DIGITAL TRANSFORMATION AND SUPPLY CHAIN RELATIONSHIPS AS DRIVERS OF SUSTAINABLE PERFORMANCE: THE MEDIATING ROLE OF TOTAL QUALITY MANAGEMENT IN PAKISTAN

Abstract

The paper examines the impacts of digital transformation and relations within the supply chain on sustainable performance and the mediating effect of Total Quality Management (TQM). Although previous studies have recognized the significance of digitalization and collaboration towards sustainability, there is inconclusive empirical research on how these capabilities have been converted into economic, environmental and social impacts particularly in Pakistan settings. The research fills this gap by providing and experimenting an integrated capability-based model explaining how and through which processes sustainability results are obtained. The adopted design was a quantitative, cross-sectional research design. The firms were identified to be operating in Pakistan and data were obtained using a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The assessment of measurement reliability and validity were evaluated using Cronbachs alpha, composite reliability, AVE and HTMT, and structural relations were evaluated by bootstrapping processes. The findings indicate that the digital transformation has a strong beneficial influence on the sustainable performance (β = 0.319, p = 0.001). The direct effect of TQM on sustainable performance (β= 0.426, p = -0.001) is also strong and mediating influences on digital transformation and supply chain relationships are significant. The direct impacts of relations with suppliers and distributors are negligible and this means that relational resources are of contribution to sustainability via quality execution mechanisms. The model describes 76.4 percent of the variations of sustainable performance. This research study is important in that it empirically confirms that TQM is a dynamic capability of the execution level that transforms digital and relational resources into sustainable performance. The results not only can be used by managers in their practices but also serve as a strong basis of longitudinal and cross-country studies in the future.

Keywords: Digital transformation; Total Quality Management; Supply chain relationships; Sustainable performance; PLS-SEM; Emerging economies