EIX: Group Assignment

 

“Big data analytics (BDA) capability and decision-making: The role of data-driven insight on circular economy (CE) performance in Malaysian manufacturing firms.”

1.0 Introduction

Big data analytics (BDA) has risen to prominence as an essential component in delivering actionable insights for decision-making (Dubey, Gunasekaran, Childe, Blome, & Papadopoulos, 2019). The application of advanced analytic techniques to large amounts of data is known as big data analytics. Corporate intelligence, customer relations, and a lot of analytic applications can benefit from BDA (Russom, 2011). In order to foster evidence-based decision-making, organisations require efficient ways of processing huge volumes of heterogeneous data into useful comprehensions. (Gandomi & Haider, 2015). The circular economy (CE) is a business idea that has garnered a lot of traction among practitioners and researchers. The successful adoption and execution of this corporate management model, however, remains a difficulty. Big data analytics (BDA) should be used as the foundation for informed and data-driven decision making in CE supply chain networks (Gupta, Chen, Hazen, Kaur, & Santibañez Gonzalez, 2019).

According to Shamim, Zeng, Khan, & Zia (2020), researchers have focused their attention on the relationship between decision-making (DMQ) performance and BDA in developing market enterprises due to the roles of BDA itself. However, empirical study on the antecedents of data-driven insights (DDI) for improving DMQ and their impact on circular economy performance is sparse. The previous research on the role of BDA in enabling and informing decision-making has mostly concentrated on organisational performance. Although BDA collects useful data on manufacturing activities at various phases of the production cycle in order to maximise resource use (Gupta et al., 2019), how data-driven insights could help manufacturers update their product and process expertise is still not clear (Ghasemaghaei & Calic, 2019). Little attention has been made in the existing literature on BDA competence to understanding that data-driven insights role in decision-making (Janssen, van der Voort, & Wahyudi, 2017) and, as a result, improving CE performance in Malaysian manufacturing firms.

Concerns about design products, productivity improvements and processes that embrace reusable and regenerative design are emerging in developing and developed markets (Sauvé, Bernard, & Sloan, 2016). According to (Gupta et al., 2019), we want to study whether manufacturing firms in Malaysia can do well in CE activities with the help of BDA, the ability to apply Big Data Analytics matters in acquiring insights that lead to better decision-making (Acharya, Singh, Pereira, & Singh, 2018) and the Malaysian Manufacturing firm's outcomes due to the assistance of BDA in making decisions (Ghasemaghaei & Calic, 2019). However, BDA is said to have a positive relationship with decision making. The addition of BDA can improve the ability to make effective decision-making. (Dubey et al., 2019). BDA helps decision-makers by revealing hidden linkages and facts that are difficult to deduce using the human intellect. This aids decision-makers in making sound decisions based on sound analytical underpinnings (Osman, Elragal, & Ståhlbröst, 2022). However, in order to generate more data insights, many researchers suggested that BDA should be increased as well (Ghasemaghaei & Calic, 2019). But, most studies have ignored the data-driven insights when decision-making is made. BDA and decision-making can be facilitated by data-driven insights as well as can improve CE performance.

The importance of this study is to examine the role of BDA to help the manufacturing firms in Malaysia to increase the CE performance. We aim to address the research questions:  how decisions in CE activities can be done well by manufacturing firms in Malaysia with the help of BDA, how does the capacity to use BDA matter in terms of assisting businesses in gaining insights that lead to better decision-making and how were the Malaysian Manufacturing firm's outcomes due to the assistance of BDA in decision-making. To be clear, we want to know the roles of BDA capability in manufacturers in increasing their quality of decision-making and CE performance. In this study, we demonstrate the knowledge-based view (KBV) as a key in increasing the quality of decision-making and organisational learning will increase the efficiency of knowledge application. We organize this paper as follows: CE and BDA literature in the section then we describe and introduce the hypothesis development as well as the sampling technique. In the last section, we discuss the contributions of the study, discussion and the directions of the future research.

 

2.0 A digital-enabled circular economy

 

Awan et al (2021) described digital-enabled circular economy as a digitally empowered CE is a new notion that may help enterprises improve resource use, efficiency, and production. Kristoffersen (2020) addressed the problem that both CE and Digital Technologies (DTs) are new fields, there is little systematic guidance on how DTs can be used to fully realize the potential of circular strategies for increasing resource efficiency and productivity, as well as little understanding of the supporting business analytics (BA) capabilities required to do so.

