence not only the acceptance of the new product but also the survival and growth potential of the entrepreneurs’ business ideas [1]. This stage is challenging and critical for N. M. Nguyen (B) · H. C. Pham RMIT University, 702 Nguyen Van Linh Street, Ho Chi Minh City, Vietnam e-mail: [email protected] N. T. T. Dang Banking University, 56 Hoang Dieu 2 Street, Ho Chi Minh City, Vietnam © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_2

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creating the financial flows and the resources necessary to maintain and reinvest in the product, which ultimately ensures the business’s vitality, competitiveness, and growth potential [2]. However, negotiation in the launching stage contains several significant difficulties to overcome, such as lack of trust [3], lack of a well-known brand [4], or the doubts from customers [5]. Furthermore, besides these prominent challenges, entrepreneurs’ launching innovations stage is also subject to additional difficulties related to the decline in market demand, inflation, and changes in customers’ consumption habits in the post-Covid-19 era. Vietnam’s innovative start-up ecosystem still involves many difficulties as well as withstands significant negative impacts of the Covid-19 pandemic. The Covid19 impact on the majority of young people’s entrepreneurial spirit has caused many anxieties and concerns among young people in terms of business [6], which are likely to influence their negotiation behaviours during business operation processes. There is still a theoretical and practical gap in terms of challenges and recommendations for entrepreneurs in Vietnam within the context of post-Covid-19 era [7]. Especially, there is still limited research, if any, which focuses on negotiation behaviours of entrepreneurs within the new product launching stage in the Vietnamese context. In brief, based on a review of extant literature about entrepreneurship, two remaining research gaps have been identified, which have motivated this study. Firstly, there is still limited research focusing on studying the Covid-19’s impact on the significant disruption of entrepreneurs’ business operation topic, especially in emerging countries. Secondly, there is also little research generated to explore whether the identified entrepreneurship negotiation behaviours can bring advantages or disadvantages to entrepreneurs in a specific negotiation context, such as the new product launching stage in Vietnam. Considering the emphasized literature gaps, this study explores entrepreneurship’s negotiation behaviours and examines their effects on the negotiation performance in the new product launching stage, with a focus on the Vietnamese context.

2 Literature Review 2.1 Some Critical Challenges When Launching New Products in Post-Covid-19 Era A significant challenge posed by Covid-19 is that the ability to identify and predict market trends and needs during the new normal period has become extremely difficult. During the post-Covid-19, when the economies and people’s lives are in the recovery period, several previous studies have consistently emphasized the change in consumers’ needs and their purchasing decisions [8]. Mehta et al. [9] stated that, in a tight economic period, consumers tend to shift their focus on consuming essential products. Nagra and Shreya [10] expected the non-essential products demand to be

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dropped critically during the post-Covid-19 period. The change in customers’ preferences not only reduce the demand for products offered by entrepreneurs but also seriously reduces the entrepreneurs’ business liquidity since the trading activities have been disrupted. The demand decline, inventory increase and prolonged period will make the health of start-up business’s cash flow fall into a negative situation. Several previous studies suggested entrepreneurs to come up with immediate actionable strategies to deal with the liquidity challenge posed by Covid-19. Entrepreneurs also face another major challenge from the market which is acknowledged as the inflation in the post-Covid-19 period [11]. Inflation in the post-Covid-19 period has been spreading to many developed and developing countries around the world. High inflation has also been recorded as the major reason that led to the increase in raw materials in recent years, especially after the Covid-19 appearance. However, not all start-ups have enough financial resources to meet and cope with the current inflation situation [11]. Thus, entrepreneurs need to focus on figuring out how to allocate resources and improve the business’s storage capacity to be able to cope with the difficulties caused by inflation.

2.2 Research Gaps As stated in the introduction part, based on a review of extant literature, two remaining research gaps have been identified as the foundation to conduct this research. Firstly, Covid-19 has significantly disrupted the operations of most enterprises, particularly those run by start-up entrepreneurs who have few resources and a weak capacity to withstand the effects of crises [12]. Therefore, discovering challenges and proposing solutions for entrepreneurs in the post-Covid-19 era has received major attention from previous scholars. Prior investigations of how Covid-19 might affect entrepreneurs’ business operations have mostly concentrated on issues including supply chain disruption, declining demand, reduced liquidity, workforce challenges, financial challenges, and technological challenges such as, Engidaw [13], and Asma and Prabhakaran [8]. However, little focus has been placed on the entrepreneurs’ new product launch period, which is greatly impacted by variations and declines in demand, the increase of inflation rate, the instability of the supply chain, and shifts in consumption patterns. Investigating the difficulties encountered during the new product launch period, which is crucial to the growth of start-ups, in the post-Covid19 era promises to provide several significant contributions to both academic and practical knowledge about entrepreneurship. Secondly, previous entrepreneurship negotiation studies have applied several theories such as The Big Five theory and entrepreneurship personalities theories to highlight and differentiate prominent negotiation behaviours of entrepreneurs and nonentrepreneurship groups such as in the studies of Maxwell and Lévesque [14], and Artinger et al. [15]. However, little research has been done to discover whether the

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identified entrepreneurship negotiation behaviours can bring advantages or disadvantages to entrepreneurs in a specific negotiation context, such as the new product launching stage. This study has been motivated by the above research gaps. This study expects to, theoretically, contribute to the literature development about negotiation behaviours of entrepreneurs in general and entrepreneurs’ negotiation during the new product launching stage within the post-Covid-19 recovery in particular. Notably, one of the significant contributions from this study to the negotiation knowledge development is the exploration of a set of prominent entrepreneurship negotiation behaviours and the examination of their relationship with the negotiation performance during the new product launching stage. Practically, with the consideration of updated contextual events such as Covid-19, the research can enhance more entrepreneurs’ awareness about the importance of having appropriate negotiation behaviours to overcome business challenges as well as deliver feasible recommendations for entrepreneurs to develop more effective negotiation strategies for launching new products successfully during this period.

2.3 Theoretical Lens This study extended the Behavioural Negotiation Theory (BNT) [16] to identify and discover the importance and influence of entrepreneurship negotiation behaviours on the negotiation outcomes in the new product launching stage. BNT provides a base negotiation framework in which a negotiation process is determined by a negotiation context and a negotiators’ cognition. While the negotiation context in this study, the launching stage, is static, the cognitions of the negotiators are dynamic and have a key role in differentiating the negotiation process among various negotiators, according to BNT. In addition to the traits associated with the negotiation setting, the personalities of the entrepreneurs will also be taken into account when identifying their important negotiation behaviours and when examining the negotiation process in the launching stage, especially in the post-Covid-19 era. Entrepreneurial behaviour during negotiations may be distinctive in a variety of ways. Complexity, feelings, connections, and uncertainty are cited as factors that highlight the particularities of the negotiation process [3]. In accordance with the objectives and the defined research topic, this study investigates and explores a set of significant negotiation behaviours of entrepreneurs during the new product launching stage in the post-Covid-19 era based on BNT and earlier studies linked to entrepreneurial cognition.

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3 Research Method A qualitative data collection technique provides “an in-depth study of events or processes over a prolonged period” [17] and is appropriate to the aims of this research. The objective of the qualitative research is to examine and screen for independent variables in the proposed theoretical model and to determine on a preliminary basis the relationship between the independent and dependent variables. Qualitative methods have been employed to identify the negotiating behaviours thought to be essential in the negotiation process between innovative entrepreneurs and clients during the launch phase of a business. From the qualitative approach, this study conducted a series of semi-structured interviews with Vietnamese entrepreneurs. The researchers sought participants from various industries in this study to ensure a wide representation of the research findings. The interviews were conducted within two months, from the beginning of 2022, about 3 months after the social distancing period in Vietnam ended. Entrepreneurs with full or partial ownership of their companies and launch-stage negotiation expertise made up the participants in the interview. 14 interviews were conducted with entrepreneurs from a range of sectors as shown in Table 1. Table 1 Participants’ profile

Order

Industry

Role

Code

1

Technology

Founder

T.1

2

Technology

Founder

T.2

3

Technology

Founder

T.3

4

Technology

Founder

T.4

5

Technology

Founder—General Director

T.5

6

Technology

Founder—General Director

T.6

7

Medical

Founder

ME.1

8

Medical

Founder—General Director

ME.2

9

Agriculture

Founder

A.1

10

Education

Founder—General Director

E.1

11

Food and beverage

Founder—General Director

F.1

12

Manufacture

Founder—General Director

M.1

13

Manufacture

Founder—General Director

M.2

14

Manufacture

Founder—President

M.3

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The contents of the interviews were recorded, transcribed, stored and encrypted in computers. Immediately after each discussion, the author relied on audiotapes and notes to retype the entire discussion contents using Word software and stored the audio and transcripts in NVivo 11 for further analysis. The researcher applied thematic analysis, which allows the researcher to search and identify common threads across the set of interviews [18], to identify, analyze and report patterns within collected data from the interviews.

4 Research Findings Our data collection revealed five key behaviours, including concern for one’s own outcome, concern for others’ outcomes, relationship-building, emotional expression, and risk-taking, that have a positive or negative impact on the negotiation outcomes of an innovative entrepreneur in the launch stage.

4.1 Concern About Personal Outcomes The Covid-19 Pandemic pushed entrepreneurs’ businesses into a difficult situation, especially with the financial situation. The shutdown of operations, stagnant goods, and a decline in market demand placed the financial situation of many start-ups in desperate straits. This is especially acute for businesses that are preparing to launch new products since they have just gone through the product development and completion processes, which are described by some of the participants as the financial draining process. Therefore, many entrepreneurs believe that focusing on personal benefits, such as improving the profits of the business, should be their priority at this stage. An entrepreneur shared that: “I have many pressures such as financial, and therefore when I have a chance to earn benefits from any deal, I have to express the concern about them” (T.5). However, the emphasis on self-benefit also comes with a notice about its adverse effects. In the Covid-19 pandemic, many customers are becoming more cautious when making new product purchasing decisions and prioritize spending money on products that are necessary to stabilize their lives or business. Thus, if the concern about personal benefits is over-expressed, it can make customers feel unappreciated, their interests are not guaranteed, and can lead to conflicts of interest between the parties. A manufacturing entrepreneur said: “You need to focus on clarifying the benefits that new products could bring to customers. The most important thing at this stage is taking care of your customer’s wishes” (M.2).

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4.2 Concern About Others’ Outcomes This is one of the most important negotiation behaviours that received high consensus from the participants when they emphasized the importance of taking care of the client’s interests. This behaviour becomes even more important in the post-Covid19 context when many customers no longer prioritize to try and experiment with new products. One participant shared that: “In the current post-Covid-19 situation, convincing customers to use new products is really difficult, because for them new products could always come with risks and might destabilize their business operations. Therefore, in my opinion, clarifying the benefits with customers is a prerequisite to convince them.“ (A.1). Some entrepreneurs also shared that paying attention to customers’ interests is one of the important factors that helps increase customer sympathy, not only contributing to their success in a deal but also creating favourable conditions for them to have more business opportunities in the future. “Concern for others’ benefits gives me some intangible benefits, like their trust and promotion that will not only help me succeed in the current contract but also open up opportunities to approach new deals in the future.” (ME.2).

4.3 Building Relationship As noted in the study, many entrepreneurs consistently shared that the negotiation process during the new product launch phase is a great opportunity that enables them to generate relationships and networks with their potential customers. The negotiation process is a great opportunity for entrepreneurs to have direct contact with customers, listen to the customers’ requests, and to clearly present the benefits that new products can bring; as a result, the trust and sympathy from customers are gradually generated. Such values can be hardly delivered by marketing strategies, especially in the new product launch phase. A technology entrepreneur shared that: “Marketing strategies usually help your product reach customers, but in order to convince them to buy your product and build a relationship with them, you need an effective negotiation process.” (T.3). In the post-Covid-19 context, when consumers tend to be more careful in spending, building a good relationship with customers also helps them create a good reputation and the opportunity to reach other customers in the future. “Once you have a good relationship with a client, you have the opportunity to be referred by that person to other potential customers”. (M.3).

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4.4 Emotional Expression As noted by the research, during the new product launch phase, many customers have little information regarding new products and the entrepreneurs. Therefore, they often make shopping decisions based on their emotions. Creating positive emotions for customers; therefore, plays an important role in the ability to persuade customers to choose to buy new products. A health entrepreneur said: “When negotiating, clients often choose their response based on how I react or express emotions during the negotiation process.” (H.1). Expressing positive emotions will bring more advantages to entrepreneurs in the process of negotiating a new product launch, especially by impacting on sympathy and made a pleasant impression on customers. An entrepreneur emphasized that: “If I display positive expressions such as enthusiasm, cheerfulness, openness, and patience; customers often show similar expressions. But if I show signs of fatigue or impatience, customers will get a bad impression of me. They even share that bad experience with others.” (T.5).

4.5 Risk-Taking This study indicates that risk-taking, in the post-Covid-19 context, can cause many disadvantages for entrepreneurs in the new product launch period. First, in the postCovid-19 period, the business situation is subject to many uncertainties, such as supply chain disruptions, unstable raw material supplies, and labour shortages. Therefore, entrepreneurs’ businesses will find it difficult to predict future fluctuations and control the risks they will face. In addition, when management capacity is still limited, controlling product quality is another challenge when production volume increases dramatically. An entrepreneur shared that: “Having a good product is important, but do not forget that you also need to choose the right orders for your business capacity.” (A.1). This participant continued: “At first, I thought it was just a failure of an order. But in fact, it also had intense effects on my company’s reputation and brand, making it more difficult for me to reach new customers.” (A.1). The consequences do not only encapsulated in the failure of an order, but also affects the reputation, brand, and customer confidence in the new product.

5 Discussion This study contributes to the negotiation knowledge development is the exploration of a set of prominent entrepreneurship negotiation behaviours. In brief, mainly relies on the negotiation framework developed by BNT [16], this study examined the determining factors of the innovative entrepreneurs’ negotiation outcomes during the new product launching stage. This study extends the existing works on exploring

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entrepreneurship negotiation by discovering and explaining the influence of a set of prominent entrepreneurship negotiation behaviours, which are rooted from the entrepreneurial social cognition, on the negotiation performance, while previous studies on this topic mainly focused on differentiating the negotiation behaviours between entrepreneurship and non-entrepreneurship group. Besides showing consistent results with previous scholars on the effect of showing concern about customers’ benefits, and showing building relationship intention on improving negotiation outcome, this study’s findings also highlighted several different results and provided new perspectives about the type of emotional expression and effects from risk-taking on the launching stage negotiation performance in the post-Covid-19 era. While previous scholars stated risk-taking as an important entrepreneurial negotiation behaviours differentiator and might significantly leverage the negotiation performance of an entrepreneur in comparison with other non-entrepreneurial negotiators (e.g. from Dunne [19], Artinger et al. [15] and), this finding is in contrast by highlighting the negative impact from risk-taking on the negotiation performance in the launching stage. This study is one of the few to show that innovative entrepreneurs tend to prioritize safety over a certain period. This finding is consistent with Hytti [20], whose study argued that entrepreneurs can be counted as safe-seeking professionals under some specific uncertain situations. Furthermore, it supports Dinnar and Susskind’s [3] acknowledgement that entrepreneurs tend to be overconfident about their own abilities and tend to take a high level of risks that might exceed the handling capability of the business. Entrepreneurs should not overestimate their business capabilities since uncertainty about production capability might lead to deviations in assessing the level of acceptable risk or to foresee the effects. This study significantly extends the literature on entrepreneurship’s emotional stable characteristics by highlighting the more frequency in expressing positive emotions of entrepreneurs. This result is consistent with previous negotiating studies about the significance of emotional expression in a negotiation process (e.g. Li and Roloff [21], Brett and Thompson [22]) but contradicts entrepreneurship’s high frequency in expressing negative emotions to pressure other negotiators to achieve their targeted outcomes acknowledgement from Artinger et al. [15] and McMullan and Kenworthy [23]. The negotiators decide how they will behave based on the emotional cues they receive from others [24]. Therefore, when negotiators find that the other party exhibits positive emotions, they also tend to reciprocate with positive emotions demonstrating their intention to maintain a positive environment during the negotiation process and facilitating mutual agreement [25]. The finding from this study consistently agree with the study of Steinmetz et al. [26] and by showing that exposing positive emotions is the key to shaping customer buying intention and to maintain an open negotiating environment with the customers. This result also consistently supports Shimoli et al. [27] statement by showing less negative emotion is one of the significant success traits of the entrepreneurs. In the post-Covid-19 context, when customers become more cautious when making new product purchasing decisions, the ability to create positive emotions and excitement for customers plays an important role in enhancing the entrepreneurs’ persuasion. Therefore, entrepreneurs

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are advised to express positive emotions during negotiations at the new product launching stage.

6 Limitations and Future Directions There are some limitations that need to be acknowledged when discussing the results from both phases of this study and developing future research directions. Firstly, since the nature of qualitative research is to collect the individual opinions of each participant. Therefore, on the same problem, the thoughts or respondents may be different among participants, leading to biases or shortcomings in the researcher’s analysis. Further research may use the quantitative research approach to test the generalization of the propositions from this study might be useful to support each other to improve the accuracy of research results. Secondly, this study only focuses on Vietnamese participants, implying that there might be an issue from cultural perspective between innovative entrepreneurs from different cultures. Future studies can focus on the cultural aspect to expand the innovative entrepreneurs’ perspective during the negotiation process, especially at the new product launching stage.

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Does Digital Transformation Increase Efficiency in Business? Evidence from Vietnam During the COVID-19 Pandemic Le Thanh Tung and Le Anh Duc

Abstract During the COVID-19 pandemic, the urgent strategy in the application of the Internet of Things (IoT) and digital transformation has helped companies well drive their supply chains and urgently respond to the market’s demands. This paper proposes to identify the impact of digital transformation on the outcomes of business operations in Vietnam’s market. Our primary database has been collected by an online survey having 82 enterprises. The Ordinary least square (OLS) regression method is applied to the quantitative analysis of the econometric model. Our results confirm that digital transformation in advertisement and logistics have not only increased the revenue and profit but also supported the labour productivity of the companies. However, the estimated results indicated that digital transformation in the after-sale service and the human resource management could reduce the business efficiency in these companies. Our study is maybe the first one in the digital transformation issue in Vietnam, therefore, it suggests some management implications for the leaders in the Vietnamese business environment. Keywords Digital transformation · Internet of things · Business strategy · Business transformation · COVID-19 pandemic

1 Introduction The outbreak of the COVID-19 pandemic over two recent years has forced businesses to undergo restructuring to survive, adapt and operate in this pandemic. Because the social distancing policy and social contact restriction have been widely applied in many countries, digital transformation has played a central role in the restructuring L. T. Tung (B) Faculty of Economics and Public Management, Ho Chi Minh City Open University, Ho Chi Minh City, Vietnam e-mail: [email protected] L. T. Tung · L. A. Duc Policy and Applied Economics Research Group, Ho Chi Minh City Open University, Ho Chi Minh City, Vietnam © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_3

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process in companies worldwide. On the other hand, the outbreak of the COVID19 pandemic is considered such as a catalyst in fast accelerating this process [1]. The digital transformation process changes the internal elements of the business, and its result is to make goods and services smarter, on the other hand, it helps closely connect between individuals and individuals, and between individuals and communities in faster and more convenient ways. However, digital transformation has only been promoted in developed countries and some emerging countries, but it has not really spread to all countries. Along with the explosion of social activities on online platforms, the Internet of Things (IoT) is predicted to robustly explode around the world. Vietnam is now considered as a Southeast Asian manufacturing hub, and this economy has emerged as a potential investment destination and as a highly dynamic business environment [2]. Business in Vietnam is really a good place in Southeast Asia with a high potential profit [3]. Digital transformation is also a current trend in Vietnam when the outbreak of the COVID-19 pandemic has seriously affected the operation of the companies. The damage of many businesses has dragged national economic growth to the lowest level for three recent decades [4]. The social distancing measure has been taken to combat the epidemic infection, but it has put businesses in front of unprecedented challenges because of having to implement many complex disease prevention solutions. Digital transformation in business is simply understood as the application of digital technologies to create new business processes for new customers and market requirements. In the COVID-19 pandemic context, digital transformation is seen as an optimal choice for businesses to maintain their supply chain of goods and services, survive and gradually adapt in the current context [5]. The pandemic is still unpredictable when it will end. The lockdowns in major cities and the phrase “new normal” have changed a lot of consumption habits and business operation ways. If evaluated from a positive direction, the two recent years have been considered as a helpful period for businesses to restructure the operation system as well as found new approaches to serve customers in the context of the Industrial revolution 4.0 and the Internet of things (IoT). Many businesses are following the digital transformation strategy as a survival way and cannot be reservedly experimented with it. One of the clearest examples is the explosion of e-commerce channels during the pandemic period. When Vietnam changes its stance in fighting the epidemic [6], digital transformation becomes a mandatory condition for using technology to check information related to vaccinations or prevention regulations in pandemic. Facing many difficulties and challenges because of the outbreak of the COVID-19 pandemic, however, digital transactions and digital transformations have increased sharply and will become the main directions in the business environment in Vietnam’s economy in the coming time. Although there have been changes in digital transformation in the Vietnamese business community over the past time, Vietnam’s overall digital economic environment is still at a limited level when compared to other countries in the region. For example, the online purchasing payment in Vietnam is still low compared to other nations in the region. In the general forecast, because of the limitation of resources, digital transformation in developing countries such as Vietnam faces many challenges

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and impediments to improvement in the coming years [7]. Several research questions are arisen: What role does digital transformation play in the business processes of Vietnamese businesses (as measured by indicators like revenue, profit after tax, and labour productivity) during the COVID-19 pandemic? Or, more specifically, what are the primary areas in which Vietnamese enterprises have promoted digital transformation during the COVID-19 epidemic, and how effective have they been? What needs to be done in the post-COVID-19 period to strengthen the role of digital transformation in the process of reforming Vietnamese firms’ operations?

2 A Brief Review of Related Studies The outbreak of the COVID-19 pandemic has been a huge challenge for every business system, from the country to the individual level, revealing both strengths and weaknesses of each organization in strategy responses to the pandemic. However, businesses can be received many benefits from digitalized services in the postpandemic period. Seamless and timely outreach and engagement with customers are just amongst of many benefits digital transformation offers for business organizations in the outbreak period of the COVID-19 pandemic. In the time of global contagious disease, the social distancing policy, which includes a conscious rule to reduce close contact in the community to slow and hopefully halt the spread of this dangerous virus, has harmed the supply chain of businesses worldwide. Therefore, digital transformation is really a process of restructuring operations at enterprises [8], because it is related to all core activities such as operational management, human resource management, production process operation, sales/marketing/after-sales, supply chain operations, etc. Thus, digital transformation affects all activities in the value chain of enterprises [9]. Enterprises cannot digitally transform only a few areas of activity because then digital transformation still consumes a lot of resources but has very low efficiency, Digital transformation must be carried out on all core activities of enterprises. The key to speeding up the process of restructuring business operations in response to the COVID-19 epidemic is digital transformation. In the booming era of business in the internet platform, digital technology allows and enhances digital transformation to quickly happen in many aspects of business organizations. Obviously, this phenomenon has created a revolution in business approaches and has allowed the application of new methods in management. In fact, digital transformation is not a short-term plan but a long-term and resource-intensive strategy of enterprises [10]. Digital transformation can even pose a financial risk to enterprises as many resources will be spent to serve the digital transformation process. Many enterprises have also experienced major setbacks during the digital transformation process. Because it consumes a lot of enterprises’ resources, digital transformation presents businesses with both opportunities and threats [11]. From the perspective of production and business, the integration of digital technologies is gradually being introduced into all areas of business activities. Digital transformation is essentially a process of comprehensively restructuring enterprises

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in key areas [12]. The promotion of the application of advanced technologies to the digital transformation of production and business activities has fundamentally changed the way that enterprises operate, their organization’s operating model, the way they market their business and deliver new value to its customers and accelerates business operations [13]. Digital transformation also helps businesses to rapidly increase customer satisfaction through big data analysis to better understand customer needs, discover hidden needs, get identify essential needs and thereby provide a variety of products to better meet these needs. Digital transformation is reducing many types of costs for businesses and turning all operational processes smarter, using resources more efficiently, on that basis, minimizing resources during business operations [14]. Digital transformation promotes automation, allowing many businesses to cut input resources but increase output, thereby reducing production costs and increasing competitiveness [15]. Digital transformation is also a strong push to change the culture of organizations, requiring types of organizations to constantly change, actively seek new things, experiment with growth potential, and be more comfortable accepting failures as part of the process of making systems smarter [16]. Obviously, the digital transformation in organizations is quickly changing the approach companies get done and enhance to create new types of products for new markets. It is a challenging process when digital transformation is compulsory for managers to take critical thinking at everything companies do and how companies do it [17]. Digital transformation is taking place in the world at an increasing speed, opening doors for countries to accelerate the race to increase productivity, promote innovation, and improve international competitiveness [18].

3 Methodology To quantitatively analyze the impact of digital transformation on the business efficiency of companies, the paper applies the Ordinary Least Square (OLS) method for estimations, respectively [19]. In this study, the business efficiency of companies is presented by three indicators including Revenue, Profit and Labour productivity, therefore, we estimate three econometric models below. Revenueit = β1 + β2 DT_ Advertisementsit + β3 DT_Logisticsit + β4 DT_ After_sales_serviceit + β5 DT_ HRMit + εit

Profitit = φ1 + φ2DT_ Advertisementsit + φ3DT_Logisticsit + + φ4DT_ After_sales_serviceit + φ 5DT_ HRMit + it Productivityit = α1 + α2 DT_ Advertisementsit + α3 DT_Logisticsit + α4 DT_ After_sales_serviceit + α5 DT_ HRMit + δit

(1) (2)

(3)

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Table 1 The descriptive statistics of the variables Variable

Measurement

Mean

S.D

Dependent variable Revenue

= 1 if increase; 0 otherwise

0.35

0.053

Profit

= 1 if increase; 0 otherwise

0.37

0.054

Productivity

= 1 if increase; 0 otherwise

0.23

0.047

Independent variable DT_Advertisement

= 1 if application; 0 otherwise

0.91

0.031

DT_Logistics

= 1 if application; 0 otherwise

0.78

0.046

DT_After_sales_service

= 1 if application; 0 otherwise

0.90

0.033

DT_ HRM

= 1 if application; 0 otherwise

0.94

0.027

Observations

82

where, Eqs. 1, 2 and 3 have the dependent variables Revenue, Profit, Productivity, respectively. There are four independent variables added in each equation Digital transformation in Advertisements (DT_Advertisement), Digital transformation in Logistics (DT_Logistics), Digital transformation in After_sales_service (DT_ After_sales_service) and Digital transformation in Human resource management (DT_ HRM). Besides, t represents time periods and i is cross-sectional unit with i ∈ [1, n]. Finally, ε, C and δ are the error terms. This study uses a primary database that has been collected from 82 companies in Vietnam by an online survey. The survey’s duration is from 15 November to 15 December 2021 done by the research team of the Vietnam Report Joint Stock Company (Vietnam Report company). This period was selected because it could help to identify whether digital transformation supported the business efficiency of companies during the COVID-19 pandemic. The descriptive statistics of the variables used for three econometric models are presented in Table 1.

4 Result and Discussion To quantitatively analyze the impact of digital transformation on the business efficiency of the companies in the study sample, we conduct a regression technique using the Ordinary least squares (OLS) method with the three most important indicators representing business performance are revenue, profit, and labour productivity. The estimated results are presented in Table 2. First, digital transformation in the field of advertising has had a positive impact on all three indicators of revenue, profit, and labour productivity with statistical significance at 5%. The estimated results strongly confirm that digital transformation in the advertising field has been highly effective in helping businesses do business in the context of the pandemic outbreak. In fact, advertising is an area where businesses

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Table 2 Estimated results Independent variable

Dependent variable: revenue (Eq. 1)

Dependent variable: profit (Eq. 2)

Dependent variable: labour productivity (Eq. 3)

DT_Advertisement

1.175** (2.344)

1.147** (2.237)

1.037** (2.268)

DT_Logistics

0.295** (2.177)

0.221 (1.597)

0.143 (1.160)

DT_After_sales_service

−0.897** (−1.891)

−0.821* (−1.694)

−0.899** (−2.079)

DT_HRM

−0.546** (−2.278)

−0.528** (−2.155)

−0.325 (−1.485)

Constant

0.371* (1.671)

0.381* (1.682)

0.287 (1.421)

R_squared

0.142

0.117

0.083

Observation

82

82

82

Notes **, * significant at 5%, 10%, respectively. t-statistics are in the parentheses

often apply new technologies and therefore need to continue to promote digital transformation in this area so that customers can access product information quickly and experience the most to stimulate consumer buying behaviour. Second, the logistics sector is also considered as the bright spot of businesses in digital transformation during the outbreak of the COVID-19 pandemic. Although digital transformation in the field of logistics (freight forwarding) has a positive impact on all three indicators of business performance, only the regression coefficient of the revenue model is statistically significant at 5%. In fact, digital transformation in logistics has been promoted by businesses to adapt to social distancing and contact restriction measures to avoid disease transmission. Obviously, despite travel restrictions in the context of the pandemic, consumers can transfer and receive goods with ease. Thus, digital transformation in the logistics field has had positive effects in improving the operational efficiency of enterprises during the COVID-19 pandemic outbreak in Vietnam. Third, digital transformation in the after-sales sector has a negative impact on the business performance of enterprises. In particular, the regression coefficients of the DT_ After_sales_service variable have negative signs and are statistically significant in all econometric models. Thus, digital transformation in the after-sales sector has not really been effective in the context of the outbreak of the COVID-19 pandemic. This finding is useful for businesses in improving the quality of warranty work, consulting for products when there is a breakdown or technical problem. To improve the efficiency of digital transformation in the after-sales field, it is necessary for employees to consult and repair products at home, they need to perform professional processes in this field to create sympathy for consumers. However, after_sales_service has always been a weakness of business enterprises in developing countries like Vietnam.

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Fourth, digital transformation in human resource management was found to reduce revenue, profit, and labour productivity at enterprises during the pandemic. The DT_ HRM variable has a negative and statistically significant impact at 10% on the business performance indicators of the business, which are revenue and profit. In fact, digital transformation is not a single action but a process of corporate restructuring, in which digital transformation affects all employees through changing work processes. Therefore, digital transformation in the field of human resource management is high cost but also faces the risk of failure when the current employees protested because they had to attend training classes and change the old working style. Thus, digital transformation in the field of human resource management is a big challenge for managers in the near future. Finally, the COVID-19 pandemic has robustly and urgently pushed the digital transformation process in companies faster and faster than ever seen before. Digital technologies not only help promote inclusive growth in business but also make organizations more resilient in times of crisis. The digital transformation enables the business community to manage the effects of social disruption by remaining virtually connected and productive between demand and supply in the market. The study results confirm that digital transformation has had positive effects on the business performance of enterprises in Vietnam amid the outbreak of the COVID-19 pandemic. However, the statistics from the survey still show that businesses seem to be spending quite a bit on digital transformation activities in the past time while 85% of businesses spend 5–10% of total revenue on digital transformation. Furthermore, there are some challenges which can harm the digital transformation in Vietnam in the post-COVID period such as the shortage of high-quality labours in digitalization and high costs of the technologies for enhancing the digital transformation in companies. Thus, limited resources for digital transformation are also a challenge for businesses in developing countries like Vietnam.

5 Conclusion The COVID-19 pandemic outbreak has forced the communication of people to change around the globe, especially in the business environment. In the time of the pandemic, businesses were looking at digital technologies as a helpful means of engaging with their customers, allowing sales and commercial services to run flexibly, and increasing the automation administration platform and faster decisionmaking processes. This paper aims to explore the impact of digital transformation on the business performance of enterprises in Vietnam through a research sample of 82 enterprises. Indicators representing business performance include profit, revenue, and labour productivity. Research results show that digital transformation has both positive and negative impacts on the business performance of enterprises. Specifically, digital transformation in advertising and logistics increases business efficiency; in contrast, digital transformation in after-sales and human resource management has a harmful impact on business performance at enterprises. Furthermore, we determined

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that, despite the advent of the COVID-19 pandemic, businesses in Vietnam continue to devote limited resources to digital transformation activities. There are several practical implications to be drawn from the research results. First, administrators should prioritize digital transformation for highly effective areas such as advertising and logistics. It is necessary to accelerate and quickly implement digital transformation activities in these areas. Due to limited resources, managers should implement policies that prioritize resources for areas that are undergoing effective digital transformation. In addition, it is necessary to have solutions to promote comprehensive digital transformation in all areas of operation. Digital transformation should be considered as a restructuring of business operations and must involve the entire workforce. Obviously, digital transformation is not an easy and quick process. It needs the integration of digital technologies into the main aspects of organizations, therefore, fundamentally changing the ways operate and provide value to markets. Besides, digital transformation is also a cultural change in all areas of organizations and requests businesses to continually raise questions and run experiments for new products, on the other hand, well prepare for potential failures. Digital transformation in human resource management is the key to implementing digital transformation at enterprises. Improvement is essential, managers need to take measures to increase the quality of digital transformation in the after-sales service, thereby spreading digital transformation as a tool to improve the operational efficiency of the business. In future studies, the econometric models should consider characteristics of firms or business environment variables such as interest rate of banking systems.

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9. Weber, E., Büttgen, M., & Bartsch, S. (2022). How to take employees on the digital transformation journey: An experimental study on complementary leadership behaviors in managing organizational change. Journal of Business Research, 143, 225–238. 10. Verhoef, P. C., Broekhuizen, T., Bart, Y., Bhattacharya, A., Dong, J. Q., Fabian, N., & Haenlein, M. (2021). Digital transformation: A multidisciplinary reflection and research agenda. Journal of Business Research, 122, 889–901. 11. Li, F. (2020). Leading digital transformation: Three emerging approaches for managing the transition. International Journal of Operations & Production Management, 40(6), 809–817. 12. Hund, A., Wagner, H.-T., Beimborn, D., & Weitzel, T. (2021). Digital innovation: Review and novel perspective. The Journal of Strategic Information Systems, 30(4), 101695. 13. Melovi´c, B., Jocovi´c, M., Dabi´c, M., Vuli´c, T. B., & Dudic, B. (2020). The impact of digital transformation and digital marketing on the brand promotion, positioning and electronic business in Montenegro. Technology in Society, 63, 101425. 14. Oh, K., Kho, H., Choi, Y., Lee, S. (2022). Determinants for successful digital transformation. Sustainability, 14(3), 1215. 15. Shetty, P. (2018). Internet of Things: The key to digital transformation. Retrieved December 15, 2021, from https://magazine.wharton.upenn.edu/digital/internet-of-things-the-key-to-dig ital-transformation 16. Kraus, S., Durst, S., Ferreira, J. J., Veiga, P., Kailer, N., & Weinmann, A. (2022). Digital transformation in business and management research: An overview of the current status quo. International Journal of Information Management, 63, 102466. 17. Papadopoulos, T., Baltas, K. N., & Balta, M. E. (2020). The use of digital technologies by small and medium enterprises during COVID-19: Implications for theory and practice. International Journal of Information Management, 55, 102192. 18. Zoppelletto, A., Bullini Orlandi, L., & Rossignoli, C. (2020). Adopting a digital transformation strategy to enhance business network commons regeneration: An explorative case study. The TQM Journal, 32(4), 561–585. 19. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data. MIT Press.

COVID-19 Disruption Risk—A Game-Changing Factor for SMEs Digital Supply Chain Transformation Vu Minh Ngo , Hiep Cong Pham , and Huan Huu Nguyen

Abstract Digital transformation in supply chains has emerged as a response to minimize disruption risks during the COVID-19 pandemic. While both large and small to medium enterprises (SMEs) are placing considerable effort into digital transformation, the interactions between environmental dynamism, technology, and organizational capabilities, seem to favor the SMEs’ efforts and rapidly close the digital gap between them and large enterprises. This paper is based on the technologyorganization-environment framework (TOE) and uses multi-group analysis on 923 firms in Vietnamese to empirically explore this phenomenon. This study found that faster digital transformation uptake could be achieved under the impacts of the TOE three sets of factors. However, SMEs were found to adopt faster technology deployment rates than large enterprises as the pandemic disrupts and resets the adoption path of digital technologies. This study provides crucial implications for both SMEs and large enterprises in their digital transformation. Keywords Digital supply chain transformation · Absorptive capability · Learning intention · Supply chain disruption risk · The COVID-19 pandemic

1 Introduction Regardless of their capabilities, technology infrastructure, size, business model, or business environment, firms are under pressure to expedite their digital transformation as a result of the voluminous media coverage and hype surrounding the V. M. Ngo (B) · H. H. Nguyen School of Banking, University of Economics Ho Chi Minh City, 59C Nguyen Dinh Chieu Street, Ward 6, District 3, Ho Chi Minh City, Vietnam e-mail: [email protected]; [email protected] H. H. Nguyen e-mail: [email protected] H. C. Pham School of Business and Management, RMIT University Vietnam, 702 Nguyen Van Linh, District 7, Ho Chi Minh City, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_4

35

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outstanding benefits of digital technologies on firms’ performance [1]. Academic studies on the subject of digital transformation provide proof of this phenomenon. The theoretical idea of “technological determinism,” which holds that disruptive technologies are discovered and subsequently significantly alter and determine how people live and do business, is used by MacKenzie and Wajcman [2] to explain this pattern. This viewpoint has a flaw in that it emphasizes “adapting to the technological change” rather than “shaping it” [2]. Consequently, this process of technological diffusion is likely to leave small and medium-sized enterprises (SMEs) behind as late adopters compared to large enterprises, who could accrue most of the benefits of digital transformation as early adopters and increase the SMEs’ digital gap [3]. The current research stream on SMEs’ digital transformation also takes this technological determinism approach and focuses on how to modify and change SMEs’ resources and business models to adapt to the technological changes, which is unlikely in the short term. The Covid-19 disruption risk has been argued to accelerate the SMEs’digital transformation process remarkably and rapidly close the digital gap between them and large enterprises. However, SMEs with different technology competence and capabilities are unequally benefited from this “technological-social” trend. Following this view, this study uses technology–organization–environment (TOE) framework to provide empirical evidence on this phenomenon by debunking the complex interactions between environmental dynamism, firms’ capabilities, technology, and the decision of digital transformation adoption in SMEs and large enterprises.

2 Literature Review 2.1 Technology-Organization-Environment Framework Adoption models based on rational choice (TAM, TPB, TRA) are often accused of focusing too much on utilitarianism and technological determinism [4] which propose technologies, not human factors, are dominant in innovation adoption decisions. Reversely, internal competence-resources models (RBV, DC, KB) have suffered from causal ambiguity and tautology in explaining firms’ innovation activities [5–7]. Balancing these two schools of thought, the TOE model suggests a multidimensional view into the technology adoption decision by utilizing both external factors (environment—COVID-19 disruption risk) and internal factors (organization—learning capabilities) as well as technological characteristics to predict innovation adoption decision at the organizational level.

