0% found this document useful (0 votes)

19 views516 pages

Local Guide to IoT and Sustainability

Q: What are the main challenges in creating explainable AI, and why is it important for different industry applications?

The main challenges in creating explainable AI are developing systems that offer clear and actionable insights without sacrificing predictive accuracy and handling the complexity of algorithms that often operate as 'black boxes.' Explainable AI is crucial for industry applications to ensure trust, accountability, and compliance with ethical standards, especially in sectors like healthcare and finance where decisions have significant consequences. Solutions include designing user-friendly interface layers and adopting constraints that guide transparent operations .

Q: How do AI technologies influence resource efficiency strategies within supply chains?

AI technologies enhance resource efficiency strategies within supply chains by optimizing inventory management, forecasting demand accurately, and improving logistics through real-time data analysis. This reduction in waste and improved alignment of supply with demand lead to cost savings and sustainable operational practices. However, successful integration requires overcoming challenges such as data integration from disparate systems and potential workforce displacement due to automation .

Q: How might Fintech innovations contribute to financial inclusion in MENA countries, and what challenges do they face?

Fintech innovations contribute to financial inclusion in MENA countries by providing low-cost, accessible financial services that extend banking capabilities to underserved communities, particularly women and remote populations. These technological advances facilitate economic growth by improving access to financial tools. However, challenges include regulatory barriers, technological literacy gaps, and ensuring data security and privacy as Fintech services proliferate .

Q: How does the integration of Industry 4.0 contribute to sustaining competitive advantages and achieving strategic objectives according to recent research?

The integration of Industry 4.0 within organizations contributes to sustaining competitive advantages by enhancing their capability to leverage new technologies that streamline operations and increase efficiency. These advancements facilitate the realization of strategic objectives by fostering innovation and enabling more effective resource management, thus helping organizations maintain a competitive edge in dynamic markets .

Q: Analyze the potential benefits and drawbacks of using machine learning in financial risk management.

The benefits of using machine learning in financial risk management include enhanced prediction accuracy and the ability to identify patterns in massive datasets, which can improve risk assessment and decision-making processes. However, drawbacks involve the risk of perpetuating existing biases if the input data is flawed, the challenge of interpreting complex model outputs, and ensuring model adaptability to rapid market changes. Maintaining model transparency and continuously updating algorithms with new data are critical for mitigating these issues .

Q: Evaluate the effects of AI's incorporation into the education sector, particularly during the COVID-19 pandemic.

AI's incorporation into the education sector, especially during the COVID-19 pandemic, has enabled more personalized and flexible learning experiences through digital platforms. These tools have maintained learning continuity and adapted assessments to meet remote teaching needs. However, reliance on digital education has also raised issues such as academic integrity concerns, equity in access, and the necessity for teachers to adapt quickly to new technologies .

Q: What are the ethical considerations in implementing AI processes and structures in businesses, and how can these be addressed?

Ethical considerations in implementing AI processes and structures include ensuring data privacy, reducing algorithmic bias, and enhancing transparency in decision-making. Addressing these requires adopting "privacy by design" principles, increasing stakeholders' ethical literacy, and employing explainable AI techniques to make decision processes understandable and justifiable. Continuous oversight and adaptation of ethical standards in AI deployment are essential to sustainable business practices .

Q: In what ways has AI influenced marketing decision-making, and what are the potential concerns associated with its use?

AI has significantly influenced marketing decision-making by enabling firms to collect and analyze substantial consumer data, which improves marketing strategies and personalization efforts. However, the use of AI in marketing raises concerns about privacy invasion and the potential dehumanization of consumer interactions. These concerns stem from AI's ability to manipulate consumer thought processes and emotions, challenging the ethical boundaries of digital marketing .

Q: What are the implications of AI's ability to enhance customer service management through personalized and customized services?

AI's ability to enhance customer service management lies in its capacity to deliver personalized and customized services powered by data analytics. This approach improves customer experience by precisely targeting individual customer needs, leading to increased satisfaction and loyalty. However, the implications include the potential challenges of ensuring data privacy and maintaining genuine human interaction to supplement AI-driven services .

Q: Discuss the role of AI and machine learning in improving the accuracy of predictive models for renewable energy production.

AI and machine learning play a crucial role in enhancing the accuracy of predictive models for renewable energy production by processing vast datasets to find patterns and anomalies. These technologies enable improved forecasts and efficiency in energy management, addressing the complexity and variability inherent to renewable energy sources. However, the implementation must address challenges such as data quality and algorithm bias to maintain model reliability .

The document discusses the Internet of Things (IoT) and its role in technological sustainability and business competitive advantage. It highlights the integration of advanced technologies such as AI, Fintech, and Blockchain in various sectors to improve efficiency and foster innovation. The book comprises 30 chapters that explore applications of these technologies in areas like healthcare, education, and digital marketing, aiming to provide insights for both academia and industry.

Uploaded by

Jared Ogalo

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

0% found this document useful (0 votes)

19 views516 pages

Local Guide to IoT and Sustainability

Uploaded by

Jared Ogalo

We take content rights seriously. If you suspect this is your content, claim it here.

Available Formats

Download as PDF, TXT or read online on Scribd

Internet of Things

Technology, Communications and Computing

Muneer Al Mubarak
Allam Hamdan Editors

Technological
Sustainability
and Business
Competitive
Advantage
Internet of Things

Technology, Communications and Computing

Series Editors
Giancarlo Fortino, Rende (CS), Italy
Antonio Liotta, Edinburgh Napier University, School of Computing
Edinburgh, UK
The series Internet of Things - Technologies, Communications and Computing
publishes new developments and advances in the various areas of the different facets
of the Internet of Things. The intent is to cover technology (smart devices, wireless
sensors, systems), communications (networks and protocols) and computing
(theory, middleware and applications) of the Internet of Things, as embedded in the
fields of engineering, computer science, life sciences, as well as the methodologies
behind them. The series contains monographs, lecture notes and edited volumes in
the Internet of Things research and development area, spanning the areas of wireless
sensor networks, autonomic networking, network protocol, agent-based computing,
artificial intelligence, self organizing systems, multi-sensor data fusion, smart
objects, and hybrid intelligent systems.
Indexing: Internet of Things is covered by Scopus and Ei-Compendex **
Muneer Al Mubarak • Allam Hamdan
Editors

Technological Sustainability
and Business Competitive
Advantage
Editors
Muneer Al Mubarak Allam Hamdan
College of Business & Finance College of Business & Finance
Ahlia University Ahlia University
Manama, Bahrain Manama, Bahrain

ISSN 2199-1073 ISSN 2199-1081 (electronic)

Internet of Things
ISBN 978-3-031-35524-0 ISBN 978-3-031-35525-7 (eBook)
[Link]

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
Switzerland AG 2023
This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether
the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of
illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and
transmission or information storage and retrieval, electronic adaptation, computer software, or by similar
or dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
The publisher, the authors, and the editors are safe to assume that the advice and information in this book
are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the
editors give a warranty, expressed or implied, with respect to the material contained herein or for any
errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional
claims in published maps and institutional affiliations.

This Springer imprint is published by the registered company Springer Nature Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Paper in this product is recyclable.

Foreword

Technological sustainability has received considerable attention recently from

nations and businesses as it secures existing and future resources for the well-being
of human and all creatures living on the planet. This type of sustainability promotes
innovations and improves the whole society. It brings competitive advantage to the
country and business when it is implanted in the systems and strategy. Embedding
an advanced technology into business process can increase resource efficiency,
achieve better business performance, and improve customer satisfaction. Thus,
technological sustainability can bring innovations, manage resources efficiently,
and foster economic and social developments. Going green, making better products,
and having healthy society are all possible now with the strategizing and operation-
alization of important technological applications such as Internet of Things (IoT),
artificial intelligence (AI), financial technology (Fintech), Big Data, and Blockchain.
This book covers topics on recent technologies that can improve performance
and bring a sustainable competitive advantage. It explores the immense potential
held by the implementation of such technologies. The book, for instance, discusses
the applications of Internet of Things (IoT) in education, using computer-supported
collaborative learning (CSCL) system that can help develop cooperative education
for an effective educational environment. On the other hand, financial technology
(Fintech) is being used immensely in the financial sector to govern financial transac-
tions in a more cost-effective way with less risk, great accuracy, and high speed.
Artificial intelligence (AI), whether for Industry 4.0 or Industry 5.0, has been used
all over the world to solve problems, increase efficiency, and support humans.
Blockchain technology is also discussed in this book that has ecologically improved
the situation and supply chain process. Other topics covered are renewable energy,
digital marketing, social media, and cloud computing.