 

Cagno (2021) stated that CE aims to close the material loop by changing from a linear to a circular economy, reducing material extraction, waste disposal, and, as a result, environmental strain. By using a variety of productivity and efficiency-enhancing as well as restorative measures to keep goods, components, and materials in use for longer, the CE envisions a global economy in which value generation is disconnected from the use of scarce resources (Blomsma and Tennant, 2020) and potentially to contribute to multiple UN Sustainable Development Goals (SDGs) (Schroeder, Anggraeni, & Weber, 2019). Since they allow for the creation and processing of data and information necessary for circular business models and the complex needs of circular supply chains, digital technologies are an enabler for the upscaling of the circular economy (Berg, 2020).  Digitalisation may be regarded one of the Circular Economy's (CE) enablers since it gives insight and information into products and assets, such as knowledge of their location, condition, and availability (Antikainena, 2018).

 

There is a dearth of support for enhancing existing and developing new ways for DTs to help the CE through smart circular strategies (Kristoffersen et al., 2019, Kristoffersen et al., 2020) and the industry's implementation of CE principles has been slow (Circle Economy, 2020; Haas et al., 2015; Planing, 2015; Sousa-Zomer et al., 2018). According to IBM, BDA may help firms make better and quicker decisions, model and forecast future events, improve business intelligence, and increased operational effectiveness (Chai, Labbe & Stedman). This work contributes by analyzing the existing literature on big data analytics. As a result, some of the many big data tools, methodologies, and technologies that may be used are described, as well as their applications and potential in diverse decision domains (Elgendy & Elragal, 2014).

 

 

3.0 Theoretical background and hypothesis development                                              

 

Big Data Analytics (BDA) is crucial in affecting the organisations’ decision making and is advantageable for the performance of the Circular Economy (CE). According to Wamba et al. (2017), there is a positive link between organisational performance and BDA. For instance, Lehrer et al (2018) found that BDA improved the probability of innovation performance. A series of literature conducted on decision-making based on the theory of organizational learning. Knowledge resources are difficult to duplicate since they are complicated (Alavi & Leidner, 2001). In order to comprehend the data-driven insights and decision-making with organisations, scholars have built the foundations for the theory applications whereas organisational learning and Knowledge-Based View (KBV) (Ghasemaghaei, 2019; Ghasemaghaei and Calic, 2019).

 

In his research, Grant (1996) points out important insights from the KBV outlook, proposing that the major strategic resource of organisations is knowledge and these crucial resources of knowledge are rooted in the information technologies and systems like software agents and data mining techniques (Alavi & Leidner, 2001). Researchers have dedicated a great amount of focus on the examination of how BDA leverages organisational performance (Rialti et al., 2019), manufacturing performance (Dubey et al., 2019), environmental sustainability (Dubey et al., 2019), the optimization of resources (Zhao et al., 2017) and the advancement of performance of Circular Economy (Gupta et al., 2019).

 

This means that BDA will increase the efficiency of knowledge application through better organisational learning. In this study, we argue that organisational learning is crucial in the management of knowledge and knowledge sharing beyond the firm's boundaries. BDA helps in the development of a sustainable competitive advantage in which it promotes the production of hard-to-imitate and valuable knowledge resources. Firms' learning skills are profoundly founded on organisational capacity to encourage effective decision-making. The study has examined the learning theory as the foundation for how organisations produce data insights (Ghasemaghaei & Calic, 2019). Organisational learning theory is critical for firms to take advantage of new possibilities from external sources of information, and it may help them gain a competitive advantage. Researchers have proposed that a quick generation of data-driven insight could be through organisational learning capability to improve the efficiency of decision-making (Ghasemaghaei & Calic, 2019) despite the previous study has indicated that resource utilisation has increased by BDA (Song et al., 2017).

 

LSDM is known as Large-Scale Decision-Making which is a new and quickly evolving study topic that is becoming increasingly popular in real-world decision-making settings. In the context of LSDM, Ding et al. (2020) have found that big data is especially beneficial. Meanwhile, Palomares et al. (2013) proposed that LSDM study gives useful insights for determining the best solution to real issues and overcoming the non-cooperative behaviour of main decision-makers. According to Ding et al. (2020), LSDM is a technique that is time-consuming and difficult. Liu et al. (2014) explained that LSDM is the circumstance that involved a number of 20 and above members' participation while this number could be beyond the personnel inside the firm. 

