An Artificial Neural Network Examination of the Intention to Implement Blockchain in the Supply Chains of SMEs in Tonga

An Artificial Neural Network Examination of the Intention to Implement Blockchain in the Supply Chains of SMEs in Tonga

Malia Benedine Faasolo, Eli Sumarliah
Copyright: © 2022 |Pages: 27
DOI: 10.4018/IRMJ.287907
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Abstract

The research intends to examine the impacts of the technology, organization, and environmental factors on the implementation of blockchain in the supply chains of SMEs in the Kingdom of Tonga. These include regulatory support, competitive pressure, cost, upper management support, complexity, and relative advantage. The research uses SEM-PLS to test the hypotheses and the Artificial Neural Network method to analyze and classify survey data from 201 SMEs. Findings show that relative advantage, cost, complexity, and competitive pressure significantly affect implementing blockchain in the supply chains. As SMEs frequently have limited capital to invest in technology but meets the same obligations to streamline business operations to optimize profits, blockchain provides a feasible choice for the firms’ sustainability with its characteristics of security, transparency, and immutability that are prospective to develop SMEs’ performance. Thus, the paper provides novel insight regarding the determinants of SMEs' intention to implement blockchain in their supply chains.
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Introduction

Digital innovations are vital in processing and managing the interchange of indications in the supply chain (SC) management and operations. Traditional SCs are dispersed in nature and need connection preservation; consumer and supplier organization processes are no self-adequate (Buyukozkan & Gocer, 2018). Earlier publications emphasize the significance of digital innovations in SC management and operations such as blockchain (Queiroz & Wamba, 2019; Kshetri, 2018), artificial intelligence (Baryannis et al., 2018), big data diagnostics (Govindan et al., 2018), and cloud computing (Maqueira, & Ortiz-Bas, 2019; Gonul Kochan et al., 2018). Firms that provide investments in new technology have identified their prospect to lessen cost and maintain competitiveness (Bar et al., 2018). Thus, firms should move from operating non-integrated silos to incorporated improvement-operations all over inner end-to-end activities and outer consumer interaction. Besides, Bollard et al. (2017) argue that the adoption of technology and operative capacity should be used in mixture and in proper order to attain an all-inclusive and multiple effects.

According to Sihn et al. (2016), SMEs (Small-Medium Enterprises) frequently have inadequate resources for technological investments, but they have identical necessity to be effective and efficient in managing and allocating their capitals. A current SME’s chief executive-officer conference regarding how the digital market can disturb industries in a developing country admitted that SMEs could not depend on conventional activities anymore due to the world’s transformation into a digital economy despite numerous issues regarding digitizing industries economy (Low, 2018). In a developing country (including Tonga), SMEs should see technologies as investments instead of costs to support sustainable development (Business Today, 2018). Adopting technologies will help SMEs improve products and services, respond faster to consumers’ demands, and enhance “time-to-market”. However, although SMEs achieve significant computerization, they find it complicated to tackle the digitalization disparity for profit and productivity (Huawei, 2018). Thus, SMEs in Tonga rely on their capabilities to implement technologies to realize higher advantages of digitization and knock market opportunities through global and seamless platforms and supportive logistics and infrastructures.

SMEs play an essential role in Tonga’s lively industry environment as Tonga’s industrial sector primarily comprises SMEs (Naidu & Chand, 2012). According to Faasolo and Sumarliah (in press), Tonga is a country in the South Pacific with 106,000 people (70% of them live around Tongatapu, the capital on the central island). Fifty-two islands are populated in Tonga, while 124 islands are unpopulated. In 2018, Tonga had a 28,598 workforce. The primary sectors are manufacturing (40.9%), which consists of SMEs (63%) and microbusiness (37%) (Naidu & Chand, 2012). Until now, literature focusing on the intention to implement technology among SMEs in Tonga remains scarce (Faasolo and Sumarliah, in press). The latest study conducted by Faasolo and Sumarliah (in press) empirically investigated influential determinants of the intention to adopt mobile technology by women’s micro and small businesses in Tonga. It found that the most influential determinant of intent to use mobile technology is social support, which also influences perceived ease of use and usefulness. Based on the authors’ search results on the Web of Science database, none of the existing literature has focused on implementing blockchain technology to improve supply chain management and operations among SMEs in Tonga.

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