Founding President and Chairman Prof. Abdulla Y. Al Hawaj

of Board of Trustees
Ahlia University,
Manama, Bahrain

v
Preface

Technological sustainability is contributing well nowadays in businesses to survive

and thrive in an ever-changing world. It is about securing existing resources and
saving the planet for future generations. If used well, it can reduce time taken in the
process and utilize the data in an efficient way. Technological sustainability is about
promoting innovations, improving social development, and providing green prod-
ucts that benefit society. It reduces business risks as an enterprise can be better man-
aged and increases profitability. Business competitive advantage is possible when
technological substitutability is built into its processes and culture. Therefore, tech-
nological sustainability can bring innovations, manage resources efficiently, and
foster economic and social development. It has been used in many areas such as
solar power, green products, green supply chain, storage technology, internet bank-
ing, nanotechnology, and many others.
There are many approaches to technological sustainability. Among these
approaches, but not limited to, are artificial intelligence (AI) and financial technol-
ogy (Fintech). AI can widely perform human tasks that are required for decision-
making with the aid of computer-based devices. Many processes can be automated
and mimicked using sensor technology and robotics. Undoubtedly, the advance-
ment of AI technology has enabled organizations to change their ways of doing
businesses to meet the needs and wants of different stakeholders with an aim for
more sustainability. On the other hand, Fintech is a technology used to support
financial services and can be best functioned using the Internet of Things, Big Data,
AI and Blockchain. This book shall serve as a guide not just to academia but also to
the industry to adopt suitable strategies that offer insights into global best practices
as well as innovations in the domain.
There are 30 chapters in the book, and each one has been evaluated by the edito-
rial board and double-blind peer reviewed by at least two other reviewers.
The chapters of the book are divided into two main parts:
I. Applications of Internet of Things, AI, and Financial Technology
II. Digitalization Towards Improved Sustainable Business, and Society

vii
viii Preface

The chapters of this book present a selection of high-quality research on theoreti-

cal and practical levels, which ground the uses of smart technologies in business,
technological sustainability and business competitive advantage, healthcare, media,
marketing, education, entrepreneurship, and other vital areas. We hope that the con-
tribution of this book will be useful to academics and decision-makers at various
economic and executive levels.

Manama, Bahrain Muneer Al Mubarak

Allam Hamdan
Contents

Part I Applications of Internet of Things, Artificial Intelligence,

and Financial Technology
Sustainable Competitive Advantage Through Technological Innovation:
An Introduction�� 3
Muneer Al Mubarak and Allam Hamdan
Artificial Intelligence in Marketing and Organizational
Decision-Making: Some Challenges and Concerns�� 9
Hasan Anwar, Muneer Al Mubarak, and Ali Bakir
Internet of Things for Healthcare: Evaluate User’s Acceptance
and Sustainability During Pandemics�� 25
K. P. Jaheer Mukthar, C. Nagadeepa, T. K. Satheesh Kumar,
Edwin Ramirez-Asis, Juan Villanueva-Calderón, and J. K. Singh
Fintech and the Changing Competitive Environment of Retail Finance:
A Study on the Development of a Cross-Functional and Cross-Sectoral
Financial Regulatory System�� 49
Raj Bahadur Sharma, Ijaz Ali, and Imran Ahmad Khan
Impact of Digital Marketing and IoT Tools on MSME’s Sales
Performance and Business Sustainability�� 65
D. Ravindran, K. P. Jaheer Mukthar, Eva Zarzosa-Marquez,
Julián Pérez Falcón, Robert Jamanca-Anaya, and Liset Silva-Gonzales
The Higher Education Students’ Perception on IoT Acceptance
as an Educational Facilitating Medium: Perception
from Omani Context�� 79
Ghilan Al-Madhagy Taufiq-Hail, Maryam Juma Ahmed Al Farsi,
Adel Sarea, and Ibrahim Rashid Humad Al Shamsi

Artificial Intelligence in Marketing: Concerns and Solutions �� 101
Abdulrahman Hesham Alammal and Muneer Al Mubarak

ix
x Contents

The Impact of Emerging Technologies on Accounting and Promises

to Minimize Operational Costs �� 115
Mahmood Mohamed Mansoor, Rami Mohammad Abu Wadi,
and Ruaa Binsaddig
Understanding Artificial Intelligence Through Its Applications
and Concerns�� 135
Hussain Abbas Maki, Muneer Al Mubarak, and Ali Bakir

Fintech Adoption in Palestine: Bank Customers’ Perspectives �� 153
Bahaa Sobhi Awwad

Success Factors of Using Artificial Intelligence�� 169
Shahad Omar Al Hleewa and Muneer Al Mubarak

Fintech and Financial Inclusion: Evidence from MENA Countries �� 185
Lubna Khalaf and Rami Abu Wadi

Impulse Buying Behaviors in a Digital World�� 199
Maryam Husain Almahdi, Jameela Radhi, Faisal Alhawaj,
and Abdulraqeeb Najeeb
Analyzing the Effects of Digital Communication on Project
Management in Bahrain During the COVID-19 Pandemic
(a Case Study)�� 211
Sara Ismaeel, Edward L. Murphree, Allam Hamdan,
and Mohammed Kanan
The Factors Affecting the Adoption of Artificial Intelligence
Technologies in Organizations�� 237
Khawla Khalifa, Mukhtar AL-Hashimi, and Allam Hamdan
The Impact of Teaching Artificial Intelligence Concepts and Tools
in Improving Creative Thinking Skills Among Talented Students�� 267
Mohammed F. Abu Owda, Assma H. Abu Mousa, Mahmoud D. Shakfa,
and Dawood A. Al-Hidabi

Part II Digitalization Towards Improved Sustainable Business,

and Society
Digital Risk in International Business Management and Allied Areas
in India, the UAE, and Austria�� 283
Udo Christian Braendle, Nasser Almuraqab, M. V. Manoj Kumar,
and Ananth Rao
An Online Market in Your Pocket: How Does an Augmented
Reality Application Influence Consumer Purchase Decision�� 307
Haneen Mohammad Shoaib and Muhammad Saleem
Contents xi

Healthcare Technology and Innovation Management Methods:

Theoretical Interpretation�� 315
Michael Fascia, Ellie Koseda, and Bryan McIntosh
The Relationship Between Food E-Advertising and Children’s Obesity
in Bahrain: Role of Rules�� 323
Aalaa Ameer Affooni and Allam Hamdan
The Obvious Foreseen Effects of Machines Replacing Humans
in Society �� 335
George Sammour and Laila Malas

Digitizing Business Education and Quality of Education: A Survey�� 353
Ali Ateya Ali Alromaihi, Allam Hamdan, and Amir Dhia

Digital Sustainability for Business Education: Literature Review�� 373
Esra AlDhaen
The Feedback System Based on Computer-Supported Collaborative
Learning (CSCL) on the Case of Covid-19�� 387
Samer Shorman, Mohammad H. Allaymoun, and Omer Awad Hag Hamid
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen:
Sustainable Technology-Driven Business Model During Pandemic�� 401
C. Nagadeepa, K. P. Jaheer Mukthar, Edwin Ramirez-Asis,
Hober Huaranga-Toledo, Marcos Espinoza-Maguiña,
and Sandra Mory-Guarnizo
The Implementation of Blockchain Technology in the Development
of Socioeconomic Environment: A Conceptual Framework�� 415
Nabil Ahmed Mareai Senan and Imran Ahmad Khan
The Impact of Smart Technologies on SME Sustainability:
The Mediation Effect of Sustainability Strategy – Literature Review�� 431
Fatema AlZayani, Allam Hamdan, and Haneen Mohammad Shoaib
Development of a Cloud Business Process Architecture Using
the Riva Method �� 455
Mohammad Omar Sabri and Mahmoud Odeh
Solar Farms, Sustainability and Mitigating CO2 Emissions:
A Technological Approach�� 473
Ahmed Sami, Allam Hamdan, and Salem Aljazzar
Renewable Technologies: Solar Power and Wind Power Energy
Utilization – Advantages and Disadvantages�� 507
Bayan Ahmed, Muneer Al Mubarak, and Mohammed Khouj