 

LSDM is often used to address complicated problems in the operations management and electronic commerce field of study. As a result, LSDM is associated with BDA, which measures how many participants from the same industrial cluster are collaborating together to solve complicated resource scarcity concerns. The movement of decision-making from conventional to LSDM in the big data era illustrates this situation has been boosted by Tang and Liao (2019) in their latest efforts. Big data has long been regarded as critical in LSDM for dealing with natural resource constraint issues. Decision-making on big data-driven is often acceptable in leading organisations (McAfee et al, 2012). Tang and Liao (2019) found that the potential benefits of employing big data technologies for decision-making have begun to be studied in operations and management science research. Ding et al. (2020) have emphasised the need of utilising appropriate preference representations in LSDM for developing a data-driven large-group decision-support system. The complicated issues are facing by modern organisations could be solved associated with LSDM; yet, few studies has be conducted on how the LSDM in dealing with complicated issues could be done through the application of big data tools and a decision-support system.

 

Therefore, BDA participation in CE is emerging as a crucial topic of study considering its significance in organisations. According to Chen et al. (2012), BDA is a means of putting practices and methodologies into action “that analyse critical business data to help an enterprise better understand its business and market and make timely business decisions” (p.1166). Decision-making quality uses in his research and Raghunathan (1999) defined it as “the quality of the decision made by the decision-maker” (p.280). In recent, through knowledge-share practices, the research has introduced a relationship between decision-making quality and BDA (Ghasemaghaei, 2019). Ghasemaghaei (2019) has proposed that knowledge sharing has substantial implications for the outcomes of decision-making. Despite the fact that BDA has been identified as a crucial source for producing business value and improving company performance, there has been very little study on the influence of BDA on decision-making quality. Knowledge focus on data analytics has emerged as an interesting topic in a few manufacturing firms in the last few decades (Alavi & Leidner, 2001; Ghasemaghaei, 2019). However, further study is needed to determine if and under what conditions an organisation may use current information to develop new knowledge and execute effective actions (Alavi & Leidner, 2001).

 

3.1 Business intelligence and analytics and data-driven insights

Business intelligence and analytics (BI&A) was recently put under the limelight by academics and businesses in the past 20 years ago (Chen et al., 2012). BI&A is an integral tool for acquiring and assimilating intelligence upon conducting business and identifying business innovation. By definition, BI&A is “the techniques, technologies, systems, practices, methodologies, and applications that analyse critical business data to help an enterprise better understand its business and market and make timely business decisions” (Chen et al., 2012, p. 1166). Its role is well researched however there is room for discovery in understanding the impact of BI&A on circular economy (CE) performance. According to Dubey et al. (2019), BI&A relates in accordance with the ability to enhance innovation. Therefore, businesses that utilise BI&A will have much advanced resources that they can take into consideration when deciding. The utilisation of BDA makes the process to draw insights from a vast pool of data easier and it elevates the understanding of prescriptive, predictive and descriptive data. Therefore, business or project managers should heed the call to equip themselves with the skills to foster effective data-driven insights. Hence, the following hypothesis is suggested:

H1: Business intelligence and analytics positively relates to a firm’s data-driven insights.

3.2 Big data analytics and data-driven insights                

Big data analytics enables businesses and organisations to make smart decisions by disclosing previously concealed truths (Ding et.al, 2020). Scholars with a dynamic capability perspective have frequently studied BDA to investigate the link between BDA management and organisational success (Wamba et al., 2017). The flexibility of BDA equipment, organisational competencies, and staff experience all contribute to BDA. BDA equipment emphasises the similarity between chronological (past data) and current tasks to obtain knowledge into tasks, BDA management capabilities emphasise predicting future possible consequences derived from BI&A information and data, and BDA personnel expertise emphasises the decision-making process carried out to continue to improve future outcomes, according to Wamba et al. (2017). BDA human competencies, it is said, act as catalysts for mobilising management to comprehend multiple business processes in order to answer changing demands in the big data world. Firms may adapt BDA for strategic use by cultivating BDA management capabilities. Hence, the following hypothesis as suggested: H2: Business intelligence and analytics positively relates to a firm’s circular economy performance.

 

Organisational BDA can be an explanatory component in data-driven insights to learn from previous practices and evaluate their influence on future outcomes. Organisational BDA is regarded as an essential capacity that affects organisational success in the research. BDA is a knowledge-based capacity in the context of this research (Shamim et al., 2019). Wamba also suggested that improving organisational understanding capacities can aid managers in better understanding previous and present patterns as well as forecasting future trends. Firms may use BDA to enhance internal processes, operations, and organisational efficiency by identifying opportunities from various types of data (Rialti et al., 2019). The following hypothesis suggested as:

H3: Big data analytics capabilities positively relate to a firm’s data-driven insights.