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2.2 Digital Supply Chain Transformation and COVID-19 Disruption Risk Digital transformation in supply chain (SC) operations has progressed rapidly in recent years as global SCs face many uncertainties from increasingly complex global supply systems and the COVID-19 pandemic [8]. Digitalization transformation is referred to as the transformations in the interaction between people and their surroundings, resulting from the application of novel technologies [9]. Furthermore, Agrawal et al. [10] considered digital SC transformation as the changes in business models and ecosystem from leveraging digital competencies to understand customers’ preferences better and create real-time visibility on the SC operations. It enhances the SC members’ performance in collaborating, exchanging information, and strengthening the relationship among SC members and customers. Since the probability and magnitude of SC disruption risks play a formative role in a business’s risk perceptions [11], the perceived overall supply disruption risks are the combination of probability and magnitude of losses to the SC performance [12]. In this study, both the magnitude and probability of losses caused by the COVID-19 pandemic exert different influences on the perceived supply disruption risk, positively affecting firms’ digital SC transformation decisions. H1: Perceived COVID-19 SC disruption risk is positively associated with firms’ digital SC transformation level.

2.3 Technological Competence and Digital SC Transformation Organizational technological competence refers to the knowledge, skills, and attitudes of firms towards digital applications [13]. Digital transformation means successfully applying a technology’s support and applications to enhance work efficiency. The study of Matt and Hess [14] emphasized that digital transformation requires certain technological competencies to become a technological market leader. Therefore, the ability to successfully apply the features of technologies to improve the working efficiency of this group of people is also higher. In terms of digital transformation in SC operations, Cichosz et al. [15] highlighted that having IT competence centers, including technology developers, web managers, or robotic specialists, was a critical success factor for the digital transformation of logistics service providers and plays an important role in supporting logistics business to deliver efficient technology adoption decisions. Thus, this study considers technological competence as a significant factor that enables SC members to leverage technology usages and foster the whole SC digital transformation. H2: Technological competence is positively associated with firms’ digital SC transformation level.

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2.4 Organizational Learning and Digital SC Transformation 2.4.1

Absorptive Capacity

The intention to digitalize the SC does not only result from members’ SC disruption risks but also requires them to have adequate internal capabilities. When an individual does not have sufficient internal capacity, the intention to adopt or learn new things might be delayed or even removed [16]. Absorptive capacity is defined as “a set of organizational routines and processes by which firms acquire, assimilate, transform and exploit knowledge to produce a dynamic organizational capability” [17]. A study by Kostopoulos et al. [18] indicated absorptive capacity as having a direct influence on the innovation and financial performance of a business. Knowledge transformation and exploitation, as parts of absorptive capacity [19], have been identified as a significant determinant of the innovation performance in high-tech firms [20], enhancing the innovative and flexible business model development [16]. Hence, the absorptive capacity of the chain members to exploit and internalize external knowledge and technologies from trading partners is the focus of this study. H3: Absorptive capacity to exploit external knowledge and technology from trading partners is positively associated with firms’ digital SC transformation level. 2.4.2

Learning Intent

Learning intent indicates the intention to explore new knowledge and adopt new techniques into business operations. Learning intent firstly encourages businesses to explore external knowledge and then exploit the newly acquired knowledge by applying it to the operation [21], generating an innovative way to solve a certain problem or to accomplish a specific task, leading to the transformation in the business model [22]. Absorptive capacity has been described as a part of the learning process since it determines the intention of individuals to learn new things. Thus, it can be argued that learning intent plays a mediating role in the relationship between absorptive capacity and SC digital transformation. Businesses with strong absorptive capacities tend to be inclined towards novel solutions [16], which is the application of technology to work and will gradually lead to the digital transformation of the whole SC. Thus, firms’ capabilities to absorb external insights and strong joint learning intent with their trading partners in the SC could be the determinant factors in firms’ digital transformation decisions. H4: Learning intent to absorb external insights from trading partners positively mediates the relationship between firms’ absorptive capacity and the level of digital SC transformation.

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2.5 Effects of COVID-19 SC Disruption Risk on SMEs’ Digital Transformation Since the shocks triggered by the COVID-19 pandemic lockdowns and social distancing measures make it more complicated for businesses in the SC to keep the information flow uninterrupted as the interactions in the SC comprise multiple layers of communication. Digital transformation is necessary to satisfy the increased information processing requirements of a highly unpredictable market [23]. Thus, based on the TOE framework, we propose that the environmental factor of the COVID-19 pandemic has significantly accelerated firms’ process of digital transformation. The post-COVID-19 normal could potentially reward firms’ efforts and resources dedicated to digital transformation with more success than the pre-COVID19 normal. As a result, under the moderations of the pandemic, firms’ organizational factors and technological competence could influence their digital transformation more profoundly. On the other hand, when market uncertainty is exceptionally high, firms are constantly under survival conditions and could hesitate to invest in innovative resources. Firms tend to prioritize cost-cutting as a coping strategy in crises [24] which reduces their capacity to learn and innovate. Thus, it raises questions on the moderating relationship between the SC disruption risks and firms’ internal learning processes, technological competencies, and digital SC transformations. Hence, the following hypotheses are proposed: H5a: COVID-19 SC disruption risk moderates the relationship between firms’ absorptive capacity and the level of digital SC transformation. H5b: COVID-19 SC disruption risk moderates the relationship between firms’ learning intent and the level of digital SC transformation. H5c: COVID-19 SC disruption risk moderates the relationship between firms’ technological competence and the level of digital SC transformation. Moreover, as a response to COVID-19 pandemic, many researchers urge businesses to consider alternative models and frameworks of SC management, such as resilient SC [25] or viable SC [26]. As it happens, large enterprises’ demand for building supply redundancy or digital connectivity between stakeholders within the SC could provide access to digital technologies for SMEs and close the SME digital gaps to a significant level [3]. SMEs with Besides, governments can provide supports and issue policies to facilitate the digital transformation to a wider group of adopters, including SMEs [27]. Thus, this study argues the impacts of the COVID-19 pandemic on SMEs’ digital transformation are more profound than that in large enterprises. H6: The impacts of COVID-19 SC disruption risk perceived by firms on digital SC transformation are more profound in SMEs than in large enterprises.

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3 Method The study purposely used companies that participated in international trade sectors so as to explore the cross-border impacts of the COVID-19 pandemic on companies’ SC. More than 2000 companies from the importer-exporter list were contacted via email and phone calls from mid-June to the end of October 2020, with the request to complete a survey using a self-administered questionnaire. Most of the items in the questionnaire were adapted from previous studies and operationalized using the 7-point Likert scale. The survey drew responses from more than 1020 firms on digital SC-related factors, achieving a 51 percent response rate. After excluding companies with missing data, the final sample included 923 companies in 15 different industries. Our hypotheses were tested using the partial least square approach of structural equation modeling (PLS-SEM). The number of employees and sales were used to divide the sample into SMEs and large enterprise groups for multi-group analysis. To test the moderating effects of the COVID-19 SC disruption risks, moderated analysis was employed. The moderated analysis was executed using 5,000 bootstrapping resamples in SPSS 22.

4 Results and Findings 4.1 Measurement Model Empirical results are based on a sample of 923 firms. Specifically, the sample comprised of firms from 15 different industries such as commercial (208 companies), consumer goods (91), construction (69), and food (57). Of the 923 companies, there were 504 small-sized firms with less than 100 employees (55%), 224 mediumsized firms with 101–500 employees (24%), and 195 large-sized firms with more than 500 employees. About 39% of the firms are original equipment manufacturers, 36% are distributors, and 14% are service providers. The measurement model was assessed to assure the validity and reliability of the research model’s constructs. The convergent validity and reliability were first examined by means of internal consistency. All 20 of the 20 indicators had outer loadings greater than 0.7 and three loadings were between 0.6 and 0.7 [28]. All the constructs’ average variance extracted (AVE) were greater than the recommended threshold of 0.5 [29]. These results supported the constructs’ convergent validity. All Cronbach’s α and composite reliability (CR) values exceeded the level of 0.7 suggested by [28]. Thus, the constructs’ internal reliability was established. Discriminant validity was tested using the Heterotrait-Monotrait (HTMT) ratio of correlations. Our results indicate that all HTTM values were less than 0.75 except for three values of DSC ↔ AC (0.756), LI ↔ AC (0.776), and LI ↔ DSC (0.769) relationships.

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4.2 Hypothesis Testing 4.2.1

Structural Model Analysis

First, we examined the collinearity between constructs in the structural model. Results show that the variance inflation factor (VIF) values of all exogenous variables were below the recommended threshold of 3.3 [29]. Based on the TOE framework of innovation adoption, we proposed that COVID-19 SC disruption risks, technological competencies, and organizational learning factors drive firms’ practices of digital SC transformation. The direct effects of SDR → DSC (H1: β = 0.086, p = 0.016), TC → DSC (H2: β = 0.046, p = 0.041), AC → DSC (H3: β = 0.342, p < 0.01) were all significant, suggesting that H1, H2, and H3 are supported. Regarding the mediating effects of learning intent on the relationship between absorptive capacity and digital SC transformation, the bootstrapping procedure in PLS-SEM suggested that the indirect effects of AC → LI → DSC (H4: β = 0.368, p < 0.01) is significant. However, the direct effect of AC → DSC is still significant. Thus, learning intent only partially mediates the impacts of absorptive capacity on digital SC transformation, and H4 is supported. The TOE framework suggests that the interplays between environment, technology, and organizational factors will shape the adoption paths of any innovations. As one of the biggest health crises in human history, the COVID-19 pandemic is expected to have significant impacts and could either accelerate or hinder the firms’ adoption processes of any innovation. Results suggested multiple moderating impacts of the pandemic. While the interaction effect of TECHxSDR → DSC (H5a: β = 0.056, p = 0.181) was not significant, the moderation effects on the two learning factors were both significant. However, opposite sign of coefficients was observed in the interactive effects of ACxSDR → DSC (H5b: β = −0.110, p < 0.01) and LIxSDR → DSC (H5c: β = 0.130, p < 0.01). Specifically, as presented in Fig. 1, the effect of absorptive capacity on digital SC transformation is stronger when the COVID-19 SC disruption risk is lower. In contrast, the effect of learning intent is stronger when COVID-19 SC disruption risk is higher. Overall, only H5b and H5c are supported. Full results of the analysis are shown in Fig. 1.

5 Discussion 5.1 Theoretical Implications This study makes several theoretical contributions. First, compared to other technology diffusion models, it could be much more comprehensive to use the TOE framework to formulate firms’ digital transformation decisions in extreme situations.

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Fig. 1 Research model estimation results. Source own research. Note SCD-COVID-19 SC disruption risk; PSD-Probability of SC disruption risk due to the COVID-19 pandemic; MSD-Magnitude of SC disruption risk due to the COVID-19 pandemic; AC-Absorptive capacity; LI-Learning intent; TECH-Technology competence; DSC-Digital SC transformation; DTU-PrevsPost COVID-19 digital technology utilization; *p < 0.05; **p < 0.01; ***p < 0.001

Specifically, using the TOE framework, this study could better understand the significant influence of the COVID-19 pandemic, technological competence and firms’ learning capabilities and interactions between them on firms’ innovation activities. Second, this study is also one of the few that employed technology adoption as a social construct that can be shaped and leveraged [30] when interacting with other social constructs such as the business environment dynamism. In line with few studies [3], this study found that the exceptionally high level of uncertainties in the COVID19 pandemic accelerates the process of digital transformation in SMEs. Under the specific situation of the pandemic and the demand of building SC resilience to ensure the connectivities with key partners, digital technologies have been promoted and applied by many SMEs as the key solution to deal with the aftermath of the pandemic. Finally, the significant positive impacts of absorptive capabilities and learning intent on digital SC transformation are consistent with findings on the crucial roles of relational capital and business-to-business open innovation [31] within the SC. In the SC context, relational capital could help SMEs to regularly interact with trading partners and access external knowledge and innovations.

5.2 Managerial Implications Firstly, this study provides useful strategies of digital SC transformation which managers could consider. In fact, only exploiting the ability to learn and absorb new knowledge is not the best strategy to innovate in this current period, especially for SMEs given their absorptive capabilities could be limited compared with large

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enterprises. On the other hand, because of the massive scale and urgency of the current health crisis, firms have pulled closer to work collaboratively and openly at an unprecedented level. During the pandemic, firms in the SC also have a strong desire to build SC redundancies and digital collaboration networks with their key suppliers. As a result, the most effective strategies for SMEs in the current period is to use open innovation and relational capital with partners for successful digital SC transformation. Hence, SMEs managers should constantly update their technological infrastructure to keep up with the competitive landscape. Secondly, this study provided urges SMEs managers to take advantage of the current health crisis to uptake their digital technologies as an effective pandemic response. The current health crisis also resets the adoption path of digital technologies and provides SMEs with access and supports from different institutions to uptake their digital transformation [3]. This is confirmed in this study that COVID19 disruption risks create more significant impacts on digital SC transformation in SMEs than in large enterprises. The studied SMEs reported a higher deployment rate of new technologies. Also, the pandemic may force governments and other stakeholders to provide more financial and policy support to enable SMEs to cope with the negative impacts of the pandemic, creating a rare opportunity for SMEs to speed up digital transformation, increasing both internal capability and external competitiveness. With the significant uptake of digital transformation, firms’ absorptive and learning intent was found to be significant and positive towards this effort. Thirdly, it is found that digital transformation during the COVID-19 pandemic has significant impacts on the number of digital technologies used in SMEs (DSC → DTU). This finding confirms the immediate effect of digital transformation on actual SMEs’ operations and capabilities in the short term. Hence, during the pandemic context, the potential benefits and time-to-breakeven for digital technologies investments in SMEs will be much more favorable than in the usual context. This could be the motivation for managers to seriously consider taking this opportunity to close their digital gaps.

6 Conclusion This study aims to assess how firms decide on digital transformation strategies and deployment of new technologies to respond to SC disruption caused by the COVID19 pandemic. By incorporating elements based on the TOE framework, the proposed model comprehensively identifies and ascertains key drivers of firms’ digital transformation decisions, including the significant influence of the COVID-19 pandemic and the interactions between external environments (pandemic), technological competencies, and organizational learning capabilities. Using a sample of 923 firms in Vietnam currently participating in global SCs, the study’s results suggest that the sudden jump in COVID-19 pandemic SC disruption risk, especially the magnitude of losses, accelerates firms’ efforts to transform their SC digitally. Moreover, in

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the current situation, learning intent has a crucial facilitating role for firms’ open innovation initiatives using their learning relationship with partners in the SC. Acknowledgment This research is funded by University of Economics Ho Chi Minh City (UEH).

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Enhancing Citizen Willingness to Use E-Government: The Case of Ho Chi Minh Linh Nguyen Duy Yen and Huan Nguyen Hong

Abstract Along with the rapid development of the Industrial Revolution 4.0, organizations have the tendency to digitize their business to keep up with the emergence of technology. The public and administrative service providers start to innovate their operations. The purpose of this paper is to find out the factors affecting the intention to use the E-Government of Ho Chi Minh residences as well as the degree of their influence and, thus, to point out how the Government can improve the system and boost residences’ willingness to adopt it. This study employed non-probability convenient sampling and surveys are distributed as online Google form. The target audiences are residents living and working in Ho Chi Minh city. Moreover, there will be no age range for this survey since E-Government service aims to all Vietnamese citizens. The influence that Personal Innovativeness has on Behavioral Intention toward E-Government is significant, as does Online Experience. Perceived Ease of Use and Perceived Behavioral Control weigh the lightest in the influence on Behavioral Intention within the chosen context. Perceived usefulness is proven to have a negative impact on intention to use E-Government services. The primary significance of this paper lies in offering a better understanding and insights of the willingness to adopt E-Government. Keywords E-Government · Ho Chi Minh · TPB model · TAM model · Personal innovativeness

L. N. D. Yen International University, Vietnam National University, Ho Chi Minh City, Vietnam e-mail: [email protected] H. N. Hong (B) Chang Jung Christian University, Tainan, Taiwan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_5

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1 Introduction As technology information systems have been emerging, distributing a business online has not only opened opportunities for innovations and business models but also eventually changed how organizations deliver products and services [20]. E-service, without a doubt, under the development of E-commerce has rapidly turned into an important channel where services are provided through the Internet. E-Government is one of the emerging innovations classified as E-service. E-Government offers information about administrative procedures and online public services, helps to execute, observe and evaluate the process of handling administrative paperwork, e-public services as well as collects and handles complaints, recommendations of individuals and organizations nationwide [21]. E-Government is still a new concept, a new way for Vietnamese in general and for Ho Chi Minh residents in particular. Traditionally, people would have to personally go to administrative offices or city councils for their public administrative paperwork [22]. Moreover, it is considered to be difficult for them as well, especially senior citizens, when they are not aware of which departments would be the responding ones. Residents find it time consuming when they have to travel from office to office and wait in a queue. Applying E-Government helps ease the frustration, but there are challenges. One of the obstacles faced by E-Government service is the resistance to use or the willingness to adopt the innovation. Even though Vietnam is considered to have the population fall within the golden age (more than 50% are under 30) whose ability is utilizing technology, Baby Boomers and Generation X fall in the segmentation of E-Government and information systems can be unfamiliar with them [18]. The difficulty is to get them to try E-Government service and retain them in the future. There are many studies indicating the influence of how people perceive the level of usefulness and ease of use of a website on the individual’s intention to perform the action (TAM model–[10]). Researchers also conducted research and experiments to confirm Davis’ conclusion as well as used it as a foundation [4, 5, 7]. On another hand, the Theory of Planned Behavior–TPB [3] has been widely employed as a framework to explain and analyze how humans behave. According to [3], human intention toward a certain behavior is impacted by their attitude, subjective norms and perceived behavioral control. Applying the Technology Acceptance Model (TAM), integrated with the concept of “Perceived Behavioral Control” from the Theory of Planned Behavior [3] and the “Online experience” factor modeling from Cho’s research [9], this paper aims to reflect a model describing what factors influence the intention to use E-Government that is suitable within the context of Ho Chi Minh city. Since administrative tasks are primary for all residents, they cannot deny it even when the attitude is negative. Hence, “Attitude” factor from the TPB model is not employed. For the same reason, “Subjective norms” is also eliminated. However, since the target audience of E-Government is everyone, the generation gap as well as the digital literacy–the ability to use technology–is taken into consideration in this

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paper. The authors decided to employ Personal Innovativeness–the willingness of individuals to use technology–in this study. As a developing country, adopting technology is difficult with the barrier of age gap as well as limitations in innovations. Therefore, the expected outcomes of this paper are potentially contributing to the enhancement of willingness to use E-Government of citizens and to the solutions in encouraging Vietnamese to employ public digitized services. However, this paper focused solely on analyzing the topic of E-Government from the residents’ point of view, which accounts for one of the four targeted subjects that E-Government aims at. In addition, this study’s population cannot represent all Vietnamese and the findings cannot demonstrate an accurate evaluation. The research objective is to point out what impacts the intention and from that propose how to influence people to employ and utilize E-Government service. The findings of this paper will answer the following questions: 1. What factors influence the intention to use E-Government service? 2. To what extent do these factors influence the intention to use E-Government service? 3. How to influence people to adopt the E-Government service?

2 Literature Review 2.1 E-Government Service Characteristics Since the website has been a powerful tool in online marketing, organizations should invest in improving the interaction as well as integration between its users and the website. An effective and efficient website should acquire the characteristics of navigation (the ease for users to look for information on the website), aesthetic, information quality, accessibility and functions (personalization, customer service, social responsibility) [12]. These traits have influences on user experience, which determine their intention to use E-Government. In this study, the effectiveness of E-Government from residents’ perception is measured by “perceived usefulness” and “perceived ease of use”. “Perceived usefulness” is the degree to which users believe that the information system will improve their performance and productivity [11]. Residents perceive E-Government as useful when it is able to provide needed information boosting the accomplishment of their work. Davis [11] argued that a useful website would improve task productivity as well as efficiency. The degree to which E-Government is perceived as useful has a direct impact on residents’ intention to use it. As mentioned earlier in this literature, when residents have access to the needed information on E-Government, they tend to come back and practice online public services in the future. Hence, the content offered on E-Government plays a vital role in creating and maintaining customer satisfaction [14]. E-Government is considered

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to be useful when it is integrated with related systems and other related departments. For instance, one citizen would have to contact different departments in order to accomplish public administrative paperwork. One of the difficulties users face is that they are not aware of which departments hold what area of authority and responsibility. Therefore, the E-Government becomes the only information system for all public services in which residents exercise one-time login to fulfill any public administrative task. Wangler and Paheerathan [28] defined the two ways to integrate websites: vertical integration and horizontal integration. Horizontal integration means E-Government is integrated with functions and departments within one area of administration. Contrary to that, vertical integration describes the integration between all legal functions of one government. Despite many advantages of system integration, vertically or horizontally integrated type has its own drawbacks. One of the issues is removing barriers when integrating two legal bodies with different hierarchy levels which requires solid political unity. The distinguished authorities, laws as well as organizational cultures are considered to be obstacles when executing system integration due to the lack of cooperation that raised those differences. H1: Perceived Usefulness (PU) has a positive influence on intention to use E-Government service A website’s “perceived ease of use” is the degree to which time, expense and effort of the user are saved when he or she engages in E-Government instead of the traditional procedures [25]. Venkatesh and Davis [26] indicated that “perceived ease of use” has a positive relationship with the intention to use an information system. Personalization and customization based on consumers’ needs and demands are critical factors in creating customer relationships as well as maintaining customer experience [23]. These features of E-Government initiate the proactiveness of residents in doing public administrative processes, which encourages them to make use of E-Government services. H2: Perceived Ease of Use (PEOU) has a positive influence on intention to use E-Government service.

2.2 User Characteristics User characteristics being analyzed in this paper are perceived risk, perceived behavioral control and online experience. Warkentin et al. [29] proposed that previous experiences of users affect their intention to use E-Government through the mediating of trust factors. As long as users encounter good experiences and are satisfied with the service offered, they have the tendency to make future approaches to EGovernment service. In this paper, authors employed these variables to measure the “online experience” factor (adapting Cho’s research [9]).

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– Time spent on online experience – Frequency of online experience – Online experience tendency. H3: Online Experience (OE) has a positive influence on intention to use EGovernment service Wu [30] identified three elements of “perceived behavioral control” as navigation control, interacting pace and content. Besides the information needed to be provided to the users, a website should be able to demonstrate a good pace of interaction. As E-Government integrates all public administrative procedures across all departments and legal bodies along with hierarchy levels of one city or one government, residents need to have access to information required for their paperwork in order to complete it promptly. As a result, these variables impact residents’ intention to continue using E-Government in the future. H4: Perceived Behavioral Control (PBC) has a positive influence on intention to use E-Government service

2.3 Personal Innovativeness It is worth mentioning that the E-Government service does not target online young generations like Millennials or GenZ. As E-Government is an information hub and a tool for residents to accomplish their public administrative work, Baby Boomers (people born from 1946 to 1964) and Generation X (people born from 1965 to 1980) also fall in the targeted audiences. A survey conducted by Bresman and Rao [6] indicated that although GenX and Millennials have, to some extent, the same eagerness to use and adopt technology as well as perceive the usefulness of technology in their work lives, Millennials are considered to be more enthusiastic toward innovations. GenZ also demonstrated an interest in technology developments that enhance their lives, socially and personally, according to Kasana’s research–a technology service company; while GenX and Baby Boomers showed reluctance to adopt it. Gao et al. [13] defined Personal Innovativeness as the willingness to accept technology. [1] adopted Personal Innovativeness as a moderator in how the information impacts users’ intention to use. On another hand, [24] considered Personal Innovativeness as an independent factor and proved its critical role in studying users’ behavior. H5: Personal Innovativeness (PI) has a positive influence on intention to use EGovernment service The intention to behave is described as the users’ readiness to take action and is expected to be the antecedent of the actual behavior [2]. According to [11], once users possess the intention to adopt e-service or any technology innovations, they are

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Model 1 Conceptual framework

more likely to actually use that software. This statement was supported by the paper of [27] in their research explaining how and why one view and adopts technology. H6: Behavioral Intention (BI) has a positive influence on actual behavior (UB) toward E-Government service (Model 1).

3 Methodology This study employed non-probability convenient sampling. Due to the impact of COVID-19, surveys are distributed as online Google forms. The target audiences are residents living and working in Ho Chi Minh city (both Saigonese and non-Saigonese) since one of the goals of doing public administrative work online is to reduce the time and efforts of residents when traditionally they have to go back to their hometown. Moreover, there will be no age range for this survey since E-Government service aims to all Vietnamese citizens. The survey is presented in both English and Vietnamese, with variables being modeled from previous relevant studies and adjusted to fit the authors’ purpose. A five-point Likert scale is employed to assess chosen variables (from 1 as strongly disagree to 5 as strongly agree). Respondents are 49.3% male and 50.7% female which is an even distribution of respondents. Among them, 6% are under 20, the main age range of audiences is from

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20 to 30 with the percentage of 59, 28% are from 30 to under 40, from above 40 to under 50 takes up to 3.3% and the rest are above 50 (3.7%). These percentages reflected a fair distribution of survey and the data presented most of target population that E-Government service aims to. However, there is an uneven share among them, the reason for this is because authors focused on the young generation who are more open and eager to adopt innovations and are more familiar with the technology. Respondents mostly possess undergrad education (65.3%), postgraduates cover the percentage of 19.7% and high school graduates are 5%. This indicated a diverse educational background of the population which can reflect their perceptions toward E-Government service fitting with the purpose of this study. In terms of monthly income, most respondents have an average income of above 20 million per month (28.7%), from 5 million to under 10 million is 28%, from above 10 million to under 20 million is 19.6% and under 5 million is 23.7%. The demographic of this population satisfied the requirements as well as the scope for this paper, hence, the data collected is appropriate and reliable to carry out the analyzing process.

4 Findings 4.1 Convergent Validity Figures in Table 1 are well presented and within the acceptable range which is required to be larger than 0.7). Chin [8] argued that for empirical research, besides Cronbach’s Alpha (CA), Composite Reliability (CR) has to be larger than 0.6. On another hand, Composite Reliability has to be larger than 0.7 for affirmative research [16]. Other studies also clarified that 0.7 is the proper threshold for the vast majority of cases [15]. In order to validate the convergence of PLS-SEM, Average Variance Extracted (AVE) is applied. Höck and Ringle [19] claimed that measurement scale convergence is considered to be valid if AVE falls in the range from 0.5 and higher. Table 1 demonstrated that all variables have CA larger than 0.9, CR higher than 0.9 and AVE larger than 0.75. This is an indication that the chosen factors are trustworthy and appropriate for this paper as well as being meaningful.

4.2 Discriminant Validity A well-structured research model must possess Heterotrait-Monotrait Ratio (HTMT) lower than 1.0. However, [17] suggested that when HTMT ratio appears to be smaller than 0.9, Discriminant Validity is established between the chosen pair of given constructs. Table 2 demonstrates all variables’ HTMT is under 0.9 indicating the reliability of variables for this study.

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Table 1 Convergent validity Measurement scale

Cronbach’s alpha

Composite reliability

Average variance extracted

BI

0.892

0.925

0.754

OE

PBC

PEOU

PIIT

PU

UB

0.929

0.916

0.915

0.924

0.940

0.943

0.949

0.941

0.947

0.946

0.954

0.957

0.824

0.728

0.855

0.815

0.807

0.815

Code

Outer loadings

BI1

0.888

BI2

0.910

BI4

0.835

BI5

0.839

OE1

0.853

OE2

0.932

OE3

0.926

OE5

0.919

PBC1

0.894

PBC2

0.880

PBC4

0.881

PBC5

0.918

PEOU1

0.916

PEOU4

0.917

PEOU5

0.941

PIIT1

0.923

PIIT2

0.905

PIIT3

0.870

PIIT4

0.914

PU1

0.903

PU2

0.868

PU3

0.906

PU4

0.925

PU5

0.889

UB1

0.919

UB2

0.878

UB3

0.883

UB4

0.903

UB5

0.930

4.3 Hypothesis and Research Model Testing The result of R2 indicates the proposed model is able to interpret the dependent variable BI profoundly with R2 = 0.731. UB factor is also well explained with R2 equals to 0.660. The value of BI and UB’s Q2 are both significantly higher than 0 (0.531 and 0.532, respectively). The relations between PBC, PEOU, PU and BI are

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55

Table 2 Discriminant validity AVE

BI

OE

PBC

PEOU

PIIT

BI

0.754

OE

0.824

0.761

PBC

0.798

0.794

0.756

PEOU

0.855

0.778

0.831

0.819

PIIT

0.815

0.890

0.718

0.823

0.785

PU

0.807

0.686

0.738

0.754

0.835

0.789

UB

0.815

0.876

0.801

0.807

0.848

0.885

PU

0.877

Table 3 Path coefficients PLS–SEM

BI -> UB

Hypothesis

Path coefficients

Standard deviation

T values

P values

Hypothesis testing

H6

0.813

0.023

35.064

0.000

Supported

OE -> BI

H3

0.212

0.058

3.631

0.000

Supported

PBC -> BI

H4

0.118

0.062

1.902

0.057

Supported

PEOU -> BI

H2

0.127

0.063

2.009

0.045

Supported

PIIT -> BI

H5

0.587

0.058

10.176

0.000

Supported

PU -> BI

H1

−0.119

0.066

1.797

0.073

Supported

supported with F2 ≈ 0.02. The figure of SRMR equals to 0.058 (< 0.08) claiming the appropriateness and trustworthiness of the proposed framework. The outcomes accept hypotheses H2, H3, H5 and H6 with the significance of 0.05 and H1 and H4 with the significance of 0.1. Path Coefficients analysis is presented in the Table 3.

5 Discussion According to the findings, the influence that the Personal Innovativeness variable has on Behavioral Intention is significant with a path coefficient of 0.578. It proves that enhancing the Personal Innovativeness of residents will remarkably impact their intention to use E-Government service in the future. This finding is also supported by the research of Rosen [24]. Online Experience has the second highest path coefficient (0.212), indicating that previous online experiences that users had positively impacted the intention to use E-Government service. This statement is aligned with the finding by [29]. Findings determined once consumers frequently encounter smooth online experiences, they have higher intention to use E-Government service in the future. On another note, this result also concluded that people who have a tendency to interact with

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online applications in most aspects of their lives display a positive behavioral intention toward E-Government. Perceived Ease of Use and Perceived Behavioral Control weigh lightest in the influence on Behavioral Intention within this context (0.127 and 0.118, respectively). The findings of Perceived Ease of Use and Perceived Behavioral Control brings to an agreement with the studies of [22]. When residents have easy access to E-Government service as well as the interface between them and the system is friendly, they are reported to be more likely to return for further usage. This statement aligns with the result of Perceived Behavioral Control factor. Once users perceive that they have the control over their behavior in finding information and their interaction with the website, they possess a tendency to adopt more EGovernment service. Perceived usefulness is proven to have a negative impact on the intention to use E-Government service. Even though the relationship between Perceived Usefulness and Behavioral Intention is confirmed, respondents perceived the current E-Government of Ho Chi Minh city is not useful enough to persuade them to continue using the system. This can be due to the new implication of the system creating a lack of information offered, a gap in connecting and integrating departments as well as legal bodies of Ho Chi Minh city. Furthermore, this new process innovation is introduced to citizens lately when they are still more familiar with the traditional ways of processing public administrative paperwork. Despite the fact that intention does not necessarily lead to actual behavior, the authors claimed that Behavioral Intention to use E-Government service within Ho Chi Minh city residences has a significant influence on how they actually execute the behavior. Path Coefficients presented to be 0.813 and R2 are well demonstrated for both Behavioral Intention and User Behavior (0.731 and 0.660, respectively). The Path Coefficient PLS-SEM analysis indicated that proposed variables have a positive influence on Behavioral Intention and User Behavior, except for Perceived Usefulness as the newness of the system being introduced leading to users not having enough experience to view it as being useful. This study is the foundation for proposing the improvement in users’ cognitive and enhancing their experience with the EGovernment service. Besides, management has a basis to reinforce the application’s features as well as performance in order to develop residents’ perception toward EGovernment service. E-Government service should outperform traditional ways of doing paperwork in order to be perceived as being useful, i.e., helping residents to get necessary information and contact responding departments in order to save time, eliminate confusion and be more convenient. Moreover, Personal Innovativeness is considered as the most significant element impacting users’ intention with EGovernment. Hence, to boost their intention to adopt E-Government, the Government should look into ways to raise the willingness to try new technology and innovations among citizens, help them to get out of their traditional ways and adopt the advanced system. For instance, constantly improve the User Interaction and User Experience of government websites to corporate with the Perceived Ease of Use supporting the Baby Boomer generation when interacting. Furthermore, Online Experience is the second most important factor in determining users’ intention with E-Government which involves their previous online interactions. It is not within the control power of the Government; however, it can be guided by ensuring residents are encountered with

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positive experiences while being online (e.g., eliminating financial fraud, identity theft). In order to increase residents’ intention to employ E-Government service, the system should establish a user-friendly environment where citizens can interact easily to find needed information on the website for them to complete their paperwork. In addition, E-Government websites need to make sure the interface between system and users is smooth, and the content offered is clear in terms of responding departments, and responsible legal bodies.

6 Conclusion and Recommendations Ho Chi Minh residents in this paper view the current E-Government as not being useful for them to switch from the traditional ways. Residents prefer to personally be in the authority offices and acquire information from authorized personnel. This traditional way provides quality information as citizens can ask further questions based on what is answered. The system of E-Government is seen to lack information and clear pathways between departments and legal bodies of Ho Chi Minh city. It is recommended to update a wide range of data on the system and arrange them in the most visualized way possible. Moreover, educating residents is important. The resistance to adopt new things together with the lack of useful information enhance negativity in behavioral intention. Campaigns should be promoted to announce the benefits of E-Government, and demonstration videos could be used to guide citizens through the procedures and how to take advantage of E-Government. It is proven that once residents can get required information easily, process documents conveniently and their problems are solved promptly, they are more likely to have repeat behavior for future usage. Therefore, in order to encourage residents’ willingness to use E-Government service, the system should be displayed in an organized manner with reasonable user interactions improving user experiences. This can be done through the designing of the webpage stage when developing. Multiple user acceptance tests should be conducted to collect feedback and improve the workflow. The ultimate purpose of this is to strengthen user experience exceeding the old traditional ways. Promoting the willingness to adopt technology will assist with the intention to use E-Government among Ho Chi Minh residents. The findings contributed to the current academic resource by combining the adoption factors into a unified model presenting a comprehensive view of all the elements driving adoption behavior. The model suggested a foundation for gaining an understanding of the common framework, which may be practiced as a guideline for policymakers to establish policies and to increase the use of E-Government services. Key insights obtained can aid regulators and stakeholders appreciate the interests of citizens. Furthermore, recognizing adoption characteristics motivates policymakers to devise and implement ways of advancing people’s willingness to use

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E-Government in obtaining information or performing transactions. By offering upto-date and accurate information, an interactive E-Government system can entice individuals to make use and advantage.

7 Limitation and Future Research This paper focused solely on analyzing the topic of E-Government from the residents’ point of view, which accounts for one of the four targeted subjects that E-Government aims at. Hence, future research is recommended to expand the scope into a wider population. In addition, this study was conducted in the context of Ho Chi Minh city, hence, the population cannot represent all Vietnamese and the findings cannot demonstrate an accurate evaluation. Lastly, due to the time constraint, the needs of users as well as their attitude and experience with the E-Government often change. Therefore, in order to fill the gap and effectively assess E-Government service, it is suggested that researchers should base on long-term data.

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13. Gao, T., Rohm, A. J., Sultan, F., & Huang, S. (2012). Antecedents of consumer attitudes toward mobile marketing: A comparative study of youth markets in the United States and China. Thunderbird International Business Review, 54(2), 211–224. 14. Glazer, R. (1991). Marketing in an information-intensive environment: Strategic implications of knowledge as an asset. Journal of marketing, 55(4), 1–19. 15. Hair, J., Hult, G. T., Ringle, C., & Sarstedt, M., (eds.). (2017). A primer on partial least squares structural equation modeling (PLS-SEM). In Sage. 16. Henseler, J., & Sarstedt, M. (2013). Goodness-of-fit indices for partial least squares path modeling. Computational Statistics, 28(2), 565–580. 17. Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. 18. Hien, N. M. (2014, October). E-Government and the aging society: a Vietnamese perspective. In Proceedings of the 8th international conference on theory and practice of electronic governance (pp. 300–303). 19. Hock, M., & Ringle, C. M. (2010). Local strategic networks in the software industry: An empirical analysis of the value continuum. International Journal of Knowledge Management Studies, 4(2), 132–151. 20. Huang, M. H., & Rust, R. T. (2017). Technology-driven service strategy. Journal of the Academy of Marketing Science, 45(6), 906–924. 21. Ndou, V. (2004). E-Government for developing countries: Opportunities and challenges. The Electronic Journal of Information Systems in Developing Countries, 18(1), 1–24. 22. Nguyen, T. T., Phan, D. M., Le, A. H., & Nguyen, L. T. N. (2020). The determinants of citizens’ satisfaction of E-Government: An empirical study in Vietnam. The Journal of Asian Finance, Economics, and Business, 7(8), 519–531. 23. Roehm, H. A., & Haugtvedt, C. P. (1999). Understanding interactivity of cyberspace advertising. In Advertising and the world wide web (pp. 37–50). Psychology Press. 24. Rosen, P. A. (2004). The effect of personal innovativeness in the domain of information technology on the acceptance and use of technology: a working paper. Oklahoma State University. 25. Shih, H. P. (2004). An empirical study on predicting user acceptance of e-shopping on the Web. Information & Management, 41(3), 351–368. 26. Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186–204. 27. Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS quarterly, 425–478. 28. Wangler, B., & Paheerathan, S. J. (2000). Horizontal and vertical integration of organizational IT systems. Information Systems Engineering. 29. Warkentin, M., Gefen, D., Pavlou, P. A., & Rose, G. M. (2002). Encouraging citizen adoption of E-Government by building trust. Electronic Markets, 12(3), 157–162. 30. Wu, S. I. (2006). A comparison of the behavior of different customer clusters towards Internet bookstores. Information & Management, 43(8), 986–1001.