Index�� 521
About the Editors

Muneer Al Mubarak Prof. Al Mubarak received his PhD in Business and

Economic Studies (Marketing) from University of Leeds, UK. Prof. Al Mubarak’s
expertise is in strategic management, marketing management, and relationship mar-
keting. He held several managerial positions in Ahlia University such as Department
Chairperson, Dean of College of Business and Finance, Acting Dean of Students
Affairs, Acting Dean of Graduate Studies and Research, and Vice President for
Administration and Finance. He contributed to several quality assurance programs
and institutional accreditation over the years. He has over 35 years work experience
as he contributed well to teaching and training in areas such as leadership, strategic
management, relationship marketing, marketing management, marketing communi-
cations, sustainability, corporate social responsibility, customer relationship man-
agement, and service excellence. He has participated in many community activities
over the years and is a reviewer of many reputable international journals. He is also
a member of several high-ranked editorial advisory board journals, such as Journal
of Young Consumer and Social Responsibility Journal.

Allam Hamdan Allam Hamdan is a full professor, is listed within the world’s top
2% scientists list by Stanford University, and is the Dean of College of Business and
Finance at Ahlia University, Bahrain. He is the author of many publications (more
than 250 papers, 174 listed in Scopus) in regional and international journals that
discussed several accountings as well as financial and economic issues concerning
the Arab world. In addition, he has interests in educational related issues in the Arab
world universities like educational governance, investment in education, and eco-
nomic growth. He was awarded the First Prize of Al-Owais Creative Award, UAE,
2019 and 2017; the Second Prize of Rashid bin Humaid Award for Culture and
Science, UAE, 2016; the Third Prize of Arab Prize for the Social Sciences and
Humanities, 2015; and the First Prize of “Durrat Watan,” UAE, 2013. He achieved
the highest (1st) scientific research citation among the Arab countries according to
Arcif 2018–2022. He is a member of National Qualifications Framework NQF –
Validation Panel, and Appeal Committee, General Directorate of NQF, Kingdom of
Bahrain. He is also a member of Steering Committee in International Arab
Conference of Quality Assurance of Higher Education.

xiii
Part I
Applications of Internet of Things,
Artificial Intelligence, and Financial
Technology
Sustainable Competitive Advantage
Through Technological Innovation:
An Introduction

Muneer Al Mubarak and Allam Hamdan

1 Introduction

Sustainable development creates innovation, growth in business, and competitive

advantage (Baumgartner, 2014). It is about environmental protection, social respon-
sibility, and economic development (Nastanski & Baglione, 2014). A firm’s strategy
should consider sustainable development that brings social, environment, and eco-
nomic benefits. It improves firm’s corporate social responsibility by looking at a
wider business scope that meets different stakeholders’ expectations and manages
their concerns (Al Mubarak, 2021). Performance can be improved and competitive
advantage gained by integrating necessary internal changes required by a firm to
suit Industry 4.0 innovation. Commercial innovation, economic, and technological
capabilities can be used to improve internal forces. If these capabilities are widely
used, it would lead to a sustainable competitive advantage (Ramadan et al., 2022).
On the other hand, Industry 5.0 extends the concept of technology and puts more
emphasis on the role of human in sustainable development rather than focusing only
on technological capabilities (Kolasińska-Morawska et al., 2022). With Industry
5.0, firms can better use resources and gain competitive advantage as it improves
workforce performance and increases stakeholders’ expectations (Al Mubarak, 2022).
Customer relationship management relies on artificial intelligence (AI) and the
Internet of Things (IoT) as they help in planning, analyzing, and tracking custom-
ers’ requirements. These technological applications work well for human to enhance
quality and output. Customers can now make e-shopping through chatbot tools and
interactive voice assistant (Kaczorowska-Spychalska, 2019). AI contributes to the
advancements of many human industries such as medical, industrial, and

M. Al Mubarak (*) · A. Hamdan

College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]; ahamdan@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 3

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
4 M. Al Mubarak and A. Hamdan

commercial (Lai & Ma, 2020; Mishra & Tripathi, 2021). Technological applications
have improved efficiency of private and public sectors and led to more sustainable
development (Al Mubarak, 2022). Blockchain is a technology that efficiently helps
the process of documenting transactions and tracing tangible and intangible assets
in a network with the aim of reducing risk and cutting costs. Blockchain protects
and stores data in a shared database using a consensus mechanism. The entire block
network is built around the concept of relying on information grid that displays the
data source and the owner of the data. It is mainly used in supply chain manage-
ment. Blockchain technology supports sustainable supply chain management by
improving efficiency, traceability, and transparency (Alawi et al., 2022).
Firms have recently pursued a sustainable financial technology (FinTech or
green) approach in their business to reduce negative impact of production on envi-
ronment, society, and economy. Sustainable FinTech success factors in the business
include agility, security, and innovation (Nguyen, 2022). This goes with the issue of
digital economy that aims to reduce pollution for green development. Therefore,
manufacturing firms need to adopt a green development approach of digital econ-
omy by introducing business model innovation (Han & Zhang, 2022). Renewable
energy sources have recently received considerable attention by firms and govern-
ments. These sources can efficiently be managed by intelligent machines in areas
such as electricity generation forecasting (Krechowicz et al., 2022). This paper
focuses on the most recent technological advancements that support sustainable
development goals and create competitive advantage in many spheres including
business, health, and education. Few studies have focused on the linkage of triple
dimensions which are technology, competitive advantage, and sustainable
development.

2 Literature Review

Artificial intelligence (AI) has been incorporated in industrial, commercial, and

medical settings to help in analyzing, sharing, and storing of knowledge in a timely
manner. It focuses on process reengineering that uses technological elements of
robotics functions (Ruiz-Real et al., 2021). AI is a smart agent of technology that
carries out specific tasks of humans. Such technology has made business process
more efficient using technological applications such as eBay and Amazon (Lu et al.,
2018; Haenlein & Kaplan, 2019). AI complements human efforts with a high level
of accuracy and in a timely manner in tasks such as analysis, knowledge storage,
and logical interpretations of things (Ghosh et al., 2018). On the other hand, Internet
of Things (IoT) applications have been intensively used in different areas including
remote monitoring healthcare applications. These monitoring applications have
improved healthcare services in recent years by implementing appropriate proce-
dures, technologies, and diagnostics algorithms (Benedict, 2022). It consists of bil-
lions of network devices that are intelligently used in the areas of planning,
management, and decision-making in different sectors such as healthcare,
Sustainable Competitive Advantage Through Technological Innovation: An Introduction 5

manufacturing, agriculture, telecommunications, and transportation. The use of this