 

According to the research, main advantages can be derived in terms of material reuse by improving material efficiency and incoherence of product design (reduction of waste from the manufacturing process and material reuse), as well as other sustainability-related benefits by attempting to integrate technological infrastructure, boosting data management to track real-time material in the product's life cycle, and connecting personal skills. Because BDA is recognised as a vital facilitator of the circular economy, it may aid firms in aligning resources with long- and short-term plans (Awan et al., 2021; Kristoffersen et al., 2020).  This is in line with Gupta et al. (2019), who claimed that effective BDA use is vital for improving resource circulation by boosting the efficacy of the material and, as a result, increasing the effectiveness of company operations. Most literature also suggests that BDA skills enable businesses to successfully leverage infrastructure and manage personnel talent to build reuse and recycling-friendly processes and products. In light of this new reality, Corporate leaders are examining the effect of big data to see how it might be leveraged to produce insights from organised and unstructured data for improved decision-making. Hypothesis 4 is suggested as,

H4: Big data analytics capabilities positively relate to a firm’s circular economy process.

 

 

 

3.3 Data-driven insights and decision-making quality                             

Data-driven decision-making has permeated all levels of management, and good data management has become a critical capability for success (Rejikumar,2018). Indeed, these decisions determine success, with proper judgments assisting in the achievement of goals and incorrect decisions leading to failure. Data is the most important component in making good decisions (Yu, 2022). It is the centre point of success for firms and sectors. However, the use of data in decision-making presents strategic issues such as data errors, broad aggregate measurements, and a lack of real-time data for decision-making. Hence, there is a need to change present procedures and adopt a data-driven decision-making methodology (Siddiqi, 2020).

H5: Data-driven insights positively relate to a firm’s decision-making quality.

3.4 Big data decision-making and circular economy performance                     

Prior research has progressively stressed the necessity of good decision-making in product life cycle management (Kristoffersen, Blomsma, Mikalef, & Li, 2020). Data-driven insight influences manufacturers to make rational and effective decisions. Because a huge volume of information is used to produce inventive solutions and solve problems, an organization's learning skills incorporate and employ powerful insights into the best course of action to improve decision-making (Ghasemaghaei, 2019). However, according to (Božič & Dimovski, 2019), there is a scarcity of research on BI&A-influenced decision-making and its implications for value-added business operations. Choosing the optimal course of action includes learning about the optimal courses of action and utilising advance technology for the redesign or reuse of services and goods to maximise material recovery. Increase the efficiency of materials and the efficiency of end-of-life products to redesign elements and create business value through an efficient decision-making process.

   We suggest that if CE-related decisions are derived by obtaining some relationships and carefully implemented based on reliable data insights, companies can better able to discover new patterns by using visualisation tools in adapting to different environmental challenges, thereby improving effectiveness and competitiveness. As a result, we recommend the following:

H6:The effectiveness of big data decision-making is positively related to the circular economy.

 

3.5 The mediating role of data-driven insights                             

In order to improve its CE performance, the organisation (firm) is stressing the issue more. As a result, enhanced decision-making participation is split into two categories: knowledge-based resources as well as organisational learning.  Learning theory resources, as stated by (Puranam and Swamy, 2016), play a significant role in shaping outcomes. This is due to the fact that data collection, processing, interpretation, and synthesis allows firms to increase their performance and competitive edge. Data-driven insights are increasingly posing a challenge to organisations, resulting in better decision-making (LaValle et al., 2011). An organisation can improve decision-making by introducing data-driven insights, which boosts added-value company's operations.

It has been proved that BI&A aids in the identification of control of knowledge techniques as well as produces new perspectives on  decision-making. Consequently, our findings assist businesses in making informed decisions. Also, we predict that data-driven insights from organisational BDA capabilities will be more strongly linked to BI&A. Concern for the efficient use of data-driven insights fosters a long-term approach to business decision-making, as well as a concentration on BI&A. The perspective is formed based on a concept proposed by March (1997). The primary premise of this strategy is that credible data is used to implement choices in the firm. Information processing, collecting, and interpretation have an impact on an organisation's decision-making process.

We believe that the BDA's capabilities can transform the process of decision-making by using data-driven insights. Hence, we recommend the hypotheses below:

H7: Data-driven insights mediate the relationship between business intelligence and analytics and decision-making quality.

 

H8: Data-driven insights mediate the relationship between big data analytics capabilities and decision-making quality.

