Strategic response to Industry 4.0: an empirical investigation on the Chinese automotive industry

Purpose: The purpose of this paper is to examine the strategic response to Industry 4.0 for Chinese automotive industry and to identify the critical factors for its successful implementation. Design/methodology/approach: A technological, organizational, and environmental framework is used to build the structural models, and statistical tools are used to validate the model. The data analysis helps to determine which factors have impact on the strategic response and whether their relationships are positive or negative. Interpretive structural modeling method is applied to further analyze these derived factors for depicting the relationship. Findings: The result shows that company size and nature do not increase the use of advanced production technologies, while other factors have positive impacts on improving the technology adoption among the companies surveyed. Practical implications: A strategic response to Industry 4.0 not only helps in improving organizational competitiveness, but it also has social and economic implications. For this purpose, empirical data are collected to measure the understanding of Industry 4.0 in the Chinese automotive industry. Originality/value: Despite the fact that the Chinese Government has proposed the “Made in China 2025” approach as a way to promote smart manufacturing, little empirical evidence exists in the literature validating company’s perspective toward Industry 4.0. This paper is to fill the research gap.