type of technology has been increased because of COVID-19 that has restricted
movements. It has been intensively used in healthcare, transportation, and smart
construction. This technology can best be adopted by most companies when certain
issues are solved such as costs, security, and privacy (Umair et al., 2021).
Industry 4.0 witnessed mass technological advancements ranging from artificial
intelligence, the Internet of Things, blockchain, to big data that have improved
economy and society. This disruptive technology has created concerns by employ-
ees that it would replace them ending up jobless. In contrast, Industry 5.0 technol-
ogy complements what humans do, rather than replacing them. In this case,
cooperative technology-human work takes place for quality input and output that
leads to sustainable development. Therefore, adoption of Industry 5.0 by firms
brings sustainable development and competitive advantage. Firms need to prepare
for such adoption by having a challenging human resource strategy, high-caliber
staff that can adapt the new disruptive work environment. Legal and regulatory
issues are required to regulate the activities considered in Industry 5.0. Leadership
commitment makes a big difference to successfully implement new processes (Al
Mubarak, 2022). Industry 5.0 is a new technological transformation that includes
intelligent devices, intelligent systems, and intelligent automation to help human
intelligence to accomplish the work. It is not a replacement but a complement to
human efforts. In this sense, jobs are expected to increase and not the other way
round. Such cooperation is expected to increase business efficiency with a mini-
mum waste, and customizable manufacturing. Therefore, it is important to have
machines and robots that help humans by means of brain-machine interface of arti-
ficial intelligence (Nahavandi, 2019).
Digital economy has recently been a hot issue that should be considered by many
firms to reduce pollution and go green for sustainable development. Therefore,
manufacturing firms need to adopt a green development approach using digital
innovation. Han and Zhang (2022) suggested innovation paths and orientations
toward green development. These orientations’ paths are efficiency, value, user, and
ecology. Every firm adopts an innovation path that suits it. The efficiency-oriented
path improves firm’s efficiency, maximizes energy, utilizes resources, and reduces
pollution by adopting intelligent production and reducing costs. The value-oriented
path enables a firm to transform itself in the industry using digital services for better
sustainable development. The user-oriented path focuses on deepening the relation-
ship with the user and customizes innovations that reduces waste and improves
resource allocation. The ecology-oriented path uses a digital platform to develop
smart connected product systems with a business ecosystem.
Khan et al. (2022) suggested a hybrid renewable energy system (HRES) to man-
age energy resources. It is configured to achieve both technical and economic objec-
tives of a firm. Technical objective enhances life span and increases resources
performance, while economical objective reduces costs. It was concluded that
HRES can meet energy demand in remote locations using advanced software and
hardware required to improve performance. A hybrid (distributed) decentralized
control system is recommended as it allows using different control forms in a single
6 M. Al Mubarak and A. Hamdan

system. Therefore, HRES can be managed using technological and economical

techniques to improve performance and reduce costs.
The technology has contributed well to supply chain management, particularly in
logistics. The last-mile service in logistics is to reach as many people as possible
even if natural environment is negatively impacted. There is a need to find solutions
that help improve logistics and do not harm natural environment. Incorporating
digitalization in the process would make it faster with a special consideration to
ecology. The couriers-express-parcel market has been redefined using technology
such as online stores of logistics. Last mile in logistics is the final stage of distribu-
tion and the point of contact between customer and service provider. Implementation
of technological solutions positively impacts the environment by reducing CO2
emissions in the field of transport. Incorporating technology in logistics has opti-
mized the last mile and reduced number of returns (Kolasińska-Morawska
et al., 2022).
Using supply chain strategies such as buffering strategies and bridging strategies
helps achieve resource efficiency and competitive advantage. Buffering strategies
include product design and process reengineering to manage scarce natural resources
by reusing, remanufacturing, and recycling these scarce resources. Bridging strate-
gies include formal contracts based on a transaction, relational contracts based on
trust and cooperation, and vertical integration where a focal company controls
inputs of the other company. These two strategies lead to resource efficiency by
minimizing costs and waste and securing natural resources for sustainable competi-
tive advantage. Buffering and bridging strategies were found to have positive
impacts on resource efficiency, while bridging strategies have a positive impact on
competitive advantage (Kalaitzi et al., 2019).

3 Conclusion

Disruptive technology such as artificial intelligence (AI), the Internet of Things

(IoT), financial technology (FinTech), and blockchain has made the world better. Its
applications have been used in many spheres such as healthcare, education, and
business. Firms’ operations have become more efficient, and performance increased.
AI is a smart agent that could be in the form of robotic that can carry out certain
human tasks. It functions with a high accuracy and in a timely manner to store,
analyze, and interpret information. Internet of Things (IoT) technology deals with
billions of network devices that are intelligently used in many sectors such as
healthcare, manufacturing, agriculture, transportation, and telecommunications.
Financial technology (FinTech) has made a big transformation in financial transac-
tions, paying more attention to environment and at the same time improving busi-
ness performance. Blockchain technology cost-effectively stores data, shares
information, and tracks tangible and intangible assets in a business network. All
these technological applications, whether in Industry 4.0 or Industry 5.0, have
improved and will advance the whole world. The focus of the technology is not to
Sustainable Competitive Advantage Through Technological Innovation: An Introduction 7

replace humans, but rather to complement their efforts. Digital economy improves
the environment as firms become more conscious with the way they manufacture
and recycle focusing on efficiency, value, user, and ecology. Furthermore, firms now
pay more attention to the renewable energy in their production and need a technol-
ogy that best control the process.
Technological innovation, undoubtedly, brings huge benefits to private and pub-
lic sectors, nationally and internationally. It changes the way firms carry out their
works. It also changes the way people live, study, and make shopping, to name a
few. Competitive firms always seek to improve their internal and external capabili-
ties to stay ahead of their counterparts. This requires finding that uniqueness to
make it what it wants to be. That uniqueness is called competitive advantage, an
advantage over rivals. Advantages include advanced technology, economies of scale
in production, efficient supply chain management, excellent and prompt services,
and optimum cost structure. All these advantages should first be obtained and then
sustained where the real challenge lies. Firms might obtain competitive advantage
of certain applications in Industry 4.0 such as an early level of artificial intelligence
but does not work to sustain it in Industry 5.0. In this sense, sustainable competitive
advantage should be the target of every firm that wants to pursue sustainable devel-
opment. It is about managing existing resources efficiently and planning to secure
future resources as well. The requirement for technological development and inno-
vation varies from one sector to another but all should be ready to adopt it to improve
inputs and outputs. This study links and discusses technology, competitive advan-
tage, and sustainable development dimensions and highlights benefits of techno-
logical applications in private and public sectors. Few studies have mentioned such
a linkage.

References

Al Mubarak, M. (2021). Sustainable development through five senses of effective corporate social
responsibility strategy. Social Responsibility Journal, 17(6), 829–839.
Al Mubarak, M. (2022). Sustainably developing in a digital world: Harnessing artificial intel-
ligence to meet the imperatives of work-based learning in Industry 5.0. Development and
Learning in Organizations, 37(3). [Link]
Alawi, B., Al Mubarak, M., & Hamdan, A. (2022). Blockchain evaluation framework for sup-
ply chain management: A decision-making approach. Supply Chain Forum: An International
Journal, 23(3), 212–226. [Link]
Baumgartner, R. J. (2014). Managing corporate sustainability and CSR: A conceptual frame-
work combining values, strategies and instruments contributing to sustainable development.
Corporate Social Responsibility and Environmental Management, 21(5), 258–271.
Benedict, S. (2022). IoT-enabled remote monitoring techniques for healthcare applications – An
overview. Informatica, 46(2), 31–149.
Ghosh, A., Chakraborty, D., & Law, A. (2018). Artificial intelligence in internet of things. CAAI
Transactions on Intelligence Technology, 3(4), 208–218. [Link]
Haenlein, M., & Kaplan, A. (2019). A brief history of artificial intelligence: On the past, present
and future of artificial intelligence. California Management Review, 61(4), 5–14. [Link]
org/10.1177/0008125619864925
8 M. Al Mubarak and A. Hamdan