Business Use of Blockchain in New Zealand Organisations an Exploratory Study Michael Wang

and Geoffrey Chow

Abstract The purpose of the survey study is to understand the current business use of blockchain technology in New Zealand organisations. Over the past five years or so, an increasing number of organisations have become increasingly interested in blockchain technology. However, very few blockchain studies have been conducted in New Zealand organisations. A survey of New Zealand businesses using blockchain was conducted to look at the use of blockchain in New Zealand. Several propositions have been proposed accordingly. This is an exploratory study to understand the current and expected use of blockchain technology, the main reasons of applying blockchain, and barriers to further investment in blockchain. The results provide insights into the future blockchain research. Keywords Blockchain · Technology · Survey · New Zealand

1 Introduction Blockchain technology has attracted the attention of organisations in different industries. It has enormous potential applications for any enterprise involved in recordkeeping, documentation, registrations, and transactions. Blockchain is not only a new type of internet infrastructure based on distributed applications but also a new type of supply chain network [1]. It is also known as distributed ledger technology [2]. It allows participants to secure the settlement of transactions, achieve the transaction, and transfer assets at a low-cost [2]. It is an emerging technology in today’s world and a lot of revolution and research has just begun regarding this distributed technology. For example, an important feature of blockchain technology is the security. It is very difficult to modify, change, delete or add information or blocks without being detected or approved by other users [3, 4]. M. Wang Department of Management, Kingston University London, London, UK G. Chow (B) New Silk Roads Global Institute, Melbourne, Australia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_6

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Although blockchain technology is relatively new, it has drawn increasing attention since 2008 [4]. The first generation of blockchain refers to the core technology applied to create cryptocurrencies. For example, Bitcoin is a cryptocurrency based on blockchain technology. The blockchain 1.0 appeared in 2009 and provided a technique for an incorruptible digital ledger of economic transactions. The technology provides opportunities for business capability development and innovation. Blockchain 2.0 was developed by Ethereum in 2015 from a decentralised digital ledger, they used an improved blockchain for validating transactions. The second generation of blockchain includes various categories of applications, such as Blockchain 2.0 protocols, smart contracts and decentralised applications, etc. With the improvement of computer and information technology, Blockchain 2.0 protocols now can be widely used to manage all transactions including virtually everything of value [5]. Smart contract can be applied in various environments and industries for various purposes [4]. Many blockchain projects are designed for the transferring of various assets and values using blockchain [5–7]. The argument for the first and second generation of blockchain transactions focuses on the cost savings and efficiency by trustless interactions in decentralised business models [3]. This can cause disruptive innovations in many industries. The third generation of blockchain is still emerging. The new generation of blockchains is also characterised by lower energy consumption and way interoperability. New Zealand is a small country with 5.12 million population in June 2021. This represents a small domestic market. Many New Zealand organisations need to compete with the overseas companies in the international markets. In addition, the major productions such as dairy, meat and wood heavily relied on export [8]. Based on the technology-organisation-environment framework (TOE framework), digital technology offers many opportunities for these entrepreneurs [9], e.g. new business models, reducing the cost and barriers. Blockchain technology optimises international supply chain operations, such as traceability, visibility and security [3]. Moreover, Blockchain may allow companies to improve their sustainability [10]. This government priorities focus on long-term challenges and opportunities in New Zealand. Blockchain technology is considered as an appropriate technology to support the government’s strategic vision. The research project was funded by the Crown Research Institute Scion to explore the use of blockchain technology in New Zealand. This is the first part of the study to conduct an exploratory study to understand the current use of blockchain. The following four research questions have been formulated, • RQ1: What applications for blockchain are currently used in New Zealand organisations? • RQ2: What key attributes of blockchain do the New Zealand organisations would like to further develop in the real world? • RQ3: What are the main reasons for applying blockchain in New Zealand organisations? • RQ4: What are the barriers to further investment in blockchain in New Zealand organisations?

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In this study, a short survey is designed based on the research questions to understand the current business use of blockchain in New Zealand organisations. This provides an overview of blockchain for different stakeholders and researchers. This is an exploratory study, and no specific hypothesis or theory was being tested. It is important to remember that since a self-selected sample was used, the survey results may be not necessarily representative of all New Zealand organisations using the blockchain. Having said that, according to the findings, we proposed several propositions for further research. The remainder of the paper is structured as follows. Section 2 provides a literature review. Section 3 describes the research methods. Then, the descriptive analysis and survey results are discussed in Sect. 4. The last section presents propositions and concludes the paper with limitations and further research directions.

2 Literature Review Blockchain is viewed as a useful tool to improve the efficiency of business processes and supply chain transactions [6, 7, 11, 12]. It is essential to understand the important attributes which may be used to strengthen the capabilities in the business. Blockchain offers several attributes, which can be adopted in the business operations [12–15]. In the literature, we have merged and summarised the six key attributes of a blockchain in Table 1. They are immutable, transparency and visibility, decentralised, trust, security, and global network. Immutable is considered as a key attribute of a blockchain, it is also knowns as irreversibility. Chen and Xu [1] identify four features: decentralisation, traceability, immutability, and currency properties from the technical point of view and advantages of blockchain technology including reliability, trust, security, and efficiency. According to the nature of blockchain, blockchain is a decentralised network. This enables and supports decentralised decision-making. Zheng and Xie [16] state that the key characteristics of a blockchain include decentralisation, persistency, anonymity, and auditability. Saberi and Kouhizadeh [17] argue that blockchain technology ensures transparency, traceability, and security to manage global supply chain management problems. Sultan and Lakhani [18] identify the main characteristics of blockchain: decentralised, transparent immutable, and consensus driven. Blockchain creates a trustless network by using complex mathematical algorithms. Zyskind and Nathan [19] suggest that blockchain is an auditable and trusted system. MansfieldDevine [20] emphasises that trust plays an important role in a business network, the blockchain offers assurances about the authenticity of transactions, and provides a kind of assurance that is cheaper and a standardised service for companies. This also implies many implications of blockchains in business operations. Moreover, blockchain promotes transparency and visibility, as all stakeholders in the blockchain network can receive and verify updates simultaneously. The service is not limited to corporate business, it can also be used for public sectors. Conte de Leon and Stalick [21] argue that blockchain can provide higher service availability at a lower cost for

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Table 1 Important attributes of a blockchain [3] Attributes of a blockchain

Explanation

Studies

Immutable

After the data has been approved by all nodes in the blockchain, it is almost impossible to modify or delete it

Chen, Xu [1], Swan [6], Hackius and Petersen [12], Tapscott and Tapscott [13], Sultan and Lakhani [18], Zheng, Xie [22]

Decentralised

Blockchain is a decentralised governance technology. There is no central storage. This can reduce the risks and support decision making

Chen, Xu [1], Wang, Wu [3], Yli-Huumo, Ko [4], Swan [6], Hackius and Petersen [12], Tapscott and Tapscott [13], Dobrovnik, Herold [15], Zyskind, Nathan [19], Mansfield-Devine [20], Pereira, Tavalaei [23]

Trust

The trust plays a vital role in business relationships. Blockchain allows business partners to trade together without knowing each other. This may create a new business model

Chen, Xu [1], Wang, Wu [3], Underwood [11], Tapscott and Tapscott [13], Dobrovnik, Herold [15], Sultan and Lakhani [18], Mansfield-Devine [20], Beck, Stenum Czepluch [24], Kosba, Miller [25], Christidis and Devetsikiotis [26]

Transparency and visibility Data is verified and broadcast to all nodes in the blockchain almost simultaneously. There is no way to hide transactions or records, so this increases trust and adds value to business systems

Wang, Wu [3], Underwood [11], Tapscott and Tapscott [13], Dobrovnik, Herold [15], Sultan and Lakhani [18], Zyskind, Nathan [19], Caro, Ali [27]

Security

Cryptographic technology creates a secure environment. Furthermore, it offers confidentiality, authenticity and nonrepudiation to support various business activities

Yli-Huumo, Ko [4], Wang [5], Underwood [11], Tapscott and Tapscott [13], Mansfield-Devine [20], Kosba, Miller [25], Caro, Ali [27]

Global Network

Blockchain can establish a standardised global system. Blockchain technologies based on shared information and decentralised network. It can be scaled internationally

Wang, Wu [3], Underwood [11], Tapscott and Tapscott [13], Swan [14], Sultan and Lakhani [18]

certain types of enterprise applications. These attributes provide assurance and add value to the current business processes.

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3 Research Method This is an exploratory study. In this study, a short survey was used to collect the responses from blockchain specialists and management (e.g. CEO, director, managers). We only invited the New Zealand organisations, which had already applied blockchain technology in their operations. The short survey consists of nine questions related to the experience and knowledge of Blockchain in New Zealand organisations. The short survey leads to less fatigue and consequently better data quality, this reduces fieldwork cost, and are likely to increase response rates, thus reducing response bias [28]. We used SurveyMonkey to manage the data collection. To ensure the study is meeting ethical requirements, the anonymous research survey was used in the project. After the initial search, a small number of New Zealand companies have used Blockchain in their business operations. We searched the organisations via LinkedIn and relevant Blockchain conferences in New Zealand. Total 50 companies have been identified and invited to this study in New Zealand. We send an invitation letter with a web link via email in early July 2019. Total 24 valid responses have been received. The response rate is 48% in this survey study. Considering the small population using Blockchain in New Zealand, the sample size can be satisfied [29]. Descriptive statistics is used for the data analysis in the study. As this was an exploratory study, descriptive statistics were considered appropriate for presenting the survey results [30]. Then, according to the survey results and discussion, we proposed several propositions for future research.

3.1 Reliability and Validity Reliability and validity are criteria for assessing the quality of business research. Reliability is concerned with the question of whether the results of a study are repeatable. Validity is concerned with the integrity of the conclusions generated from a piece of research [28]. The short questionnaire was designed by several researchers to ensure objectivity, reliability and validity [29, 30]. The questions were derived from the literature review. We used multiple choice questions with “other” answer. The multiple choice questions are effective when respondents were asked to pick their favourite or least-favourite option from a predetermined list, and adding an “other” answer option or comment field can solve a common drawback and reduce the response bias [30].

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4 Descriptive Analysis and Results In this section, the survey results are presented. A questionnaire survey was undertaken in New Zealand organisations. Based on the TOE, in this study, the technological context may include blockchain technology as well as the relevant business processes, and the organisational and environmental context refers to the companies in New Zealand. The first four survey questions indicate the demographic information. Then the following four questions were designed to answer the research questions. A summary of the results from the survey in each of the areas addressed follows.

4.1 Descriptive Results 4.1.1

Company Size

A large proportion of responses came from small and medium-sized enterprises (SMEs). The result is not surprising as almost all New Zealand businesses fall into this SME category, according to the OECD report, SMEs defined as businesses with 0-49 employees, made up 99% of New Zealand businesses in 2020. This result could be interpreted as small companies may be more flexible and willing to experiment with new technology in their business. Table 1 indicates the company size in the survey (Table 2).

4.1.2

Location of Organisations

All responses were from Auckland and Wellington except one organisation was in Northland. This is also in line with the demographic characteristics in New Zealand. Auckland and Wellington are New Zealand’s major cities, this shows that the companies using blockchain are concentrated in major cities in New Zealand. In other words, companies are in major cities in New Zealand more likely to adopt blockchain technologies. Table 2 Company size

Companies size

Responses (%)

1−19 employees

58.33

14

20−199 employees

37.50

9

>200 employees

4.17

1

Total

100

24

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Table 3 Current use of blockchain in industries Industry

Responses (%)

Construction

4.17

1

Information media and telecommunications

37.50

9

Financial and insurance services

41.67

10

Professional, scientific and technical services

4.17

1

Health care and social assistance

4.17

1

Other services

8.33

2

Total

100

24

Table 4 Respondents’ position Positions

Responses (%)

Chief executive officer/senior management

70.83

Department/functional managers/intermediate management

12.50

3

Team leader/supervisor/line management

4.17

1

Staff/employee

12.50

Total

100

4.1.3

17

3 24

Industry

The Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 is used to analyse industry statistics in the study. Not all the industries have been covered in this survey. Over 70% of organisations came from industries including the Information Media and Telecommunications, and Financial and Insurance Services. Table 3 illustrates the current use of blockchain in different sectors.

4.1.4

Respondents’ Position

Table 4 shows the respondents’ position in the survey. About 70% respondents were CEO and senior managers in the companies. This indicates the accuracy of the results in this exploratory study.

4.2 Research Questions Answers 4.2.1

RQ1: Applications for the Current Use of Blockchain

Blockchain has great potential for diverse applications. Zheng and Xie [16] argue that in the next generation of blockchain systems, blockchain technology can be used

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Table 5 Applications for the current use of blockchain

Applications

Responses %

Smart contracts

58.33

14

Payments

58.33

14

Digital currency

54.17

13

Traceability

50.00

12

Supply chain

45.83

11

AI technologies

37.50

9

Internet of things

33.33

8

Automation

25.00

6

Cloud storage

16.67

4

Electronic voting

8.33

2

Robotics

0.00

0

37.50

9

Other (please specify)

for various applications beyond cryptocurrencies. Mansfield-Devine [20] argue that blockchain offers a chain of trust in the business model. This may bring a big change in current business models, traditional agents may be eliminated. Many current studies focus on using blockchain to facilitate the flow of information and cash [14, 31], which should be used in conjunction with other digital technologies e.g. seniors, smart contracts, Artificial Intelligence (AI), Automation, internet of things, etc. to transform and digitalise the traditional business model globally [4, 6, 12, 25]. To understand the current use of blockchain, respondents were asked to indicate the applications in their organisations. According to the survey results, the most popular blockchain applications are smart contracts and payments in New Zealand. 14 companies are currently using blockchain for payments and smart contracts. Blockchain applications for digital currency, traceability and supply chain are frequently found in the survey. 9 companies mentioned other uses including transportation, travel, tokenisation, international trade, communications, financial markets, identity and venture capital. Table 5 summarised the survey results of the current use of blockchain in New Zealand organisations.

4.2.2

RQ 2: Key Attributes of Blockchain for Future Development

Transparency and visibility is an important attribute of blockchain technology [31]. Blockchain is a decentralised database, this allows all stakeholders to simultaneously receive and verify updated information in the network. Cryptography and hashing are used to create data stored in the blockchain, all the transactions or records are almost immutable [13, 26]. This provides an assurance and a new trust mechanism [13, 20]. Potential new applications of blockchain are unclear, thus we focus on the key attributes of blockchain, which were used in the questionnaire, to look at the expected use of blockchain for the future.

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Table 6 Expected use of blockchain for future Attributes

Responses (%)

Transparency and visibility

87.50

21

Decentralised

70.83

17

Trust

70.83

17

Security and authenticity

66.67

16

Global Network

62.50

15

Immutable

50.00

12

Other (please specify)

29.17

7

To understand the expected use of blockchain, respondents were asked to indicate the key attributes of blockchain that their organisation would like to promote in the real world. 87% respondents expected transparency and visibility, the following attributes include decentralised, trust, security, and authenticity. 7 companies indicate other expected use including permissionless, programmability of value, digitization of value, open data and open platforms, economic participation of users, and privacy of data. Table 6 summarised the expected use of blockchain in this survey.

4.2.3

RQ3: Main Reasons/Motivations for Applying Blockchain

The third research question is used to understand the main reasons/motivations for applying blockchain in organisations. For example, why the companies would like to use blockchain in their organisations? According to the survey results, we identified the main reasons including competitive advantages, new business models, and improving the effectiveness of current business. Other reasons mentioned in the survey are assured compliance, new products, multiple companies’ platform, providing choices to consumers, public good, the future of money, open source, and open data. Table 7 summarised the main reasons for applying blockchain in this survey. Technologies play an important role to drive the competitive advantages and innovation [9]. Table 7 Main reasons/motivations for applying blockchain Reasons

Responses (%)

Competitive advantages

58.33

14

New business models

54.17

13

Improving effectiveness of current business

41.67

10

Cost savings

33.33

8

Risk management

33.33

8

Stakeholder’s requirements

16.67

4

Other (please specify)

37.50

9

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Table 8 Barriers to further investment in blockchain Barriers

Responses (%)

Regulatory issues

47.83

11

Lack of in-house skills/understanding

34.78

8

Implementation—replacing or adapting to legacy system

13.04

3

Concerns over sensitivity of competitive information

8.70

2

Uncertain ROI

8.70

2

Technology is unproven

8.70

2

Potential security threats

4.35

1

No barriers

13.04

3

Other (please specify)

26.09

6

4.2.4

RQ4: Barriers to Further Investment in Blockchain

In this survey, we asked the respondents, who have already used blockchain in their organisations, to think about the barriers to further invest the technology. The top barrier was regulatory issues. This indicates that government needs to pay attention to support the new technologies development. One company suggested that “adoption was happening on its own pace, but regulators need to be more proactive”. Thus, further policy and regulation studies on blockchain may be required in New Zealand. Another respondent emphasised that “finding talent, the demand globally for highly skilled technology people is high and the supply is low.” some companies “viewed blockchain as “new” tech and therefore not mainstream.” Table 8 summarised the barriers to further investment in blockchain.

5 Discussion, Propositions and Conclusion This paper presents a survey study on blockchain applications in New Zealand organisations. We focused on the New Zealand companies using the blockchain. There were some interesting results, very few industries indicated the use of blockchain in their operations from this survey, and the most popular blockchain applications were smart contracts and payments. This may provide evidence that blockchain can facilitate the goods, information, and cash flows in the supply chains. This may imply the potential opportunities to expand the current use of blockchain in New Zealand industries. The expected use of blockchain was studied based on the key attributes of blockchain for future development. Transparency and visibility are the top expected use of blockchain in this survey. Some respondents mentioned applying blockchain for “open communities”. Having said that, a caution must be considered for the type of information sharing, privacy, duration etc. The adoption of digital technologies improves virtuality and can facilitate information sharing and collaboration among

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the supply chain partners [3]. Blockchain technology may represent the sharing of information, collaboration, and trust among the stakeholders, and it can help remove barriers in supply chains. Thus, the following propositions are put forward. • Proposition 1. Blockchain technology may improve the transparency and visibility of companies. • Proposition 2. Blockchain technology may improve the supply chain relationship between companies. The top main reason for applying blockchain is a competitive advantage, which is an attribute/advantage that allows a business to outperform its competitors and deliver greater value to consumers. New business model is the second main reason for applying blockchain, this supports that the SMEs have a high level of business innovation in New Zealand. Furthermore, blockchain technology offers several unique advantages, which allows companies to create value and gain competitive advantages [3]. As mentioned before, due to international competition, higher customer expectations and supply chain complexity, New Zealand organisations need to continue to gain and enhance the competitive advantages and business innovation to compete in the international markets. The survey results are in line with the characteristics of New Zealand business trading. Digital technologies play a vital role in digital transformation processes. It has a positive influence on innovation activities [32]. Digital technologies afford more information, computing, and connectivity, they enable new forms of collaboration, this offers tremendous potential for firm innovation [9]. Thus, the following propositions are proposed. • Proposition 3. Blockchain technology may improve the competitive advantage of companies. • Proposition 4. Blockchain technology may facilitate the innovation in companies. The top two barriers to further investment in blockchain were from outside New Zealand organisations, they were regulatory issues and a lack of in-house skills/understanding. This may ring a bell for further policy and regulatory studies. The effective integration of technological considerations into business is an important aspect of business planning. The results may provide some useful strategies for implementing blockchain in New Zealand business. Blockchain is a relatively new digital technology, not many New Zealand companies have used blockchain, some respondents viewed blockchain as “new” tech and therefore not mainstream, and there have been questions about implementing blockchain. In this paper, we present the survey results from the NZ companies and provide several propositions for future research. Technologies alone cannot improve business performance. It is important to understand the underlying mechanism for the digitalisation in organisations. This study is part of a larger blockchain research project at Scion, we did not expect to answer all the questions regarding blockchain. However, this paper may inspire more practitioners and researchers to consider the new tech in their businesses and research. The following limitations of the study include that a small number of companies have been studied in New Zealand, the findings from the survey are not necessarily

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representative of all New Zealand businesses, and this may be difficult to generalise the results to all New Zealand organisations. The study did not specify the future applications of blockchain. The practitioners need to consider the attributes of blockchain in the different use cases. Overall, the survey study draws a big picture about the current and expected use of blockchain, the main reasons for applying blockchain, and barriers to further blockchain investment in New Zealand organisations. Future work could support the organisations to utilise blockchain for specific purposes and overcome the barriers. Note: The questionnaire is supplied for a review process, it is available on request from the first author of this article.

References 1. Chen, G., et al. (2018). Exploring blockchain technology and its potential applications for education. Smart Learning Environments, 5(1), 1–10. 2. Tschorsch, F., & Scheuermann, B. (2016). Bitcoin and beyond: A technical survey on decentralized digital currencies. Communications Surveys & Tutorials, IEEE, 18(3), 2084–2123. 3. Wang, M., et al. (2021). Blockchain and supply chain management: A new paradigm for supply chain Iintegration and collaboration. Operations and Supply Chain Management: An International Journal, 14(1), 111–122. 4. Yli-Huumo, J., et al. (2016). Where is current research on blockchain technology?-a systematic review. PLoS ONE, 11(10). 5. Wang, M., Wang, B., & Abareshi, A. (2020). Blockchain technology and its role in enhancing supply chain integration capability and reducing carbon emission: A conceptual framework. Sustainability, 12(24), 10550 6. Swan, M. (2015). Blockchain: Blueprint For a new economy. Sebastopol, O’Reilly Media Inc 7. Wang, B., et al. (2022). Applying blockchain technology to ensure compliance with sustainability standards in the PPE multi-tier supply chain. International Journal of Production Research, 1-17. 8. Fresne, K. d. (2007). Taking new zealand to the world: Why exporting matters, N.C.o.T. Unions, Editor. BusinessNZ. 9. Vial, G. (2019). Understanding digital transformation: A review and a research agenda. The Journal of Strategic Information Systems, 28(2), 118–144. 10. Wang, M., Wang, B., & Abareshi, A. (2020). Blockchain technology and its role in enhancing supply chain integration capability and reducing carbon emission: A conceptual framework. Sustainability, 12(24), 10550. 11. Underwood, S. (2016). Blockchain Beyond Bitcoin. Association for computing machinery. Communications of the ACM, 59(11), 15. 12. Hackius, N., & Petersen, M. (2017). Blockchain in logistics and supply chain: Trick or treat?. In Proceedings of the Hamburg International Conference of Logistics (HICL) 2017. epubli. 13. Tapscott, D., & Tapscott, A. (2016). Blockchain revolution: How the technology behind bitcoin is changing money, business, and the world. Portfolio/Penguin. 14. Swan, M. (2017). Anticipating the economic benefits of blockchain. Technology Innovation Management Review, 7(10), 6–13. 15. Dobrovnik, M., et al. (2018). Blockchain for and in logistics: What to adopt and where to start. Logistics, 2(3). 16. Zheng, Z., et al. (2018). Blockchain challenges and opportunities: A survey. International Journal of Web and Grid Services, 14(4), 352–375.

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17. Saberi, S., et al. (2019). Blockchain technology and its relationships to sustainable supply chain management. International Journal of Production Research, 57(7), 2117–2135. 18. Sultan, K., & Lakhani, R. (2019). Conceptualizing blockchains: Characteristics & applications. arXiv.org. 19. Zyskind, G., Nathan, O., & Pentland, A. (2015). Decentralizing privacy: Using blockchain to protect personal data. In 2015 IEEE Security and Privacy Workshops. 20. Mansfield-Devine, S. (2017). Beyond bitcoin: using blockchain technology to provide assurance in the commercial world. Computer Fraud & Security, 2017(5), 14–18. 21. Conte de Leon, D., et al. (2017). Blockchain: properties and misconceptions. Asia Pacific Journal of Innovation and Entrepreneurship, 11(3), 286-300. 22. Zheng, Z., et al. (2017). An overview of blockchain technology: Architecture, consensus, and future trends. In IEEE 6th International Congress on Big Data. 23. Pereira, J., Tavalaei, M. M., & Ozalp, H. (2019). Blockchain-based platforms: Decentralized infrastructures and its boundary conditions. Technological Forecasting and Social Change, 146, 94–102. 24. Beck, R., et al. (2016). Blockchain–the gateway to trust-free cryptographic transactions. In European Conference on Information Systems. Springer. 25. Kosba, A., et al. (2016). Hawk: The blockchain model of cryptography and privacy-preserving smart contracts. In IEEE Symposium on Security and Privacy (SP). 26. Christidis, K., & Devetsikiotis, M. (2016). Blockchains and smart contracts for the internet of things. IEEE Access, 4, 2292–2303. 27. Caro, M. P., et al. (2018). Blockchain-based traceability in agri-food supply chain management: A practical implementation. In 2018 IoT Vertical and Topical Summit on Agriculture-Tuscany, IOT Tuscany 2018. Institute of Electrical and Electronics Engineers Inc. 28. Zikmund, W. G (Ed.). (2013). Business research methods (9th ed.). Mason, OH: South-Western. 29. Bryman, A., & Bell, E (Ed.). (2011). Business research methods (3rd ed.). Oxford University Press 30. Fowler Jr, F. J. (2013). Survey research methods. Sage publications. 31. 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, 15-26. 32. Wang, M. (2016). The role of innovation capability in the Australian courier industry. International Journal of Innovation Management, 20(7), 1–18.

Understanding the Impact of Low Personalization on Customers’ Prior Negative Experience with Virtual Conversational Agents: A Conceptual Framework Huu Trong Nguyen Abstract Virtual conversational agents (VCAs) powered by artificial intelligence (AI) have attracted great interest from many research scholars. Its diverse applications are widely acknowledged, and the ability to deliver personalized responses has become a key for increased service quality provided by this AI-powered tool. Building on the perspective of learning from experience theory, this research explores the prior negative experience and presents a conceptual framework to understand its effects on customers’ avoidance behavior with VCAs. Low personalization is expected as the main driver of perceived low informativeness, low credibility, low enjoyment, violation of shared language and information overload, leading to avoidance behavior and switching intention of customers. In addition, time pressure is believed to moderate the links between perceived low informativeness, violation of shared language and information overload as negative prior experiences and switching intention. The findings offer a novel way to understand customer behavior with VCAs under avoidance rather than approach perspective. Important theoretical and managerial implications are provided. Keywords Virtual conversational agents · Avoidance behavior · Switching intention · Time pressure · Artificial intelligence anxiety

1 Introduction Virtual conversational agents (VCAs) or chatbots are bots that can communicate with customers just like human agents via a text-based interface. Its ability to replace frontline human employees from performing repetitive tasks to learning and responding to customers empathetically based on experience has attracted great interest from many research scholars and industry practitioners [1–4]. VCAs powered by AI have also become an emerging tool that firms are utilizing to enhance service experience in recent years. For instance, Booking.com allows their chatbots to provide H. T. Nguyen (B) Faculty of Management Law and Social Sciences, University of Bradford, Richmond Road, Bradford BD7 1DP, United Kingdom e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_7

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Table 1 Key research on VCAs Descriptions

Research

Investigation on the roles of anthropomorphism on customer-VCA interaction

[1, 3, 7–10]

Investigation on VCAs’ quality stimulating customers’ approach behaviors

[2, 4, 11–15]

Investigation on various applications of VCAs used in customer service

[5, 16–20]

Investigation on why people use VCAs

[21]

customers with bookings’ information, United Parcel Service’s virtual assistant can help customers to accurately track their parcels, and Skyscanner’s bot can accommodate users with flight information and bookings. A report also reveals that KLM Royal Dutch Airlines solved at least 16,000 cases weekly by using chatbots [5], proving the potential of this AI in the service sector. However, industry practitioners also reports that many VCAs can only perform well in straightforward tasks, and the lack of ability to provide personalized responses can be the reason that drive customers away from this AI [6]. Table 1 shows that research on VCAs paid more attention to its human-likeness, applications, and customers’ motivation to use VCAs while investigation of why people choose to avoid VCAs remains unanswered. Therefore, this research will expand and further existing knowledge of customer experience with VCAs, particularly in relation to avoidance rather than approach behaviors which were widely studied. This raises the research questions ‘What are the salient aspects of customers’ prior negative experience toward VCAs?’, ‘How does low personalization influence these aspects?’ and ‘How does time pressure moderate the relationship between those aspects with customers’ switching intention?’ The main objectives of this research are as follows: (1) to understand how people avoid VCAs based on their prior negative experience, (2) to identify various factors influencing customers’ avoidance behavior and switching intention, (3) to study how low personalization leads to prior negative experience, (4) to explore how time pressure moderates the relationship between customers’ prior negative experience and their switching intention, and (5) to propose recommendations to reduce VCA avoidance and switching intention. Adapting the perspective that VCA users are information-seeking oriented, this research postulates that perceived low informativeness, low credibility and low enjoyment would cause an increased tendency to avoid this AI-power tool [4]. In addition, violation of shared language and information overload would also be embedded as the main triggers of avoidance behaviors. Little is known about the avoidant effects of the later variables in VCA domain, however, preliminary examination reveals that they are communication problems between human-human interactions within online environment [22]. Therefore, it is imperative to cross-validate their effects in VCA context. This research will also investigate low personalization, which was not widely examined in VCA domain, as the major cause of customers’ perception of their prior negative experiences. Time pressure will be coined as the key moderator of prior negative experiences and switching intention relationships.

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Because VCAs are now becoming an important tool used in customer service, it is imperative to recognize how customers respond to this AI-powered technology under prior negative experiences. This paper also develops a conceptual framework that gives both research scholars and industry practitioner’s better understanding of VCA avoidance and switching intention, and to minimize such behaviors. The following section will cover the theory underpinning. Next, factors that make customers stay away from VCAs will be discussed, followed by the research framework. Research methodology is proposed for future data analysis. Contribution, limitation, and direction for future research are also presented.

2 Literature Review 2.1 Theory Underpinning This research investigates factors triggering users’ avoidance behavior under learning from experience theory [23], which suggests that people tend to make a decision based on the experience they previously had. The theory supports the idea that experiences are generated from individuals’ interactions and engagement with the external world. Such information gained from experiences consequently retains in their mind and helps them remember facts. Learning from experience theory was previously employed to explore prior negative experiences as the logic behind ones’ avoidant motivation in online environment [24, 25]. Similarly, when VCAs fail to provide customers a positive experience, this AI-based tool is likely to drive customers away, be ignored from future usage, and/or trigger switching intention. Below are the attributes of negative prior experience with VCAs.

2.2 Low Personalization Service that best matches customers’ individual needs would be more satisfactory than one-size-fits-all service. Over the past decades, personalization has been given high priority as a firms’ competitive advantage because it is positively linked with customer satisfaction and loyalty [26]. Also, it is used as one of the important indicators measuring service quality in both conventional and online environments [27, 28]. This AI-based technology is distinctive in the way that it resembles human agents based on its ability to learn from experience and to deliver personalized responses which consequently enable customers to think as if they are individually taken care by human agents [11]. Ability to deliver customized answers could also induce customers’ trust through information processed by natural language [8]. As VCAs are expected to replace frontline human employees to some extent, customers might

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seek the intelligent agent’s support which are individually tailored for them. Therefore, with merely standardized answers, they might view VCAs as an alternative version of web-based Q&A (Question and answer) tabs, leading to the perceptions that services being provided by this AI-powered tool are irrelevant and unreliable to their personal needs, and they might also develop an increased negative enjoyment experience. Moreover, pre-generated messages designed for VCAs could help this AI-enabled technology provide immediate responses to customers, however, it is also the main source creating unmatched language used between customers and VCAs. In addition, the ability to provide instant responses with excessively irrelevant details could also be a trigger for customers’ perceived information overload. Therefore, it is expected that low personalization is associated with negative prior experiences. It is hypothesized as below: H1a/b/c/d/e Low personalization has positive relationship with (a) perceived low informativeness, (b) perceived low credibility, (c) perceived low enjoyment, (d) violation of shared language and (e) overload of information.

2.3 Low Informativeness and Credibility Previous research addresses the significance of information quality on customer satisfaction in several tech-based contexts [29–31] and such a link has already been acknowledged in VCA research [32]. Li and Mao [4] further highlight that perceived credibility and perceived informativeness, which represent information quality, are keys for ones’ continual uses of VCAs. Credibility of information is crucially important because it is associated with the users’ perception of whether the intelligent advisors are trustworthy. At the same time, informativeness is closely related to the perception toward the relevance of the information [4]. In this instance, it is expected that if VCAs are unable to provide qualified information, customers might tend to avoid this AI-powered tool and switch to use alternative services (e.g. live chat). Therefore, it can be hypothesized as below: H2a/b Perceived low informativeness has positive relationship with (a) avoidance behavior/(b) switching intention. H3a/b Perceived low credibility has positive relationship with (a) avoidance behavior/(b) switching intention.

2.4 Low Enjoyment In the conventional shopping experience, people not only look for acquisition of product/service, but they also need consumption of the product/service enjoying

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[33]. It is also believed that enjoyment is the main trigger that determines whether one is willing to interact with VCAs [2]. As VCAs are new technology resembling human-like characteristics, curiosity and entertainment are found as the main reasons triggering ones’ approach behavior [34, 35]. Therefore, if customers learn that interacting with VCAs is less enjoyable, they might be more likely to ignore this AI and seek alternatives. Thus, it can be proposed that: H4a/b Perceived low enjoyment has positive relationship with (a) avoidance behavior/(b) switching intention.

2.5 Violation of Shared Language According to the theory of human communications, when people finds that their communication style is similar to others, there will be increased mutual attraction because they do not have to put much effort to obtain information from others [36]. Also, similar language can increase ones’ willingness to trust the other person during mutual interaction [37]. Based on the similarity in the language used within instant messages between couples, psychologists can also predict the stability of a threemonth relationship [38]. Previous research in VCA context already provides strong evidence that shared language is key to the increase of perceived utilitarian and hedonic, leading to continual use of this AI-powered tool [4]. Therefore, if the VCAs cannot share similar language, users might find it difficult to understand, triggering their intention to ignore this AI. It can be hypothesized as below: H5a/b Violation of shared language has positive relationship with (a) avoidance behavior/(b) switching intention.

2.6 Overload of Information Customer behavior in online environment is largely affected by how much information they are exposed [39], and information overload can significantly create an avoidant effect on ones’ decision making and productivity [40]. Prior research found that when VCAs are designed to respond in a human-like pace, users are likely to feel as if this AI-enabled tool is taking care of their queries and developing a perception of warmth, leading to easy absorption of information [41]. However, when users are overloaded with pre-generated messages provided by VCAs, they might develop avoidance behavior and intention to switch to alternatives because too much information might confuse an individual and affect their ability to set priorities [42]. Therefore, it is hypothesized that:

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H6a/b Overload of information has positive relationship with (a) avoidance behavior/(b) switching intention.

2.7 Avoidance and Switching Intention Avoidance is the behavior of getting out of an environment, or ignoring the communication attempts from others [43]. In marketing research, avoidance behavior is known as all actions by individuals who want to minimize the revelation of specific exposure [44] while switching intention describes the tendency ones stop or reduce the use of specific product/service in order to use the alternatives [45]. Understanding avoidance and switching behavior has been a long-lasting area triggering inquiry for both industry practitioners and researchers as they are the greatest obstacles to achieve firms’[44]. Over the past decades, researchers have addressed avoidance and switching behavior in several contexts, [24, 25, 46, 47]. However, less emphasis was given to AI context. In this research, it is expected that negative prior experience is key to stimulate avoidance behavior over VCAs. In this instance, they tend to seek alternatives (e.g. live chat) as replacement of this AI-powered tool, leading to switching intention. Therefore, it is hypothesized as below: H7 Avoidance behavior has Positive relationship with switching intention.

2.8 Time Pressure Time pressure is the perception of not having enough time to perform specific tasks [48], and it could increase ones’ need to make decisions more quickly [49]. In retailing context, it is the situation where the consumers have little control over time and expenditures [50]. When services are unable to provide the expected solution or fail to accomplish specific tasks under their time pressure, they are more like to develop anger and regret [51] and customers may also feel inconvenient with the service, leading to the intention to switch [52]. The use of AI-enabled tools could derive from inquisitiveness such as curiosity and pastime, however, when customers are task-oriented and are in time pressure, it is expected they would have an increased tendency to switch if the information provided by VCAs are not transparent, overload or language-alienating. Therefore, it is hypothesized that (Fig. 1): H8a/b/c Time pressure moderates positive relationship between (a) low informativeness, (b) violation of shared language, (c) overload of information.

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Fig. 1 Conceptual framework

3 Methodology 3.1 Data Collection Participants in Vietnam will be approached for data collection. Demonstrations of VCAs will be embedded in the Qualtrics online survey tool to ensure that participants can clearly understand what VCAs are and to enable them to distinguish VCAs with live chat and other voice-user interfaces. To validate their response, participants will be required to provide the names of service VCAs they used or to describe the tasks they perform during the interaction. Reverse items will also be used. Following the guideline for conducting analysis using structural equation modelling [53], 20 cases for each construct are required. Therefore, with 12 constructs, 240 valid responses will be needed. Convenience and snowball sampling will be adopted. Respondents within the researcher’s networks will be approached electrically via multiple social networking sites. To maximize the outcomes, incentives of 20,000₫ (approx. $1) as phone credit will be given to respondents. Independent samples t-test and chi-squared test will be used to ensure there is no significant difference between the answers completed by respondents with and without incentives.

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3.2 Measurement A 7-point Likert scale with anchors as “1 = strongly disagree and 7 = strongly agree” will be used for all constructs in the study. Low personalization (3 first-order constructs, 19 items) will be adapted from Chen and Gong [11]. Low informativeness (5 items), low credibility (7 items) and low enjoyment (3 items) will be adapted from Li and Mao [4]. Violation of shared language (4 items) and overload of information (4 items) will be measured using scales from Li and Wang [22]. Avoidance behavior with the scales of eighteen items (3 first-order constructs) will be adapted from Cho and Cheon [24]. Switching intention (3 items) will be measured using scales adapted from Kim and Shin [54]. Finally, time pressure (6 items) will be adapted from [50]. Validity and reliability of all measurement items were previously tested and ensured that they meet or exceed the threshold values. As data will be collected from respondents residing in Vietnam, the backtranslation technique will be used [55]. In this instance, translations from English to Vietnamese, and then from Vietnamese to English will be made by two different bilinguals. The researchers will thereafter confer with two bilinguals to clear up errors if the back-translation and the source language are not identical. To validate the understandability of the questionnaires, laymen will then be employed.

4 Contribution This research makes four main theoretical contributions. Firstly, this research applies learning from experience theory to understand avoidance behavior and switching intention in AI context, which is expected to be novel. Secondly, this research develops a comprehensive framework of avoidance behavior which has not been previously found in VCA context. Thirdly, the study highlights the pivotal effects of personalization on customer perception on VCAs. Finally, it provides evidence for the moderating effect of time pressure on the relationship between prior negative experiences and switching intention. In addition, this research is useful for AI developers and industry practitioners who are deploying VCAs to enhance customer service. They will understand more of why their customers avoid using service VCAs, and therefore, improving this AI accordingly.

5 Limitation and Future Research Participants are required to recall their interaction with chatbots and complete selfreporting form. Even though this method is widely used, researchers may wish to cross-validate the results based on real-time data. Future researchers might wish to find linguistic-cue stimuli of prior negative experiences with VCAs as a form of AI.

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Finally, negative emotions such as anger and contempt, and its drivers should be investigated as the triggers for customers to avoid VCAs.