 

 

4.0       Sampling technique

4.1       Sample and Data Collection

 

The ASEAN has launched the Digital Asean project to address the challenges that would underlie a regional digital economy in ASEAN, allowing the Fourth Industrial Revolution's advantages to be fully realised and turned into a force for regional economic inclusion. In response to this endeavour, the Malaysian government announced the MyDIGITAL goals. The Malaysia Digital Economy Blueprint is being developed for the period 2021 to 2030 in order to determine the direction and specify the strategies, initiatives, and objectives that will be used to provide the groundwork for the digital economy's growth, including bridging the digital divide. The Blueprint will ensure that the country is equipped to adopt digital technology by harnessing present opportunities. As a member of ASEAN, the Malaysian government is actively working on the idea of MyDigital, laying out 22 strategies that include 48 national initiatives and 28 sectoral initiatives as part of a plan to assist the digitization of the economy. It will be implemented in three parts over a ten-year period, from 2021 to 2030. The first phase, which runs from 2021 to 2022, focuses on strengthening the foundations and speeding up digitalization. From 2023 to 2025, the second phase will focus on promoting inclusive digital transformation. In the last phase, which runs from 2026 to 2030, Malaysia is expected to become a regional market for digital products and digital solutions providers (Economic Plan Unit, 2021). As a result, Malaysia is an appropriate setting for this research.

 

            The study focused on the population of big data-driven manufacturing firms in Malaysia. Meanwhile, the amount of population is unknown to researchers. Hence, we conduct the study using the non-probability research method. The sampling technique used in this study is convenience and snowballing sampling technique. In the initial data collection, we emailed the Google Forms questionnaire link to ten firms. We access the firms’ contact details through the Federation of Malaysian Manufacturers’ website. In the email, we asked the recipients to forward the questionnaire to the personnel who work with big data and decision-making in the related firms. We received the response from 7 firms and 30 employees and we were able to use all of them in the data analysis. The duration of data gathering took three weeks from April 11 to May 2, 2022. The firms that took part in this study are manufacturing companies that employed between 20 to 200 people and firms aged around 2 to 20 years. We gathered information from essential frontline employees and managers, as well as middle and high managers, who were involved in big data-related operations. To exclude any influence that these factors could have on decision-making, we controlled firm age, firm size, respondent level of managerial, respondent education, respondent age, and respondent experience in this study.

 

4.2       Data Analysis Plan

 

            The study is based on a research method that has been established in order to achieve the research objectives of the study. The research method begins with a consultation about the research’s problem statement with the supervisor. Discussions include a variety of  research methods such as identifying problem statements, research topics, and research objectives. After that, the consultation continues to discuss the process of collecting information on the problem that has been discussed, identifying respondents and analysing the data.

           

The study will be analysed right after we managed to get our thirty (30) respondents in the questionnaire. The component in the questionnaire is divided into two sections. Section A consists of the background of the respondents such as name of company, type of company, year of company, total revenue, total employee, position, age of respondents, and level of education. Next, descriptive statistical methods were used in order to analyse the data in section B. This is to provide a high-level of analysis of the data. For information, a 7-point likert scale was used to collect respondent's answers to the study.

 Once the data is collected, the data will be analysed using statistical software.  We choose Statistical Package for Social Science (SPSS) version 20.0 considering SPSS is the data analysis tool that is commonly used by other researchers. This software allows for precise data analysis, which was then used to result at a well-informed conclusion and set of suggestions. To analyse closed-ended questions, a 7-point likert scale is used.  Descriptive statistics as well as inferential statistics were applied in this study to interpret the survey questions on the level of significance where (p <0.05). While, for the statistical tool, we have decided to use hypothesis testing.  Hypothesis testing method has also been used in previous study. Then, we will create the shell table. The objective of this table is to construct a dataset with the predicted total number of sections and rows in the end table.  Table 1 and 2 (Appendix) are the shell tables that we can generate from our questionnaire.

 

4.3       Measures

 

            This study was done using the quantitative method, which is based on a structured questionnaire in data collection. There are five variables measured in the questionnaire. These items have been self-developed, adapted, and adopted. Eight items from Shamin et al. (2019) were used to assess decision-making quality. Božič & Dimovski (2019) and Gold et al. (2001) inspired us to construct nine items to access BI&A. Eight items from Akter et al. (2016) and eight items from Ghasemaghaei and Calic (2019) were adopted to measure BDA and data-driven insights respectively. The CE performance measuring scale was designed by the authors based on available literature and implemented in the research. On a seven-point Likert scale, respondents were asked to rate how strongly they agreed with the following statements: "1-strongly disagree" to "7-strongly agree."

 

 

5.0       Results

5.1       Reliability and validity

Muijhs in 2004 contended that validity is one of the most crucial design features of any measurement instrument study. Hence, validity can be defined as a process that corresponds to how well a test evaluates what needs to be tested. While validity is the writing ability evaluation accurately represents the writing ability being assessed. Instrument reliability is critical to ensuring that the instrument will perform consistently at other times. As a result, the instrument as a test is trustworthy.