Han, X., & Zhang, J. (2022). Business model innovation paths of manufacturing oriented towards
green development in digital economy. International Journal of Environmental Research and
Public Health, 19(24), 6454. [Link]
Kaczorowska-Spychalska, D. (2019). How chatbots influence marketing. Management, 23(1),
251–270. [Link]
Kalaitzi, D., Matopoulos, A., Bourlakis, M., & Tate, W. (2019). Supply chains under resource pres-
sure: Strategies for improving resource efficiency and competitive advantage. International
Journal of Operations & Production Management, 39(12), 1323–1354. [Link]
IJOPM-02-2019-0137
Khan, A. A., Minai, A. F., Pachauri, R. K., & Malik, H. (2022). Optimal sizing, control, and man-
agement strategies for hybrid renewable energy systems: A comprehensive review. Energies,
15(17), 6249.
Kolasińska-Morawska, K., Sułkowski, Ł., Buła, P., Brzozowska, M., & Morawski, P. (2022).
Smart logistics—Sustainable technological innovations in customer service at the last-mile
stage: The polish perspective. Energies, 15(17), 6395.
Krechowicz, A., Krechowicz, M., & Poczeta, K. (2022). Machine learning approaches to predict
electricity production from renewable energy sources. Energies, 15(23), 9146.
Lai, K., & Ma, S. (2020). Sensitivity and specificity of artificial intelligence with Microsoft Azure
in detecting pneumothorax in emergency department: A pilot study. Hong Kong Journal of
Emergency Medicine, 30(1), 1–8. [Link]
Lu, H., Li, Y., Chen, M., Kim, H., & Serikawa, S. (2018). Brain intelligence: Go beyond artifi-
cial intelligence. Mobile Networks and Applications, 23(2), 368–375. [Link]
s11036-017-0932-8
Mishra, S., & Tripathi, A. (2021). AI business model: An integrative business approach. Journal
of Innovation and Entrepreneurship, 10(1), 1–21. [Link]
Nahavandi, S. (2019). Industry 5.0—A human-centric solution. Sustainability, 11(16), 4371.
Nastanski, M., & Baglione, S. L. (2014). Sustainability: Benefits of social responsibility to brand
value & profit. The Journal of International Management Studies, 9(2), 164–173.
Nguyen, V. P. (2022). Evaluating the FinTech success factors model to achieve a sustainable finan-
cial technology business: An empirical study in Vietnam. Cogent Engineering, 9(1), 2109317.
Ramadan, M., Amer, T., Salah, B., & Ruzayqat, M. (2022). The impact of integration of Industry
4.0 and internal organizational forces on sustaining competitive advantages and achieving stra-
tegic objectives. Sustainability, 14, 5841. [Link]
Ruiz-Real, J. L., Uribe-Toril, J., Torres, J. A., & De Pablo, J. (2021). Artificial intelligence in
business and economics research: Trends and future. Journal of Business Economics and
Management, 22(1), 98–117. [Link]
Umair, M., Cheema, M. A., Cheema, O., Li, H., & Lu, H. (2021). Impact of COVID-19 on IoT
adoption in healthcare, smart homes, smart buildings, smart cities, transportation and industrial
IoT. Sensors (Basel, Switzerland), 21(11), 3838. [Link]
Artificial Intelligence in Marketing
and Organizational Decision-Making:
Some Challenges and Concerns

Hasan Anwar, Muneer Al Mubarak, and Ali Bakir

1 Introduction

Artificial intelligence (AI) has been attracting much research interest following its
rapid incorporation in an increasing number of contexts and appliances, such as
smartphones, customer service, journalism, creative professions, music production,
and marketing (Carlson, 2015; Lu et al., 2020; Makridakis, 2017; Marshall, 2018;
Quackenbush, 2018; Sterne, 2017; Zhang et al., 2021). AI is undoubtedly enhancing
the capabilities of businesses and industries in an increasingly competitive and
aggressive global market. Most industries are using data analytics and business
intelligence made possible by new AI technology in their marketing decisions. It is
envisaged that the adoption of AI technology would lead to the creation of new
goods and services, as well as significant increases in productivity (Makridakis,
2017). It is also suggested that AI offers marketing increased processing power,
cheaper prices, availability of large data, and advancements in machine learning
techniques and models (Huang & Rust, 2021). Furthermore, AI is increasingly
being used in operational marketing, such as risk detection and help-desk response
management, as well as consumer insights and targeting, copy formation and selec-
tion to match target customers, and pricing to maximize return from individual con-
sumers (Marinchak et al., 2018). AI global investment in marketing enterprises has

H. Anwar
The George Washington University, Washington, DC, USA
M. Al Mubarak (*)
College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]
A. Bakir
University of Business and Technology, Jeddah, Saudi Arabia
e-mail: [Link]@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 9

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
10 H. Anwar et al.

escalated; $2.5 billion was invested in AI marketing enterprises in 2018 and $1 bil-
lion in the second half of 2019. Globally, over $11 billion has been invested since
2014. (Martin & Writer, 2019).
Although studies are proliferating on AI in marketing, nevertheless, the findings
on its role in marketing remain inconsistent and unfocused (Verma et al., 2021). The
aim of this study is to discuss AI contribution to the various marketing functions,
particularly those functions that were shown by Yang and Siau (2018); it will also
touch upon strategic decision-making and organizational structure and will pose
some concerns.

2 Literature Review

2.1 Artificial Intelligence: Definitions

In the sixth century, AI was introduced as concept by Homer’s Iliad in the form of
self-propelled chairs, and in 1937, Alan Turing who invented the computing machine
declared that machines can be considered artificially intelligent if they are able to
mimic human intelligence (McCorduck, 2004; Nilsson, 2010). Moreover, in 1955,
the term “artificial intelligence” was proposed by McCarthy et al. (1955) for a sum-
mer research project investigating how intelligence can be exercised by machines,
aiming to accurately characterize every aspect of intelligence for a computer to
replicate. The literature displays several similar definitions of AI, for example,
Simon (1955, p. 96) defined AI as “systems that exhibited intelligence, either as
pure explorations into the nature of intelligence, explorations of the theory of human
intelligence, or explorations of the systems that could perform practical tasks requir-
ing intelligence.” Huang and Rust (2021, p. 31) defined AI as “the use of computa-
tional machinery to emulate capabilities inherent in humans, such as, doing physical
or mechanical tasks, thinking, and feeling.” Technologies that imitate human intel-
lect, machines that perform tasks that humans would perform, and human intelli-
gence manifested by computers are more recent definitions of the term (Bolander,
2019; Huang & Rust, 2018; Shankar, 2018). Piscopo and Birattari (2008, p. 275), on
the other hand, described machines with AI as artifacts that can carry out tasks in the
real world without human involvement.
Davenport (2018) identified some of the core technologies that have been used
within AI; these include machine learning, natural language processing, rule-based
expert systems, neural networks, deep learning, physical robots, and robotic process
automation. Kaplan and Haenlein (2019) also indicated that AI is capable to accu-
rately understand external information, learn from such information, and display
dynamic adaptation. Davenport and Ronanki (2018) focused on AI’s software plat-
forms, such as automating corporate operations, discovering new information from
data, or connecting customers and employees. Brooks (1991) alternatively sug-
gested that AI was intended to make computers, like people, do things, which can
Artificial Intelligence in Marketing and Organizational Decision-Making… 11

be described as intelligent. Intelligence here refers to the ability to understand iden-

tity, emotional knowledge, rationality, innovation, reasoning, and critical thinking
(Russell & Norvig, 2016). Currently, robots can only be trained to execute a limited
set of activities, such as identifying human faces or forecasting how likely an
Internet visitor is to click on a banner advertisement. Often referred to as “weak AI”
or “narrow AI,” these algorithms are incapable of learning outside the small area of
their design. However, Kurzweil (2005) pointed out that as learning is a mental
activity, in principle any mental activity may be learnt; and since computers can
learn to learn, it is conceivable to create machines that can “learn how to learn” in
the future, a notion known as “strong AI”.