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41. Gnewuch, U., Morana, S., Adam, M., & Maedche, A. (2018). The chatbot is typing …– the role of typing indicators in human-chatbot interaction. In I. Kompatsiaris et al. (Eds.), PROCEEDINGS OF THE 17TH ANNUAL PRE-ICIS WORKSHOP ON HCI RESEARCH IN MIS (2018), LNCS (vol. 10673, pp. 377-392). Springer 42. Hu, H.-F., & Krishen, A. S. (2019). When is enough, enough? investigating product reviews and information overload from a consumer empowerment perspective. Journal of Business Research, 100, 27–37. 43. Donovan, R. J., & Rossiter, J. R. (1982). Store atmosphere: An environmental psychology approach. Journal of Retailing, 58(1), 34–57. 44. Baek, T. H., & Morimoto, M. (2012). STAY AWAY FROM ME: Examining the determinants of consumer avoidance of personalized advertising. Journal of Advertising, 41(1), 59–76. 45. Mu, H-L., & Lee, Y-C. (2021). How inclusive digital financial services impact user behavior: A case of proximity mobile payment in Korea. Sustainability, 13(17). 46. Iranmanesh, M., Min, C. L., Senali, M. G., Nikbin, D., & Foroughi, B. (2022). Determinants of switching intention from web-based stores to retail apps: Habit as a moderator. Journal of Retailing and Consumer Services, 66, 102957. 47. Youn, S., & Kim, S. (2019). Understanding ad avoidance on facebook: Antecedents and outcomes of psychological reactance. Computers in Human Behavior, 98, 232–244. 48. Ryari, H., Alavi, S., & Wieseke, J. (2021). Drown or blossom? the impact of perceived chronic time pressure on retail salespeople’s performance and customer–salesperson relationships. Journal of Retailing, 97(2), 217–237. 49. Yao, J., & Oppewal, H. (2016). Unit pricing matters more when consumers are under time pressure. European Journal of Marketing, 50(5/6), 1094–1114. 50. Herrington, J. D., & Capella, L. M. (1995). Shopper reactions to perceived time pressure. International Journal of Retail & Distribution Management, 23(12), 13–20. 51. Voorhees, C. M., Baker, J., Bourdeau, B. L., Brocato, E. D., & Cronin, J. J. (2009). It depends: Moderating the relationships among perceived waiting time, anger, and regret. Journal of Service Research, 12(2), 138–155. 52. Keaveney, S. M. (1995). Customer switching behavior in service industries: An exploratory study. Journal of Marketing, 59(2), 71. 53. Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data analysis (5th ed.). Prentice Hall. 54. Kim, G., Shin, B., & Lee, H. G. (2006). A study of factors that affect user intentions toward email service switching. Information & Management, 43(7), 884–893. 55. Brislin, R. W. (1970). Back-translation for cross-cultural research. Journal of Cross-Cultural Psychology, 1(3), 185–216.

Personalisation-Privacy Paradox from Marketing Perspectives: Literature Review and Future Research Directions Hanh Thi Hong Hoang, Lam Son Nguyen, Chinh Hong Nguyen, Nga Viet Le, Nhung Thi Nguyen, and Len Thi Dinh

Abstract This paper aims to provide a structured review of personalisation-privacy trade-offs among customers and suggest future research directions. Specifically, the research attempts to identify common themes within this domain, particularly the prevailing factors influencing consumer attitude and behaviour toward disclosing personal data. To this end, findings from 82 marketing papers on personalisationprivacy paradox from 2000 to 2022 were analysed and integrated through a systematic review approach. Results show that perceived benefits and perceived privacy control are major drivers whereas perceived privacy concerns are major barriers toward consumer self-disclosure behaviour. Trust in the organisation can moderate the effects of antecedent variables on the consumers’ willingness to disclose. Research gap is also identified for further studies. Keywords Personalisation · Privacy behaviour · Consumer disclosure · Personalisation-privacy paradox

1 Introduction To cope with fiercer competition, and as markets have become more fragmented and saturated, many firms adopt personalized marketing strategies which tailor their products and services to better meet customers’ needs and wants. To develop custom offerings, companies must accumulate a broad range of customers’ individual data, such as their demographic, social and financial backgrounds [1]. However, this is not without its challenges in the face of the current government regulations around privacy and the right to request data erasure [2]. This creates a conundrum that we refer to as the personalisation-and-privacy paradox. From customers’ perspective, the personalisation-privacy paradox can be understood as personalisation-privacy trade-offs [3]. On the one hand, today’s consumers ask for true personalisation, bespoke content, and product recommendations tailored H. T. H. Hoang (B) · L. S. Nguyen · C. H. Nguyen · N. V. Le · N. T. Nguyen · L. T. Dinh Academy of Finance, 58 Le Van Hien Street, Bac Tu Liem District, Hanoi 00000, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_8

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to their specific needs. On the other hand, consumers increasingly worry about the collection and sharing of their private information. These concerns have been heightened by a series of privacy breakouts which erode consumer trust, for instance: The Cambridge Analytica scandal, along with Facebook’s practice of providing private user data to select brands, or Google’s breach of GDPR regulations for their personalized, intrusive ad-targeting. Hence, consumers may feel invasive and become more cautious about disclosing personal information to companies. Since “data is new oil” of the digital era [4], how to obtain such personal information without causing consumer backlash is of essence for businesses today. This systematic review acts as a linkage between current studies and potential research on the exchange between personalisation and privacy among customers. In particular, we distinguish from recent literature review papers [5] by focusing on understanding the paradox from Marketing perspectives. As such, the present study evaluates the existing empirical research on personalisation-privacy paradox to identify the prominent motivations and factors that affect consumer attitude, intention, and actual behaviour toward disclosing personal data. It highlights the various factors that shape consumer attitudes and behaviour, as well as offers a potential justification for the observed discrepancy between attitude and behaviour. The literature review also reveals the limitation of existing studies on the personalisation-privacy paradox, and suggests future research directions. The main contributions of this study are twofold. First, our work is among a few studies examining consumer behaviour toward personalisation whereas much research into disclosing behaviour has been centred on customer privacy. Second, our research serves as a pioneer in synthesizing various factors influencing disclosure behaviour through the lens of self-disclosure theory. By doing this, the study provides valuable theoretical and practical implications to marketers and policy makers in executing relevant privacy policies and ratifying the current nascent data protection legislation to better match with the evolving data landscape. The paper continues with a brief literature review regarding personalisation and reported personalisation-privacy inconsistency. Following that, the methodology and approach of the study are described. The next section outlines the findings and discussion. Finally, the paper ends with implications and conclusion.

2 Literature Review 2.1 Personalisation and Disclosure Behaviour In the last two decades, a number of definitions of personalisation have emerged within the realms of marketing, information technology and more. Adapted from Sunikka & Bragge [6], Table 1 (see Appendix) provides several selective explanations from marketing discipline. Although describing by different ways, the shared agreement among these definitions is that personalisation involves activities that

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customize technology services and interaction in order to achieve desired goals. Fan and Poole [7] offer the most comprehensive list of dimensions of personalisation, which is detailed in Table 2 (see Appendix). Empirical evidence about the nexus between personalisation and disclosure behaviour has never reached a consensus. On the one hand, the first strand of research [8, 9] documented a positive linkage between personalisation and disclosure behaviour. For instance, [8] explored the influence of three antecedents-online privacy concern, information control, and perceived customisation benefits-on individuals’ willingness to reveal online. The findings indicated a positive effect on a customer’s willingness to divulge less sensitive information. Also, the advantages of personalisation can counteract the negative effects of requests for sensitive information when levels of apprehension are decreased or control is increased, and that perceived risk and trust in the organisation act as mediators in the process of disclosing information. Sayre and Horne [9] investigated voluntary disclosure of personal data and found that consumers were willing to provide personal data in return for a modest discount at a grocery store. In addition [10], found that the utilization of online personalisation by consumers is the result of a balance between the value they place on personalisation and their concerns regarding privacy. Furthermore, a consumer’s willingness to use personalisation services is positively impacted by their trust in the organisation. On the other hand, another strand of literature revealed weak or no direct links between personalisation and disclosure behaviour. Spiekermann et al. [11] sought to measure the correlation between privacy attitudes and online behaviour. The research clustered participants into distinct aggregated privacy profiles according to their responses to information requests. Upon assessing the variation in personal information disclosure among the privacy clusters during an online shopping simulation, no noteworthy distinctions were observed. However, no further research was conducted to pinpoint the reasons why distinct privacy profiles react in a similar fashion in a behavioural setting.

3 Methodology The present study followed the structured review procedures suggested by Quoquab & Mohammad [12], and Barth & de Jong [5]. Initially, we justified the research questions, and established inclusive and exclusive criteria applied in the queries. Scholarly articles published in English were evaluated with an exclusion of working papers, proceedings, books and book chapters. Our review focused on pertinent articles covering the time period of 2000−2022, in order to capture consumer privacy behaviour of the new millennium. A comprehensive review of applicable research was performed across 10 databases, comprising Springer, Taylor & Francis, Emerald, Wiley Online Library, Scopus, Science Direct, Web of Science, Google Scholar, PsycINFO and ProQuest. Springer, Scopus and Web of Science were utilized because the databases offer rankings based on citation count. The rest of the databases were chosen since they provide

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an extensive selection of papers related to business and social science studies. We further paid due attention to articles published in high-ranking Marketing journals. The search and review of relevant articles were conducted by the two researchers independently to reduce risk-of-bias assessment. The forms and questions are pretested before use to ensure consistent interpretation among reviewers. Any reviewer disagreement was resolved by consensus. We employed the following queries in order to examine the personalisationprivacy paradox from the viewpoint of Marketing: (1) What is the present comprehension of the personalisation-privacy paradox from a Marketing standpoint? (2) Which factors attribute to the personalisation-privacy paradox? (3) What are the significant research trends present in consumer privacy-personalisation studies? (4) What are promising themes for future research in regard to personalisation and privacy? Based on these questions, we developed the eligibility criteria to identify relevant works. Search terms or keywords include “personalisation”, “consumer privacy”, “the privacy paradox”, “consumer information disclosure”, and “marketing”. The scope of the search consisted of the title, abstract and full text of the articles. Two independent researchers performed a database search from different locations, resulting in a 98% match rate. The research yielded 576 scholarly articles; however, 72 of these were excluded for duplication. A total of 504 abstracts were further reviewed, leading to the exclusion of 356 documents due to their lack of relevance (They included working papers, editor notes, proceedings, e-books, book chapters, articles published prior to 2000, and articles from other disciplines such as engineering, technology). A pool of 148 papers were put through the next round to check the journal quality. Only articles published in journals which were listed on the Chartered Association of Business Schools (CABS), the Scimago Journal Ranking or the 2019 Australian Business Deans Council (ABCD) Journal Quality List were selected, resulting in removing 66 papers. A final selection of 82 papers were included for further summarizing and synthesizing. The final set of qualified papers were analysed using NVivo software, and thematic analysis was then employed to extract key themes. These themes were integrated and categorised into nodes, thereafter content analysis was used to comprehend the presence, meanings, and relationships of the identified themes. We found 4 main emerging themes including: type of data and data sensitivity, consumers’ perceived values of personalisation, antecedents of consumer disclosing behaviour, and the psychological variations. The outcomes of the analysis and its insights are addressed in the following section. Table 3 (see Appendix) summarizes key articles from 2000 to 2022 on the topic of personalisation-privacy paradox.

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4 Discussion and Findings 4.1 Type of Data and Data Sensitivity The functional theory of self-disclosure recognies that individuals generally have goals they seek to attain by means of self-disclosure [13]. Therefore, people decide what, how and with whom they will share information. Nevertheless, the decision of what to reveal is strongly linked to their privacy considerations [8, 14, 15]. The United States Federal Trade Commission generally divides the data obtained online into three distinct types: anonymous information, personally unidentifiable information, and personally identifiable information. Chellappa and Sin [10] suggests that perceived consumers’ concern for privacy in using personalisation services may vary across information type; therefore, consumers’ intention to use personalized services should be assessed regarding each information type. Phelps et al. [15] conducted a study on consumer attitudes toward providing personal information to marketers, discovering that their level of willingness varied depending on the type of data. Demographic and lifestyle information was found to be the most willingly given, whereas financial information and personal identifiers were given less readily. Moreover, Mothersbaugh et al. [8] claimed that the inconsistency between privacy concerns and information disclosure behaviour might be attributed to the sensitivity of the information requested. Examining over eight types of information: contact details, general financial data, family facts, personal details, online lifestyle data, offline lifestyle data, media usage, and website perception, the authors found that contact and financial information were seen as the most sensitive while media usage and website perception were considered less sensitive. The findings also suggested that privacy concerns had different influences on consumers’ propensity to disclose information, which depends on the level of information sensitivity. Future research can further testify how the type of information disclosed is highly correlated with privacy concerns and intention to disclose information of consumers. Firms can obtain customer information for their personalisation strategy through “overt or covert” means [16]. Overt information collection means that customers are aware that their information is being gathered at that time (e.g., when they supply an email address). Covert data collection happens when the company secretly records customer information without explicit consent from the customer. In such situations, the level of information that consumers are willing to disclose may be different. In an overt situation, consumers would be highly aware of their personal data would be collected and used later for other purposes,hence, they would be more cautious in providing personal information than that in a covert context. In addition, it is possible that individuals’ likelihood of revealing information can be contingent upon the norms of the disclosure setting. In business contexts, participants generally communicate with each other in a transactional way, continually evaluating costs and benefits, whereas social contexts are often characterized by generosity and faith. These findings point to the fact that when individuals share information in a commercial setting, they expect something in return. Whether it be a

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personalized experience or financial compensation, people may view their privacy as a valuable commodity depending on the benefits associated with the exchange [17, 18]. Therefore, it is strongly suggested that future research should probe into whether consumers are willing to reveal various information depending on the context.

4.2 Consumers’ Perceived Values of Personalisation The behavioural intention to reveal personal data might be greatly influenced by consumers’ perceived values of personalisation. Consumers may agree to provide information if they perceive those personalized services bring about benefits that matches with their needs or preferences. Xu et al. [19] found that personalization encourages customers to disclose more information despite perceived risks. Also, Chellappa and Sin [10] indicated that the value of personalisation has a positive impact on personalisation use as opposed to privacy concerns. Li and Unger [20] shared similar findings, confirming that privacy concerns may be surpassed by personalisation quality when using a service. Additionally, it is possible that anticipating higher rewards of customisation could lead individuals to appreciate the value of disclosing personal information, thus making them more likely to do so. In other words, perceived values of personalisation would determine the perceived benefits of disclosing personal data. Given the significance of the matter, it is essential to be aware of how consumers appraise personalisation and measure the values they assign to experiencing various types of personalisation [10]. While existing studies have focused on understanding the effects of personalisation on customers’ intention to use personalized services [10, 20, 21], little has known about consumers’ perceived values of personalisation. The potential advantages of personalisation may come from the convenience it provides to consumers from having different elements of internet browsing and customized purchasing experience [10]. The convenience here means time/effort savings the personalized services allow when consumers search for appropriate information or complete purchasing job, which can be understood as conditional value. Furthermore, Mothersbaugh et al. [8] justified that consumers advocate to customized websites because of its enhanced efficiency and pleasure to use. The mentioned values could be considered as the functional value of customisation as it focuses on the perceived utility generated by the personalized attributes. However, it is argued that besides conditional and functional value, personalisation benefits can be evaluated based on the capacity to arouse positive or negative feelings, which we term emotional value,or the capacity to provide knowledge and familiarity to customers [22], what we call epistemic value. The variance in consumers’ perception of personalisation can be explained by the determinants of their perception. According to Mothersbaugh et al. [8], perceived level of customisation (i.e., perceived belief of the extent to which the website allows for customisation), perceived frequency of usage, and perceived customisation value are drivers of perceived customisation benefits.

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4.3 The Antecedents of Self-Disclosure Behaviour for Personalisation 4.3.1

Perceived Trust in the Organisation

Cloarec et al. [3] suggest that disclosing information in turn for personalisation constitutes “a social exchange” in which two parties involve in the process of cost– benefit analysis to form an ongoing relationship. Trust can be viewed from a social exchange perspective as an expectation that an exchange partner will not act in an exploitative manner based on judgments about their attributes and motives [23]. As the advantages exchanged become more diversified and valuable over time, trust is established, and trustworthiness develops as both partners abide by the principle of reciprocity. According to self-disclosure theory, trust is a key factor in people’s decision to disclose information [24]. Trust is essential when it comes to revealing information online, which is impacted by people’s apprehension of privacy and their beliefs about how their privacy can be regulated [8, 22]. On social network platforms, trust becomes even more prominent [25, 26]. Digital trust can be shaped by customers’ prior experiences with privacy breaches [14]. Chellappa and Sin [10] claimed that online enterprises could boost their prospects of obtaining users’ personal information through trust-building strategies, as customer willingness to utilize personalisation services is impacted by their “trust in the vendor” (p.189).

4.3.2

Perceived Benefits of Disclosing Information

The “privacy calculus” theory proposes that individuals always rationally weigh the potential risks attached to a loss of privacy against the potential benefits of data release [27]. In some cases, the perceived benefits may suppress the perceived privacy risks of data disclosure [19]. These perceived benefits attached to data disclosure may include financial gains through promotional discounts, coupons, prize draws, etc. [19, 21, 28], customisation of services offered [10, 17], social benefits [28, 29], or even entertainment benefits [28]. Financial benefits (gains) can be seen as the foremost explicit value that consumers incline to disclose their personal data [21]. Consumers tend to disclose requested information in order to gain access to financial/economic offered by firms including but not limited to: price discounts, coupons and bonus points [30]. In the case of disclosing information for personalisation, financial benefits seem to be more ample and intrusive since they are often expressed in monetary terms. Studies indicate that consumers’ perceived values of personalisation would determine the perceived benefits of disclosing personal data [10, 17], which encourages consumers to more data releases. In this sense, we propose that perceived personalisation benefits would be an antecedent of consumers’ perceived benefits

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of disclosing information, and it is positively influenced the willingness to disclose data of consumers. Social benefits obtained from disclosing personal information include forming and maintaining relationship with others [29], obtaining support from others and “social bonding” [30, 31]. Ardiansyah et al. [28] found that social benefits are the most significant benefits that drive peer-to-peer interaction via social media advertising. In other words, self-disclosure behaviour can be regarded as the prevalent way for individuals to fulfil their need for belongings or the need for relatedness which is a fundamental driving force of human behaviour. Entertainment benefits are perceived as the “fun and relaxation” experienced when using personalized services or playing or networking with others [28]. Personalisation can offer entertainment benefits as it enables the services to be tailored as individual preferences which can bring more joy to the customers [30].

4.4 The Psychological Variations Although consumers regularly express their worries about the collection and misuse of their data, they often allow unconditional collection of their data or provide information freely [32–34]. Researchers of privacy behaviour have pointed out a number of distorting influences such as: information asymmetry, bounded rationality [35], cognitive biases and psychological deviations (i.e., anchoring, framing, hyperbolic discounting, over choice, metacognitive processes) [36, 37]. Particularly, psychological deviations, such as “hyperbolic discounting” which refers to the human tendency of favouring immediate gratification, coupling with “self-control bias” make rational decision-making difficult [38, 39]. Affective states like happiness with the Internet [3] also influence customer intentions to reveal personal data in exchange for personalisation. Furthermore, Massara et al. [32] urged that the privacy paradox is subjected to mediating dispositional or situational variables, addressing the multiple facets of the phenomenon. Also, the interactions between predicting variables can alter the effects of antecedents to the actual disclosure behaviours, for instance: how perceived risks interact with trust moderates the relationship between information disclosure intention and actual behaviour [33]. Cloarec et al. [3] acknowledged the role of reciprocity, which is measured by “experience sharing frequency”, as a potentially important moderator on the link between intentions and actual behaviours of self-disclosure. Solove [40] highlighted that behaviour in privacy paradox research requires decisions to be made under certain conditions, whereas attitudes about privacy are more general. This suggests the necessity of conducting experimental studies under diverse contexts and realistic settings [39]. Hence, further research can utilize the above suggestion by undertaking ethnographic studies to observe disclosure behaviour in real life scenarios, and then comparing with their stated intention through survey studies.

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5 Conclusion and Implications This research endeavours to investigate the existing empirical literature on the personalisation-privacy paradox and examine prominent motivations and factors affecting the attitude, intentions, and actual behaviour of customers with regard to revealing personal information. By systematically reviewing 82 relevant articles on personalisation-privacy issues from 2000−2022, the research finds that perceived benefits and perceived privacy control are major drivers whereas perceived privacy concerns are major barriers toward consumer self-disclosure behaviour. Trust in the organisation can moderate the effects of antecedent variables on the consumers’ willingness to disclose. Companies must capitalize on customer data to ensure success on the web. The challenge lies in gathering and utilizing this information in a way that makes customers feel secure. Studies indicate that while tailored services offer convenience to users, firms must factor in privacy considerations. Striking a balance between web personalisation and privacy concern is vital to a website’s prosperity. For marketing managers, it is recommended that privacy sensitive customers should be treated as a different segment. Accordingly, firms should employ a strategy that provides features to meet the requirements of customers who are open to personalisation, while understanding that a select few consumers may still be unwilling to take part in personalisation, even with extra privacy functions. Moreover, digital businesses should focus on trust-building initiatives to enhance their capacity to acquire and apply customer data. It is also essential for vendors to comprehend and measure the various values customers may attach to experiencing different forms of personalisation. For future research, more qualitative and experimental studies to fully capture actual consumer behaviour toward disclosing personal information should be conducted. Apart from cognitive variables such as benefit–cost calculation and perceived risk of disclosing data, the impact of affective factors is also needed to take into consideration in the disclosing process. Future studies can evaluate the efficacy of various elements of information technology in enhancing customer-perceived value of online personalisation over time. Investigating the domain where personalisation approaches are implemented, such as an app, could be a critical factor in understanding customers’ use of these services and thus a promising direction for future inquiry. In addition, it may be beneficial to further explore the correlation between the availability of information transparency functions and the propensity for personalisation, while factoring in the quality of transparency that companies offer through their privacy policies.

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Appendix Table 1 Definitions of personalisation Authors

Definition(s)

Peppers and Rogers [41]

“Personalisation is the customisation of a product or service to the customer’s preference” (p.56), providing them with greater convenience, more cost-effective options, or other advantageous benefits

Blom and Monk [42]

Personalisation is “a process that changes the functionality, interface, information content, or distinctiveness of a system to increase its personal relevance to the individual.” (p.195)

Chellappa and Sin [10]

“Personalisation can be defined as the ability to proactively tailor products and product purchasing experiences to tastes of individual consumers based upon their personal and preference information. Therefore, personalisation is critically dependent on vendors’ ability to acquire and process consumer information, and on consumers’ willingness to share information and use personalisation services.” (p.181)

Tam and Ho [43]

The authors dictate three types of personalisation: “User-driven personalisation when the user specifies in advance the desired web layout and content that matches her interests and preferences with the tools and options provided. In transaction-driven personalisation, an online merchant generates the personalized layout and content, and thus personalisation is driven by previous transactions. Context-driven personalisation employs an adaptive mechanism to personalize content and layout for each individual user based on the context and inference of users’ processing objectives in real time (e.g., product inspection versus random browsing)” (p. 890)

Montgomery and Smith [44] “Personalisation is an adaptation of the marketing mix to an individual customer based upon the marketer’s information about the customer.” (p.131) Source Compiled by the authors. Adopted from Sunikka and Bragge [6]

Table 2 Design dimensions of personalisation Factors for personalisation

Design strategies

Utilitarian and relational orientation

Identify and correlate orientation

Collective experience with service Social context

Strategies for interaction that can be tailored to collective experience and the social context Personalized interaction can be effective in fostering customer relationship, collaboration and engagement

Uncertainty in goals and choices

Reflection on goals Co-creation strategies

Source Compiled by the author

Chellappa and Sin [10]

“Personalisation versus privacy: an empirical examination of the online consumer’s dilemma”

“The personalisation privacy paradox: an empirical evaluation of information transparency and the willingness to be profiled online for personalisation”

1

2

Chen et al. [14]

Authors & year

Article

No

Utility maximization theory

Social exchange

Theories used

Findings

Quantitative (survey Those who prioritize research) information transparency are the least likely to be open to online profiling

Quantitative (survey The consumer’s research) willingness to utilize personalisation services is driven by their trust in the provider

Methodology

Table 3 List of key articles on personalisation-privacy paradox from 2010 to 2022 (Arrange by year)

(continued)

Based on secondary data from a survey that assessed attitudes toward privacy and information sharing online. Trust was not explicitly addressed as a separate construct. Moreover, data on the quality of privacy policy at firm level is missing and the sample size was slightly biased toward more educated, wealthy, and knowledgeable people about the Internet

Measure the intention to use personalisation services rather than their actual usage statistics

Limitations and suggestions

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Article

“Disclosure antecedents in an online service context: the role of sensitivity of information”

“The personalisation–privacy paradox: implications for new media”

No

3

4

Table 3 (continued)

Coyle-Shapiro, et al. [18]

Ardiansyah, et al. [8]

Authors & year

No

Prospect theory

Theories used

Findings

Literature review (Secondary search)

Privacy as a commodity if seeing from privacy calculus perspective. Yet “privacy concerns are situational which makes them weak predictors of behavior” (p. 5) The way in which data is gathered could potentially have an effect

Quantitative (survey The impact of online research) privacy concerns on willingness to disclose was particularly evident when the information was more sensitive; however, when the level of confidentiality was less stringent, this diminished the effect of those privacy concerns, counterbalancing the overall disclosure

Methodology

(continued)

Limitations and suggestions

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Article

“Antecedents to consumer peer communication through social advertising: a self-disclosure theory perspective”

No

5

Table 3 (continued)

Masur, [28]

Authors & year Self-disclosure theory consumer socialization theory

Theories used

Findings

Quantitative (survey Trust plays a pivotal role research) in encouraging peer interaction through social network plaforms, alleviating privacy concern and perceived privacy control. Social benefits seem to be the most prominent factor driving these communications, outweighing economic and entertainment benefits

Methodology

(continued)

Used self-report, cross-sectional data future research should investigate the influence of developmental experience factors, such as brand or product experience, other than age or life cycle stage on consumer trust in an SNS. Additionally, the role of other antecedents, such as prior interactions with a vendor, should also be examined

Limitations and suggestions

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Authors & year

Tsai & Men, [45]

Article

“The personalisation–privacy paradox in the attention economy”

No

6

Table 3 (continued)

Proposed framework based on enhanced apco model by adding attention to investigate the paradox

Theories used Literature review (secondary search)

Methodology It is essential to include attention when exploring the personalisation–privacy paradox

Findings

(continued)

Further empirical studies should explore the correlation between greater knowledge of privacy settings and satisfaction with personalized ads. With regards to attention management, further research may probe how and why providing consumers control over their personal data could have favorably impacts on advertising effectiveness

Limitations and suggestions

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Article

“Balancing web personalisation and consumer privacy concerns: mechanisms of consumer trust and reactance”

No

7

Table 3 (continued)

Waldman, [46]

Authors & year Exchange theory Reactance theory

Theories used Quantitative (Survey Research)

Methodology The relationship between web personalisation and website loyalty is lessened by privacy concerns, and the underlying influence varies depending on the degree of such concerns. When consumers have lower levels of privacy concerns, web personalisation increases their trust, resulting in greater loyalty. Conversely, when privacy concerns are higher, web personalisation affects loyalty through psychological reactance

Findings

(continued)

Further studies could investigate the effects of the interplay between various facets of personalisation and varying degrees of consumer privacy concerns on consumer decision-making. Other psychological variables (e.g., satisfaction and loyalty) should also be included in explaining long-term consumer-website relations. Field or lab experiments should be employed to obtain data and examine the causal relationships of the variables

Limitations and suggestions

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Authors & year

Cloarec, [3]

Article

“The personalisation–privacy paradox at the nexus of social exchange and construal level theories”

No

8

Table 3 (continued) Methodology

Social exchange theory Quantitative survey Construal level theory research

Theories used Happiness with the Internet is the most influential factor in driving individuals to be willing to provide personal information in exchange for personalisation, exceeding other privacy-related factors (e.g., trust and risk perceptions). The frequency of experience sharing, which is a form of reciprocity, has a significant impact on online social interactions

Findings

Data on intention rather than actual behaviour further effects of “happiness with the Internet” and “experience sharing frequency” across various digital platforms, for instance: social media, marketplaces should be elaborated in contextualized models Personalisation based on sensitive data can be an useful avenue for future research (Article 9, GDPR)

Limitations and suggestions

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Applying Theory of Constraints in Food Safety Management Across Supply Chains: The Viewpoints of Chinese and Vietnamese Fishery Exporters Tram T. B. Nguyen, Thang Ta Duc, Scott McDonald, and An Duong Thi Binh Abstract One weak link in food networks can jeopardise human health by breaching food safety management. Needless to say, food manufacturers must develop a plan for improving operations management to provide safer goods. Hence, identifying any inherent constraints in food safety management implementation could result in improved procedures, higher efficiency, and monetary gains for exporting nations in emerging economies. This research applied the theory of constraints to identify constraints that could limit fish and fishery manufacturers’ food safety management system (FSMS) performance in global trading. Moreover, physical, behavioural, management policy, supply chain relationships, and standards constraints are recognised. Specifically, the significance of intangible FSMS aspects in searching for improvements to ensure performance and profitability is emphasised so stakeholders can immediately identify and eliminate the constraint(s) to ensure enterprises’ FSMS can continue to satisfy changing market demand and legislative regulations. Keywords Theory of constraints · Food safety management · Food manufacturing · China · Vietnam

T. T. B. Nguyen Faculty of Business Administration, Ho Chi Minh City Open University, Ho Chi Minh, Vietnam T. T. Duc · S. McDonald School of Business and Management, RMIT University, Ho Chi Minh, Vietnam A. D. T. Binh (B) CIR Tech Institute, HUTECH University, Ho Chi Minh, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_9

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1 Introduction The most crucial component of food quality, which encompasses sensory attributes (such as taste, odour, and colour), shelf-life time, dependability, and convenience, is referred to as food safety [1]. Comparatively, food safety is more difficult to be observed than other components. Nonetheless, high-quality (e.g., good-looking, tasty) food can be unsafe owing to pathogens, toxic compounds, or physical hazards. Additionally, globalisation is a competitive advantage for food production, commerce, and consumption. On the one hand, organisations can benefit from lowcost labour and raw resources, better financing opportunities, larger product markets, arbitrage opportunities, and additional inducements offered by host governments to entice foreign capital [16]. At the other end of the spectrum, global supply chains increase the level of complexity combined with the nature of food products, which could involve a high level of risks and vulnerabilities [32]. For that reason, these anxieties have heightened customers’ awareness of food safety issues and all relevant sectors to develop and construct a more efficient management system to moderate food safety risks. To strengthen food safety management in the global food supply chain, organisations must devise a strategy for continuous improvements [20]. Identifying any food safety management implementation constraints could result in better practices, higher operational efficiency, and financial gains. Currently, no research identifies supply chain management constraints. Moreover, [17] discussed that operation management theory could give a creative and efficient approach to enhancing product safety and security in the global supply chain. Henceforth, This study uses operation management theory to better understand and identify food safety management system limits in global food supply chains.

2 Literature Review 2.1 Food Safety Management System Firms in the food chains are held accountable for establishing a food safety management system (FSMS) as both legislative regulation and market demand. A supply chain perspective greatly emphasises safety issues that might arise during system transfers as a corollary of improper storage, handling, and distribution of the product rather than manufacturing or processing flaws and improper packing (or a combination of these) [17, 27]. In the literature, elements of FSMS from this perspective have been comprehensively established, such as the regulation and standards compliance [7, 23, 26], traceability and recall [3, 29], risk assessment [29], supplier relationship management [36] and so on. Implementing FSMS could present numerous challenges owing to the complication of global food supply chains driven by multiple stakeholders [9]. They form a complicated chain in which one node of

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the supply chain consisting of several procedures, operating activities, and entities is breached or contaminated. However, fulfilling the stringent requirements of FSMS poses many difficulties through food products’ transference on numerous links myriad interconnecting firms worldwide. Firms must embrace government-set public and private standards. Food safety standards are vital to supply management because they improve food safety, corporate image, and market access [11]. Extensive research shows that standards can spark an uneven distribution of trade profits by excluding the least developed countries and the most poverty-stricken farmers [12, 18, 23]. These difficulties are dilemmas for organisations attempting to enhance food safety, notably SMEs or small-scale farmers from developing countries that lead the global food supply chain.

2.2 Theory of Constraints (TOC) The management paradigm of TOC is “a chain is only as strong as its weakest link.” A system’s performance is invariably restricted by its components. Despite the system’s intricate interconnections, these restrictions are created by a minuscule number of elements in the system, namely the “constraint” [8]. By strengthening the weakest link, the entire organisation’s interdependent resources, departments, and processes could improve. Mabin [15] investigated the outcomes of over 80 successful TOC deployments and found that operational and financial performances infallibly enjoyed notable improvements. Conversely, there is a lack of TOC implementation in the food industry except for [21]. They also used TOC to identify seven broad categories of constraint types in the UK local food supply chain and proposed an alternative model of the TOC for local food producers. Likewise, to improve FSMS performance [30], analysed the food safety scandal in Taiwan in 2014 related to the usage of gutter/tainted oil by several oil suppliers, driving 1256 businesses to build a responsible supply chain based on the TOC. These findings support the feasible application of TOC in FSMS in the food supply chain.

3 Research Methodology 3.1 Research Context To analyse the in-depth understanding of these constraints, the global fishery supply chain is used as a focal context for case studies. Fish and fishery products are the most traded food commodities worldwide. International trading, therefore, plays a vital role in economic growth and development in the fisheries sector and food and nutrition security. In addition, the cases of fishery supply chains are interesting and

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relevant because they also pose significant safety risks due to the rapid increase in international incidents of contamination [6]. Commonly reported food safety problems resulted in rejecting, destroying or returning traded products to the country of origin, which seriously impact the value chain, such as loss of foreign currency earnings for many developing countries, damage to reputation and eroding consumers’ confidence.

3.2 Research Sample Firms currently processing and exporting fishery products worldwide are selected as samples for the study because they work closely with upstream and downstream stakeholders in the global supply chains. This study uses the purposeful sampling method to choose firms that meet prespecified critical criteria such as firm size, geographical location, currently trading fishery products worldwide, and so on [4]. Participants in the case study are senior supply chain managers from Chinese and Vietnamese firms that are diverse in scale and have many years of experience in trading fisheries products worldwide. For the number of cases to use, Yin [35] suggested that there should not be more than four or five cases in a single study since this number should provide sufficient opportunities to identify the themes of the cases and conduct the cross-case analysis. Specifically for theory application purposes, according to Eisenhardt [5], the range of 4–10 instances “generally works well” since fewer than that may render portraying the complexity of the actual world impossible, and more than that may impede researchers’ cognitive assimilation of the information (Table 1).

4 Findings 4.1 Physical Constraints In the investigated context, physical constraints include equipment and facilities related to restricted operational and testing resources to ensure food safety in fishery supply chains. At the beginning of the supply chain, small farmers/fishers or intermediaries have limited operational and testing resources such as storage facilities, equipment, and monitoring/recording devices. According to Case J’s manager, natural fishes and shrimps are seldom infected with germs and contain preservative chemicals as physical resources on board are utilised to maintain the quality and safety of raw materials. The managers of the other cases also confirmed this constraint since most of the exporters consider this link the most critical one in the whole supply chain. Similarly, they emphasised the agents’ role in collecting raw materials from many

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Table 1 Description of the organisations in the study Case Size/ownership

Product

A

Large/private

. Frozen and dried fish and Europe, Japan, US, Korea, shrimp Middle East, Africa, Taiwan, Malaysia, Singapore, Australia . Pond processing: salmon, pangasius fish, scallop, whelk, king crab meat . Grape seaweed . Anchovy, squid, clam meat (for the domestic market only)

Market

B

Large/private

. Pangasius fish . White and yellow clams

Aiming at high-value markets such as Japan, USA, EU, Canada, Australia, Middle East, North Africa, Singapore, and Korea

C

Large/private

. Tiger shrimp . Prawn

Japan, USA, EU, Canada, Australia, New Zealand, Middle East, North Africa, Singapore, China, Lebanon, UAE and Korea

D

Medium/state-owner . Frozen and dried fish . Frozen and dried shrimp

E

Medium/private

. Salmon . Pangasius . Fish . Whelk . King crab meat

Japan, USA, EU, Canada, Australia, New Zealand, Middle East, North Africa, Singapore, China, Lebanon, UAE and Korea

F

Medium/private

. Tiger shrimp . Prawn

USA, EU and Asian countries

G

Small/State-owner

. Freshwater, marine and tropical fish . Cooked shrimp . Crab meat

Asia countries

H

Small/private

. Crab meat . Prawn . Shrimp . Squid . Fish

USA, EU and Asian countries

I

Small/private

. Prawn . Shrimp

EU and Asian countries

J

Small/private

. Fish

Asian countries

EU, North Africa and Asian countries

farmers/fishers about potential cross-contamination. Given that the number of involved stakeholders extends the trading chain, it is impossible to prevent crosscontamination. In their paper, Tran et al. [25] also discussed this issue in shrimp production and trading, in which coordination of chain segments from wholesale

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agents down to smaller agents and farmers/fishers is beyond the control of processors/exporters. This issue constrains food safety risks and other social and environmental concerns, such as illegal catching and even human rights abuses in Asia [33].

4.2 Managerial Policy Constraint Having an FSMS certification does not guarantee high hazard detection, assessment, and management in food supply chains [7]. Therefore, each organisation could implement food safety policies to boost FSMS performance. The managerial policy describes how an organisation will conduct its services, actions, or business to achieve food safety objectives. Policy constraints arise when the environment changes, yet the company’s policies remain unchanged because organisational management controls them [15]. In this case, managerial policy constraints could impede FSMS performance. Invisible management policy constraints are harder to recognise and overcome than physical ones. Generally, a department’s management committee or managers develop the policy influenced by the outside policy [14]. This constraint is often triggered by long-established company policies. Observing these firms, all are satisfied with their standards and regulatory compliance. Seemingly, compliance with standards and rules appears crucial for FSMS’s survival and worldwide market access. There are two trends in managerial policies relating to FSMS awareness. Firms adopting FSMS as an approach to entering the global market only fulfil criteria if “buyers require” standards, certifications, traceability, and risk assessments. This category contains small enterprises (H, I, and J) with little financial capability and two state-owned medium corporations (D and G) with bureaucratic organisational structures.

4.3 Behavioural Constraint When performance measures or policies give rise to entrenched behaviours hindering a system’s performance, behavioural constraints are imminent. Behavioural constraint emphasises the dimension of human resource in FSMS because it is essential for each person to have a shared perception of the importance and understands the food safety performance expectations of their job. Therefore, each employee or person within a company has shared accountability for minimising the risks to food safety, and the organisation’s overall food safety efforts rely heavily on each attempt [34]. This research indicated that behavioural constraint is more critical for fish processors and packers. Specifically, case G’s manager says peeling and removing shellfish or crab shells requires intensive labour. Sharp shells could tear workers’ gloves, causing contamination. If the individual overlooks food safety, the

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issue is not discoverable. Moreover, FSMS is based on inspections and risk management; thus, managerial behaviour is crucial. Case D’s previous middle-level manager prioritised a packaging supplier based on his relationship over the company’s audit. This violated the company’s food safety management policy. Human behaviour is dynamic, complicated, and impacted by numerous circumstances, rendering it difficult to manage. Currently, organisations employ frequent inspections and training to enhance employee food safety knowledge. However, they are insufficient since food handlers’ education and attitudes determine food handling behaviour.