 

Our result would be invalid if we are not truly evaluating what we claim to be evaluating. We have used The Fornell and Larcker criterion strategy to investigate discriminant validity in our research. The construct of factor loadings must be more than 0.65 to generate convergent validity. Besides, the average variance extracted (AVE) and composite reliability or known as CR are admissible if the values are greater than 0.5, and the AVE remains smaller than the construct's CR (Fornell.and Larcker,.1981). Table 3 depicts the values that have all the criteria.  As we can see, the column of factor loadings;for all the components are higher than 0.65. The sixth column also shows the Cronbach’s Alpha’s reliability where the value is in the range of 0.81 to 1.00, which indicates it is considered as very reliable.

 

Other measurements, such as the hetero-monotrait property ratio (HTMT), were used to examine the validity of discrimination. HTMT is also known as a newly proposed multi thread-multimethod matrix measurement. As stated by Henseler, Ringle, & Sarstedt (2015), this method is better than the method established by Fornell and Larcker in 1981 and cross-section loading method. According to the requirements, if the HTMT level is higher than the threshold, we could notice the lack of discriminating in validities. According to the criterion, each construct's HTMT ratio should be smaller than 0.85 to show that there is convergent validity. Hence, as seen in Table 4, we managed to establish the discriminant validity as all the components meet all the requirements suggested.

 

 

5.2       Hypotheses testing

            To evaluate the hypotheses, we employed Partial Least Squares (PLS) structural equation modelling which is useful for a multiple of reasons: (1) PLS is a structural equation modelling approach for estimating composite factor models that uses construct scores rather than sum scores. (2) PLS contains adequate and necessary information to estimate various weights as well as assist in the detection of a wide range of measurement model misspecifications. (3) When other models fail, PLS can be used in a variety of situations involving tiny samples. (4) For exploratory research, PLS can be a useful tool. Furthermore, it is considered both the measurement model and the theoretical structural model at the same time (Chin et al., 2003) . We have 6 hypotheses needed to be tested in this research. We refer to Table 5 for the hypotheses testing.

 

            First, we looked at direct correlations. BI&A is favourably and strongly related with data-driven insight (=0.695, p 0.001) and circular economy performance (=0.513, p 0.001), according to the findings. H1 and H2 have been ruled out by these results. The results also show a clear link between BDA and data-driven insight ( =0.000, p 0.001) and CE performance ( =0.133, p 0.001), hence H3 is accepted and H4 is rejected. Decision-making quality (= 0.003, p 0.001) is favourably connected to data-driven insights, and decision-making value is strongly related to CE performance (= 0.475, p 0.001). H5 has been supported by these data, but not H6. Because the sample size is small and the p-value is much less than the level of significance, we reject H1, H2, H4, H6.

 

 

6.0       Discussion

The impact of business intelligence and analytics and big data analytics on CE performance by improving DMQ and DDI was investigated using data from 30 respondents from Malaysian manufacturing enterprises. The findings suggest that CE performance are not influence or related by the capabilities of business intelligence and analytics and big data analytics. These findings are different with other study which says they are positively related.  Furthermore, whereas BDA capabilities are a better prognosticator of DDI and not of CE performance. The findings of our research contradict (Ghasemaghaei & Calic, 2019) assertion that BDA capabilities and BI & A have a favourable link with DDI and improve DMQ. We also discovered that BDA is more highly linked to the quality of decision-making while having no effect on CE performance. The need of using suitable preference representations in LSDM for developing a data-driven large-group decision-support system have highlighted in the previous studies. (Ding et al., 2020). Consequently, in this study, LSDM demonstrates the extent to which members of industrial clusters use BDA to address the complex resource shortage. There are 6 out of 8 hypotheses that have been tested. Based on the diagnostic testing of the variables, there are only two hypotheses that can be accepted. First, it is proven that BDA capabilities positively influence a firm’s DDI at H3= 0.000, p < 0.01. Then, it also has been proven that DDI positively relate to a firm’s DMQ at H5= 0.003, p < 0.05. Lastly, all of the other hypotheses are rejected as the p-values are greater than the significance level of 5%. The other two hypotheses, H7 and H8 have been exempted from data analysis as the sample sizes are too small.