2.2 Social Media, AI, and Marketing

One can hardly write about marketing and consumer behavior nowadays without
bringing into the discussion social media. The latter has become an environment
where consumers engage in a many-to-many communication and the creation and
dissemination of content. This is further enabled by the emergence of online com-
munities (Kaplan & Haenlein, 2010), allowing brands to permeate their presence to
target audiences (Fournier & Avery, 2011; Wirtz et al., 2013). For quite a while now,
business organizations have been collecting and making use of increasing quantities
of data, leading to the development of successful frameworks for distributed data
analysis. Such frameworks include streaming, batch, and graph processing systems
(Carbone et al., 2017; Dean & Ghemawat, 2008; Gonzalez et al., 2014; Isard et al.,
2007; Zaharia et al., 2012). The proven success of these frameworks encouraged
businesses to delve more into analyzing large data sets which has now become a
crucial part of their marketing and business decision-making; it has also ushered in
the age of “Big Data.”
Like their counterpart in other business functions, marketing specialists saw an
opportunity in the availability of large amount of unstructured data that were created
in blog posts, online reviews, and social networking sites (Wedel & Kannan, 2016).
AI techniques are increasingly used to mine this data, identifying patterns to con-
nect social media activity with firm outcomes (Goh et al., 2013; Netzer et al., 2012).
Using text mining techniques on social media user-generated content, these special-
ists can build an econometric model that measures the impact of social media activ-
ity on consumers’ purchase behavior. Similarly, text mining techniques are used to
examine user-generated content related to product (e.g., online reviews) that shows
how sentiment toward specific product features predicts future sales. (e.g., Archak
et al., 2011).
Analytics programs are also being applied to social media data to inform busi-
ness decisions and derive consumer insights in different industry contexts (Andzulis
et al., 2012; Choi et al., 2018). For instance, Xiang et al. (2015) found a strong cor-
relation between guests’ experiences shared in online reviews and guest satisfaction
ratings. Kwok and Yu (2013) used text analytics techniques to identify the type of
12 H. Anwar et al.

content (e.g., text, link, photo, and video) and message (e.g., marketing vs. conver-
sational) that received more engagement on Facebook in the context of restaurants.
Xu et al. (2016) advanced a framework that combined insights from big data (e.g.,
social media) and traditional marketing sources to develop new products and pro-
vide a taxonomy on the appropriateness of relying on big data versus traditional
marketing data sources. Fan et al. (2015) argued that social media content analysis
can help with customer segmentation and profiling, online reviews can help build a
product’s brand reputation, and social media can support location-based advertising.

2.3 AI and Business Intelligence Applications

The term “AI application” does not have a precise meaning (Legg & Hutter, 2007).
Various aspects of intellect are thought to exist for humans. Based on the context
and the type of decision that must be made, AI applications may differ in complex-
ity (McCarthy et al., 1955; Nilsson, 2010). It has been almost 30 years since AI was
first introduced, and its use has grown dramatically. Implicitly constructed applica-
tions are those that use statistics to learn from past mistakes and so are not entirely
predictable, error-free, or explainable (Simon, 1955). Human developers provide
computers with reasoning rules and information retrieval to automate work tasks,
sometimes referred to as automated systems. These rules result in systems that are
reliable and explicable, with well-defined and well-documented capabilities
(Bolander, 2019). AI has gained momentum as new applications are made possible
by rapid advances in a wide range of information technologies (e.g., computer
vision, machine learning, and natural language processing) and an explosion of data
to train available algorithms (Bornet et al., 2021). For instance, Japan’s leading
convenience store 7-Eleven (SEJ) designed a new platform named “Seven Central”
for the “practical data use to support the company’s future IT strategies and trans-
formational initiatives.” Once a customer makes a purchase, it takes Seven Central
“barely a minute” to use that data. That enables SEJ to gain real-time data insights
for business intelligence as well as ensure that their data is secure (Faster insights
with real-time analytics, Google Cloud case studies).
The scope of data applications is expanding to encompass more complex AI and
machine learning (ML) techniques, capable of supervised learning, using and train-
ing deep neural networks that can be used in prediction (Jordan & Mitchell, 2015).
However, the promise of AI is much bigger than supervised learning; emerging AI
applications are increasingly operating in changeable environments, reacting to
changes, and taking sequences of actions to accomplish long-term, designated goals
(Agarwal et al., 2016; Nishihara et al., 2017). These new reinforcement learning
(RL) applications are designed to learn to exploit the gathered data as well as
explore the space of possible actions. RL deals with learning to operate continu-
ously within an uncertain environment based on delayed and limited feedback, find-
ing their way into dialogue systems, UAVs, and robotic manipulation (Gu et al.,
2017; Ng et al., 2006; Van Den Berg et al., 2010). The central goal of an RL
Artificial Intelligence in Marketing and Organizational Decision-Making… 13

application is to learn a policy, a machine that yields effective performance over

time, e.g., piloting a drone. These machine’s characteristics drive new systems
requirements which will support fine-grained computations, rendering actions in
milliseconds when interacting with the real world. Existing frameworks that have
been developed for Big Data workloads or for supervised learning workloads fall
short of satisfying these new requirements for RL.

2.4 Artificial Intelligence and Marketing Functions

Artificial intelligence is an important technology that is having a significant impact

on the capabilities and marketing management, as well as the optimization of mar-
keting functions and strategies. Although AI is recognized to offer potential benefits
for consumers (e.g., Pitardi et al., 2021), there are, however, inherent concerns for
consumers derived from AI’s increased use, including privacy, dehumanization
(Lobschat et al., 2021; Puntoni et al., 2021), thought, and emotions (British
Psychological Society, 2021). This is especially so, as marketing and consumer
behavior have mainly drawn on psychological theories as a core source in gaining a
deeper understanding of the thinking, desires, and experiences of individual con-
sumers (Malter et al., 2020).
Nevertheless, AI associated with adaptive and dynamic big data has created
capabilities that have a significant impact on marketing management; these capa-
bilities can lead to value creation through the marketing mix (Erevelles et al., 2016).
The literature is exploring the role that robotics will have in settings, such as ser-
vices, service encounters, and the formation of service attitudes (Borghi & Mariani,
2021; Huang & Rust, 2018; Mariani & Borghi, 2021; Paluch & Wirtz, 2020; Pitardi
et al., 2021; Van Doorn et al., 2017; Wirtz et al., 2018).
Research on AI’s relevance to marketing has recently increased with consumer
research, organization, and marketing strategy as emerging core areas (Mustak
et al., 2021; Vlačić et al., 2021). In this paper and following Yang and Siau’s (2018)
marketing function classification, the use of AI will be looked at in the main market-
ing functions of promotion, marketing information management, customer service
management, marketing decision-making, marketing operations, pricing and prod-
uct place management, financing and securing transaction, and transportation.
In terms of promotion, using AI-powered conversion optimization tools, busi-
nesses may capture consumers’ preferences for certain products with the aim of
recommending or promoting similar products, resulting in increased business con-
version (Miikkulainen et al., 2018). For example, advertisement image click-
through rates may be used to score advertisements, and AI can then choose the most
effective ones based on those results (Gijs et al., 2019). Promotional activities would
then be issued to customers automatically through e-mail, postal mail, or media
platforms; all based on data gleaned from consumer behavior research. In addition,
businesses may foresee customer behavior and choose the kind and timing of the
offer (Turban et al., 2018).
14 H. Anwar et al.

In relation to marketing information management, Sterne (2017) pointed out that

large amounts of big data from many sources may be crunched by AI systems and
then extracted for use in business decisions. By making use of AI, a company’s abil-
ity to gather and analyze data will be enhanced, as well as its ability to have better
understanding of its consumers’ needs, wants, and interests.
Furthermore, AI has had a significant influence on customer service manage-
ment; it greatly enhanced the analysis of client data to provide services and goods
that are both individualized and customized (Turban et al., 2018). Kühl et al. (2019)
pointed out that for the purpose of eliciting and monitoring customers’ needs, AI
has already shown its capacity to provide useful insights and guidance using super-
vised machine learning models. Since chatbots are currently commonly used in
consulting and after-sales support, it is now possible to provide customer care to
customers around the clock (Rozga, 2018). Customer feedback and sales marketing
are other common uses for robocalls (Jarek & Mazurek, 2019). The importance of
using social media platforms to communicate with clients directly cannot be over-
stated (Rohm et al., 2013). Prioritizing customers’ problems and properly deciding
which to reply to is critical since, with prevalent consumerism, it is unwise and does
not make business sense to disregard customer comments (Gijs et al., 2019).
More than a century ago, Weld (1917) suggested that marketing decision-making
could be improved and supported by intelligent systems, which offer options based
on the knowledge of the environment that was made available to them. Selling pro-
cedures, distribution networks and product place, material or commodity rearrange-
ment, and sales pricing and profit margins are all choices that must be made for a
company to be effective in the current market conditions. According to Moreno
(2009), it is possible to create a model that mimics the decision-making process of
expert traders using AI, depending on the model’s scalability and accuracy. A hybrid
intelligence system is useful for creating marketing plans as it blends computer
analysis with the opinion and inventiveness of the human mind (Li, 2000). Speeding
up strategy generation, strengthening decision-making certainty, and increasing
decision abundance are all potential advantages of AI-based systems for decision-
making (Li & Li, 2009). Such systems would maximize efficiency by assisting in
making more consistent judgments, particularly in analyzing the industry’s situa-
tion, company’s resources, and capabilities, as well as production planning deci-
sions (Metaxiotis et al., 2002).
Marketing operations are as important as other marketing functions. Due to dis-
ruptive changes in marketing brought about by AI, firms need to constantly improve
their performance to keep up with these developments. Using chatbots, AI-powered
search engine optimization, and other AI technologies in web design allows AI web-
site builders to develop simpler and more efficient and effective user interfaces
(Bharat, 2017). AI also improves managers’ creativity and allows companies to
devote more time to developing new products by taking away tedious and repetitive
tasks (Kumar et al., 2019), freeing up human resources for creative and innovative
endeavors. AI applications can help in creating a wide range of new marketing pro-
cedures that can be implemented automatically and dynamically in a variety of sce-
narios. As Wirth (2018) noted, marketing is increasingly relying on technology such
Artificial Intelligence in Marketing and Organizational Decision-Making… 15