4.4 Supply Chain Relationships Constraint Dealing with lower operating costs and the supply chain’s additional complexity, supply chain relationships play a vital role in avoiding safety problems [17]. The study analyses upstream and downstream supply chain relationships to determine whether they impede FSMS improvement. Spot market and contract are two prevalent fisheries procedures, according to Cases C and I’s manager. Due to the growing demand for food safety and steady supply, the spot market may be supplanted by strict contracts. In the upstream, corporations select suppliers for raw materials, additives, processing aids, packaging materials, and food contact materials. To overcome physical constraints, they provide loans and capacity investments for fishers, agents, or suppliers and deploy personnel to site inspection agents to regulate food safety from raw materials. Farmers/fishers, agents, and processors can deliver better and safer inputs via tight coordination. However, case E’s manager said these methods are expensive and time-consuming. Small-scale players outnumber processors/exporters in the fishing business, rendering food safety monitoring unfeasible.

4.5 Certification and Standards Global trading firms must comply with all national and international FSMS standards and regulations. Certification and regulations have assisted organisations in developing food safety policies, processes, and practices in recent years. Numerous analysts argue that standards are a tariff since they are exorbitant to implement and certify, making them a considerable impediment for small firms and those in undeveloped countries [26] and the issue of exclusion of smallholder and family farms (e.g., [22, 23]). In this study, all participants acknowledged their willingness to “adopt all standards that are required by importers,” yet compliance with standards remains a constraint in implementing FSMS because of varying national requirements. All respondents agreed that EU and US importers look for HACCP, SQF, BRC, and Global GAP certifications from exporters. Meanwhile, Japan and Korea are more concerned about the products’ maximum residue limit (MRL) of antibiotics than certifications.

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Moreover, managers claim that importers’ food safety criteria are inconsistent in cases C, D, F, and I. Due to the system’s intricacy, even a slight adjustment might create organisational problems. Changes in standards prolong cargo inspection time at ports before and after transportation. They also hike testing and certification expenses and stress that importer rejection will damage their brand identities and financial performance. Since 1974, the US has had an Automatic Food Detention Policy. Instead of scrutinising each cargo upon importation, the FDA will employ a “blacklist” to automatically detain items without physical examination based on the history of a product, producer, shipper, grower, importer, geographic region, or country [31].

5 Discussion Global trading organisations with different resources, firm sizes, and trading environments could encounter at least one FSMS performance constraint. This research utilises TOC to detect FSMS supply chain constraints. In fishery chains, five broad categories of FSMS implementation constraints are identified globally (Fig. 1).

Physical constraint

Supply chain relationships constraint

Behavioural constraint

Food safety managament system

Certificate and regulatory constraint

Managerial policy constraint

Fig. 1 Summary of constraints on the performance of FSMS

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The study findings further support previous studies that highlighted the weakness of physical resources in operating FSMS at small-scale stakeholders, leading to food safety risks in the global supply chain [23]. However, the physical constraint is more critical in the inputs supply sector, including small-scale farmers/fishers and agents, than in processing/exporting. Fish processing and exporting firms are likely to have managerial policy constraints reflected in FSMS obligations. According to this research, the goal for some top managers is passing an audit or collecting certificates; therefore, they lack commitments to FSMS to mitigate contamination risk. Moreover, due to the labour-intensive nature of fish processing, enterprises must deal with employee behaviour that can impede FSMS effectiveness. This research confirms previous findings that humans are the main FSMS implementation challenge [13, 18]. Inconsistent international certificates and rules constitute a barrier for enterprises adopting FSMS, which could undermine a developing country’s industry. The research finds that players in the global supply chain lack collaboration. Significantly, collaboration raises food safety control based on stakeholder support, reducing FSMS’s physical constraint. However, these practices are limited due to the complexity and globalisation of supply chains. Thanks to the “TOC tells us that we are doing something wrong” [21], businesses could have a constraint-based approach to recognise emergent problems in implementing FSMS. Focusing on the wrong constraints or not knowing they exist could affect FSMS performance and waste organisational resources, hampering businesses towards making more profit [19]. This study reveals that FSMS constraints emerge from managerial policy, fragile supply chain relationships, varying standards requirements, and inappropriate behaviours. Generally, non-physical limitations are more challenging to handle than physical ones. However, the organisation could profit if non-physical constraints are removed [15]. Remarkably, FSMSs do not emphasise managerial policy and human behaviour in global supply chains. However, prior studies have noted the relevance of FSMS aspects, such as microbiology, technology, legislation, scientific-based inspection, preventative strategy, and so forth [28], to build principles and techniques for achieving adequate food safety. Furthermore, managers could deploy TOC in adopting FSMS to handle emergent issues utilising its advanced problem-solving methodologies, such as the Five Focusing Steps and Thinking Processes (TP) [8]. Moreover, food supply chain stakeholders should not rely on training or standards. Contrastingly, firms should concentrate on food safety competencies and behaviours to strengthen their FSMS. Food safety is never enough, and the performance of the whole chain is as strong as the weakest link.

6 Concluding Remarks This paper applies TOC to understand better and highlight the limitations of FSMS in the global context of fisheries supply chains. This research makes three significant contributions. First, this is the first application of TOC as a constraint-based

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approach for food safety issues in global food supply chains, which could provide a novel approach to food safety management and multiple valuable constraint-based tools. Second, the research findings highlight the relevance of FSMS intangibles. This study helps stakeholders, especially exporters, recognise FSMS weaknesses. Stakeholders can swiftly detect and eliminate FSMS constraints to suit changing market demand and legislative regulations to ensure profitability. Nonetheless, this study has limitations that call for future research. First, this research may necessitate a larger sample to evaluate its external validity. Future studies may quantify the viability of using TOC to reduce food safety hazards in supply chains. Next, the findings are generalised using quantitative research. Second, the sampling strategy was designed to capture common patterns in developing countries where most fisheries are produced. To generalise the results, additional research is needed on diverse food supply chains, such as grains and vegetables, since each has distinct features and requires specialised FSMS. Third, this work has concentrated chiefly on identifying FSMS constraints, not feasible solutions.

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Vendor Certification Program and Performance: Mediating Role of Absorptive Capability in Agricultural Food Processing Firms Pradeepa Jayaratne, Hung Nguyen, Huy Truong, Tram Nguyen, Duy Tran, and Ha Lam Bich Abstract Many food processing organizations increasingly apply numerous vendor certification programs (VCP) to ensure quality and sustainable competitive advantage in the sector. However, the impact of such VCP on the performance of the agricultural food supply chain (AFSC) remains debatable among both professional and academic arenas due to numerous factors. This study identified absorptive capability (ABS) as complementary asset which can be used to leverage VCP and AFSC performance. Statistical analysis was carried out using the data collected from 85 organizations involved in the agricultural industry in Vietnam. This research shows that there is a strong relationship between a firm’s VCP and its ABS. Food processing firms first see unfavourable benefits from direct implementation of VCP, however, accumulative efforts with manufacturer’s ABS could be paid off. ABS plays a mediating role in realizing VCP in improving innovation, and operational and financial performance. These results play a significant role in the agricultural sector to improve their performance and to implement sustainable agricultural practices. This paper significantly adds value in expanding the literature in AFSC, especially using VCP and ABS on increasing performance in AFSC. It also recommends new avenues to explore research in areas such as identifying the conditions appropriate to use VCP in agricultural sector to improve the performance. Keywords Vendor certification program · Absorptive capability · Performance · Agriculture

P. Jayaratne (B) · H. Nguyen The Business School, RMIT Vietnam, Hanoi, Vietnam e-mail: [email protected] H. Truong · D. Tran The Business School, RMIT Vietnam, Ho Chi Minh, Vietnam T. Nguyen Ho Chi Minh City Open University, Ho Chi Minh, Vietnam H. L. Bich Faculty of Management Information Systems, HUTECH University, Ho Chi Minh, Vietnam © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_10

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1 Introduction Considering consumer pressure, food safety and quality have become serious issues in both developed and developing nations [1]. In one way, consumers demand higherquality, safer food due to rising household income, customer awareness, and technological advancements. On the other hand, this is exaggerated because it threatens their health and safety [1]. Because food is such an important part of everyone’s lives, end-to-end quality and safety improvements are required, particularly in the agricultural food supply chain (AFSC). Hence, stakeholders must improve food production and distribution processes to comply with these requirements. The introduction of the concept of sustainable development by the United Nations General Assembly in 2015 added to the pressure. This necessitates that businesses consider integrating economic, social, and environmental performance when improving business processes. To align with the current trends, the Vietnamese AFSC tries to achieve sustainable growth by becoming a demand-driven, quality-focused supply chain [2]. On the other hand, globalization and disbursement of production and consumption have increased supply chain (SC) complexity, putting additional strain on AFSC quality and safety. Delivering safer and higher-quality products to customers with full traceability from farm to fork is now a top priority in food supply chains [3]. However, food recalls worldwide have eroded trust in the AFSC. The 2008 Chinese milk scandal changed business practices and quality assurance. Salmonella Heidelberg contamination on turkey production by Cargill in Arkansas in 2011 is another example [4]. European horsemeat scandal in 2013 resulted due to poor SC relationships, lack of collaboration, and power imbalance between suppliers [5]. These issues demanded firms to introduce various vendor certification programs to enhance the quality and safety of products and services. According to research, VCP helps boost competitiveness because certifications are issued by relevant control bodies only after a comprehensive, systematic, and detailed investigation of relevant processes [6]. VCP forced organizations to be more innovative to increase vendo growth [6, 7], and to improve business performance directly and indirectly [7]. Hence, buyers use VCP as a criterion to select suppliers. Meanwhile, Martinez-Sanchez [8] claims that supply chain absorptive capability (ABS) assists firms to improve their operations and processes through the application of external knowledge. Many food processing companies also collaborate with suppliers to create new products to improve quality, lower costs, and gain first-mover advantages in the market. Considering all these facts, this study examines the relationships with ABS as a mediator for performance improvements. Moreover, there is a lack of studies in it pertaining to AFSC, hence we selected agricultural sector to fill this gap. Hence, this study examines the relationship between VCP, supply chain ABS, and performance of AFSC in Vietnam.

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2 Theoretical Background and Research Hypotheses 2.1 Vendor Certification Program (VCP) and Supply Chain Absorptive Capability (ABS) Vendor certifications are becoming more popular as a criterion for selecting highquality suppliers, as it particularly ensures the efficiency and effectiveness in production and related logistics operations. According to Candido et al. [9] certification implementation helps organizations to enhance their processes and increase knowledge and awareness of the techniques which can be part of the ABS of the firm. Research says that, even when such certifications are discontinued, it will not have a negative impact on performance, as the good practices have already become part of the company culture and are embedded in the processes, hence still promoting the absorptive capability. Absorptive Capability is identified as a critical capability that drives to enhance their knowledge, thereby improving operational performance and competitiveness. The ABS of a firm represents the ability to obtain information, knowledge about market demand behavior, and know-how techniques from external market, such as SC partners and apply them to improve product quality and cost efficiency. Best practices such as early involvement of suppliers in product innovation and implementing VCP yield access to suppliers’ modern technologies. Such initiatives allow firms to use their patents and know-how, thereby promoting the ABS of the firm. VCP enhance the buyer-supplier relationship and information sharing. Hence it is possible to argue that vendor certification has a positive impact on absorptive capability. Hypothesis 1. VCP has a positive relationship with SC absorptive capability.

2.2 Absorptive Capability and Performance From a knowledge-based view (KBV), it can be argued that complementary knowledge added by farmers (suppliers) can be utilized or blended with the buyer’s knowledge (manufacturers) to increase performance. SC partners often exchange information and knowledge about market demand, know-how and techniques to enhance final product quality and reduce costs. In supply chains, ABS provides exclusive opportunities such as “hidden” competitive advantage that cannot be easily imitated. A firm’s absorptive capability measures knowledge acquisition, knowledge assimilation, knowledge transformation, and knowledge exploitation. Previous studies suggest that ABS positively has a positive effect on innovation of the buying company. Sivakumar et al. [10] argue that knowledge-sharing routines between buyers and

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suppliers are essential for successful product innovation. Tsai [11] shows that absorptive capacity impacts the development of new product, hence ABS positively moderates operational performance. Furthermore, combination of farmers’ new knowledge and existing knowledge can be used as a strategic weapon to increase innovation, which helps to create entry barriers, thereby increase the competitive advantage. This is particularly important when suppliers provide specialized or unique resources to a buying firm that has only limited knowledge about these technologies. The social capital created through collaborative activities between suppliers and manufacturers. Absorptive capabilities with suppliers such as VCP on demand, inventories, and technological processes, can effectively influence the use of innovative developers such as R&D teams, eventually enhancing the teams’ innovation performance. Frequent and intensive VCP facilitate knowledge exchanges, which would help to overcome organizational conflict. The enterprises’ intend to utilize the farmers’ specialized knowledge in their know-how projects. This is a critical issue for developing countries such as Vietnam due to many reasons. Yang, Pham et al. [12] highlighted that due to lack of a deeper understanding of SC collaboration, especially farmers are struggling to integrate with other partners in their SC. Empowering farmers to actively participate in collaborative operations would increase the access to dynamic information and help to increase operational performance [12]. For emerging economies such as Vietnam, social capital is vital for increasing economic performance due to the lack of investments and high transaction costs of both the public and private sectors [13]. From the perspective of transaction cost economics, VCP can be identified as a relationship-specific investment which reduces uncertainty and potential conflicts and discourages efforts to seek a private advantage. Joining VCP helps firms in improving their capability to respond quickly in a dynamic environment while also reducing risk. Moreover, research says working collaboratively on product and process innovation, helps firms to reduce uncertainties and coordination cost, resulting in improved manufacturers’ performance. For example, the Cassava industry in Vietnam shows significant improvements when the Vietnam Cassava Research and Extension Network initiated collaborative developments with all stakeholders, including farmers and cassava processing factories. Kawano [14] highlighted that such joint collaborative approaches especially help small scale-farmers to increase their income by using innovative and sustainable farm management practices. Goyal [15] further stressed that poor interactions between farmers and food processors is a key challenge as it impact both operational and financial performance. Teece [16] argued that increasing access to high-quality information helps firms to increase their dynamic capabilities. Financial performance gained through influential knowledge and innovation would depend on the ABS of the competitors [17]. Teece [16] highlighted that firms need to continuously explore the dynamic nature of operations and processes, both internally and externally. This is because dynamic capabilities are significantly different from ordinary or routine capabilities. Dynamic capabilities drive the firms to achieve excellence in their operations and comparative advantage. Dynamic capabilities allow firms to develop subcapacities, including the ability to sense opportunities and threats, shape them and

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seize such opportunities to transform by restructuring and realigning the resources to face the changes successfully [16]. Accordingly, our study suggests that: Hypothesis 2. A supply chain absorptive capabilities exerts a direct positive effect on innovation performance (IP). Hypothesis 3. A supply chain absorptive capabilities exerts a direct positive effect on operational performance (OP). Hypothesis 4. A supply chain absorptive capabilities exerts a direct positive effect on financial performance (FP).

2.3 Vendor Certification and Performance Research shows that sharing information minimizes information distortion, dissymmetry and bullwhip-effect, hence positively impact on SC performance [16]. Implementing VCP significantly enhances information sharing, as it requires suppliers to provide all relevant information to the other stakeholders in the supply chain, thereby increasing the visibility and accessibility of the information related to production processes, product quality, and services they offered. Performance in agricultural production increased exponentially with better access to input and information, which enabled farmers to react to market incentives. Hence, VCP has a significant impact on organization performance because it collectively promotes quality management, innovation, and process improvements. Moreover, Mekhum [7] pointed out that VCP plays a significant role in reducing risk and uncertainty and improving SC collaboration, which eventually enhances performance. Implementing VCP helped manufacturing companies to improve their performance. Similarly, the agricultural context has the potential to enhance potential benefits such as improved farming resources allocation and utilization, improved process planning, lower inventory costs, increased customer service, and shorter lead times. Recently, Fu, Han [18] identified the importance of inter-organizational collaboration to enhance SC visibility and traceability in managing food contamination risks and improving the quality and safety of food products. Moreover, Fu, Han et al. [19] further stressed that vendor (farmer) collaboration and transparency are extremely challenging in AFSC as the vendors are mostly unstructured and small scale. However, due to the high demand on maintaining the quality of the food “from farm to fork”, ensuring the vendor quality on the food SC’s is becoming critical in the current competitive world. This has created more pressure on farmers to use sustainable practices in their operations. Research shows that VCP in AFSC helps farmers and food processors to gain more knowledge on sustainable practices and be more innovative to improve their operations. Moreover, other than sharing information related to short-term demand and inventory, sharing long-term information related to operations and growth strategies increasingly becomes vital [19]. Such a high degree of collaboration in sharing information requires continuous and intense communication among the firms. When buying firms willingly share their marketing and promotional plans and strategies with the suppliers, it enables them to

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Fig. 1 Research model

plan their operations and finances more efficiently, allowing them to reduce supply chain risks and market. Furthermore, sharing real-time point-of -sale data and inventory status provides opportunities for suppliers to increase performance by planning their replenishments and deliveries effectively. Hypothesis 5. VCP exerts a direct positive effect on innovation performance Hypothesis 6. VCP exerts a direct positive effect on Financial Performance Hypothesis 7. VCP exerts a direct positive effect on Operational performance (Fig. 1).

2.4 Mediating Roles of Absorptive Capability Between VCP and Performance According to research, supplier expertise and knowledge are strongly linked to innovation. Previously we discussed how supplier knowledge affects operational performance. On the other hand, the effect of supplier knowledge on performance significantly depends on the level of absorptive capability of the stakeholders involved in the process. In other words, it implies that supplier knowledge not only has a direct impact on performance, but also indirectly impact on process improvement, with absorptive capability acting as a mediator in between the two. The ability to effectively utilize a firm’s resources and absorptive capability indirectly supports firms to efficiently design (cheaper) and increase innovation in their products and services. This not only enhances the quality and flexibility but also optimizes the cost. Moreover, innovative ideas and high consumer demand for innovative products were considered as an opportunity, leading companies to improve the absorptive capability and to become more innovative. Theoretically, supplier expertise generates social capital among customers and innovators. Hence, investing in such relationships helps the innovators and developers, such as R&D teams, to understand the

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customers’ perceptions, expectations, preferences, demands, and experiences so that they can leverage this knowledge in their design process. However, such investments are non-recoverable in the short-term, hence firms try to leverage such knowledge to enhance their absorptive capability to increase their performance in the long-term. Hence, it can be argued that by deploying VCPs, firms are interested in long-term, sustainable relationships with other stakeholders and aim for long-term profitability. Therefore, it can be argued that ABS is a feasible means to reinforce the association because it creates more value for both parties by optimizing the quality, innovation, and cost. Based on the theory of Resource-Based View (RBV), sustainable performance and competitiveness can be increased by owning resources that are valuable, unique and hard to replace or imitate. Indeed, ABS is such a resource that is often hidden internally, and is part of the organization’s culture, and is linked to various components of the firm. ABS is such a resource that it is complicated to imitate. Therefore, firms that are competing especially in the mature market where they are already established, should invest more in ABS to offer higher customer values such as being agile, cheaper, and flexible. On the other hand, Oke and Kach [20] proved that ABS enhance internal operations in production, which in turn results in reducing the cost and improving performance effectively. Moreover, when firms have greater access to new knowledge and skills than competitors, they can optimize resource utilization on producing the same product more effectively and efficiently than competitors, thereby improving operational, financial and innovation performance. Such firms that become the first movers by applying new knowledge and developments in their operations can gain rare advantages that few competitors can reach in the sector. Thus, this study proposes that: Hypothesis 8. ABS strategy positively mediates the relationship between Vendor certification innovation performances (IP) Hypothesis 9. ABS strategy positively mediates the relationship between VCP and Financial Performance (FP) Hypothesis 10. ABS strategy positively mediates the relationship between VCP and Operational performance (OF).

3 Research Method and Validation The data collection instrument was distributed via email, and the research team followed up with the respondents by phone to increase the response rate. The response rate was around 12%, where 86 usable, completed questionnaires returned. When contacting the non-respondents, interestingly, we found that many firms, do not engage in external surveys as a matter of policy. Research says that a sample of 86 is enough to carry out a statistical analysis [21]. Hence, considering the other limitations too, data collection was concluded. Around 90% of the sample consisted of small and medium sized companies. Moreover, most respondents who participated in this study represent firms from vegetable, fruits, cassava, and meat industry. To

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avoid biases in the data collected, we included a combination of perceptual and objective indicators in our questionnaire. These indicators have been used and tested in previous studies in the manufacturing sector. Before starting statistical analysis, we first, examined the reliability of the sample. The Cronbach’s alpha ranged from 0.82 (Operations performance) to 0.94 (Absorptive capability), which exceeds 0.60, the threshold value, confirming the internal consistency. After testing the reliability, we analyzed data using confirmatory factor analysis (CFA). CFA analysis identified five unique constructs. Analysis shows that the χ2/df = 1.28. This indicates model fit, as the value is within the acceptable range of 1 to 3. Moreover, CFI (0.961), GFI (0.931) and RMSEA (0.057) values also suggests the model fit. As indicated in Table 1, Average Square Root Values (AVE) for all constructs are more than the correlations, which confirms the discriminant validity. Moreover, analysis shows that MSV and ASV values are also smaller than AVE [22]. Hence, it can be concluded that the sample is adequate and acceptable for this study. Table 1 Correlation matrix and construct validity measures Research constructs

CR

AVE

MSV

ASV

OP

Operational performance (OP)

0.82

0.55

0.38

0.15

0.740

Vendor certification program (VCP)

0.9

0.75

0.18

0.06

0.124

0.869

Absoptive capability (ABS)

0.89

0.68

0.18

0.14

0.354**

0.425**

0.823

Innovation performance (IP)

0.94

0.81

0.11

0.05

0.319**

0.087

0.33**

0.898

Financial performance (FP)

0.88

0.71

0.38

0.14

0.613**

0.214**

0.382**

0.029

VCP

ABS

IP

FP

0.842

Note: Diagonal elements in (bold-underlined) are the square root of the average variance extracted (AVE) between the constructs and their measures. Off diagonal elements are correlations between constructs. MSV–Max shared variance and ASV–Average shared variance. For discriminate validity, AVE should be greater than off-diagonal elements. ** Correlation is significant at 0.001

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4 Results and Discussion 4.1 Hypothesis Testing The hypotheses were tested using a structural equation model (SEM). As a first step, analysis was carried out to test the model fit. As illustrated in Table 2, the model has a good fit. Hence, continue with hypothesis testing. Table 2 shows the summary of the hypotheses test. Moreover, it also shows the direction and significance of the relationship of research constructs. Accordingly, a positive impact of VCP to SC absorptive capability (H1) was observed. Supply chain ABS has a positive impact on all performance measures, including operational (H3), financial (H4) and innovation performance (H2). These results prove substantial rewards on SC absorptive capability from VCP, which ultimately guide toward superior SC performances. Table 2 Results of the hypothesis testing Research contructs—Impact direction

Estimate

S.E.

Absorptive capaility ← vendor certification

0.364

0.095

Innovation perf. ← absorptive capaility

0.341

Operational perf. ← absorptive capaility Financial perf. ← absorptive capaility Innovation perf. ← vendor certification

P

Hypotheses

3.823

***

H1-accepted

0.116

2.925

0.003

H2-accepted

0.287

0.101

2.834

0.005

H3-accepted

0.383

0.133

2.884

0.004

H4-accepted

−0.048

0.100

−0.479

0.632

H5-rejected

0.059

0.113

0.514

0.605

H5-rejected

−0.264

0.791

H5-rejected

Financial perf. ← vendor certification Operational perf. ← vendor certification

−0.021

0.08

C.R.

χ2 = 275.83; df = 194; χ2/df = 1.42; CFI = 0.92; NFI = 0.91; RFI = 0.76; RMSEA = 0.071. Note S.E = Standard Errors; P = *** Correlation is significant at 0.001

Table 3 Results of the mediating effects

ABS as mediator for

Direct with mediator (ns)

Indirect

Mediation

Operational performance

0.001

0.08**

Full

Financial performance

0.119

0.07*

Full

Innovation performance

−0.082

0.09*

Full

P-value is in brackets; ** Correlation is significant at 0.01 * at 0.05

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4.2 Mediating Roles of Absorptive Capability Interestingly as illustrated in Table 2, this analysis failed to accept the direct relationship between VCP and performance, hence rejecting the hypothesis H5, H6 and H7. However, as shown in the proposed conceptual model, the mediating the effect of ABS between vendor certification and performance (innovation, operational and financial performance) was tested. Table 3 illustrates the outcomes of SEM analysis, which includes the direct effects with and without the mediator. The test of the indirect effects between VCP→ABS→OP and VCP→ABS→FP were all significant at 0.01 level. Interestingly, the direct effects (VCP→FP) were not significant (beta = 0.045, p = 0.398). Thus, the mediating effect of ABS is fully on Financial Performance, but partially on Costs.

5 Discussion and Implication The main objective of this study was to test the linkages between vendor certification programs, supply chain ABS and performance in agricultural context. Considering the knowledge-based view, it was upheld that supplier vendor certification programs are a source for the development of SC absorptive capability. Just exchanging information with SC partners does not increase the performance. Based on the results, we identified that SC managers need to focus on using knowledge created by their farmers and traders as they have good knowledge about the products. Moreover, because the market is unpredictable and dynamic, as are suppliers, technology and customers, rigorous and continuous communication is especially important to enrich SC’s absorptive capability, which reduces uncertainty and increases the innovativeness of products and services. The results obtained from this study confirm the importance of VCP in leveraging joint knowledge to enhance agricultural processing performance. With respect to the theoretical contribution, outcomes of this research are aligned with the existing theories. For example, existing research in other industries (manufacturing) indicates intensive communication as vital to enhancing knowledge, which confirms the findings of this research. Several other studies, like this one, show consistent findings, which indicates that product innovation is significantly expedited and enhanced when supplier knowledge is considered at preliminary stages. On the other hand, increased pressure on food security and transparency in the agricultural sector forces firm to become more innovative. Moreover, this study shows ABS as a collaborative effort of the focal enterprises in jointly capturing and applying knowledge in developing new products and services and improving processes. Previous research has shown that the VCP significantly increased the trust among SC partners, while also improving absorptive capability and inter-organization innovation. As a result, it opens up new opportunities for manufacturing firms to capitalize collaborative efforts gaining access to knowledge bases. ABS in supply chain is critical for closing the gap between organizations. Furthermore, this study shows that

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the supply chain ABS plays a significant role in enhancing financial performance. Existing research shows an alignment with these findings. For example, previous studies show a positive effect of supplier ABS on growth and market share. Over 70% of the enterprises included in this sample are involved in export-oriented operations, which tend to accumulate external knowledge from their external suppliers as many firms are integrated with foreign direct investments to increase the growth and market share.

6 Managerial Implications This research offers several managerial implications for practitioners. Previous research helped SC managers to gain insight into the importance of communication within supply chain. Our study further contributed to this concept. We found that having deep knowledge and expertise among managers on ways to integrate partners’ information and knowledge into collaborative innovation through joint development activities was helpful. First, based on the findings, it is recommended that managers in agricultural firms should focus on promoting active communication with farmers to enhance their understanding of best cultivation and harvesting practices and experience to promote continuous product innovation. As explained earlier, the knowledge attained from external stakeholders such as suppliers fosters innovation. Supply and demand information is the most critical source for joint collaborative planning, and it should be able to scale more quickly. Moreover, this study highlighted the importance of sharing information related to various events and decisions, which might affect other parties. Research has shown that by sharing their own promotion plans, enterprises that are part of the SC can avoid the considerable risk of failures, especially in releasing new products, and reduce inventory levels. Collaborative innovation brings together the strengths of each party, allowing the partners to develop new products and services using modern technologies effectively and efficiently. Additionally, utilizing the data and expertise acquired from outside stakeholders aids businesses in reducing the risk associated with innovative activities. Therefore, building and integrating both VCP and SC ABS with suppliers would enhance product innovation and development processes. Furthermore, it encouraged continuous quality improvements. All of these promotes innovation and operational excellence and financial performance.

7 Limitations and Future Research This study contributes to theory and practice in many ways, as explained in the previous section. However, there are still several limitations. Firstly, we only considered data from manufacturing firms in various agricultural industries. As a result, because the characteristics of other manufacturing industries vary significantly, the results may differ when generalized.Therefore, we recommend that future

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research include other industries in the sample to increase reliability and validity. Second, data sample includes only the top executives such as owners or directors, which may be a limitation. Even though the data collected was relevant, and valid for this study because many of the firms were small-scale organizations, collecting data using multiple respondents from each firm would have been more desirable and increased the value. Hence, it is recommended to use multiple respondents in future research.

References 1. Mishra, S., et al. (2018). Evaluating indicators for international manufacturing network under circular economy. Management Decision 2. Raghunathan, S. (2003). Impact of demand correlation on the value of and incentives for information sharing in a supply chain. European Journal of Operational Research, 146(3), 634–649. 3. Eastham, J., L. Sharples, and S. Ball, Food supply chain management. 2007: Taylor & Francis. 4. Neuman, W. (2011). Cargill recalls ground turkey linked to outbreak. [cited 2022 June 2]. 5. Madichie, N. O., & Yamoah, F. A. (2017). Revisiting the European horsemeat scandal: the role of power asymmetry in the food supply chain crisis. Thunderbird International Business Review, 59(6), 663–675. 6. Gopalakrishnan, S., & Zhang, H. (2019). The link between vendor certification and growth in IT outsourcing: A tale of two stories. International Journal of Production Research, 57(13), 4228–4243. 7. Mekhum, W. (2020). Does vendor certification impact business performance orientation in indonesia? the mediating role of vendor growth. International Journal of Innovation, Creativity and Change, 11(6). 8. Martinez-Sanchez, A., & Lahoz-Leo, F. (2018). Supply chain agility: A mediator for absorptive capacity. Baltic Journal of Management 9. Cândido, C. J., Coelho, L. M., & Peixinho, R. M. (2016). The financial impact of a withdrawn ISO 9001 certificate. International Journal of Operations & Production Management. 10. Sivakumar, K., & Roy, S. (2004). Knowledge redundancy in supply chains: A framework. Supply Chain Management: An International Journal. 11. Tsai, K.-H. (2009). Collaborative networks and product innovation performance: Toward a contingency perspective. Research policy, 38(5), 765–778. 12. Yang, Y., et al. (2021). Improving vegetable supply chain collaboration: A case study in Vietnam. Supply Chain Management: An International Journal. 13. Fafchamps, M., & Minten, B. (2001). Social capital and agricultural trade. American Journal of Agricultural Economics, 83(3), 680–685. 14. Kawano, K. (2000). The role of improved cassava cultivators in generating income for better farm management. In Cassava’s Potential in Asia in the 21st Century: Present Situation and Future Research and Development Needs. 15. Goyal, A. (2010). Information, direct access to farmers, and rural market performance in central India. American Economic Journal: Applied Economics, 2(3), 22–45. 16. Teece, D. J. (2007). Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic management journal, 28(13), 1319–1350. 17. Papazoglou, M. E., & Spanos, Y. E. (2021). Influential knowledge and financial performance: The role of time and rivals’ absorptive capacity. Technovation, 102, 102223. 18. Fu, S., Han, Z., & Huo, B. (2017). Relational enablers of information sharing: Evidence from Chinese food supply chains. Industrial Management & Data Systems, 117(5), 838–852.

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19. Fu, S., Z. Han, & Huo, B. (2017). Relational enablers of information sharing: Evidence from Chinese food supply chains. Industrial Management & Data Systems 20. Oke, A., & Kach, A. (2012). Linking sourcing and collaborative strategies to financial performance: The role of operational innovation. Journal of Purchasing and Supply Management, 18(1), 46–59. 21. Kotrlik, J., & Higgins, C. (2001). Organizational research: Determining appropriate sample size in survey research appropriate sample size in survey research. Information technology, learning, and performance journal, 19(1), 43. 22. Hair, J. F., et al. (2010). Multivariate data analysis: A global perspective (7). Upper Saddle River, Pearson.

Balancing Supply and Demand: The Impact of Consumer Anxiety and Social Contagion on Willingness to Pay More for Food During the COVID-19 Pandemic Luc Phan Tan, Thu-Hang Hoang, Majo George, and Hang Nguyen Thi My

Abstract This study aims to explore the effects of consumer anxiety and social contagion on willingness to pay more (WTPM) for food during instances of panic buying. Data were collected using a convenient sampling technique from consumers who made panic purchases for food during the COVID-19 pandemic. This study employed partial least squares structural equation modeling to evaluate the data of 408 consumers through survey method. The results show that the direct impacts of panic buying on WTPM were significant. In addition, consumer anxiety was positively associated with panic buying, but the relationship between consumers’ anxiety and WTPM was insignificant. Meanwhile, social contagion has a direct effect on both panic buying and willingness to pay more. This research is one of the earliest studies to explore the influence of psychological factors on panic buying and WTPM for food during the COVID-19 pandemic. Manufacturers and retailers can use the findings from this study to maintain stock availability during the COVID-19 pandemic and by governments as the basis for economic decisions. Keywords Panic buying · Willingness to pay more · Social contagion · Anxiety · COVID-19 pandemic

L. P. Tan Thu Dau Mot University, Binh Duong, Vietnam T.-H. Hoang University of Economics Ho Chi Minh City, Ho Chi Minh, Vietnam M. George School of Business & Management, RMIT University, Ho Chi Minh, Vietnam H. N. T. My (B) CIRTech Institute, HUTECH University, 475 Dien Bien Phu, Binh Thanh, Ho Chi Minh, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_11

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1 Introduction The new Coronavirus (COVID-19, SARS CoV-2) was declared a global pandemic in March 2020. Recently, the continued incidence of COVID-19 internationally has threatened food supplies and spread fears of future food shortages [1]. The COVID19 pandemic has dramatically affected people’s lives and changed many consumer behaviors. To ensure food security for their families, many consumers have rushed to buy food to hold in reserve. Panic buying is a socially relevant phenomenon. Stockpiling food can lead to food shortages and spur price increases. While panic buying may be temporary, it still greatly affects vulnerable people and those with low incomes. This can create instability in society. Panic buying and hoarding is a complex and vicious consumer behavior driven by a diverse set of motivations and psychological factors [2]. The potential effects of panic buying are manifold and can negatively impact supply chains and warehouses. The way the supply chain is affected by consumer panic buying is often explained as the “bullwhip effect”. Consumer demand increased so quickly that production and inventory could not meet. When manufacturers distribute products to retailers, inventory is often insufficient to meet their needs and is more likely to negatively affect the relationship between the manufacturer and the retailer. In addition, when the demand for a commodity increase, the demand for related jobs also increases. However, as the panic buying subsided, these workers became unnecessary, and companies had to lay off many employees after the supply chain regains sustainability. The fact that there is extraordinary demand to buy a commodity with limited supply can cause the price of that commodity to be pushed up. This requires consumers to be willing to pay more (WTPM) for the goods. In the context of the COVID-19 pandemic, panic buying and the uncontrolled increase of WTPM can have enormous consequences for the economic, political, and social situation. With the increase in global reports of panic buying and prices in the wake of the COVID-19 pandemic, it seems the time has come to study the phenomenon in more detail and address the many knowledge gaps in this field. Panic buying behavior stems from consumer anxiety and social contagion. Consumer anxiety during the COVID-19 pandemic is formed from negative experiences of disease epidemics in the past or from imagining uncertain future scenarios such as shortages of necessities, border blockades, unemployment, economic crisis, etc. As a result, they begin to worry, communicate with other like-minded people, and the anxiety grows and spreads throughout society at large. [3] suggest that social contagion can be generated by interpersonal interactions and resonances that increase negative effects. Individuals tend to copy each other’s feelings and behaviors, including buying behavior. This anxiety fuels the urge to buy goods in excess of needs and can lead to shortages, further spooking the community. Although there have been many previous studies on consumer behavior under normal circumstances, no such study exists on panic buying behavior. Panic buying inevitably causes customers to pay more to stock up on food [4]. In addition, there is little evidence in the context of the pandemic on the simultaneous impacts of consumer anxiety and behavioral contagion on panic

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buying behavior and WTPM. Studies on the relationship between panic buying and WTPM are still very limited. The purpose of this paper is to analyze the impact of consumer anxiety and social contagion on panic buying behavior and WTPM to stock up on food. This study is the first to investigate consumer panic buying and WTPM to stockpile food during the COVID-19 pandemic and to predict the direct and mediated effects of anxiety and social contagion on panic buying behavior and WTPM.

2 Literature Review 2.1 Willingness to Pay More Willingness to pay refers to the maximum amount a consumer is willing to pay for a product or service [5]. WTP is a measure of the value that consumers assign to a product or service they experience. The WTPM process is defined as consisting of two steps. The first includes deciding if they are willing to pay more for that product or service. Second, if they are willing to pay, they decide their WTPM threshold. If consumers have a higher WTPM level, they are more likely to demonstrate an active willingness to buy. If they have a low WTPM level, they will seek alternative purchases. In addition, when customers have an urgent need that the product or service can solve, they may be willing to pay a higher price than when their need is less urgent.

2.2 Panic Buying Panic buying is “the action of buying large quantities of a particular product or commodity due to sudden fears of a forthcoming shortage or price increase [6]. Panic buying is a negative behavior in society because it restricts or prevents vulnerable groups from accessing essential goods for life. Aware of the dangers of COVID19, consumers tend to seek out and stock up on food. This hoarding leads to panic buying behavior as each consumer scrambles to buy goods that exceed the real needs of themselves and their families. The fact that demand to buy a commodity far exceeds the limited supply can cause the price of that commodity to rise. This requires consumers to be willing to pay more for the goods. Therefore, the author proposes: Hypothesis H1. Panic buying positively affects consumers’ WTPM.

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2.3 Consumers’ Anxiety Anxiety is a feeling of insecurity and is an emotion characterized by an inner state of unease about an unexpected danger lying in the future [7]. Awareness of the dangers of COVID-19 can create fear and anxiety, leading consumers to seek out and stock up on products deemed critical to dealing with the pandemic. Consumer anxiety during the COVID-19 pandemic can come from negative experiences in the past or from imagining bad scenarios in the future. During the pandemic, purchases may be driven by psychological factors rather than actual needs, and anxiety drives purchases without due diligence. The more worried a consumer is about food shortages, the more likely they are to buy these things regardless of price and personal and family demands. Therefore, the author proposes the following hypothesis: Hypothesis H2: Consumer anxiety positively affects consumers’ WTPM. Hypothesis H3: Consumer anxiety positively affects panic buying.

2.4 Social Contagion Social contagion is the spread of ideas, attitudes, or behavioral patterns within a group of people through imitation or copying from others [7]. Social contagion includes behavioral contagion and emotional contagion. The unclear epidemic situation combined with peers buying and hoarding goods and being willing to pay higher prices to get the goods can stimulate unconscious buying behavior and the WTPM of a consumer. An individual’s impulsive buying behavior and WTPM can be copied from other individuals. They fear the prospect that the supply will not meet the demand and cause food shortages. For some people who have not yet intended to buy backup products, they will gradually accept and be convinced by the behavior of those around them. Therefore, the author proposes the following hypothesis: Hypothesis H4: Social contagion positively affects consumers’ WTPM. Hypothesis H5: Social contagion positively affects panic buying.