 

6.1       Theoretical contributions

 

            This research study adds to the literature in a variety of ways. The study's key contribution is the development and testing of a conceptual model that identifies the process that allows a company to improve its CE. First and foremost, the purpose of this article is to investigate how BDA capabilities impact data-driven insights and CE performance in manufacturing companies. The efficiency and precision of new manufacturing industries that utilise BDA capabilities may have a favourable influence across the entire organisation in terms of process and product innovation, as well as operational efficiency (O’Donovan, 2015). Our findings add to the body of knowledge by revealing that the KBV is equally significant in improving decision-making quality. This research establishes a relationship between the KBV, and the quality of decision-making influenced by data-driven insights. The KBV lens might be used to explain our conceptual model. We use the KBV to argue that learning is a key feature that offers a fresh source of information and develops new knowledge, allowing businesses to extract value from key knowledge sources. Our findings show that businesses should improve the quality of their decision-making in order to improve CE outcomes. Company leaders play a key role in accomplishing the aims of BDA adoption since the use of analytics in real-time decision-making has major positive implications on business operations and performance enhancement (Adrian & Rusli & Yusmadi, 2017).

Second, according to this study, decision-making may be achieved by developing data-driven insights that are gathered within an organisation using BDA. Although BDA skill is necessary for making quality decisions, there is little research on how to increase decision quality. (Janssen et al., 2017). It also necessitates internal efforts and particular competencies to assure the quality of big data-driven choices (Janssen, van der Voort, & Wahyudi, 2017; Shamim, Zeng, Shariq, & Khan, 2019). As a result, we propose that manufacturing companies with higher decision-making skills might transmit and internalise information to create recycling goods.

Third, most of the studies outside of Malaysia has proven that business intelligence and analytics work closely with a firm’s driven insights.  Business analytics entails much more than just displaying data, numbers, and statistics which means that the application of logic and mental processes is at the heart of analytics methods for deducing meaning from data (Nerkar, 2016). In Malaysia, on the other hand, there are few and inadequate empirical studies to prove that these two has relations to each other. Subsequently, we found that firm’s circular economy performance has nothing to do with business intelligence and analytics. Previous studies have empirical findings that emphasise the necessity of having a more holistic approach to BA development so that businesses can better manage their CE implementation and ROC of their IT portfolio, resulting in enhanced organisational performance and higher BA investment returns (Kristoffersen & Mikalef & Blomsma & Li,2021).

Moreover, our findings found that big data analytics capabilities have no influence toward a firm’s circular economy process. In Malaysia manufacturing firms, many firms has no or little awareness of the power and potential of BDA that could be to boost the circular economy process, thus, they did not adopt the BDA as a tool in their decision-making process and have no or little effect on the firm’s circular economy. Lastly, based on our research, we found that big data decision-making effectiveness has no effect onto circular economy performance. According to Del Giudice, Chierici, Mazzucchelli, and Fiano (2020), while the importance of big data in successful decision-making processes has been recognised, few empirical studies have focused on how big data may be utilised to improve the environmental, social, and economic performance of enterprises in the circular economy.

 

6.2       Managerial relevance

Acknowledgement on the importance of BDA in making decisions is rising, however, there is gap for research on its ability to influence the process of making decisions (Janssen et al., 2017). Therefore, this study is set to understand the effect of BI&A and BDA ability to influence decision making processes. Apart from that, this research can benefit the manager level executive with some idea of managing data-driven insights in influencing decision-making process. Firstly, our research positively shines lights upon the gaps in CE performance in terms of predictive, perspective, and descriptive analytics. Established BDA capabilities relates to better critical decision-making processes especially in the circular economy. One transformation that managers can undertake is to change the production method from linear to closed loop aided by the data driven strategies. Next, from the previous section, it is understood that there is an established BDA and DDI culture relationship (Duan et al., 2020). However, little exploration has been made to understand the chain between BI&A and data insights. The results in this research shed light on big data decision-making. Managers are reminded not to fully trust and rely on BDA as it may cause flawed and biased decision-making process.

Thirdly, this topic has been actively discussed among academicians as the collective awareness on the importance of BDA and BI&A. Previous research shown that there is relation of relying on BDA capabilities and the ability to make better decision (Tang and Liao, 2019). However, when it comes to empirical test to understand the role of data driven insights, little research has been conducted. Based on our results, we advised managers to carefully choose and select their best DDI in order to design strategies will improve their circular economy standards. Firms that aim to heighten their social impact standards are advised to implement data-driven insights to understand their specific issues. From the literature review, decision making involving big group must not fully rely on the professionals (Emmerling and Rooders, 2020). The result has shown that it is best to incorporate BI&A, and BDA capability as well. It is believed that better CE performance is attributed to incorporation of artificial intelligence such as BI&A, BDA and data-driven insights.

