The effects of information sharing and incentive alignment on the operational performance of supply chain: the mediation role of technology absorption capacity The case of small and medium enterprises

This study aims to investigate the effect of incentive alignment and information sharing on the operational performance of the supply chain with emphasis on the mediating role of technology absorption capacity in small and medium enterprises (SMEs).

This research is qualitative in terms of data and descriptive-applied in terms of research orientation. The required data were collected by distributing a questionnaire to 100 participants. The four main research constructs included incentive alignment, information sharing, operational performance, and absorption capacity, which together constituted the conceptual model of the research. Three criteria of reliability, convergent validity, and divergent validity were used to evaluate the fit of measurement models. To test the research hypotheses, structural equation modeling (SEM) and Smart PLS v.3 software were used. In this study, Smart PLS 3 software was used to avoid the limitations of the covariance-based approach, including sample size, distribution properties, and the type of variables studied from the component-based approach (PLS). Also, the mean replacement approach in Smart PLS 3 software was used to deal with the lost data. 

The results indicated that incentive alignment has a significant positive effect on absorption capacity, information sharing on supply chain operational performance, information sharing on absorption capacity, and absorption capacity on supply chain operational performance. Also, the research findings indicated that absorption capacity has a significant positive effect on the relationship between incentive alignment and supply chain operational performance, and information sharing and supply chain operational performance.

Based on the results of this study, small and medium-sized companies are suggested to establish basic principles and values among their working groups, to build the personality of employees, and to promote information sharing within the organization. Employees' opinions should be used in the company's decisions and delegating authority to the lower levels of the organization. Also, by promoting the spirit of trust in their employees, advertise the culture of absorption capacity among the employees of the organization, and establish incentive policies for this purpose in the organization. Because information sharing is the result of everyday relationships between employees, these relationships store trust, mutual understanding, shared values, and behavioral values in a resource called information sharing. To create and promote incentive alignment, a culture should prevail in the organization that encourages and educates these factors to pave the way for the expansion of operational performance within the organization.

In the 21st century, the importance of coordination between members of a supply chain has become essential for survival. Jobs compete as a supply chain, not as independent companies. Also, the absorption capacity is useful for companies because it allows them to identify, and absorb the value of new information gathered from internal and external sources and use it to support their business decisions. At the core of collaborative activities is information sharing, which is a participatory mechanism in which the supplier may acquire and use demand and retailer inventory status. As supply chains compete with each other, alignment encourages different companies to maximize rewards throughout the chain by creating value for consumers. Investigating the abovementioned subjects together distinguishes this study from the previous study.