Implementing Industry 4.0 and Circular Economy through the Developmental Culture Perspective – Driving a Competitive Advantage in the Manufacturing Industry

The transition toward Industry 4.0 and Circular Economy (CE) is increasingly important for the manufacturing sector in the emerging economy context, where culture plays an important role. This study explores how organisational culture, i.e., developmental culture, influences Industry 4.0 and CE transition to achieve a competitive advantage. The findings are based on 354 survey responses from manufacturing firms in Thailand. Structural Equation Modelling (SEM) was adopted to explore the mediation effect of Industry 4.0 and CE between developmental culture and competitive advantage and direct relationships. The developmental culture is examined as the firm’s intrinsic factor in advancing Industry 4.0 and CE implementation. The direct effect of Industry 4.0 on CE adoption is analysed. The results indicate a positive influence of developmental culture on Industry 4.0 and CE transition and their positive impact on competitive advantage. This implies that firms should align their cultural characteristics with developmental culture as part of their strategic approach toward adopting Industry 4.0 and CE principles. This study expands the literature by incorporating the influence of developmental culture to improve the understanding of the intrinsic influencing factor that leads to effective Industry 4.0 and CE implementation.