as speech and image processing to aid in the management of information and execu-
tion of plans at an unprecedented scale. Human activities are continuously and rap-
idly being replaced by an AI-assisted technique, known as natural language
processing (NLP), which uses AI to develop an understanding of what people do
(Dutton, 2018).
Effective management of pricing and product place is crucial for business devel-
opment and survival. AI can measure market performance and product demand to
effectively forecast price changes of various products and services (Milgrom &
Tadelis, 2018). AI can also analyze and estimate the market’s development and can
therefore forecast future needs (Burgess, 2017). Armed with those business intelli-
gence insights, companies may accordingly set the price of their products at a desir-
able and acceptable level, which can be automatically modified using AI-based
aggregate analysis, and then delivered to the market and location in the required
quantity and timing.
In the realm of financing and securing transactions, AI has already shown its
ability to secure adequate cash and budget for marketing efforts, as well as to facili-
tate the checkout and payment process. To improve checkout and payment security
and convenience, using AI has provided a range of financial help to customers. AI’s
capacity to mimic human cognition with its large databases enabled identifying,
avoiding, or overcoming fraud and cyberattacks in the payment process. False
detection AI systems must be continually updated to keep up with market trends and
verify that actual customers rather than an intruder are really paying for their ser-
vices (Dutt et al., 2018). Automated payments made possible by AI-based proce-
dures not only enhanced payment security but also made payments more convenient
and efficient (Jarek & Mazurek, 2019). The subscription feature, auto replenish-
ment, and stored payment method information are all examples of automated
payments.
As part of the overall consumer experience, transportation and delivery is a criti-
cal marketing arena that is heavily affected by AI. Fundamental marketing efforts
might be ruined without paying attention to transportation. Refrigeration delivery
trucks are being fitted with automated air temperature monitoring technology and
clever sensor structures (Shan et al., 2004). Scientists and researchers have previ-
ously proposed the idea of temperature recorders and sensors that are able to dis-
cover problems, determine status, and monitor performance online (Shan et al.,
2004). A growing number of companies are turning to AI to streamline and auto-
mate their delivery processes (Kumar et al., 2019). For example, Uber Eats makes
use of AI to improve delivery timings by considering all relevant factors, such as
projected cooking process of meals, time it takes the vehicle to collect, time it takes
the business to bring food to the customer, and the presence of vehicles (Williams,
2018). Currently, there is only a dearth of studies examining the benefits and effects
of AI in marketing. Furthermore, much of the available work focuses on the effects
of AI, overlooking the mechanisms through which it generates such effects.
16 H. Anwar et al.

2.5 AI, Business Decision-Making,

and Organizational Structure

AI is increasingly becoming crucial in supporting knowledge management. Studies

show that new meanings and roles are predicted to be generated because of the
interaction between people and technology systems. Scientists find that AI can be
used to gather, as well as understand and evaluate data, enhancing the speed and
variety of data (Shollo & Galliers, 2016). Nevertheless, Metcalf et al. (2019) noted
that the development of AI may be difficult since information is always evolving
and complex in nature. Research further shows that humans are critical to ensuring
data accuracy and assessment (Shollo & Galliers, 2016). It has also been established
that implicit knowledge is significant for the analysis of facts in making high-level
strategic judgments (Acharya & Choudhury, 2016). According to Metcalf et al.
(2019), the lack of conceptual frameworks and the dependency on past records to
forecast trends are key limiting restrictions of AI.
Terziyan et al. (2018) presented a patentable intelligence (Pi-Mind) approach
where human decision-makers are cloned, to catch sensitive information and prob-
able values. However, the target’s ability is always dependent on the input data
given by people. When technology is overstated, companies tend to concentrate on
data storage rather than information exchange. According to the 90/90 principle of
90/90 data use, the value of data diminishes as they age, where nearly 90% of data
is rarely accessed after 90 days (except for auditing and legal purposes). In other
words, roughly 90% of data lose most of their value after 3 months if not used for
business intelligence. Acharya and Choudhury (2016) suggested a cross experience
and understanding approach to overcome this issue. They stressed the importance of
information in every phase of the decision-making process and feel that organiza-
tional resources must be made available to allow effective organizational learning.
Decision-making power may be assigned across roles and units that demonstrate
varied degrees of interconnectedness to alleviate the challenge of limited human
processing capacity (Von-Krogh, 2018); this challenge can be alleviated by the
deployment of AI. Adaptation or development of structures is thought to be crucial
for the integration of AI. As a result, organizations’ procedures and functions will
shift as soon as AI technologies are put into use (Von-Krogh, 2018). Rather than
building new operations on top of existing ones, Bienhaus and Abubaker (2018)
suggested that operations should be rebuilt and rethought from the ground up. Using
Paschen et al.’s (2019) framework, researchers may determine whether the applica-
tion of AI leads to new products or services and whether the introduction of AI
enhances or diminishes human capabilities. Firms may generate different value-
creating innovations depending on the mix of these aspects (Paschen et al., 2019).
Lismont et al. (2017) reported that the more developed a corporation is in applying
AI, the more applications, processes, and associated objectives they had. Tabesh
et al. (2019) further suggested that a firm’s sophisticated structure should only be
adjusted in phases and always with close adherence to a defined methodology.
These authors argued that AI may have a positive effect on corporate systems when
Artificial Intelligence in Marketing and Organizational Decision-Making… 17

it is used in decision-making. Furthermore, the type and location of AI to be installed

are dictated by the organizational purposes for their installation, with the acknowl-
edgement that existing decision-making processes will also be affected using AI
and are likely to need some changes.
It has been shown that although AI literacy is essential for determining whether
and how to incorporate AI into current business processes, nevertheless, not every
decision issue has to be handled by technology (Kolbjornsrud et al., 2017). AI lit-
eracy requires a thorough understanding of the technology, including its merits and
disadvantages (Whittle et al., 2019). Rather than relying just on top management,
experts recommend including all employees who would be affected by the AI
implementation. Being familiar with and engaged in the incorporation of technol-
ogy give participants a sense of belonging and allow them to define and value their
role in the project. Education, it is argued, is essential to maximize AI’s potential, as
well as a thorough analysis of the competencies required to use AI effectively by
each person (Whittle et al., 2019). Top management plays a central role in helping
their employees; this further suggests that managers themselves must be knowl-
edgeable and have experience in AI technologies (Kolbjornsrud et al., 2017).
Coordination at all levels of management, constructive information sharing, proper
knowledge management practices, and a sense of business acumen all enforce a
company’s competitive edge in artificial and business intelligence. Moreover, AI
should be implemented in stages to allow confidence in AI to be built and improved
with more experience and knowledge acquisition; also, with AI introduction into
corporate decision-making, soft skills like teamwork, creativity, and good judgment
become more vital (Kolbjornsrud et al., 2017; Whittle et al., 2019).
Moreover, transparency is essential for the introduction and use of a new tech-
nology, providing information about the nature and flow of data and the contexts in
which it is processed (Singh et al., 2019), requiring a team of top managers from
current and future levels and individuals with suitable training (Watson, 2017). An
appropriate team would best be identified by the leader who would be helping
throughout the process.
In relation to confidentiality of data, as well as the risk of information leakage,
Kolbjornsrud et al. (2017) and Whittle et al. (2019) claimed that the increased open-
ness and literacy will help reduce prejudice; having more data accessible was also
seen as an advantage (Migliore & Chinta, 2017). However, this premise is called
into question, especially since gathering sufficient good-quality data has proven to
be difficult (Lepri et al., 2018). Furthermore, machine learning is always seen as
biased. Both AI Equality 360 (Bellamy et al., 2019) and Transparent Techniques
(Lepri et al., 2018) have been offered to provide answers for fair all processing
stages, but they are also thought to decrease rather than eliminate prejudice. As
Canhoto and Clear (2019) noted, the quality of a choice relies on the application
used, the resources available, the information supplied, and the interpretive abilities
of the individuals who use it.
There is, however, evidence to suggest that learning, as well as an understanding
of information confidentiality risks, may cause more openness and hence less con-
cerns. In addition, a successful implementation has been shown to depend on active
18 H. Anwar et al.

