Risk management behaviour in digital factories: the influence of technology and task uncertainty on managerial risk responses

Abstract

Purpose

This study aims to advance a behavioural approach towards understanding how managerial perception impacts the enactment of responses to risk management during the implementation of digital technologies in industrial operations and supply chains. The purpose is to investigate the influence of (digital) technology and task uncertainty on the risk perception of managers and how this impacts risk responses adopted by managers.

Design/methodology/approach

Following an exploratory theory elaboration approach, the authors collected more than 80 h of interview material from 53 expert interviews. These interviews were conducted with representatives of 46 German companies that have adopted digital technologies for different industrial applications within manufacturing, assembly and logistics processes.

Findings

The findings provide nuanced insights on how individual and combined sources of uncertainty (technology and task uncertainty) impact the perception of decision makers and the resulting managerial responses adopted. The authors uncover the important role played by the interaction between digital technology and human being in the context of industrial operations. The exploratory study shows that the joint collaboration between humans and technologies has negative implications for managerial risk responses regardless of positive or negative perception, and therefore, requires significant attention in future studies.

Research limitations/implications

The empirical base for this study is limited to German companies (mainly small and medium size). Moreover, German culture can be characterised by a high uncertainty avoidance and this may also limit the generalizability of the findings.

Practical implications

Managers should critically revise their perception of different types of digital technologies and be aware of the impact of human-machine interaction. Thereby, they should investigate more systematic approaches of risk identification and assessment.

Originality/value

This paper focuses on the managerial risk responses in the context of digitalisation projects with practical insights of 53 expert interviews.

Citation

Kessler, M., Rosca, E. and Arlinghaus, J. (2024), "Risk management behaviour in digital factories: the influence of technology and task uncertainty on managerial risk responses", Supply Chain Management, Vol. 29 No. 2, pp. 297-314. https://doi.org/10.1108/SCM-06-2023-0296