 

7.0       Conclusion

The impact of BDA capabilities on CE performance was investigated in this study, which looked at the decision-making quality of manufacturing enterprises in Malaysia. Our findings show that BDA has a favourable impact on data-driven insights, but it does not lead to improved CE performance. BDA is positively influenced the DDI and DMQ will positively affected by data driven insights. This shows that BDA capabilities indirect relationship with decision-making. Overall, we conclude that while BDA capabilities are important and useful in the creation of DDI, the relationship between decision-making and CE may not be shaped by them.

 

7.1       Limitations and future research

This study faces limitations on the sample size and the context of the study. Research is conducted with 30 respondents on data collection due to time constraints. The sample size is too small and inaccurate to draw a conclusion about the population for this study. Future studies could focus on a larger sample size within an appropriate period in conducting the research. Besides, this study is conducted in the developing country context, Malaysia in which these findings might suit only a single economic zone. However, future research is needed to develop and boost the generalizability of these findings which fits well with other economies such as European countries and the United State.

In recommendation, future research can focus on scopes other than in this study. For instance, in examining the role of Circular Economy performance in mediating the environmental and innovation performance with Big Data Analytics capability. We also suggest future researchers test the data integration management capability in mediating the decision-making and Big Data Analytics capability. The study needs to pay attention to the investigation of how Big Data Analytics capabilities in enhancing the Circular Economy performance across industries is also recommended in the future. The stakeholders' diversion role is crucial in a Circular Economy and future research may focus on the role of stakeholders in robust Circular Economy performance.

 

 

 

 

 

 

 

 

 

 

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Appendix

Table 1: Section A: Demographic and information of the respondents and businesses.

 

 

 

 

 

 

Table 2: Section B: Big Data Analytics (BDA)

 

 

 

 

 

 

 

 

 

 

 

Table 3: Reliability and convergent validity.

Variable

Items

Factor loadings

Average Variance Extracted (AVE)

Composite Reliability

Cronbach’s alpha

BIA

BIA1

BIA2

BIA3

BIA4

BIA5

BIA6

BIA7

BIA8

BIA9

0.917

0.916

0.942

0.957

0.894

0.954

0.953

0.948

0.915

0.871

0.984

0.981

BDA

BDA1

BDA2

BDA3

BDA4

BDA5

BDA6

BDA7

BDA8

0.965

0.959

0.971

0.922

0.908

0.942

0.942

0.922

0.887

0.984

0.982

Data-driven insights

DD1

DD2

DD3

DD4

DD5

DD6

DD7

DD8

DD9

0.968

0.960

0.959

0.952

0.959

0.958

0.948

0.966

0.957

0.919

0.990

0.989

Decision-making quality

DMQ1

DMQ2

DMQ3

DMQ4

DMQ5

DMQ6

DMQ7

DMQ8

0.977

0.967

0.958

0.956

0.954

0.947

0.968

0.943

0.919

0.989

0.987

 

Circular economy performance

CE1

CE2

CE3

CE4

CE5

0.979

0.976

0.956

0.954

0.953

0.928

0.985

0.981

 

 

Table 4: Heterotrait-Monotrait ratio, skewness, and kurtosis.

 

Factors

Skewness

Kurtosis

1

2

3

4

1

BDA

-1.894

4.634

 

 

 

 

2

BIA

-2.254

5.748

0.957

 

 

 

3

CE performance

-2.308

5.408

 

0.845

0.861

 

 

4

DMQ

-1.577

2.904

0.981

0.929

0.899

 

5

DD

-1.681

3.291

0.972

0.949

0.900

0.981

 

 

Table 5: Path Analysis and Hypothesis Testing

Path

Original Sample

T Statistics

P Values

BIA → DD

0.079

0.392

0.695

BIA → CE performance

0.390

0.654

0.513

BDA → DD

0.893

4.657

0.000

BDA → CE performance

-0.865

1.506

0.133

DD → DMQ

0.636

2.988

0.003

DMQ → CE performance

0.423

0.715

0.475

 

 

Table 6: Hypotheses and the results

 

Hypothesis

p-value

Result

H1: Business intelligence and analytics positively relates to a firm’s data-driven insights.

0.695

Rejected

H2: Business intelligence and analytics positively relates to a firm’s circular economy performance.

0.513

Rejected

H3: Big data analytics capabilities positively relate to a firm’s data-driven insights.

0.000

Accepted

H4: Big data analytics capabilities positively relate to a firm’s circular economy process.

0.133

Rejected

H5: Data-driven insights positively relate to a firm’s decision-making quality.

0.003

Accepted

H6: Big data decision-making effectiveness positively relates to circular economy performance.

 

0.475

Rejected


Appendix 5
 Google Form (
Questionnaire)























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