2.5 Panic Buying as a Mediator Several studies have shown that anxiety can stimulate a tendency to pay more for goods or services. When considered in the context of the pandemic, it is found that one of the factors affect panic buying and WTPM [8]. However, anxiety itself may not lead to WTPM in all conditions. While consumers may be nervous amid the pandemic, they may think the amount they have to pay to obtain goods is excessive. This situation can cause customers to perceive a lower value of goods and services, thus harming WTPM. The following hypothesis has been developed for this reason:

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H6a. Panic buying mediates the effect of consumer anxiety on WTPM. Although social contagion can increase WTPM in the long run, when consumers control panic and perceived price perception, social contagion may not directly affect WTPM in the medium and long term. Some studies have found a positive relationship between social contagion and panic buying; thus, social contagion is likely to spur panic buying behavior by consumers, making them more willing to pay. This outcome provides clues to the mediating role of panic buying between behavioral contagion and WTPM: H6b. Panic buying mediates the effect of social contagion on WTPM.

3 Research Methods 3.1 Measurement Development Consumer anxiety was measured using the three-item scale adopted by [7]. Panic buying was measured by seven items as [6]. Eight items to measure social contagion were used in accordance with [7]. Finally, WTPM was measured by a three-item scale as used by [5]. Overall, the study’s questionnaire encompassed 21 items, following the back-translation method. All measurement items used a five-point Likert scale, anchored from strongly disagree (1) to strongly agree (5). Before conducting the official survey, a pilot test was conducted with 50 consumers to confirm content validity.

3.2 Survey Administration Using a convenient sampling method, questionnaires were used to collect opinions directly from shoppers at Aeon shopping mall in Ho Chi Minh City, Vietnam. AEON Mall was chosen because it is one of the largest shopping mall chains in Vietnam. Individuals with shopping experiences during the COVID-19 pandemic were invited to participate in the survey. Using a filter question, the consumers selected to participate in the survey had all previously purchased food during the COVID-19 pandemic. To encourage participation in the survey, each respondent was randomly selected for a gift with a value between US$1 and US$5. The demographic information of the respondents is shown in Table 1.

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Table 1 Research sample information Frequency (percentage)

Categories Gender

Female Male

143 (35.05%)

Age

18–30

23 (5.63%)

30–40

114 (27.94%)

Job

265 (64.95%)

Over 40

271 (66.42%)

Homemaker

291 (71.32%)

Officer

67 (15.68%)

Worker

40 (9.80%)

Freelance

10 (2.45%)

Source Author

4 Research Results 4.1 Measurement Model Table 2 presents the results of the evaluation of the measurement model. The table depicts that Cronbach’s alpha, composite reliability, and factor loadings were above the critical value of 0.70. In addition, the average extracted variance (AVE) values of all constructs were higher than the minimum threshold of 0.50. These results indicated the reliability and validity of all constructs in the model [9]. Discriminant validity was tested using the following two tests (see Table 3). Firstly, the square roots of AVEs were larger than correlations among constructs that indicated the measures were discriminate [10]. Secondly, the author also used the Heterotrait-Monotrait ratio of correlations (HTMT) to test the discriminant of the structures; the results showed that there was no value lower or higher than the confidence interval CI0,9 or include the value 0 [11]. Thus, both convergent and discriminant validity was established for this measurement model. Table 2 Construct reliability and convergent validity Construct

Cronbach’s alpha

Average variance extracted (AVE)

Composite reliability (CR)

Panic buying

0.834

0.521

0.877

WTP

0.733

0.650

0.848

Consumers’ anxiety

0.769

0.683

0.866

Social contagion

0.861

0.526

0.895

Source Author

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Table 3 Correlation, square roots of AVE, and Heterotrait-Monotrait (HTMT) ratio values Constructs

Consumers’ anxiety

Panic buying

Social contagion

WTP

Consumers’ anxiety

0.826

0.636

0.326

0.128

Panic buying

0.550

0.722

0.358

0.241

Social contagion

0.303

0.276

0.726

0.283

WTP

0.103

0.180

0.235

0.806

Note Correlations and Heterotrait-Monotrait ratio are at the lower and upper of the diagonal, respectively; the square roots of AVE are highlighted in bold Source Author

4.2 Structural Model The R-square scores of the endogenous variables panic buying and WTPM were 0.316 and 0.071, respectively, values which were considered acceptable [9]. A ttest calculated from the bootstrapping process of 5,000 samples was applied to test the direct effects (Fig. 1 below). The results show that the direct impacts of panic buying on WTPM were significant. Thus, H1 was supported. In addition, consumers’ anxiety was positively associated with panic buying, but the relationship between consumers’ anxiety and WTPM was not significant; hence H3 was supported, while H2 was not supported. Social contagion was also positively associated with both panic buying and WTPM, supporting H4 and H5. According to the partial mediation model, consumers’ anxiety predicted panic buying (β = 0.513; p-value = 0.000) and panic buying predicted WTPM (β = 0.145; p-value = 0.019). These results show that although the indirect effect of consumers’ anxiety on WTPM through mediation of panic buying was 0.074 (β = 0.513 × 0.145; p-value < 0.05). The relationship between consumers’ anxiety and WTPM was not significant (β = −0.039; p-value = 0.530). These results demonstrate that panic buying fully mediates the effect of consumers’ anxiety on WTPM, thus supporting H6a. Social contagion predicted panic buying (β = 0.121; p < 0.034) and panic buying predicted WTPM (β = 0.145; p-value = 0.019). These results show that although the indirect effect of social contagion on WTPM through mediation of panic buying was 0.017 (β = 0.121 × 0.145; p-value = 0.133), the indirect effect was not significant; hence H6b was not supported.

5 Discussion In this study, initially, it was anticipated that panic buying increases WTPM. The results support this expectation. The results are also consistent with the findings of previous studies that demonstrated when an individual makes a panic buying purchase, they seem to lose their normal perception of perceived price and perceived value. And willingness to pay a higher price to achieve the purchase purpose [12].

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Fig. 1 Theoretical framework and analysis results

Second, regarding consumer anxiety, these findings suggest that negative emotions will lead to panic buying behavior in the long run. Findings from this study are consistent with previous research by [7, 13], who found a positive effect of consumer anxiety on panic buying behavior. In the context of the COVID-19 pandemic, panic buying can act as a coping mechanism to control fear and anxiety. Although most reactions to fear stem from awareness, in the context of uncertain situations, the response to fear can be driven by emotion. Having an adequate supply of food can provide temporary solace to relieve anxiety and regain control of emotions. This study provides interesting results showing that anxiety has no impact on WTPM. This shows that anxious consumers aren’t trying to achieve their purchase goals at all costs. Although consumers may be worried, they may think that the amount they have to pay to obtain goods is too high. This causes customers to perceive a lower value of goods and services, thus negatively affecting WTPM. The current results support the claim that panic buying fully mediates the effect of consumers’ anxiety on WTPM. This means that when consumers are anxious, they are more likely to make panic purchases and ultimately increase WTPM. This result shows that anxiety involves a process that ultimately develops into a WTPM. An anxious consumer would also not increase WTPM if they did not make panic purchases. Third, this study found that social contagion directly affects panic buying behavior and WTPM. The research results can be explained by an individual’s tendency to

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copy the behavior of others in times of uncertainty. In the context of this study, individuals make panic purchases after they see others engaging in this behavior and are also willing to pay a higher price to obtain the item. Social contagion can include the contagion of behaviors and emotions. This study demonstrates the role of social contagion in two behaviors, including panic buying and WTPM. The behavior will be more assertive if an individual sees more people behaving in this way. In addition, social contagion is used as a justification for panic buying behavior. Social contagion leaves an individual feeling unsatisfied if they fail to do so, encouraging multiple people to engage in the same behavior. With the limited supplies of food, panic buying behavior can drive prices up. While this may be temporary, it does not deter the consumer’s desire to acquire the food. As a result, some consumers are willing to pay a higher price to get the goods first. Social contagion causes others to compete to pay higher prices to limit future food shortage risks. The current results do not support the claim that panic buying mediates the effect of social contagion on the WTPM. However, the results imply that similar to panic buying behavior, WTPM is also influenced by social contagion. Seeing people around them willing to pay higher prices to buy food makes an individual more inclined to do the same without necessarily being in a panic buying frame of mind.

6 Research Contributions 6.1 Theoretical Contributions This research enriches the existing literature in several ways. First, this study is one of the earliest studies investigating the relationship between panic buying behavior and WTPM for food, especially in the context of the COVID-19 pandemic. Previous studies have focused only on panic buying behavior [14]; this study explores customer behavior more deeply. When shoppers panic about limited food supplies, they’re willing to pay more for food. Second, this study contributes to the literature on customer behavior by revealing a significant positive effect of social contagion on both panic buying and WTPM. Although scholars have previously suggested the importance of social contagion on consumer behaviors, including panic buying [15, 16], they have not paid adequate attention to exploring the effects of social contagion on WTPM. The novel findings of the current study posit that an individual’s behavior, including panic buying and WTPM, could be influenced by others through imitation of that behavior. Social factors such as the behavior of those around them play an essential role in shaping an individual’s buying behavior and propensity. In some uncertain situations, such as the COVID-19 pandemic, consumers see shopping for and hoarding goods like others to be a temporary solution to cope with the risk of future shortages and to satisfy their own psychological needs. Third, the results of this study show that in the context of a pandemic, emotional factors have a more substantial influence on panic buying behavior than cognitive factors. In addition,

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anxious consumers don’t try to achieve their purchase goals at all costs because they will then weigh up the money spent against the perceived value.

6.2 Practical Contributions The results of this study provide implications for stakeholders on consumer purchasing behavior during the COVID-19 pandemic. First, the pandemic can significantly increase the demand for epidemic prevention goods and products. Manufacturers need to plan to increase production output to meet the needs of society. Retailers need a robust inventory management plan to meet the needs of the market. In addition, retailers should also work closely with suppliers to maintain supplies of raw materials and ensure continuity of production. Second, the government also needs to facilitate safe isolation options to ensure working conditions for companies producing food as too many people buying food in excess of their actual needs can imbalance supply and demand. When consumer demand outstrips producer supply, the prices of products will skyrocket. As a result, it may lead to a pandemic crisis; thus, policymakers need to have strict regulations on the price of food and severely punish those who engage in price gouging. Third, mainstream media channels need to quickly deliver accurate news to reduce consumer panic and ostracize individuals or organizations that spread misleading information that causes panic. Finally, the government should issue official policies and up-to-date information on the status of the COVID-19 epidemic and urge people not to indulge in panic buying because of the COVID-19 pandemic.

7 Limitations and Directions for Future Research This study demonstrates the role of consumer anxiety and behavioral contagion on the panic buying behavior and WTPM. This study uses a convenient sampling method with a limited number of samples. Subsequent studies may expand the sample to subjects located in COVID-19 hotspots. In addition, this study was limited to understanding the factors influencing panic buying and WTPM including social contagion and anxiety. Further studies may incorporate other factors to clarify panic buying behavior further.

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References 1. Kerr, W. A. (2020). The COVID-19 pandemic and agriculture: Short-and long-run implications for international trade relations. Canadian Journal of Agricultural Economics/Revue canadienne d’agroeconomie, 68(2), 225–229. 2. Hall, M. C., et al. (2020). Beyond panic buying: Consumption displacement and COVID-19. Journal of Service Management. 3. Plé, L., & Demangeot, C. (2020). Social contagion of online and offline deviant behaviors and its value outcomes: The case of tourism ecosystems. Journal of Business Research, 117, 886–896. 4. Wang, H. H., & Na, H. (2020). Panic buying? Food hoarding during the pandemic period with city lockdown. Journal of Integrative Agriculture, 19(12), 2916–2925. 5. Demirgünescedil, B. K. (2015). Relative importance of perceived value, satisfaction and perceived risk on willingness to pay more. International Review of Management and Marketing, 5(4). 6. Lins, S., & Aquino, S. (2020). Development and initial psychometric properties of a panic buying scale during COVID-19 pandemic. Heliyon, 6(9), e04746. 7. Darrat, A. A., Darrat, M. A., & Amyx, D. (2016). How impulse buying influences compulsive buying: The central role of consumer anxiety and escapism. Journal of Retailing and Consumer Services, 31, 103–108. 8. Gyrd-Hansen, D., Halvorsen, P. A., & Kristiansen, I. S. (2008). Willingness-to-pay for a statistical life in the times of a pandemic. Health Economics, 17(1), 55–66. 9. Hair, J. F., et al. (2016). A primer on partial least squares structural equation modeling (PLSSEM). Sage publications 10. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. 11. Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. 12. Anselmsson, J., Bondesson, N. V., & Johansson, U. (2014). Brand image and customers’ willingness to pay a price premium for food brands. Journal of Product & Brand Management. 13. Paksoy, H. M., et al. (2020). The impact of anxiety caused by COVID-19 on consumer behaviour. Transnational Marketing Journal, 8(2), 243–270. 14. Gazali, H. M. (2020). The COVID-19 pandemic: Factors triggering panic buying behaviour among consumers in Malaysia. Labuan Bulletin of International Business and Finance (LBIBF), 84–95. 15. Kaur, A., & Malik, G. (2020). Understanding the psychology behind panic buying: A grounded theory approach. Global Business Review, 1–14. 16. Putri, A., et al. (2021). Antecedents of panic buying behavior during the COVID-19 pandemic. Management Science Letters, 11(6), 1821–1832.

Critical Success Factors for Food Safety Management and Their Impact on Business Performance: Empirical Evidence from China and Vietnam An Duong Thi Binh, Tram T. B. Nguyen, and Thu-Hang Hoang

Abstract This study focuses on identifying critical success factors (CSFs) and their impact on food safety management system (FSMS). The study aims to examine whether and how specific multi-level CSFs (organisational, market, and governance) influence FSMS. It then empirically investigates the extent FSMS influences firms through financial and operational performance. We adopted a quantitative approach by surveying 324 food firms in China and Vietnam. Web-administered questionnaires collected the data, processed by exploratory factor analysis and structural equation modelling. Our findings offer practical solutions for firms to strengthen management responsibility, develop practices of food safety governance, and collaborate with stakeholders in global supply chains. Keywords Critical success factors · Food safety management · FSMS · Business performance · China · Vietnam

1 Introduction Critical success factors (CSFs) are management areas that drive a firm’s success [1]. More research recognizes the CSF theory relevance to the food-safety control level [2–4]. Besides, a few studies detected CSFs in making decision, managing levels, and levelling the function of the food safety management system (FSMS). Kirezieva et al. [5] revealed the organisational level, the market or the supply chain structure, A. D. T. Binh · T. T. B. Nguyen (B) Faculty of Business Administration, Ho Chi Minh City Open University, Ho Chi Minh, Vietnam e-mail: [email protected] A. D. T. Binh e-mail: [email protected] T.-H. Hoang School of International Business–Marketing, University of Economics Ho Chi Minh City, Ho Chi Minh, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_12

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the macro environment. So far, most research has focused on confirming the presence of CSFs at one level. Furthermore, food safety regulations and standards have served as a blueprint for controlling management in international trading; where FSMS offers a framework of standardised requirements to assure stakeholders [6]. Although [7] affirmed HACCP alone could not control food safety, other activities still receive less attention [8]. Lastly, the business goal is to improve performance. Also, the expensive FSMS development and implementation result in no such thing as a free safe lunch [6, 9, 10]. Studies explore the quality management system and business performance relationship [2, 11, 12], but leave that between performance and FSMS. Besides, FSMS is expected to improve financial and operational angles [2], drawn into by few writers [13]. The study determines the CSFs presence and impact on FSMS and examines the FSMS correlation. Following sections cover literature review, hypotheses and model. In Sects. 3 and 4, the methodology addresses the objectives and conducts testing via factor and structural equation modelling analyses. Subsequently, we discuss findings and implications before enlightening the value and suggesting future research.

2 Research Framework and Hypotheses Development 2.1 Critical Success Factors Three fundamental levels namely organisation, market, and governance [2, 5, 12, 14, 15] are reviewed. Then, several hypotheses are proposed in this section. The organisational level Management responsibility should be emphasised since managers continually improve FSMS. It provides commitments to food safety [2, 5, 15–17], guarantees the resource and labour [2, 16], establishes the policy and culture as well as updates the system [18–20]. Furthermore, managers must specify duties and authority for engaged individuals, to assure the operation and maintenance [19]. Therefore, the tested hypothesis is: H1. Management responsibilities significantly influence the FSMS implementation. Although the organisation provides resources for FSMS [19] human resource is a challenge [2, 6, 16]. Employee traits represent attitudes, knowledge, and beliefs about food safety [21]. Human resource is reflected by employee involvement [2, 3, 16, 22], knowledge [2], actions [18–20], and training [2, 23, 24]. Moreover, facilities are vital in global chains and Western regulations. [2, 3, 5, 15–17] also considered infrastructure and environment essential. Thus, the hypotheses are proposed: H2. Human resources significantly influence the implementation of the FSMS. H3. Organisational resources significantly influence the implementation of FSMS.

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The market level Player relations could affect FSMS [5]. Collaboration demonstrated an advanced management [3, 14, 15, 25]. Goffin et al. [26] confirmed closer relationships among manufacturers and suppliers create advantages. Meanwhile, [3] defined a collaborative supply chain as the strong commitment, supplier relationships, information exchange degree. Despoudi et al. [27] confirmed farmers and cooperatives coordination generated the low level of losses and low-quality peaches in Greek. Generally, measuring collaboration utilise practices [14, 15, 28–30], which explore firm collaboration through the hypothesis: H4. Collaborative activities concerning food safety significantly influence FSMS. The monitoring migrates from developed to developing countries [31]. Consequently, producers depend on external financial support [6, 16, 32] from the government, NGOs, business networks, and instituitions [3, 10, 23, 33]. The hypothesis is proposed: H5. External support of food safety management significantly influences FSMS. Food safety governance [34] investigated food safety governance, agro-climatic conditions, and the public policy environment. Governance guarantees firms’ adherence due to enforcement [35]. There are direct and indirect governance [35]. Further, enforcement procedures can be undertaken randomly or regularly [5, 35]. Fines, recall, and market disqualification examplifies repressive measures, whereas informative forms include remedial steps and ‘naming and shaming’ [35]. While incentives promote compliance [3], information and education support companies [36]. Therefore, the hypothesis is proposed: H6. Food safety governances significantly influence the firms’ FSMS.

2.2 The Relationship Between FSMS and Business Performance FSMS is expected to deliver advantages, including increased sales [37], accessibility to the value chain [6, 9], reduced costs [38], higher stakeholder satisfaction [22, 39], and improved efficiency [40]. Koh et al. [41] measured performance using operational and financial dimensions. Kafetzopoulos and Gotzamani [2, 8] also assessed by finance, operation, and product/service quality. In this study, operational performance shows the continuing success of an organisation’s internal operations [11]; while financial performance covers the firm’s financial and market-related objectives [2]. With these rationales, hypotheses are developed: H7. FSMS implementation positively influences the firms’ operational performance. H8. FSMS implementation positively influences the firms’ financial performance.

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H9. Operational performance positively influences the firms’ financial performance.

2.3 FSMS Implementation FSMS is based on quality assurance and legal requirements [42]. However, critical components such as Prerequisite programs (PRPs) and HACCP principles have been derived from EU legislation (EC, 2002), the Code of Federal Regulation, Codex (CAC, 2009), and ISO 22000. PRPs are the vital settings and practices [19], emphasising a sanitary environment and quality reassurance [7]. HACCP is a science-based approach detecting and regulating hazards [43]. Altogether, the hypotheses are built in Fig. 1.

3 Research Methodology Our population covers food firms in Asia. First, China and Vietnam are the top fishery and agriculture exporters [44]. Second, global markets of surveyed firms are considerable. 324 food enterprises answered, including the fisheries (48.7%), agricultural (41%), drinks (6.8%), and others (3.5%). 71.6%, 17.1% and 11.3% are SMEs, large and micro firms respectively. Respondents are mainly quality control managers (29.7%) and supply chain managers (29.4%). Measuring variables are confined to the most representative indications. The fivepoint Likert scale questionnaire was analysed and refined by four academics, three leaders, and two consultants, followed by an online pilot survey of 50 food firms.

Fig. 1 The research model of CSFs and their relationship with business performance

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4 Data Analysis and Results 4.1 Construct Reliability and Validity EFA extracted the latent constructs for principal components analysis (PCA). The data suitability was assessed, showing coefficients ≥0.3. Six constructs were established after deleting “Support from non-governmental organisations” and “Support from financial institutions”. 69.605% of the variance is explained with Kaiser– Meyer–Olkin 0.872, Bartlett’s test of Sphericity 1685.232, p = 0.00, Eigenvalue > 1, MSA > 0.743, factor loadings >0.6. They were named after “Human resource”, “Management responsibility”, “Collaboration”, “FS governance”, “External support” and “Organisational resources” (Table 2). Similarly, the data suitability extracted the latent constructs. Two constructs were established after dropping “Company’s operational costs of previous year” due to impure measurement. 72.707% of the variance is explained with Kaiser–Meyer–Olkin = 0.901, Bartlett’s test of Sphericity = 1297.143, p = 0.00, Eigenvalue > 1, MSA > 0.815, factor loadings > 0.653. They were named after 11 items loaded on them. The reliability was confirmed through Cronbach’s alpha > 0.750. The inter-item correlations suggest a strong relationship (>0.6) [45] in Table 1. Tests determined the validity. The latent components demonstrated a good fit. Finally, variables passed construct, convergent, discriminant, and nomological validity tests.

4.2 Model Estimation A two-step SEM approach assesses the model [45, 46]. The data fit suggests the adequate support (Table 3). Further, hypotheses are supported except for H8 (Table 4). Table 1 Reliability checks for FSMS implementation FSMS implementation

Cronbach’s alpha

N of items

Item mean

Inter-Item correlations (Minimum–Maximum)

Mean of Item-Total Correlation

HACCP

0.940

7

3.566

0.638–0.744

0.693

Prerequisite programs (PRPs)

0.931

8

3.540

0.499–0.728

0.627

Other activities (OA)

0.955

11

3.521

0.549–0.747

0.658

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Table 2 Validity check Constructs

Items

Factor loading

Cronbach’s alpha

AVE a

CR b

(Corr)2 c

Human resources (HR)

HR1

0.810

0.842

0.570

0.841

0.373

0.859

0.612

0.862

0.476

0.834

0.627

0.834

0.370

0.820

0.500

0.799

0.440

0.796

0.541

0.824

0.476

0.762

0.521

0.762

0.335

0.948

0.860

0.949

0.489

0.925

0.676

0.926

0.537

0.894

0.631

0.895

0.537

Management responsibility (MR)

Organisational resources (OR)

Collaboration (C)

FS Governance (G)

Support (S)

FSMS implementation (PER) Operational performance (OP)

Financial performance (FIN)

HR2

0.775

HR3

0.695

HR4

0.736

MR1

0.844

MR2

0.845

MR3

0.731

MR4

0.698

OR1

0.777

OR2

0.751

OR3

0.844

C1

0.723

C2

0.773

C3

0.660

C4

0.666

G1

0.754

G2

0.762

G3

0.774

G4

0.645

S2

0.778

S3

0.788

S4

0.580

HACCP

0.944

POP

0.900

OA

0.938

OP1

0.824

OP2

0.875

OP3

0.785

OP4

0.796

OP5

0.854

OP6

0.794

FIN2

0.824

FIN3

0.815

FIN4

0.790

FIN5

0.777

FIN6

0.764

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Table 3 Model fit indices Stat

CSFs model

Implementation model

Measurement model

Structural model

Recommended value 0 ≤ χ 2 ≤ 2df

χ2

285

348.377

892.411

962.223

Df

194

254

558

571

p

0.000

0.000

0.000

0.000

p < 0.05

RMR

0.041

0.038

0.042

0.058

0.90

PNFI

0.766

0.922

0.782

0.792

>0.5

GFI

0.923

0.918

0.866

0.863

>0.5

Table 4 Structural model and hypotheses testing results Hypothesis

Standardised regression weights

SE

p

Test results

H1

0.187

0.080

0.006

Accept

H2

0.126

0.063

0.033

Accept

H3

0.147

0.066

0.013

Accept

H4

0.259

0.080

0.000

Accept

H5

0.209

0.102

0.000

Accept

H6

0.160

0.086

0.037

Accept

H7

0.714

0.051

0.000

Accept

H8

−0.103

0.066

0.142

Reject

H9

0.806

0.084

0.000

Accept

5 Discussion and Implication 5.1 Impact of CSFs on Operational Performance Internal and external CSFs contribute significantly to the operational performance. FS policies, personnel knowledge, and technology are the most essential indicators. According to the SEM, “Management responsibility” has the greatest influence on FSMS at the organisational level. Generally, the internal CSF discovery underlines their specialised roles in supply chains [2, 3, 6, 16]. Surprisingly, external variables impact more on FSMS, contradicting to [2] and aligning with [3, 47], and [12]. Our findings highlight a lacking system in emerging economies [48].

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5.2 The Link Between FSMS Implementation and Business Performance This is the first study to look at the direct relationship between FSMS and twodimensional performance. First, operational and financial performance is analysed. Second, FSMS adds value solely to operation. That operational performance is a predictor of financial performance backs up previous findings [2]. Nonetheless, an indirect relationship between FSMS and financial performance might be explained that a quality management system or only the HACCP evaluates FSMS [2, 49].

5.3 Theoretical and Managerial Implications This study has important implications in food businesses. First, it validates three levels that FSMS interacts with. Second, the study broadens CSF theory to various levels. Third, this is the first research to emphasise external influences. It also defines the conceptualisation of enterprises’ levels of collaboration, and support sources. Fourth, improving CSFs and FSMS will enhance operational and financial performance. The results provide vital implications to FSMS. The finding implies the prioritisation of the organisational factors. Moreover, companies should focus on cooperating with their stakeholders. Furthermore, the government, local authorities, and business groups should assist enterprises, particularly in emerging markets. This study also demonstrates the significance of enterprises’ proactive participation in the food chains.

6 Conclusion FSMS supports the CSF theory and improve operational and financial performance. Further, companies should strengthen management responsibility, develop practices and collaborate with their stakeholders. It also emphasises the roles of government, local authorities and corporate associations. Nonetheless, the quantitative analysis triggers a bias. Therefore, the results and suggestions are needed to develop further. Also, the sample of 324 firms in two countries is another limitation. Importantly, this research raised several gaps needed to be investigated to develop tools for assessment. Second, more CSFs should be recognised for safer chains. Third, investigation is required to explain the indirect relationship between FSMS and financial performance. Finally, the importance of collaborative supply chains should be researched.

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Green Certification Pressures and Sustainability Performance: From Environmental Symbolic Drivers to Process Innovation Hung Nguyen, George Onofrei, Mohammadreza Akbari, Ying Yang, and Frank Wiengarten Abstract Despite the expected positive performance, findings have often been mixed with debate on green certification adoptions under various pressures. A better understanding of these pressures and associated organizational environmental and process management systems can help firms deploy resources appropriately and effectively. Many of these pressures have been referred to as symbolic adoption rather than actual implementation. Using diffusion of innovation and signaling theories, this study argues that process innovation can take an important role in facilitating sustainable performance improvement in both actual and symbolic environmental adoptions. The empirical study from 680 manufacturers in ten different countries showed that pressures on green certification triggered process innovation and eventually enhance firms’ positioning and sustainable measures. However, pursuing green certification did not automatically guarantee all sustainable measures, especially in terms of business performance. This study found that process innovation can mediate this relationship to enhance business and environmental performances. Manufacturers may first see unfavorable benefits from direct implementation of green certification; however, accumulative efforts with process innovation could be paid off. Besides, the environ-

H. Nguyen (B) RMIT University, 521 Kim Ma, Ba Dinh, Hanoi, Vietnam e-mail: [email protected] G. Onofrei Atlantic Technological University: Letterkenny, Letterkenny, Ireland e-mail: [email protected] M. Akbari James Cook University: Townsville, Queensland, Australia e-mail: [email protected] Y. Yang Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne, UK e-mail: [email protected] F. Wiengarten ESADE, Av. Torre Blanca, 59 E-08172 Sant Cugat, Barcelona, Spain e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_13

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mental symbolic drivers also facilitated the process of innovation and environmental improvement but not business measures. These results enhance the development of organizational processes to accommodate resources for sustainable green supply chain strategies. Keywords Environmental management · Process innovation · Manufacturing

1 Introduction The green certification pressures (GCP) reflect requirements and expectations for a firm in the supply chain to comply with set standards for environmental management system (EMS) practices. Obtaining ISO 14001 certification can signal firms’ compliance with set standards for environmental performance such as reducing emissions and the use of resources and raw materials in their processes and saving energy [1, 2]. Indeed, many of these environmental certifications have symbolic nature [3, 4], rather than the actual implementation. Literature often debates these drivers as “not fully integrated process improvement” or “environmental symbolic adoptions” and the relationship to sustainable performance. Literature generally suggests that to be effective, firms must integrate their internal processes with overall environmental management activities [5] but could not clearly define how it takes in terms of organizational structure, aligning values and beliefs, pressures and resources. While environmental symbolic drivers (ESD) are needed to inform compliance with stakeholder pressures, they can also create linkages to manufacturing processes. This study proposes to review these relationships and performance implications in light of process innovation (PI) as a mediator. Process innovation (PI) enables manufacturing firms to seek and apply new environmental knowledge or new cleaner production techniques required to meet the standards. The basic argument of this study is that coordination of GCP pressures and process innovation is needed to achieve sustainable benefits including environmental and business measures. This study enhances literature in the area of environmental certification and adds a different contextual view of symbolic activities in environmental management literature.

2 Literature Review and Theoretical Framework 2.1 Green Certification Pressures (GCP), Process Innovation (PI), and Sustainable Performance (SP) GCP reflect usage of the environmental standards such as ISO14000 in the manufacturing realm by customers, suppliers, and competitors. In the manufacturing industry, green certification is a set of standards to integrate environmental aspects into the

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design and manufacture of products [6]. When manufacturers obtain ISO 14001 certification that indicates their processes for manufacturing can control emissions, energy, and resources [1]. PI enables manufacturing firms to capture and apply new knowledge or know-how to their existing production processes. The main premises of this concept suggests that GCP promotes communication and collaboration, which eventually influence operating processes both within and outside an organization [7]. In the environmental context, a successful PI helps firms develop capabilities in capturing and applying internal and external knowledge to yield superior results [8, 9]. Thus, process innovations as the way that an organization uses both knowledge and ideas of external partners can lead to better diffusions of green certification. This study argues that. H1a. GCP positively influences a firm’s process innovation. The implementation of EMS-certified processes can help firms improve market positioning in their industry and be perceived as environmental leaders, gaining first-mover advantages and improving their environmental image and reputation and sales volume [10]. Externally, the communication efforts to more environmentally conscious customers who are willing to pay a premium price for environmentally friendly products thus support the financial position of the firms. Research has found cost reductions (fewer defects and returns) associated with environmental accounting reporting systems [11]. This study suggests. Hypothesis 2b. Process innovation has a positive relationship with business performance. Competitive pressure plays a greater role to push manufacturers to adopt ecoinnovation, followed by a market-based instrument, technological capabilities, customer green demand, and environmental organization capabilities [12]. For example, in the automobile industry, car manufacturer Saab 2011–2012 leveraged supplier knowledge and resource mobilization to overcome the difficult period created by their rivals [13]. IKEA launched its supplier-based environmental policy to comply with the minimum demands of IKEA’s environmental adaptation of products and materials and the protection of forestry [14]. Those manufacturers, who can apply this knowledge and new processes first within the industry can gain rare values that not many competitors can reach. Thus, this study proposes that Hypothesis 2a. Process innovation has a positive relationship with environmental performance.

2.2 The Mediating Role of Process Innovation (PI) on GCP-SP Relationships Theoretically, green certifications practices with external partners not only create pressures but also foster social capital between external stakeholders like customers, suppliers, competitors, and innovation developers. Many manufacturing firms might consider these opportunities as a push to modify their process innovations to the

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corresponding customer’s green requirements [15] as these actions can guarantee a business’s evolvement. Therefore, scanning and learning new eco-processes, and quickly adopting and applying cleaner processes could be a possible eco-solution. In return, manufacturing firms might benefit from these process improvements such as quality improvements (e.g., environmentally friendly products, fewer scraps) and cost reductions (e.g., recycled materials) and eventually customers’ acceptance. On the other hand, the manufacturers tend to extend these relationships for the sake of return on their investment, thus enhancing the relationships further. Indeed, the external pressures from customers and competitors on green certification foster process improvement with a primary focus on efficiency and quality compliance. Competitive pressure and competitive intelligence play a greater role to push manufacturers to adopt eco-innovation [12, 16]. On one hand, green innovation occurs as the utilization of innovative ways to diminish negative environmental impacts caused by production processes [17]. Sharing green expectations and environmental collaboration would help manufacturers improve business operations such as market expectation and customer demand. These green activities can lead to more efficient operations (fewer defects, returns), better quality products (e.g., environmental innovation) at a lower cost and more flexibility. These will, in turn, lead to better business performance and higher market share, by the manufacturer. Thus, this study proposes H3a. The positive relationship between GCP and environmental performance will be stronger when firms pursue a higher level of process innovation. H3b. The positive relationship between GCP and business performance will be stronger when firms develop a higher level of process innovation.

2.3 The Moderating Role of Environmental Symbolic Drivers (ESD) Literature defines the symbolic adoption of ISO14001 as the use of certification as a way to legitimize environmental practice by looking for support from the institutional environment but without necessarily implying real environmental commitment [18, 19]. This current study argues that a symbolic environmental adoption in association with green certification pressures might have some effects on process innovation, depending on environmental maturity stages and level of industrial development. In this eco-innovation direction, this study expects a moderating role of symbolic action on real process changes carried on the certification programs. Indeed, the symbolic nature of EMS adoption may reflect the maturity levels when a firm adopts certification standards like ISO14001. Initially, companies primarily are concerned with compliance with environmental legislation without extra costs on penalties. This stage drives companies to focus on the end of the process, for example, the use of filters in chimneys and the correct disposal of waste [20]. Many examples in the literature show that the usage of reverse logistics could be an end to environmental

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Fig. 1 Research model

cycling processes, which could send a signal to the external stakeholders about environmental commitment. Therefore, at this stage, environmental management does not fully take place within the existing production process. In the preventive stage [20], manufacturers can avoid or minimize environmental impacts by focusing on adjusting their processes to pursue eco-efficiency. The extent to which manufacturers search for new green ideas, and the diffusion and generation of appropriate environmental solutions could help companies increase environmental and business performance [9]. Process innovation enables manufacturing firms to engage in ecoprocess innovation, keep up with the latest process developments, and place high importance on process reviews and updates [21]. As a result, managers must seek the fit between firms’ eco-innovation strategies and the conditions of its environment as the external environment can moderate the relationship between firms’ innovation strategies and their performance. Thus, this study hypothesizes that: Hypothesis H4: Symbolic environmental drivers strengthen the positive relationship between green certification pressures and process innovation. Figure 1 presents the research model with hypotheses.

3 Research Methods The sample consists of firms from countries like Australia, China, Croatia, Korea, Ireland, Hungary, Poland, Taiwan, the USA, and Vietnam. The sample included different manufacturing industries such as foods and beverages, fashions and textiles, chemicals, furniture, semiconductor, electrical machinery, precision instrument, metal products, automotive, and other industries. The majority of manufacturing firms in this study has exposed to global export (95%) and import (96%) that support the global sample in this current study. The model includes a process innovation construct, which focuses on firms’ ability to learn more about new processes than

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Table 1 Correlation matrix and construct validity measures Research measurements

CR

AVE

MSV

ASV

[1]

[2]

[3]

[4]

[1] Business performance

0.87

0.69

0.12

0.05

0.829

[2] Green cert. pressures

0.95

0.75

0.18

0.07

0.041

0.866

[3] Process innovation

0.88

0.56

0.30

0.13

0.340**

0.234**

0.747

[4] Environmental performance

0.92

0.73

0.17

0.08

0.064

0.298**

0.324**

0.857

[5] Environ. symbolic driver

0.78

0.54

0.12

0.06

0.024

0.577**

0.196**

0.318**

[5]

0.734

Note For discriminate validity, AVE (diagonal values in bold) should be greater than off-diagonal elements. ** Correlation is significant at 0.01

their competitors, to be updated with the latest processes, and to be first within the industry in applying new processes. The concept of GCP represents green certification pressures and expectations [22]. Performance measures were based on the cost, delivery, quality, revenues, profit, and market share [23]. Responses were measured on a seven-point Likert scale, where a value of 1 indicates “to no extent” or “unimportant” and a value of 7 indicates “completely” or “very important”. Appendix 1 presents means, standard deviations, loadings, and p-values for each of the research constructs. The results from the reliability test were good with Cronbach’s alphas ranging well above the threshold of 0.60. We conducted the CFA to confirm the exploratory factor analysis. The fit indexes in CFA confirm a moderate fit of the model to the dataset. The discriminant validity test in Table First showed that all of the AVE square root values were higher than the correlations (Table 1).

4 Results and Discussions 4.1 Research Impacts The results supported H1, H1a, and H1b, indicating positive impacts of GCP on process innovation and performance measures (Table 2).

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Table 2 Results of the hypothesis testing Estimate

Research impacts Environ symbolic drivers → Environ Perf

0.180

S.E 0.055

C.R

P

3.705

***

Green certification practices → Environ Perf

0.142

0.049

2.840

0.005

Process innovation → Environ Perf

0.250

0.058

5.734

***

Environ, symbols drivers → Financial Perf

−0.025

0.036

−0.499

Green certification practices → Financial Perf

0.618

−0.030

0.032

−0.579

Process innovation → Financial Perf

0.349

0.040

7.175

***

Environ symbolic drivers → procees innovation

0.071

0.044

1.373

0.17

Green certification practices → procees innovation

0.205

0.039

3.860

***

0.563

Note χ2 = 313.66; df = 170; χ2/df = 1.85; CFI = 0.984; NFI = 0.954; IFI =0.934; RMSEA = 0.032 *** Correlation is significant at 0.001

Table 3 Results of the mediating role of process innovation Mediator-process innovation

Direct with mediator

Indirect

Mediation

GCP to business perf

−0.025(0.557)

0.072(0.006)

Full

GCP to environ perf

0.142(0.013)

0.051(0.009)

Partial

Note p-values are in brackets

4.2 Mediating Roles of Process Innovation We used boot-trapping procedures to test for the mediation effects of PI. Table 3 indicated the outcomes, which show the direct effects with and without a mediator. The mediating role of GCP→Process Innovation→Environmental performance was significant (β = 0.051, p = 0.009), also the direct impact was significant, thus H2a was partially supported. However, the mediating effect of process innovation (H2b) was fully supported in Business Performance (β = 0.072, p = 0.006).

4.3 Moderating Effects by Environmental Symbolic Driver (ESD) We tested the moderating effects by capturing the product terms from the two variables using their standardized scores. Process innovation, the dependent variable, can be developed as the interaction of the predictors (GCP x ESD). The findings indicate that ESD enhances further the positive relationship between GCP and Pprocess innovation (β = 0.171 at p < 0.01). Thus, H4 is fully supported. To ensure no problem of multicollinearity in the dataset, we presented the variance inflation factor (VIF) within the range [1.06 and 2.45]. Table 4 highlights the moderating results.

164 Table 4 Moderating effects from environmental symbolic drivers

H. Nguyen et al. Research constructs

Process innovation Model 1

Model 2

Size

0.074*

0.071*

Green certification pressures (GCP)

0.257***

0.214***

Environ symbolic drivers (ESD)

0.091**

GCO x ESD

0.171**

R

0.274

0.287

Adjusted R2

0.072

0.076

F Change

24.67***

13.65***

*** Correlation is significant at 0.001; ** Correlation is significant at 0.01; * Correlation is significant at 0.1

5 Conclusion While many of these studies confirmed the impact of the adoption of such an ISO14001, however, they often find mixed results on environmental and business measures like profit and cost savings [24]. This study found that external pressures created a more intensive involvement in green pressures which can lead to firms’ bottom-line results, directly and indirectly. The empirical findings (Tables 2 and 4) confirmed that GCP such as green certification pressures leads to the firm’s sustainable performances, including environmental and business measures in different ways. This study further expanded these discussions by clearly defining PI and examining the relationship between performance implications of process innovation when adapting to external environmental certification. Results in Tables 2 and 4 confirmed that GCP significantly influences the manufacturer’s process innovation. Importantly, the mediating analysis (see Table 3) suggested that PI can act as an absorber system to transform green activities from an external environment (like customers/suppliers/competitors) into process changes. For operations managers, these results suggest keeping up with the latest process development and learning the newest processes from external partners. IKEA learned from its customers and carefully watched competitors for the implementation of environmental certifications [25]. The findings from this study enhance our understanding of this “environmental dilemma” by examining several stages of the adoption. Initially, manufacturers might have adopted EMS as a symbolic certificate to enhance the company’s image and to guarantee the contract. The empirical findings confirmed that environmental symbolic drivers (ESD) such as a firm’s image and meeting environmental regulations can be beneficial for environmental and business performances. Since both GCP and ESD positively affect the PI, the interaction effect between GCP and ESD can be

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beneficial for performance improvements. The results in Table 4 suggest that manufacturers should align their process improvements such as documenting expert opinions on green pressures and communicating external green expectations for process improvements. Speed in applying newly learned green knowledge from external partners can help manufacturers stay ahead of other competitors due to process-hidden pressures that are hard to mimic or copy. Several studies have suggested different taxonomies or stages in achieving competitiveness through aligning process innovation and environmental pressures [9, 10]. The findings in this study support the environmental management maturity model suggested by several authors in GSCM and performances [20].

6 Limitations This study has some limitations. Firstly, the conceptual framework could incorporate social sustainability practices and corporate reputation measures. Secondly, other performance measures could be added, to investigate the impact on other dimensions such as innovation. Third, a longitudinal study could provide further insights into how companies handle various environmental pressures. Future studies could emphasize how social capital created from customers’ environmental collaboration can send a signal for green readiness and the interaction with process changes to gain more “substantive” improvements.

Appendix 1: Constructs Means and Reliability Measures

Research construct measures

Estimate

Mean

SD

Green certification pressures (Cronbach alpha = 0.743) Competitors green vendor certification

0.847

3.54

1.65

Suppliers expectation of green vendor certification program

0.897

3.58

1.68

Current usages of green vendor certification to certify main suppliers’ operations

0.912

3.56

1.78

Customers expectation of green vendor certification in suppliers facilities

0.892

3.72

1.70

Customers use green vendor certification 0.841 to certify this plant’s quality and

3.61

1.71

Competitors adopted similar green vendor certification

3.43

1.65

0.799

(continued)

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(continued) Research construct measures

Estimate

Mean

SD

Process innovation (Cronbach alpha = 0.872) We like to lear about the newest processes 0.797

4.58

1.31

Quickly to deploy new processes

0.846

4.26

1.44

The latest process developments updates

0.825

4.66

1.32

The importance of process innovation to this facility

0.682

4.95

1.34

Frequence of deploym ent of radically different processes

0.728

4.16

1.44

No difficulty in introducing radically different processes in the industry

0.568

4.28

1.33

Environmental performance (Cronbach alpha = 0.901) Emissions control in our facility

0.873

4.36

1.65

Waste reduction in our facility

0.918

4.67

1.52

Water useage in our facilities

0.841

4.46

1.55

Reduction of energy use in our facilities

0.791

4.61

1.54

Environ symbolic driver (Cronbach alpha = 0.804) To improve the plant’s regulatory compliance

0.851

4.37

1.73

To improve the plant’s image

0.728

4.39

1.77

Business Performance (Cronbach alpha = 0.818) Market share

0.754

4.22

1.14

Profitability

0.865

4.12

1.34

Total sales

0.864

4.32

1.51

Note χ2 = 464.21; df = 251; χ2/df = 1.85; CFI = 0.978; NFI = 0.945; RMSEA = 0.037

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Heterogeneity in Consumers Willingness to Pay for Home Delivery Service in Grocery Retailing Thang Vinh Doan and Thong Le Pham

Abstract It is likely to be impossible to design a one-size-fit-all home delivery service due to the heterogeneity in consumers’ requirements. In this paper, we employ a mixed logit model in willingness to pay (WTP) space to estimate the distributions of consumers’ WTP for attributes of home delivery service in the context of grocery retailing. A choice-based experiment was conducted for data collection. The empirical results indicate that consumers’ WTP for the delivery mode and the timeliness of delivery are extremely heterogeneous, but consumers are quite homogenous in WTP for faster and more convenient time-based delivery service. Findings from the study propose that customization strategy is the one that grocery retailers and logistics service providers may use to deal with heterogeneity in consumers preferences and WTP for attributes of home delivery when designing and pricing the added-value service. Keywords Heterogeneity · Willingness to pay · Home delivery · Choice experiment · Model in WTP space

1 Introduction The strong development of the online grocery retail sector in recent years has created an urgent need for home delivery services. Since the consumer needs for this service are quite heterogeneous [1, 2], it is likely to be impossible to design a service that meets the requirements of all consumers. Therefore, customization can be a strategy that grocery retailers and logistics service providers can pursue to meet the diverse needs of consumers. For example, Bach Hoa Xanh, a grocery and convenience store chain in Vietnam, allows consumers to customize the level of delivery service attributes which tailor individual unique needs. T. V. Doan (B) An Giang University, VNU-HCM, 18 Ung Van Khiem Street, Long Xuyen, An Giang, Vietnam e-mail: [email protected] T. L. Pham School of Economics, Can Tho University, 3/2 Street, Can Tho City, Vietnam © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_14

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However, this strategy can increase retailers’ logistics costs. For example, offering convenient delivery time frame options can make delivery scheduling more costly. Boyer et al. [3] documented that delivery costs within a 3-hour time window are 45% higher than delivery costs in the case of an unspecified time window. Therefore, to recover the delivery cost, retailers may directly charge an extra fee to the retail price and offer free delivery service. This strategy is called consolidated pricing strategy. Another strategy is called partitioned pricing strategy, i.e. setting retail prices low and charging extra shipping surcharges. Morwitz et al. [4] argued that the lower selling price of a product, plus a delivery fee, is more attractive to consumers than adding a delivery fee to the base price of the product and free shipping because consumers are anchored to the base price of the product and failure to calculate the total cost. However, high delivery fees can be one of the reasons why consumers abandon online shopping [5, 6]. From the consumer’s perspective, some scholars argue that the willingness to pay for delivery service for grocery purchases is quite limited or that consumers prefer free delivery options [7, 8]. However, many empirical evidences show that there are segments of consumers looking for convenience, speed or flexible delivery options, and they are willing to make trade-off between delivery fee and the convenience [2, 9–11]. Brusch and Stüber [12] indicated that consumer expectations for delivery service vary across segments. Likewise, Gawor and Hoberg [10] and Nguyen et al. [2] also found the same results that different consumer groups have different evaluations of home delivery service attributes in the context of online electronics retailing market (e.g. digital camera). The question is, how much should grocery retailers charge for home delivery service in order to attract consumers? This study is conducted to estimate consumers’ willingness to pay for attributes of home delivery service when they shop groceries online. Findings from the present study provide the basis for grocery retailers to design and price home delivery services. The mixed logit model (MLM) is a popular tool for analyzing discrete choice data because it allows to account for heterogeneity in consumer preferences. There are two methods to estimate the distribution of WTP. The first one is to assume a distribution for the estimated coefficient of an attribute and derive the WTP for that attribute as the ratio of the estimated coefficient of that attribute to the price attribute coefficient. Such a procedure is called the model in preference space [13]. However, the distribution of WTP estimated from this method can be heavily skewed and the variance of the distribution is overestimated [13, 14]. This makes the WTP estimates unrealistic [13]. The second method refers to directly making assumption about the distribution of WTP. Train and Weeks [13] called this a model in WTP space. Many studies have shown that the WTP estimated from this method is more realistic [13, 14]. Therefore, this study applies the MLM in WTP space to estimate consumers’ willingness to pay for the attributes of last mile delivery in the grocery retail context. The paper is organized into 4 sections. Section 2 describes the choice experiments and the model applied in this research. In Sect. 3, we present the results and discuss the main findings of the study. Conclusion and implication are presented in Sect. 4.

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2 Choice Experiments and Model Estimation 2.1 Choice Experiments and Sample To estimate consumers’ willingness to pay for attributes of home delivery service, we use stated-preference data from a discrete choice experiment. The choice experiment is based on McFadden [15] Random Utility Theory (RUT). The RUT suggests that there is a latent element called “Utility” that exists in the human mind that is not observed by researchers [16]. Then, the utility is derived from attributes of goods and services that the consumers consume. In a choice experiment, each alternative of goods and services is described by the attributes and attribute levels that make up that alternative. Participants will be offered different alternatives at the same time, and they are assumed to choose the alternative that maximizes utility [17]. This data collection method has the following advantages. First, researchers can measure the relative importance of alternative-specific attributes and the trade-offs between the attributes [18]. Second, the researcher can estimate alternatives that do not yet exist or differ from the existing one [19]. Third, participants may also be offered a “no-choice” or a “status quo” option so that they can decline the options offered. This makes the choice model closer to reality. Based on a review of extant studies combined with a focus group discussion with consumers, several important attributes of the delivery services that influence consumer behavior are identified. They include delivery mode, delivery speed, delivery time windows (or time slots), timeliness of delivery service, delivery fee, ability to track order status. Regarding the delivery modes, they are divided into two main categories: home delivery and click-and-collect (e.g. buy online pick-up instore) [1, 8, 20]. From a retailer’s perspective, the choice of delivery mode depends on factors such as country characteristics, retailer characteristics and consumer behavior [7, 21]. From the consumer’s perspective, click-and-collect mode will be less convenient than home delivery because consumers have to spend time and effort to move to the pick-up points (e.g. stores). Delivery speed is the time range between the time when a consumer places an order and the time when (s)he receives it while the delivery time window is the time a consumer has to be at home when a shipper arrives. From a retailer’s perspective, delivery speed and delivery costs have a positive relationship [7]. From a consumer perspective, this is lead time. It can be the same day, two days or more. In addition, consumers’ perception of the convenience of delivery time frame options has a positive relationship with the willingness to pay for shipping fee and level of service usage [11]. Delivery timeliness refers to whether an order is delivered on-time. Late delivery may reduce shopping frequency, decrease order value, and increase consumer anxiety [22], and reduce consumer satisfaction [23]. Caspersen and Navrud [24] indicated that the delay of delivery has a negative relationship with utility and consumer preferences for last-mile delivery. Meanwhile, on-time delivery has a positive relationship with consumer satisfaction, repurchase intention, and word-of-mouth behavior [25–27].

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Order status tracking is a tool that helps consumers to track order processing and delivery progress of retailers and logistics service providers, thereby helping consumers reduce uncertainty in the shopping experience [1]. Rao et al. [25] evidenced that the performance of delivery service quality (such as on-time delivery, being able to track order status) has a positive relationship with consumer satisfaction ´ and repurchase intention. Kawa and Swiatowiec-Szczepa´ nska [28] also showed that the ability to track order status has a strong influence on consumer satisfaction. Table 1 details the attributes and levels of each attribute of home delivery service. In this study, the survey is divided into 2 parts. The first part is to collect data on consumers’ shopping habits as well as their demographic characteristics. Sampled respondents are those who are in charge of grocery purchasing of households in urban areas. In the second part, participants are asked to join in an experiment in that they are supposed to order some grocery items for their daily consumption with order value lower than VND 300,000 via an online grocery retailer’s website. We choose the order value threshold of VND 300,000 because many grocery retailers in Vietnam have been offering consumer free delivery service when the order value is above the threshold. Each participant will face 4 choice sets. Each choice situation will include 2 alternatives for home delivery and a “status quo” option in order for respondents to opt out of home delivery. Table 2 is an example of a choice set faced by a respondent. A choice-based experiment was conducted from January to March 2022 for data collection. There were 178 consumers participating in the experiment, of whom 61% were female. Table 1 Attributes and attribute levels of delivery service

Attributes Delivery mode Delivery speed

Levels

Code

Variable names Home

Home delivery

1

Pick-up in-store

0

Same day delivery

1

Speed

Order today, 0 deliver tomorrow Time slots

Yes

1

No

0

On-time delivery 80% rates 90% 100% Delivery fee

Order tracking

80

Slot Ontime

90 100

Free

0

VND 10,000

10,000

VND 20,000

20,000

VND 30,000

30,000

Yes

1

No

0

Fee

Track

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Table 2 Example of a choice set Attribute

Option 1

Option 2

Option 3

Home delivery

Home delivery

Home delivery

I would pick up my order in-store

Delivery speed

Same day

Tomorrow

Time slots

Yes

Yes

On-time delivery

80%

90%

Delivery fee

VND 10,000

VND 30,000

Order tracking

Yes

No

□

□

□

Assume you ordered some grocery items via an online grocery retailer’s website. The retailer offers you the above delivery options. Which one would you choose? You can buy the items online and either have your order delivered to home or pick up your order in-store

2.2 Model Estimation Mixed logit model (MLM) is increasingly used to estimate WTP distribution for attributes of a good or service. The model relaxes the assumption of independence of irrelevant alternatives, i.e., allowing correlation between choices of an individual [29]. In addition, the MLM also accounts for preference heterogeneity among individuals by allowing one or some parameters in the model to have random distribution [29]. According to the RUT, the utility of the consumer n derived from choosing alternative j in choice situation t is specified as. Un jt = αn pn jt + βn xn jt + εn jt /σn

(1)

where αn and βn are the coefficients on the price attribute (p) i.e., shipping fee, and the other non-price attributes (x) of a delivery service for each consumer (n); 1njt is an error term; Qn is the scale parameter for consumer n. To estimate the WTP distribution for the non-price attributes of the delivery service, one standard procedure is to assume a convenient distribution for the coefficients and derive WTP distribution for an attribute as the ratio of the attribute coefficient to the shipping fee coefficient. This is called the model in preference space [13]. However, the distribution of WTP estimated by this approach can be heavily skewed and have large variance [13, 14]. This leads to unrealistic WTP values [13]. Train and Weeks [13] proposed an alternative approach which directly specifies the distribution of WTP. The authors called this a model in WTP space. Previous research showed that this method provides a more reasonable and realistic WTP [13, 14]. Hence, this study applies the MLM in WTP space to estimate consumers’ WTP for attributes of the delivery service in the context of online grocery retailing. According to Train and Weeks [13], the model in WTP space is specified as:

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( ) Un jt = αn pn jt + γn xn jt + εn jt

(2)

where γn = βn / αn is the WTP for the attributes of the delivery service. The parameters in the model can be estimated by maximum likelihood estimation.

3 Results and Discussion Table 3 presents the estimated results of the mixed logit model in WTP space. As mentioned above, the estimated coefficients of the attributes in this model are the mean and standard deviation (SD) of the willingness to pay for those attributes. In general, the estimated coefficients on most non-price attributes are positive and statistically significant. This means that the average consumer is willing to pay an extra amount for the attributes of a delivery service. Specifically, an average consumer is willing to pay about VND11,700 for home delivery instead of in-store pickup. The standard deviation of the “home” variable is quite large and statistically significant. This implies that consumers’ WTP is very heterogeneous. Figure 1 shows that, at the 5th percentile, the WTP for the home delivery attribute is only VND4,878 while the WTP at the 75th percentile is over VND16,000. Likewise, an average consumer is willing to pay VND7,150 (= 71.5*100%) to be 100% guaranteed on-time delivery. The standard deviation of the “ontime” variable is close to the mean and is statistically significant. This shows that the consumer WTP for this attribute is also very heterogeneous. Figure 1 indicates that, while up to 25% Table 3 Mixed logit model in WTP space Variable Mean

SD

Coef.

Std. Err.

z

P>z

[[95% Conf. Interval]

Home

11,742.3

1,410.8

8.320

0.000

8,977.1

14,507.4

Speed

9,968.0

1,772.4

5.620

0.000

6,494.1

13,441.9

Slot

4,781.4

1,305.6

3.660

0.000

2,222.4

7,340.4

Ontime

71.5

28.3

2.530

0.012

16.0

127.0

Track

1,016.7

1,337.3

0.760

0.447

−1,604.5

3,637.8

Fee

−8.9

0.1

−83.870

0.000

−9.1

−8.7

Home

7,604.7

2,319.6

3.280

0.001

3,058.3

12,151.1

Speed

−12.9

1,809.7

−0.010

0.994

−3,559.8

3,534.0

Slot

62.3

1,603.1

0.040

0.969

−3,079.7

3,204.2

Ontime

−70.2

18.2

−3.870

0.000

−105.8

−34.6

Track

−2,526.6

2,268.6

−1.110

0.265

−6,973.0

1,919.7

Fee

0.3

0.2

1.360

0.175

−0.1

0.7

Notes Number of observation = 2,136; Wald chi2(6) = 7,481; Prob > chi2 = 0.000; SD: Standard Deviation

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Fig. 1 Willingness to pay (WTP) distribution for attributes of delivery service

of consumers are willing to pay at least VND10,000 to ensure 100% of their orders are delivered on time, about 5% of consumers are unwilling to pay extra to improve the punctuality of the delivery service. It is possible that this group of customers views this attribute as a “must” standard that grocery retailers and logistics service providers have to meet once they have made a commitment. Meanwhile, the estimated results reveal that WTP for the delivery speed attribute is quite homogeneous among consumers. Specifically, almost all consumers are willing to pay around VND10,000 for same-day delivery of their order rather than waiting for next-day delivery. This result supports the conclusion of Daugherty et al. [9] who said that customers are increasingly impatient and they want to receive goods as quickly as possible. Similarly, there is no difference in WTP of individual consumers for convenient delivery time window options. In general, almost all consumers are willing to pay around VND4,781 to choose a delivery time slot that is convenient for them, e.g., out of office hours or in the evening. While Merkert et al. [30] showed that Australian customers’ willingness to pay extra for delivery time frame options is not significant, the research results of Milioti et al. [31] supported this finding, demonstrating that consumers in Greece are willing to pay an additional 1.16 euros for a convenient delivery time window. We argue that choosing a delivery time window helps consumers to reduce waiting time at home, thereby creating a more positive experience in online shopping. This also helps grocery retailers to increase the success rate of delivery at the first time. One surprising result is that most consumers are not willing to pay extra amount to be able to track order status. Previous research reported that the ability to track order status has a strong influence on customer satisfaction [28]. From a customer perspective, because consumers may perceive an uncertainty during the lead time

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[32], the ability to track order status helps her/him to reduce uncertainty in the shopping experience [1]. We argue that, in Vietnamese grocery retailing context, because consumers can easily buy alternative grocery products in a walkable nearby store, the perceived uncertainty may be low. Moreover, many online grocery retailers in Vietnam now allow their consumers to track order processing status. Consequently, this can be seen as a value-created factor and a “must have” attribute that online grocery retailers and logistics service providers have to offer in e-commerce. There´ fore, consistent with Kawa and Swiatowiec-Szczepa´ nska [28], we recommend that retailers who want to succeed in e-commerce need to inform consumers about order processing status in a continuous and timely manner even if they are unwilling to pay for this attribute. In conclusion, the empirical results of this study indicate that consumers’ WTP for the delivery mode and the timeliness of delivery are extremely heterogeneous, but consumers are quite homogenous in WTP for faster and more convenient timebased delivery service. The findings of the study propose that customization strategy is the one that grocery retailers and logistics service providers may use to deal with heterogeneity in consumers preferences for attributes of home delivery when designing and pricing the added-value service.

4 Conclusions Delivery service is one of the essential services in online retailing. However, providing this service to consumers incurs costs for grocery retailers. Therefore, the retailers must decide the balance between consumer service level and cost efficiency. In this study, we conducted an experiment on consumer choice of delivery service. The research results provide some interesting insights into consumer behavior towards home delivery services. We find that almost all consumers are willing to pay extra for home delivery; However, consumers’ WTP for home delivery is highly heterogeneous. Consumers also show heterogeneity in their willingness to pay to ensure that their orders are delivered on time. It seems that some consumers see this as a mandatory standard to be met by the delivery service providers and they are unwilling to pay to improve this aspect, while many other consumers see delivery delay as an inherent phenomena, therefore they are willing to pay to improve this aspect. Meanwhile, the research results show that the WTP of almost all consumers for the delivery speed and the delivery time window is quite homogenous. Another interesting finding is that, it seems consumers see order status tracking as a default part of online grocery retailers’ websites. Therefore, consumers are not willing to pay extra for this attribute. With the above findings, this study contributes in the following aspects. Firstly, the research results add a new parameter to the strategic planning framework for last mile logistics. In addition to attributes such as delivery mode, delivery speed, time windows, and return management, retailers may charge a fee to ensure orders

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are delivered on time when designing last-mile delivery service. Second, because consumers are heterogeneous in WTP for home delivery, the study results imply that a multi-option or customization delivery strategy is the one that grocery retailers and logistics service providers may use to deal with heterogeneity in consumers’ WTP for attributes of home delivery when designing and pricing the service. Last but not least, this could be the first study in the last-mile delivery context which applies the MLM in WTP space. This contributes to the thin body of literature in the application of the MLM in WTP space albeit its advantages. Besides the above mentioned contributions, this study has the following limitations. First, this study considers only the delivery of groceries in general. In practice, groceries are diverse and the delivery of the products often require different storage conditions (e.g., dry goods, fresh, and frozen food). Therefore, future studies may consider consumer requirements and WTP for delivery service for different types of groceries. In addition, this study only considers WTP for home delivery. Further studies may consider consumers’ WTP for delivery services at centralized pick-up points (e.g., drive through stations or lockers) because these delivery modes, albeit its advantages, are quite strange to Vietnamese consumers.

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Supply Chain Risks Management and Customer Service: A Moderating Role of Mitigation Strategies Irfan Ulhaq, Rajkishore Nayak, Kevin Nguyen, and Huy Truong Quang

Abstract Over the years, supply chain risks management (SCRM) research has made noteworthy progress. However, there is little research on the management of supply chain risks and measures to reduce their impact, especially in developing nations. The purpose of this study is therefore to investigate the SCRM in the Vietnamese textile industry. Quantitative survey methods were used to collect data, and structural equation modelling (SEM) validated the relationships between model constructs. It was discovered that operational and demand risk positively affect customer service. Moreover, prevention strategies increased the effectiveness of customer service, while prevention and control strategies reduced the impact of operational and demand risk on customer service. The results of this study could support organisations in the supply chain in deciding on strategies to improve the delivery of goods and services. Keywords Supply chain risk management · Garment industries · Mitigation strategies · Covid-19 · Vietnam

1 Introduction Risks and disruptions are undeniable in global supply chain management. Covid-19, one of the recent risks not only caused disturbances in the movement of goods and goods, but also showed ways to deal with such risks [1]. Over the years, supply chain management has brought several effective strategies to overcome the risks, which has helped agencies achieve their business goals. However, the ripple effect of Covid-19 disruptions extends to the global level, causing disintegration between the supply chain networks [2]. Organizations must develop more proactive approaches to overcoming supply chain risks such as Covid-19 disruptions. I. Ulhaq (B) · I. Ulhaq (B) · K. Nguyen · H. T. Quang The Business School, RMIT University, Ho Chi Minh, Vietnam e-mail: [email protected] R. Nayak School of Communication & Design, RMIT University, Ho Chi Minh, Vietnam © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_15

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SCRM is no longer a new trend. Some studies about the SCRM have taken a traction over the years [2, 3]. Recent researchers have classified supply chain risks as internal and external risks, while others have broadened such classification by bringing external environmental factors [2–4]. Consequently, organizations need better risk management strategies to stay competitive in the post-pandemic arena and hastily changing environment. While several models have been developed for supply chain risks and the role of several types of mitigation models have been benchmarked, these models need further extensions to post-pandemic scenario [3]. This research aims at investigating the SCRM in the Vietnamese garment industries. A risk management model was developed by covering the aspect of supply chain risks considering supply chain mitigation strategies. Qualitative survey was conducted, and Structural Equation Modeling (SEM) was employed to evaluate the impact of different type of risks on customer service. The moderating role of mitigation strategies and their impact on customer service was studied. The results of this study can help companies in the garment supply chain to identify different strategies to ensure better delivery of goods and services.

2 Literature Review 2.1 Supply Chain Risks Supply chain risks can be described as “a chance of danger, damage, loss, injury or any other undesired consequences during supply chain operations” [5]. Although the firms did everything well, risks are still evident, and risks can exist in all firms. The occurrence of risks can affect the performance of organisations due to supply chain disruptions. Risks can be associated with factors such as natural disasters, terrorism, economic crisis, and political instability. As a whole supply chain risks can be related to environmental factors, economic factors, political factors, and ethical factors. Supply chain risks are complex patterns of multiple risks linked together which influence the outcomes if unmanaged properly [6]. Truong Quang and Hara [7] indicated the occurrence of a specific risk can cause a domino effect of various type of risks. Over the years, the risks associated with global supply chains with their impact and management have been widely explored [8]. However, extant literature relating to supply chain risks are either qualitative research or case studies [3, 5]. Hence this study attempts to investigate supply chain risks and mitigation strategies on the customer service perspective. Supply chain risks are closely linked to the performance of organizations working in the supply chain environment [6]. Multiple dimensions of supply chain performance are discussed in previous studies including financial and non-financial performances [9]. SCRM strategies refer to the approaches taken by the organisations to identify, evaluate, and mitigate risks. As internal and external factors can disrupt supply chain activities, it is essential to understand the fundamental differences

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between them. An effective SCRM strategy requires to assess the degree of dangers associated with the risks [10, 11]. Naturally, examining a given risk will provide insights from a single perspective, however, the overall picture of different risks in the supply chain is related to several considerations [3], as the risks do not occur independently, but simultaneously [7, 12]. In several instances risks occur simultaneously, hence, without appropriate contingency plans, the risks may have extremely devastating consequences on the business. Using empirical investigation, [12] demonstrated that an occurrence of a risk can causes a domino effect along the supply chain leading to the emergence of supply, manufacturing, and demand risks. Chopra and Sodhi [13] argued that the strategies to mitigate risks must be consider since some strategies may lack viability.

3 Research Hypothesis Paulsson [14] laments the fact that supply networks are vulnerable to a “circle of dangers” as a result of market insecurity. In the context of global supply chain management, the two risk dimensions known as (a) operational or static and (b) dynamic make such links more unexpected and significant [10]. Supply risk: Supply risks are connected with supplier-related unfavorable “upstream” occurrences that impair the focus company’s ability to satisfy customer demand (quantity and quality) [12]. Supplier risks include insolvency, price volatility, and insufficient raw material quantity [7, 8]. As a consequence of these dangers, there is a loss of confidence in the market owing to poor goods and the perishability of product supply. According to studies, low-quality goods might have a negative impact on consumer safety. As a result of strained collaborations, corporations recalling and replacing supplier components may lose market share. As a result, the following hypotheses are proposed: H1a: Supply risk has a negative impact on customer service. Operational risk: Internal disruptions that impair a firm’s production and service capability of quality, punctuality, and profitability are examples of operational risk in supply chains [12]. Design changes and equipment modifications, manufacturing mishaps, and labour disagreements are all examples of operational risks [8, 11]. The difficulties in establishing appropriate order amounts [8]. Failures in operational risk management have a worldwide impact on customer service costs and profitability. As a result, we propose the following hypotheses: H1b: Operational risk has a negative impact on customer service. Demand Risk: The distribution of outcomes attributable to unfavorable “downstream” events in the outflow that impact the possibility of consumers placing orders with the focal company, and/or variation in the volume and assortment required by the customer [3] is referred to as demand risk. This sort of risk originates from the unpredictability of random client needs, such as demand fluctuation, intense market competitiveness, customer bankruptcy, and customer fragmentation [8, 12]. Businesses will be unable to estimate real market demand due to demand risks. The

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results include expensive shortages, obsolescence, poor capacity use, and disruptive operations [12]. Cisco Systems Inc., for example, claimed $2.5 billion in inventory write-offs in 2001 as a result of poor demand forecasts and inflexible procurement contracts amongst downstream supply chain partners. As a result, the following possibilities are proposed: H1c: Demand risk has a negative impact on customer service. Risk mitigation: Mitigation is the deliberate reduction of risk to a controllable level. Despite the fact that the kind of risk effects risk mitigation and management in supply networks, the literature categorises supply chain risk reduction as strategies, tactics, facilitators, or factors [15]. Prevention approaches, according to [6], include pre-planned operations and strategic investment even in the absence of supply chain risk. Some preventive tactics include collaboration and partnerships, acquisition of multiple suppliers, information exchange, visibility, proactiveness, responsiveness, and collaborative planning [6, 16–18]. As a result, the following hypotheses are proposed: H2a: Supply chain prevention measures improve customer service. Organizations often use control approaches to manage supply chain issues caused by unplanned disruptions [19]. Various research on mitigation postponements have shown that cooperation, flexible contracts, and order change flexibility are effective approaches to mitigate the consequences of uncertainty and unanticipated surges in demand [16, 19]. Control strategies may help firms reduce operational risks during day-to-day operations [17]. According to the literature [16], redundancy, cooperation for innovation, and having a backup source may all assist to decrease the effect of inconsistent requests. As a result, the following hypotheses are proposed: H2b: supply chain control strategies positively moderate customer service.

4 Research Methodology This study examined the impact of various supply chain risks on customer service, with mitigation strategies acting as a moderator. A quantitative survey design technique was used, with 396 organisations involved in the manufacturing or trading of garments/accessories and/or trimmings, the manufacturing or trading of sewing supplies, and the transportation and logistics providers for the garment industries. The survey population was drawn from Vietnam’s North, Central, and South provinces. First, structured interviews with academicians were conducted using the Qsort method to examine the unidimensionality, validity, and reliability of research hypotheses. After that, industry respondents were asked to assess the severity of their supply chain risks and how these risks had affected their supply chain over the past five years. All interviewees were asked to assess the risks on a 5-point Likert scale ranging from 1 (strongly disagreeing) to 5 (strongly agreeing), with 2 indicating disagree, 3 indicating neutral and 4 indicating agree. SPSS 23 was used for descriptive statistics and exploratory factor analysis (EFA) to generate profile data and identify observed variables for designs. SEM was used to determine the

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185

link between designs and to analyses the simultaneous impact of various hazards on customer service. Confirmation factor analysis (CFA) was also used to assess the goodness of the model.

5 Results 5.1 EFA & CFA Results This study applied the traditional psychometric methods to assess the assessment scales’ validity and credibility [20]. EFA was employed to check the causal links between the components because the researchers had no prior evidence to determine the study constructs. As a consequence, after removing several variables that did not meet the threshold levels, the following supply chain risk concepts were identified. For instance, Eigen value 1.123, Variance extracted 60.379%, and Factor loadings of all items on the relevant concepts greater than 0.689. All of the foregoing demonstrate that the measurement scales meet the criterion for convergent and discriminant validity. Furthermore, all EFA values (item-total correlations) are greater than 0.619, with Cronbach’s Alpha = 0.889, indicating the constructs’ reliability.

6 Main Findings The result for the Parameter Estimates of Regression Models for customer service was illustrated in Table 1. The following conclusions can be drawn on the basis of the findings. • Operational risk and demand risk has a positive impact on customer service. • Prevent strategies increase the effectiveness of customer service. • Prevent and control strategies reduce the impact of operational risk and demand risk on customer service. A considerable increase in variance explained (R2) when the interaction term is introduced would indicate the presence of a moderated connection [21]. The proposed Model confirms our premise that preventive and control measures regulate some linkages between demand risk, operational risk, and customer service. The model shows that incorporating the interaction terms adds 6% to the variance. Since methodological studies on moderator research agree that significant interrelations are difficult to detect and factor loadings are limited [22]. This result makes a significant contribution. Once the presence of four main interactions between supply chain risk sources and customer service has been established, it is necessary to plot the interactions and analyse their particular aspect using the procedure as described by [21, 23] (Fig. 1).

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Table 1 Parameter estimates of regression models-customer service

Dependent variable: Customer service

Parameters

Model 1

Model 2

Model 3

Supply risk

−0.03

−0.001

−0.008

Operational risk

0.373*** 0.367*** 0.365***

Demand risks

0.177*** 0.148**

0.14**

Prevent

0.145**

0.095*

Control

0.029

0.045

Main effects

Moderators

Interaction effects Supply risk × Prevent

0.01

Demand risk × Prevent

−0.107*

Supply risk × Control

−0.022

Demand risk × Control

−0.16***

Operational risk × Control

0.162***

Operational risk × Prevent

0.109**

Model summon R2

0.17

0.18

0.24

*** Significant less than the 0.01 level ** Significant less than the 0.05 level * Significant less than the 0.10 level

INTERNAL RISKS - Deman risk (DR) - Operational risks (OR) - Supply risks (SR)

CUSTOMER SERVICE

H1 a-c

H2 a-b

SUPPLY CHAIN MITIGATION STRATEGIES ( control – prevent strategies)

Fig. 1 The conceptual framework for research

Figure 2 indicates that as demand risk moves from low to high, customer service increases if the firm has pursued prevent strategies on a low level. Meanwhile, if implementing high level of prevent strategies, when demand risk increases, customer service has no change. Hence, prevention strategies can assist businesses in reducing the negative effects of demand risk. This lends (somewhat) support to the hypothesis put forth by H2A, according to which demand risk is moderated by customer service.

Supply Chain Risks Management and Customer Service: A Moderating …

5

187

Low Prevent

4.5

High Prevent

4 CS

3.5 3 2.5 2 1.5 1 Low DR

High DR

Fig. 2 Interaction between demand risk and prevent strategies

5 4.5 4 CS

3.5

Low Control High Control

3 2.5 2 1.5 1 Low DR

High DR

Fig. 3 Interaction between demand risk and control strategies

In order to diminish demand risk in customer service, organisations should adopt prevent strategies at the low level only. Figure 3 shows that when demand risk goes from low to high, customer service improves if a firm employed low-level control measures. Meanwhile, if high-level control measures are used, while demand risk grows, customer service remains unchanged. As a result, control measures can assist organisations in mitigating the negative effects of demand risk. This provides (limited) support for H2b, which controls the link between demand risk and customer service. To reduce demand risk in customer service, organisations should implement low-level control measures. Figure 4 shows that when operational risk grows from low to high, customer service improves if a firm implemented control measures at both the low and high levels of control. As a result, control measures can assist organisations in mitigating the negative repercussions of operational risk. This supports H2b’s claim that control moderates the relationship between operational risk and customer service.

I. Ulhaq et al.

CS

188

5 4.5 4 3.5 3 2.5 2 1.5 1

Low Control High Control

Low OR

High OR

CS

Fig. 4 Interaction between operational risk and control strategies

5 4.5 4 3.5 3 2.5 2 1.5 1

Low Prevent High Prevent

Low OR

High OR

Fig. 5 Interaction between operational risk and prevent strategies

Figure 5 indicates that as operational risk moves from low to high, customer service increases if the firm has pursued prevent strategies on a low as well as high level. Hence, prevent strategies can help firms to lessen negative consequences from operational risk. This provides support for H2a that prevent strategies moderates the relationship between operational risk and customer service.

7 Discussions The findings show that the hypothesised model can account for up to 24% of customer service. Because customer service is influenced by external factors like politics, the economy, and the environment in addition to risks, it is a sizeable percentage. In other words, fashion retailers who can effectively manage these supply chain risks and implement appropriate mitigation strategies can gain sustainable competitive advantages under external factors. This study’s key managerial implication is that implementing preventative and corrective measures to reduce risk will improve

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customer service through the supply chain. The risks found in textile organizations are delays in product delivery, changes in consumer demand and product shortages are predictable risks. Managers can use control strategies, such as building up their inventory, to ward off potential losses, or preventive measures, such as gathering and analysing data on past product shortages to forecast future ones. Unpredictable risks in the supply chain, like calamities, catastrophic equipment failures, and terrorist attacks, are more difficult to prevent because they frequently go unnoticed. Control strategies like duplication are used to deal with such situations. This necessitates maintaining multiple versions of the suppliers’ products. For instance, managers might construct backup production lines, procure various suppliers for different parts, or keep extra supplies of all their products and parts on hand. Duplication can be costly if not properly planned, but it does protect against disruptions.

8 Conclusions This study investigated the moderating role of mitigation strategies and its impact on customer service. It was found that the operational and demand risk positively impact customer service. Further, the prevent strategies found to increase customer service effectiveness and reduce the impact of operational and demand risk on customer service. Organizations could adopt preventive strategies and control strategies to reduce the risk of demand and operational risk in customer service.

References 1. Harapko, S. (2021). How COVID-19 impacted supply chains and what comes next. Retrieved from June 20, 2022 https://www.ey.com/en_gl/supply-chain/how-covid-19-impacted-supplychains-and-what-comes-next 2. Chowdhury, P., Paul, S. K., Kaisar, S., & Moktadir, M. A. (2021). COVID-19 pandemic related supply chain studies: A systematic review. Transportation Research Part E: Logistics and Transportation Review, 148, 102271. 3. Ho, W., Zheng, T., Yildiz, H., & Talluri, S. (2015). Supply chain risk management: A literature review. International Journal of Production Research, 53(16), 5031–5069. 4. Chopra, S., & Sodhi, M. (2004). Supply-chain breakdown. MIT. Sloan Management Review, 46(1), 53–61. 5. Quang, H. T., & Hara, Y. (2019). The push effect of risks on supply chain performance: Service-oriented firms. Business Process Management Journal, 25(7), 1734–1758. 6. Fan, Y., & Stevenson, M. (2018). A review of supply chain risk management: Definition, theory, and research agenda. International Journal of Physical Distribution & Logistics Management, 48(3), 205–230. 7. Truong Quang, H., & Hara, Y. (2018). Risks and performance in supply chain: The push effect. International Journal of Production Research, 56(4), 1369–1388.

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8. Thun, J. H., & Hoenig, D. (2011). An empirical analysis of supply chain risk management in the German automotive industry. International Journal of Production Economics, 131(1), 242–249. 9. Fernandes, A. C., Sampaio, P., Sameiro, M., & Truong, H. Q. (2017). Supply chain management and quality management integration: A conceptual model proposal. International Journal of Quality & Reliability Management, 34(1), 53–67. 10. Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 192–223. 11. Truong, H. Q., & Hara, Y. (2018). Supply chain risk management: manufacturing-and serviceoriented firms. Journal of Manufacturing Technology Management. 12. Wagner, S. M., & Bode, C. (2008). An empirical examination of supply chain performance along several dimensions of risk. Journal of business logistics, 29(1), 307–325. 13. Chopra, S., & Sodhi, M. (2012). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review (Fall 2004), 46(1), 53–61. 14. Paulsson, U. (2007). On managing disruption risks in the supply chain. Engineering Logistics, Lund University. 15. Sarker, B. R. (2014). Consignment stocking policy models for supply chain systems: A critical review and comparative perspectives. International Journal of Production Economics. 16. Dohale, V., Ambilkar, P., Gunasekaran, A., & Verma, P. (2022). Supply chain risk mitigation strategies during COVID-19: Exploratory cases of “make-to-order” handloom saree apparel industries. International Journal of Physical Distribution & Logistics Management, 52(2), 109–129. 17. Aqlan, F., & Lam, S. S. (2015). Supply chain risk modelling and mitigation. International Journal of Production Research, 53(18), 5640–5656. 18. Ulhaq, I., Khalfan, M. M., Maqsood, T., & Le, T. (2017). Development of a conceptual framework for knowledge management within construction project supply chain. International Journal of Knowledge Management Studies, 8(3–4), 191–209. 19. Carbonara, N., & Pellegrino, R. (2018). Real options approach to evaluate postponement as supply chain disruptions mitigation strategy. International Journal of Production Research, 56(15), 5249–5271. 20. Hair, J. F., Anderson, R. E., Tatham, R. L., Black, W. C. (1995). Multivariate data analysis with readings, 4th edn. Prentice Hall, Englewood Cliffs, New Jersey. 21. Jaccard, J., Wan, C. K. (1996). LISREL approaches to interaction effects in multiple regression. In: Sage University paper series on quantitative applications in the social sciences 07–114. Sage Publications, Thousand Oaks, CA. 22. Aguinis, H., Beaty, J. C., Boik, R. J., & Pierce, C. A. (2005). Effect size and power in assessing moderating effects of categorical variables using multiple regression: A 30-year review. Journal of Applied Psychology, 90(1), 94. 23. Aiken, L. S., West, S. G., Reno, R. R. (1991). Multiple regression: Testing and interpreting interactions. Sage.

External Supply Chain Risk Assessment in the Covid 19 Pandemic Duy Tran Le Anh, Hiep Cong Pham, Nhu YNgoc Hoang, Hai Thanh Pham, Paulo Sampaio, Hang Nguyen Thi My, Huy Truong Quang, and Nguyễn T. Quyền

Abstract The aim of this paper is to identify and evaluate global risks in supply chain performance (SCP). Firstly, three criteria that are content, probability and context, are applied to identify and categorize global risks. Next, the theory of Resource-based view and Balanced Scorecard is applied to establish a series of SCP quantifiable measures. With the purpose of assessing the external risks in the supply chain, the Structural Equation Modeling (SEM) method is employed. This article is unique in the supply-chain risk management literature catalogue in that it presents an in-depth operationalization of external supply chain risk constructs, e.g. natural disasters, war & terrorism, fire accidents, political and economic fluctuation, social and cultural related issues, and disease. According to the empirical results, the supply chain can be widely considered to be vulnerable as the developed risk model can explain up to 12.6% variance of Supplier performance, 25.2% Learning and Innovation, 23% Internal business, 40.6% Customer service, and 32.4% Finance. The implications of this study proposed risks, being contextual variables, should be considered when making strategic supply chain decisions. To minimize damage from major risks D. T. L. Anh · H. C. Pham · H. T. Quang School of Business & Management, RMIT University Vietnam, 702 Nguyen Van Linh Street, Ho Chi Minh City, Vietnam N. Y. Hoang School of International Business and Marketing, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam H. T. Pham Faculty of Business Administration, Van Lang University, Ho Chi Minh City, Vietnam P. Sampaio Production and System Department, Minho University, Braga, Portugal H. N. T. My (B) CIRTech Institute, HUTECH University, 475 Dien Bien Phu, Binh Thanh, Ho Chi Minh City, Vietnam e-mail: [email protected] N. T. Quyền 2C2T—Centro de Ciência e Tecnologia Têxtil, Universidade Do Minho, 4800-058 Guimarães, Portugal © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_16

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to the company, supply chain managers should recognize cost/benefit tradeoffs as viable options. Such trade-offs, suggested by the study, can be resource reallocation, preemptive speculating and assembly postponement. Moreover, the topicality of this paper is demonstrated by the data used which were collected during the COVID-19 pandemic to validate the research models and from domains greatly affected by it. Keywords Supply chain risk · Supply chain management · Supply chain performance · Covid-19 · Globalization

1 Introduction As competition shifted from “between firms” towards “between supply chains”, risks have broadened in scope in the external supply chain (ESC) network [7]. Scholars and practitioners were drawn to this issue for the following reasons. A series of natural and socioeconomic catastrophes, e.g. earthquakes and tsunamis in Gujarat (2001), the Indian Ocean (2004), and Japan (2011); events affecting international trade, e.g. international trade between US-China, Brexit, etc.; and most recently, the COVID-19 pandemic, indicates that the world is becoming increasingly unpredictable [34]. In this concerning context, supply chains are becoming more and more susceptible to disruptions [7], exemplified by the COVID-19 pandemic and its damage to the global economy. Supply chains have also become more systematically complex, representing a globalized and dynamic marketplace. Truong and Hara [33] reported that organizations currently encounter 24 risk sources that increase alongside pandemic management measures, with severe consequences for their businesses, most common of which are productivity loss (58%), customer dissatisfaction (40%), and increased labour costs (39%). Although supply chain-inherited risks, their consequences and solutions are closely investigated [7], the in-depth insight is still limited as the majority of research related to this subject are either qualitative or case studies [25], while findings from empirical studies are sparse and mostly descriptive [2]. This study seeks to determine and examine the global risks that affect supply-chain performance. The assessment models are supported by empirical data collected from the construction sector, which is among those most heavily impacted by the pandemic [23], but not adequately investigated [23, 25]. After modeling and evaluating the risks with the collected data, results are then discussed, with conclusions and future implications provided.

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2 Theoretical Model A local supply chain includes activities occurring within a nation where domestic companies prioritize production development and customer specialization [20], specifically how product is specialized for geographical markets and customer preference, while excess control and forward integration are attempted, which generate a “closeness” between the focal companies and the suppliers [20]. An external supply chain is seen as an extended local supply chain. ESCs primarily aim to improve organizational competitiveness [26]. Foreign supplies are sought for as a cheaper alternative or substitute for local shortages. In emerging economies, firms gain frugal labor and materials, larger markets, competitive financing and trading opportunities, and appealing foreign fundings policies offered by host governments [29]. However, in an ESC, Christopher et al. [4] pointed out that alongside tempting benefits exist inherent risks, while Barry [1] insisted that lower total costs in a stable environment for an organization can also mean higher risks when a single component in the lengthy chain malfunctions. Complicated supply flow management compared to single-country chains is expected, as firms face unfamiliarity in tax regulations, currency exchange rates, free trade limitations, political uncertainties, and infrastructure [9], while foreign domestic cultures, languages, and practices also influence supply chain, e.g. material planning, demand forecasting [21]. These external risks can be war and terrorism, natural disasters, social and cultural conflict, political and economic fluctuation, transmitted disease (COVID-19), etc. [7, 34]. Despite their rareness, the consequent risks are detrimental to supply chain performance (SCP). As macro risks can be seen affecting every performance quantifiable measure, we propose these hypotheses: H1a, 1b, 1c, 1d: ESC risks detrimentally affect Supplier performance, Internal business, Learning and Innovation, and Customer service. Figure 1 presents the theoretical model of ESC. At the center are SCP quantifiable measures for assessing risk level in the SC. In this article, the balanced scorecard model of Kaplan and Norton [15] is adopted to identify traditional measurement’s drawbacks and includes operational strategies into performance goals. It also covers intangible elements such as supplier performance, innovation, labor force skills, and customer service satisfaction. Ultimately, this approach shifts emphasis from exclusively physical to both physical and intangible assets considering long-term development. Based on multiple perspectives of the model, this research presents 5 performance measurements in supply chain: (1) Supplier Performance, (2) Internal Business, (3) Learning and Innovation, (4) Customer Service and (5) Finance, of each relevant literature, are summarized below:

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Fig. 1 Theoretical model

2.1 Supplier Performance Previous authors have presented how supplier competence impacts supply chain (See Table 1). Seeing why firms should involve with suppliers in the early stages, we hypothesize that: H2a, 2b, 2c, 2d: Supplier performance has a positive influence on Learning and Innovation, Internal business, Customer service, and Finance. Table 1 Literatures about supplier performance Source

Arguments/Findings

Ou et al. [22]

High supplier performance means high quality input materials, allowing for quality and innovative products

Schiele [27]

Suppliers greatly influence the innovation process

Teece [31]

Suppliers’ key role in innovation stems from increasing use of external sources for innovation management

Windahl and Lakemond [37]

Innovative and sustainable solutions from suppliers inside and outside of supply chain channels value for business

Hoegl and Wagner [12]

Studies on influence of buyer–supplier cooperation and supplier involvement on product development show mixed results

Gualandris et al. [10]

Supplier performance is deemed crucial to company’s sustainability

Truong et al. [35]

Timely delivery of high-quality input helps minimize stagnation and material damage

Yeung [38]

Superior supplier performance manages levels of inventory, waste, and damage problems

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Table 2 Literature about innovation and learning Source

Arguments/Findings

Lee and Song [17]

Learning and Innovation abilities ties directly to company’s value

Quang et al. [25]

Learning and Innovation refer to new product and value creation, alongside continual efficiency improvement

Jones and Macpherson [14]

Inter-organizational learning can improve company’s knowledge and provide detailed information related to markets, strategy, and partnerships

Quang et al. [25]

Learning initiates building dynamics

Hult et al. [13]

Positive impacts include fast cycle time, resilience, commitment, flexibility, leading to larger strategy pool and better strategy application

2.2 Learning and Innovation Studies into the Learning and Innovation aspect varied in their recognition of its importance (See Table 2). In the current intense competitive environment that requires firms to continually update and improve new and existing product catalogues, Learning and Innovation becomes crucial for expansion and growth. Hence, we propose these hypotheses: H3a, 3b, 3c: Learning and Innovation has a positive influence on Internal business, Customer service and Finance.

2.3 Internal Business Past scholars considered internal business to be crucial in SCP (See Table 3). To satisfy customers and pursue market leadership, customer orientation should be integrated into internal measures. Therefore, we propose these hypotheses: H4a, 4b: Internal business has a positive influence on Customer service and Finance.

2.4 Customer Service Past studies show that this aspect is highly regarded by businesses (See Table 4). These hypotheses are proposed: H5: Customer service has a positive influence on Finance.

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Table 3 Literatures about internal business Source

Arguments/Findings

Quang and Hara [25]

Internal measures, or business processes, refer to how a chain can reduce cost and time, improve quality/skill/productivity while capturing utilization and distribution efficiency

Ou et al. [22]

Superior internal performance ensures high product and service quality, highly responsive, which will improve satisfaction levels of customer and company’s profits

Truong Quang and Hara [34] Cutting unnecessary costs allow firms to provide affordable prices to attract customers Fernandes et al. [5]

Outcomes: revenue growth, high levels of customer satisfaction, and market share expansion

Kaynak [16]

Efficient utilization of logistics physical assets such as machines, warehouse, logistics equipment, etc., generates return on assets

Ou et al. [22]

Exquisite customer service performance comes from company’s procedures, activities, and decisions

Table 4 Literatures about customer service Source

Arguments/Findings

Cho et al. [3]

Four customer concern categories: cost, quality, delivery and service Many companies aim to the top provider of value for customers

Fernandes et al. [5], Quang et al. [25] Satisfied customers do not tend to switch to competitors, are less price-sensitive, and tend to refer other potential customers

3 Research Methodology 3.1 Data Collection A large-scale survey was implemented, assisted by a Japanese government project about sustainable socio-economic development in ASEAN. The questionnaire was designed for the Vietnamese construction industry. 6,600 companies operating globally or having non-Vietnamese partners were chosen. Target participants are Managers, Leaders, Supervisors, etc., who are informed and experienced with logistics and SC management. The questionnaire was delivered via a link attached to email. Afterward, four follow-ups were arranged. Ultimately, there were 202 usable responses. Figure 2 illustrates the sample’s characteristics.

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Position 7.9 7.4 10.9

23.3

50.5

Top-level manager

Middle-level manager

Coordinator

Others

First-level manager

Operation fields 7.4 35.6

15.8 17.8

23.3

Construction Executive Material Distribution Concrete Production Material Manufacturing (cement, rocks, sand, etc.) Architechtural Design and Construction Planning

Working area 4.5 1.5

12.9

35

5.4 8.4 59.4

Purchasing

Logistics

Operations/ Projects

Human Resources

Risk Management

Finance

Sales

Marketing

Fig. 2 Sample characteristics

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Table 5 Human-made and natural risks Construct

Examples

Description

Human-made risks

Economic Crises, Sociocultural Conflict, Political Tensions with Prospect of Armed Conflict

Human-induced, occurring in human-settlements Consequence of intentional or accidental human activities [32]

Natural risks

Natural Disasters and Diseases

Natural manifestation Harmful to humans/other lifeforms/the environment Two types: geophysical/biological [32]

3.2 Data Analysis Process Traditional psychometric approaches, such as the Exploratory Factor Analysis (EFA) and the Cronbach’s Alpha Coefficient [11], were employed to evaluate the validity and reliability of the measurement scales. When variables outside of the threshold value have been eliminated, all items load on the corresponding components show factor loadings higher than 0.475 (>0.4—threshold value), Cronbach’s alpha coefficients greater than 0.6 (0.658), all item-to-total correlations exceeding 0.4 (0.408), suggesting the measurement scales have achieved the required standard for convergent validity and reliability. There are also two risk factors (details in Table 5) extracted as Eigenvalue = 1,681, Variance Extracted = 74,35%. Regarding supply chain performance quantifiable measures, 5 factors were extracted at Eigenvalue = 1.067, Variance Extracted = 69.823.

4 Results The influence caused by different risks on SCP was measured based on the analysis of the Structural Equation model (see Fig. 3).

5 Discussion Risks in the ESC are caused by either planning or disruptions on the supply chain [19]. During the recent pandemic specifically, as people’s health was at stake, links in the ESC must prioritize transmission control procedures. The results point out that up to 25.2% variance of Learning and Innovation, 12.6% of Supplier performance, 40.6% of Customer service, 23% of Internal business, and 32.4% of Finance can be explicated by the presented risk model; which is significant compared to past

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Finance

H3a

H5

0,317***

H1.2e

0,74***

12.6% Supplier performance

0,11*

32.4%

25.2%

Innovation and learning HUMAN-MADE RISKS

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H2c 0,157***

40.6% Customer service

NATURAL RISKS

Supported hypotheses Unsupported hypotheses

Internal business

CMIN/DF = 1.649 RMSEA = 0.057 IFI = 0.934; TLI = 0.911; CFI = 0.932

23%

Fig. 3 SEM results

research, such as that by Wagner and Bode [36], in which only 6% variance of SCP was elucidated by suggested risks. Natural risks related to the pandemic negatively affect various economic, political, social, cultural, etc. aspects. SCP was damaged by virus control procedures, e.g. social distancing, lockdowns, travel bans, export restraints, border controls, etc., that disrupt labor resources, innovation & learning opportunities, customer service responsiveness, etc. Sustainability was hindered by various risk factors, while strict policies negatively impact the global trade and credit market. Stephens et al. (2020) remarked that the COVID-19 situation was so instantaneous that alternative measures couldn’t form in time, reducing the reliability of future global value chains. Facing disruptions on the supply side, firms must develop new risk prevention strategies with alternative procedures. For example, to avoid supply shortages during lockdowns, backup supplies from substitute domestic suppliers can be befitting. A short supply chain strategy where products go directly from company to customers, sidestepping intermediaries, is also advisable when tackling supply issues, and restricted cross-countries transport policies. Furthermore, to minimize shortages from supply risks, a speculative strategy involving stockpiling is recommended. For internal operations, labor shortages can be resolved by integrating flexibility into avoidance strategies, such as enabling work-from-home options or utilizing machine replacement, allowed for by embracing Industry 4.0, whose advanced technologies can maximize the efficiency of strategizing and production, resource allocation, environmental footprint reduction, subsequently improving product quality and the supply chain in general. Moreover, Ghobakhloo [8] stated robot-assisted manufacturing can address labor shortages while maintaining efficiency and safety requirements. Consumer’s demands and behavior during the COVID-19 era were affected by social distancing. To strategically adapt to demand changes and enhance customer services, implementing home delivery are recommended, as well as delaying product assembly until order is finalized [19]. However, without proper forecasting, these

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strategies may hamper response time. The successful employment of these strategies relies on financial aid through low-interest loans from lawmakers that will boost industrial development, technology advancement, support for mass labor shift, and providing supply chain stakeholders [28]. Our finding contradicts that of Wagner and Bode [36], where no relation between risks, being either human-made or natural, and SCP was discovered. After having compared between the two studies, it is revealed that although approaches are dissimilar, the results do not oppose one another. While Wagner and Bode [36] presented an array of supply chain risks, e.g. risks in Demand, Supply, Infrastructure, Catastrophe, our research emphasizes leading contemporary ESC risks, prioritizing diseases (COVID-19) that particularly attract practitioners and directly impact currently existing organizations. Moreover, as the survey accumulates data sets from companies based in Vietnam, where political and economic barriers are rigorous and procedures are time-consuming, the results are mostly relevant for locations that share its economic, political, cultural, and geographic backgrounds instead of developed nations. Therefore, reenacting this project in a context like Germany, where political and economic conditions are stable, crisis control capabilities are competent, and underlying risk factors are different, should be reserved for future research. For a more comprehensive view, minor supply chain risks (micro risks), especially in the areas of supply, operations, and market demand could be incorporated into the risk set identified in this study. This study is unique in that it acknowledges the relationships between SCP metrics. Suppliers are seen as supply chain’s drivers of customer service, innovation, and financial profitability, whose performance and resulting inputs affect product quality, delivery time, customer service responsiveness and inventory cost conservation; and whose knowledge can help improve company’s innovation, as external innovation management are sought for more. Therefore, supplier’s contribution in the innovation process produces different outcomes, varying in the success of business operations and new product development. Learning and Innovation capabilities further assist companies in reducing cycle times, improving quality and constantly optimizing internal business operations. Consequently, Great internal competence allows for quicker response to customer demands and more timely deliveries, which generate higher customer satisfaction, followed by higher selling power and profit.

6 Conclusion and Future Research This paper adds to the supply chain risk management literature catalogue a functional establishment of ESC concepts of risk. The empirical results have found supply chains to be greatly exposed to threats, especially those from the complicated situations caused by COVID-19. Globalization comes with unpredictable supply chain risks, e.g. political crises, sociocultural conflicts, trading sanctions, taxes, etc. The pandemic caused lockdowns, border restrictions, demand change, labor regulations, etc. to be issued. These contextual risks should be considered in strategically making

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decisions in supply chain. To address the presented ESC risks, this study has established contemporary, intangible, planning-oriented, and quantifiable indicators for SCP, which are (1) supplier performance, (2) learning and innovation, (3) internal business, (4) customer service, and (5) finance. These sub-categories further dissected how risk and SCP are correlated. Specifically, these quantifiable measures can be seen as interdependent, as the influence of one’s fluctuations on another/others is noticeable. Our study recommends resource re-allocation, short supply chains development, technology integration, and information sharing as settlement strategies that top management team should consider to reduce damages from risk. For further research, the angles below are recommended. ESCs bring about cost reduction, greater reliability and profit improvement [21], but also Intellectual Property concerns [30], which are significant when outsourcing to foreign stakeholders is involved and should be regarded as an exigent risk in the global context. Relying on strategic content/process/content to interpret ESC performance is a viable option in various past qualitative and conceptual papers [18]. While operational risks, supply interruption risks, and general guidance were explored, solution effectiveness and the connection between SCP and risks have not been highlighted or validated by empirical practices. As this study primarily discusses how risks affect SCP during the COVID-19 pandemic, the implications for post-COVID context are largely overlooked. Fonseca and Azevedo [6] remarked that the digital business model might be preferred to avoid risks. Due to restraints associated with the pandemic, the healthcare and food industry will be prioritized for reinforcement [6]. Therefore, future studies can be directed towards investigating the risks in the post-COVID era, particularly the economic recovery period. As only the Vietnam construction sector was examined in this study, future research in another context/business sector may apply these findings and evaluate their validity. Additionally, different insights, attitudes and risk management cultures in other nations can be further explored by a global-scale survey. Author Contributions: D.T.L.A, H.T.Q, H.N.T.M.: formal analysis, methodology, investigation, and writing—original draft preparation; P.C.H, H.T.P and P.S: investigation and writing; P.S, H.T.Q and H.N.T.M.: resources, methodology, validation, and formal analysis; H.N.T.M. and N.T.Q.: conceptualization, methodology, computational frameworks, data curation and supervision; H.T.Q and H.T.P.: conceptualization and methodology; N.Y.N.H and H.N.T.M.: conceptualization, methodology, validation, writing—review and editing, supervision, funding acquisition. All authors have read and agreed to the published version of the manuscript.

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Risk Identification and Its Resonant Effect in Service-Oriented Supply Chain Uyen Diep My, Thang Ta Duc, Lam Nguyen Canh, Kevin Nguyen, Irfan Ulhaq, Tho Pham, Duong Thi Binh An, and Yoshinori Hara

Abstract This article investigates service-oriented supply chain risk management, differentiating it from manufacturing through two steps. In the first step, we review prior research to identify the service-oriented supply chain’s distinctive features and typical risks. In the second step, the resonant effect of these risks on service-oriented supply chain performance is examined by an empirical study in the construction sector that was hit hard during COVID-19. In doing so, a model comparing the single impacts of risks on supply chain performance to the theoretical model was developed to confirm the resonant effect mechanism. Obtained from 196 service-oriented firms in Vietnam’s construction, our study found that the resonant effect model explained 63% of service-oriented supply chain performance variance versus 46.3% in the U. D. My · T. T. Duc · L. N. Canh · K. Nguyen · I. Ulhaq School of Business & Management, RMIT University, 702 Nguyen Van Linh, Ho Chi Minh City, Vietnam e-mail: [email protected] T. T. Duc e-mail: [email protected] L. N. Canh e-mail: [email protected] K. Nguyen e-mail: [email protected] I. Ulhaq e-mail: [email protected] T. Pham Graduate School of Commerce and Management, Hitotsubashi University, 2-1 Naka, Tokyo, Japan e-mail: [email protected] D. T. B. An (B) CIRTech Institute, HUTECH University, 475 Dien Bien Phu, Ho Chi Minh City, Vietnam e-mail: [email protected] Y. Hara Department of Graduate School of Management, Kyoto University, Yoshida-Honmachi, Kyoto 606-8501, Japan e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 N. H. Thuan et al. (eds.), Business Innovation for the Post-pandemic Era in Vietnam, https://doi.org/10.1007/978-981-99-1545-3_17

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comparative model. The influence of a single risk on supply chain performance is also more significant, proving the resonant mechanism influence. Another interesting result is the low-impact demand risk on supply chain performance, reinforcing the service-oriented supply chain advantage. The notion for resonant effect reduction is minimising the coefficient of “α” to limit/eliminate risks’ relationship. Hence, the proposed resonant effect model can serve as a guide. Our recommendation to embrace supply chain management strategies, such as avoidance, speculation, and postponement, should be balanced with acceptable cost/benefit trade-offs. Keywords Risk management · Supply chain management · Supply chain risk management · Service-dominant logic · Resonant effect Article Classification Research paper

1 Introduction The supply chain, from time immemorial, has been widely recognised as a wellestablished study concentrating on distributing physical goods, managing the flow of materials, information, personnel, equipment, and cash generated by customers, and its total value [1, 2]. Nevertheless, the supply chain theory has undergone evolutionary changes through which intangible values are thoroughly considered [3]. Alongside quality, customers these days highly demand services and after-sales care. Modern practices allow customers to access different sales points to re-evaluate options and define their experiences than cyclical ones [4]. Additionally, growing digital adoption allows consumers more control over their purchases; consistent services across channels are paramount to retaining customers from opting for different brands [5]. Thus, competitiveness should be enhanced via a service-oriented supply chain deployment [6]. The supply chain and service science are believed to share similar characteristics, which can support together regarding two following critical reasons: • Firstly, the supply chain is a network of businesses requiring a solid orientation to meet customers’ needs [7]. • Secondly, each supply chain participant is both a buyer and a supplier. Customers provide either “input” products/services to their downstream partners or provide suppliers with demand information. Likewise, since service providers act as customers, each player adds value to products, forming a process called the value co-creation [5, 8, 9]. The abovementioned rationales clarify the integration of the “value co-creation” concept, proposed by Service-dominant logic, into the supply chain, originating a new business model—A service-oriented supply chain [4].

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Contrary to the focus on goods and value-in-exchange, the service-oriented supply chain requires customer involvement in the value-creation process [7, 9]. Consequently, as value co-creators, customers and supply chain participants transform the supply chain into a value-creation network [6–8]. Hence, customer experience, innovation, flexibility and agility are critical components, enabling firms to maximise assets and fulfil customer orders [5]. As a corollary of the coinciding supply and consumption process, value-in-use values will be created [10]. Service-oriented supply chains eliminate functional silos and increase internal and external collaboration among all departments involved. In other words, interaction results from a series of value-adding activities that co-occur to cater for customer need [8]. Thus, this supply chain should be viewed as an ecosystem of service [3, 9]. While service-oriented supply chains have yet to replace traditional ultimately, they propose and identify practical activities, including facility design, inventory management, shipping policies, supply operations, and pricing, as competitive advantages [10]. The primary distinction between manufacturing and service-oriented supply chains is their focusing scope: tangible versus intangible attributes [6, 8]. For a specific understanding of the service-oriented supply chain, we define it as follows: A service-oriented supply chain is a beneficial collaborative interaction among supply chain stakeholders in the pursuit of service ecosystem formation. It includes service co-production, exchange service provision, and co-creation to propose values that fulfil customers’ demands.

For example, understanding buyers strongly emphasise comfort over a heater or air conditioner, Chauffagistes, a French electrical appliance company, is now generating profit via “warmth services” contracted to keep cosy floor space temperature at an affordable price. Here, customers are paramount and involved in the value-creation process [6]. Except for outstanding features, risks are inherent in service-oriented supply chains, depleting chains’ productivity. The theme of service-oriented supply chain risk management is predicted to become a future research trend for the following reasons: • Firstly, today’s supply chains are easily disrupted by unforeseen consequences of abnormal events [11]. Fundamental reasons are (1) supply chains are more subjected to disruptions than previously [12, 13]; with (2) less visibility, supply chains induce slow decision-making and response during disruption [13, 14]; and (3) local “fixing” create problems in the supply chain sections [15]. • A spate of crises and natural disasters, especially the current pandemic, strongly signalise that such calamitous events are more recurrent and unforeseen [4]. • The recent COVID-19 outbreak has hampered global supply chains [14], with customer consumption trends witnessing changes, such as decreased fashion and cosmetics consumption [14], increased demand for necessities, stockpiling propensity, online shopping and home services.

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a Building

Flood

Normal

Resonant effect

Earthquake

Results: 1. d > b 2. c+αd > a 3. c+d+αd > a+b

c Building

Flood --> Tsunami

Fig. 1 Description of the resonant effect

This industry’s operations and supply chain management differ significantly from manufacturing. Nonetheless, there is little conceptual and empirical research on the service-oriented supply chain risk management [7]. The T¯ohoku earthquake and tsunami in Miyako, T¯ohoku’s Iwate Prefecture, Japan, on 11/3/2011 are considered. The displacement of Japan’s Pacific and North American plates led to a contrast slide in two paths. As a result, earthquakes ensued when the seabed collapsed, triggering a tsunami off the coast and resulting in a more significant total loss (Fig. 1). The total damages were estimated at $14.5 billion. However, as shown in Fig. 1, this loss merely demonstrates the measured direct influence of the disaster, i.e. “a + b.” This earthquake and tsunami destroyed roads, railways, the Tohoku Expressways, and a dam in north-eastern Japan. Consequently, Japan’s transportation network was severely disrupted and ports were confronted with immediate closure. Several conventional and nuclear power plants were shut down, and companies such as Toyota, Nissan, and Honda had to halt all automated production due to the shock. The government claimed that the earthquake and tsunami that devastated Japan’s northeast could cost $360 billion, becoming the costliest natural disaster ever. These are labelled as “c + d + αd” in Fig. 1. It is strikingly apparent that this catastrophe detrimentally influences the outputs and other supply chain risks—denoted as “α”. Consequently, the extent of the danger of these impacted risks increases—illustrated as “d” (>b), and via the “relationship” with these risks, the impact of the disaster on the outputs will also intensify “c + αd” (>a), respectively. This relationship is known as the “resonant” effect and is still missing from the literature.

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Generally, other Beta, Gamma, Delta, etc., will form huge “resonant” effects on outputs if various risks co-occur. Thus, the following research hypotheses are proposed: H*. By the resonant effect, the total impacts of all risks on service-oriented supply chain performance are greater than the sum of single effects. H**. By the resonant effect, the impact of each risk on supply chain performance is more significant than every single effect.

This paper, therefore, attempts to access service-oriented supply chain risk management in two steps. The authors initially review prior research to identify service-oriented supply chain risks and then conduct an empirical study in the construction industry, which was hard hit by the COVID-19 pandemic, to elucidate these various risks’ impacts on service-oriented supply chain performance. The findings highlight the risks associated with service-oriented supply chains and risk management strategies which were effective.

2 The Resonant Effect Figure 2 shows the “resonant” relationship between risks. These risks will then be ranked on their characteristics, in which higher-order risks “push” lower-order factors and increase severity. As shown in Fig. 2, risks are divided into three categories: • The first-order risks—the “push” determinant, e.g., natural catastrophes, political and economic issues, epidemics, etc., known as external risks, influence all supply chain activities. • The second-order risks—dynamic risks, e.g., information and financial risks, cause disruptions in supply chain operations. Fig. 2 The resonant effects between risks

External risks (1)

Dynamic risks (2)

External risks (1)

Dynamic risks (2)

External risks (1)

Core risks (3)

Dynamic risks (2)

External risks (1)

Dynamic risks (2)

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• The third-order risks—the “pushed” factor, e.g., supply, operational, or demand risk, directly affect supply chain performance and create resonant effects. Hence, the following hypotheses are proposed: • H1a, b, c, d, e: External risk adversely influences Supply, Operational, Demand, Information and Financial risks. • H2a, b, c: Information risk deleteriously impacts Supply, Operational risks and Supply chain performance. • H3a, b, c, d: Financial risk detrimentally affects Supply, Operational, Demand risks and supply chain performance. • H4a, b: Supply risk adversely affects Operational risk and Supply chain performance. • H5: Operational risk adversely affects Supplier performance. • H6a, b: Demand risk adversely affects Operational risk and Supply chain performance.

3 Research Methodology This research leverages information gleaned from a large-scale survey financially supported by the Japanese government to promote the socioeconomic growth of the ASEAN region. The survey included 3601 companies in Vietnam’s construction industry. The target respondents, who are personnel with knowledge and experience in risk and supply chain management, received this official questionnaire via email. Respondents were asked to assess their companies’ supply chain performance over the last five years through a five-point Likert to capture the respondents’ differing attitudes. Consequently, 196 responses were received (Table 1).

4 Results SEM results are visually exhibited in Fig. 3, with χ2/df = 1.473, CFI = 0.908, and RMSEA = 0.049, revealing that the theoretical model supports the data. The coefficient of R2 is 63%, which means our resonant effect model can explain the 63% variance of service-oriented supply chain performance. Natural risk, including natural disasters and epidemics, predominantly impacts all supply chain activities. Meanwhile, demand risk neither affects operational risk nor supply chain performance and is insignificantly influenced by other risks, except for natural risk, which contains COVID-19. This is an interesting result, reflecting the characteristics of service-oriented supply chains.

Risk Identification and Its Resonant Effect in Service-Oriented Supply … Table 1 Survey sample characteristics

211 Percent

Business field Building Material Distribution

27.6

Concrete production

1.5

Construction executive

50.5

Design (architecture and construction)

18.9

Transportation

1.5

Authorised capital Less than $1 million

19.9

From 1 to $5 million

25

Above $5 million

55.1

Job title Top-level manager

4.6

Middle-level manager

23

First-level manager

44.4

Coordinator

15.3

Others

12.8 SUPPLY RISK

H1.1a

Human-made risk

0.556***

H4b

0.184* 0.469*** 0.294***

INFORMATION RISK

H2c

OPERATIONAL RISK

0.268***

0.202**

FINANCIAL RISK

SERVICEORIENTED SUPPLY CHAIN PERFORMANCE

H3d

Natural risk

H6a

0.257*** Chi-square/df = 1.806, CFI = 0.904, RMSEA = 0.053, R2 = 73%

Fig. 3 SEM results

DEMAND RISK

H6b

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Table 2 Comparison results among the SEM model, the comparative model and Wagner & Bode’s (2008) findings SEM model (Standardised Total Effects Relationships

Goodness of fit

Comparative model

Wagner and Bode (2008)

HMR

→

SCP

0.383*

NR

→

SCP

0.13

−0.146**

0.01

IR

→

SCP

0.49

0.21*

0.07

0.206**

−0.03

FR

→

SCP

0.071

SR

→

SCP

0.611

0.517***

0.09

OR

→

SCP

0.562*

0.265***

NA

DR

→

SCP

0.123

0.08

0.135

−0.046

Chi-square/df

1.473

1.886

CFI

0.908

0.821

RMSEA R2 (%)

0.049

0.067

63.0

46.3

6

Table 2 compares the SEM and comparative models. The SEM model fits better than the comparative models since the SEM model better explains the serviceoriented supply chain performance variance than the comparative model (63 versus 46%), reaffirming our first hypothesis. Moreover, the SEM model’s impact on service-oriented supply chain performance is nearly twice that of the comparative model, reinforcing our second hypothesis: the resonant effect magnifies a single risk’s influence on supply chain performance.

5 Conclusion The supply chain comprises a multitude of players to serve customers, and competitive edges in supply chain management require a solid service-oriented foundation. Thus, the emerging service-dominant logic concept proposes a service-oriented supply chain with interconnected series of value-creating activities by multiple stakeholders. Supply chain risk is inherent, but its impact and predictability will vary. For example, Wagner and Bode [16] found that supply chain risks explained 6% of the variance in supply chain performance among 760 German companies. Our findings demonstrate 63% of the variance in service-oriented supply chain performance. Each risk has a greater influence on supply chain performance (Table 2). Aside from the supply chain’s service nature, our resonant effect model helps explain this significant difference. That supply and operational risk have the greatest impact on serviceoriented supply chain performance is justified through our findings. This confirms the resonance effect’s mechanism. While core risks are “pushed” factors, their impact

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on service-oriented supply chain performance is amplified and considerably enhances information risk’s influence on supply chain performance. Moreover, the time of the survey is a decisive factor. This article’s data is gathered amidst the COVID-19 pandemic, which increases supply chain risks and hampers respondents’ perception of their impact. COVID-19 distorted myriad information, changing customer behaviour or production schedules, while COVID-19 preventive measures led to financial constraints that shifted customer demand. Consequently, cutting costs and lowering customer demand activities are necessary. Meanwhile, unbalanced supply and demand hinder customer satisfaction and business efficiency. Therefore, the government should support measures such as a formal information channel to address misinformation or financial aid to lower risk severity. The SEM model explains 63% of service-oriented supply chain performance variance, which is significant, while other factors, such as management practices and strategies, influence supply chain performance. Managing the resonant effect can substantially alleviate the effect of risks on service-oriented supply chain performance. As shown in Fig. 1, reducing the resonant effect involves reducing the coefficient of “a”. Thus, the proposed SEM model can serve as a guide. Operational and humanmade risks should be prioritised regarding their major impacts on service-oriented supply chain performance. The results imply that natural, supply, and information risks push operational risk, while human-made risks encourage natural risk. Therefore, supply and information risks driven by operational and natural risks must be concentrated on. Finally, the natural risk is a pure “push” factor influencing all supply chain activities. Controlling other risks will remarkably cushion natural risks’ danger. To attenuate key contingency risks, managers should consider the costs and benefits, namely preventive, speculative, and deferred supply chain management strategies. General strategies such as avoidance and speculation can be helpful in handling typical supply chain risks [17, 18]. During the current COVID-19 pandemic, enterprises can deploy the risk avoidance strategy by increasing the service orientation of the chain. During the recent lockdown, businesses can utilise backup inputs from alternative domestic suppliers to avoid supply shortages. At the same time, a speculative strategy such as hoarding will lessen the influence of supply risks [17]. Meanwhile, Trautrims, Schleper, Cakir and Gold [19] suggest remote working to maintain operations and substituting machines for humans to deal with the labour shortages. Remarkably, demand risk has negligible influence on supply chain performance, reinforcing the service-oriented supply chain advantage. In a service-oriented supply chain, value is created upstream by demand chain management. Value-in-use/valuein-context is generated during the consumption process and depends on the service delivery context [5, 7, 9]. Customers expect high consistency in this type of business and rarely switch companies once a preferred “service” is identified. Service-oriented firms can respond to customer demands more quickly and effectively. Apart from home delivery services, Manuj and Mentzer [17] recommend delaying the assembly of finished goods until receiving orders to deal with demand fluctuations. However, those customers wait until the order can extend the response time.

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The firms will assemble semi-finished goods while awaiting order confirmation to obsolescence and cut inventory costs. Moreover, financial risk has no relation to any research concept. This result may only be relevant in the short term (Table 1) in high-capital firms and can be disparate in another context. Other fields’ studies may expand the sample range to support this claim. Most research on service-oriented supply chain risk management is qualitative [7]. Large-scale empirical studies’ findings are few and mainly descriptive to determine and evaluate supply chain risks. We used knowledge-based (expert/decision-maker assessments via Q-sort) and data-driven approaches. The results, therefore, must be validated across nations in a broader sense. Thus, an international survey could reveal cultural differences in service-oriented supply chain risk management. The SEM model solely confirms that the mechanism of the resonant effect relies upon proposed hypotheses about the relationship between concepts, leaving optimal “resonant” models undiscovered. A positive optimal resonant model maximises the impact of risks on supply chain performance so enterprises can anticipate worstcase scenarios. Once a negative optimal resonant model is detected, a mitigation strategy can be devised. While risks cannot be eradicated, their impacts are likely to be attenuated [20]-that’s when a new paradigm is needed.

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