engagement of the impacted people and a step-by-step introduction. Notwithstanding

the risk of active or unconscious prejudice, the importance of ethics should not be
overlooked in implementing AI processes and structures.

3 Conclusion

Artificial intelligence is being increasingly considered as a very crucial concept in

building industries’ competencies. In this paper, AI, as the ability of robots to mimic
human thinking, was touched upon. Machine learning, neural networks, deep learn-
ing, physical robots, and robotic process automation were identified as just a few of
the AI technologies that are being employed today in business marketing and
decision-making. It was felt that incorporating AI often overlooked the dimensions
of intelligence, including self-awareness, emotional understanding, as well as rea-
soning, creativity, logic, and critical thinking.
This study briefly covered the marketing functions that are most affected by
AI. It was shown that AI’s usefulness in promotion resides mainly in enabling firms
to collect client preferences and propose comparable items or promotions. Referring
to market information management and customer service management, AI is seen to
help companies to analyze vast volumes of data from several sources. AI stimulates
the analysis of customer data to give personalized and customized services and
items. Decision-making may be improved and supported by intelligent systems,
offering options constrained by decision-makers’ own knowledge of the environ-
ment. In generating marketing strategies, a hybrid intelligence system is seen as
ideal since it combines machine analysis with the judgment and creativity of humans.
It is suggested that firms need to constantly keep up with AI and related develop-
ments. Chatbots, AI-powered search engine optimization, and other AI technologies
in web design are found as popular methods for improving an organization’s market
presence. AI developments were most successful in pricing, product management,
and financing and securing transaction, by securing adequate cash and budget for
marketing efforts and facilitating the checkout and payment process. Big data anal-
ysis appears to be useful in identifying, mitigating, or overcoming corruption and
breaches in online payment. Furthermore, transportation and delivery are critical
marketing functions that are heavily affected by AI, as a growing number of compa-
nies are turning to AI to streamline and automate their delivery processes.
AI has also proven vital for strategic decision-making, especially in data collec-
tion, analysis, and evaluation. In relation to organizational structure and strategy,
determined advancements of AI applications in a firm are more likely to change
structures and increase procedures and goals. Applying AI in corporate processes
requires a thorough knowledge of the technology and technologically competent
top managers who must lead their teams. Many researchers have written about con-
cerns associated with AI, particularly on information confidentiality, privacy, and
algorithms’ neutrality. This paper is limited to studying AI and its support to mar-
keting functions and business decision-making. Further research may focus on how
Artificial Intelligence in Marketing and Organizational Decision-Making… 19

AI impact the future of marketing, how firms need to change their marketing strate-
gies to cope with AI evolution, and how customers’ behavior will be impacted.

References

Acharya, S. K., & Choudhury, S. (2016). Knowledge management and organisational performance
in the context of e-knowledge. Srusti Management Review, 9(1), 50–54.
Agarwal, A., Bird, S., Cozowicz, M., Hoang, L., Langford, J., Lee, S., ... & Slivkins, A. (2016).
Making contextual decisions with low technical debt. arXiv preprint arXiv:1606.03966.
Andzulis, J. M., Panagopoulos, N. G., & Rapp, A. (2012). A review of social media and implica-
tions for the sales process. Journal of Personal Selling & Sales Management, 32(3), 305–316.
Archak, N., Ghose, A., & Ipeirotis, P. G. (2011). Deriving the pricing power of product features by
mining consumer reviews. Management Science, 57(8), 1485–1509.
Bellamy, R. K. E., Dey, K., Hind, M., Hoffman, S. C., Houde, S., Kannan, K., Lohia, P., Martino,
J., Mehta, S., Mojsilovie, A., Nagar, S., Ramamurthy, K. N., Richards, J., Saha, D., Sattigeri,
P., Singh, M., Varshney, K. R., & Zhang, Y. (2019). AI Fairness 360: An extensible toolkit
for detecting and mitigating algorithmic bias. IBM Journal of Research and Development,
63(4/5), 1–15.
Bharat, M. (2017). Artificial intelligence in web design, development and marketing. Retrieved
from [Link]
Bienhaus, F., & Abubaker, H. (2018). Procurement 4.0: Factors influencing the digitisation of pro-
curement and supply chains. Business Process Management Journal, 24(4), 965–984. https://
[Link]/10.1108/BPMJ-06-2017-0139
Bolander, T. (2019). What do we lose when machines take the decisions? Journal of Management
and Governance, 23, 849–867. [Link]
Borghi, M., & Mariani, M. M. (2021). Service robots in online reviews: Online robotic discourse.
Annals of Tourism Research, 87(C), 103036. [Link]
Bornet, P., Barkin, I., & Wirtz, J. (2021). Intelligent automation: Welcome to the world of hyper-
automation. World Scientific Books.
British Psychological Society. (2021). What is psychology? [Link]
what-is-psychology
Brooks, R. A. (1991). Intelligence without reason. In M. Ray & J. Reiter (Eds.), Proceedings of
the 12th international joint conference on artificial intelligence (p. 569). Morgan Kaufmann.
Burgess, A. (2017). AI in action. In The executive guide to artificial intelligence (pp. 73–89).
Cambridge University Press.
Canhoto, I. A., & Clear, F. (2019). Artificial intelligence and machine learning as business tools:
A framework for diagnosing value destruction potential. Business Horizons, 63(2), 183–193.
[Link]
Carbone, P., Ewen, S., Fóra, G., Haridi, S., Richter, S., & Tzoumas, K. (2017). State management
in Apache Flink®: Consistent stateful distributed stream processing. Proceedings of the VLDB
Endowment, 10(12), 1718–1729.
Carlson, M. (2015). The robotic reporter: Automated journalism and the redefinition of labor, com-
positional forms, and journalistic authority. Digital Journalism, 3(3), 416–431.
Choi, T. M., Wallace, S. W., & Wang, Y. (2018). Big data analytics in operations management.
Production and Operations Management, 27(10), 1868–1883.
Davenport, T. H. (2018). The AI advantage: How to put the artificial intelligence revolution to
work. MIT Press.
Davenport, T. H., & Ronanki, R. (2018). Artificial intelligence for the real world. Harvard Business
Review, 96(1), 108–116.
Dean, J., & Ghemawat, S. (2008). MapReduce: Simplified data processing on large clusters.
Communications of the ACM, 51(1), 107–113.
20 H. Anwar et al.

Dutt, D., Contributor, CSO. (2018). 2018: The year of the AI-powered cyberattack. Retrieved
from [Link]
html
Dutton, G. (2018). Big pharma reads big data, sees big picture: Linguamatics brings natural
language processing to non-experts, expediting drug development. Genetic Engineering &
Biotechnology News, 38(1), 8–9.
Erevelles, S., Fukawa, N., & Swayne, L. (2016). Big data consumer analytics and the transforma-
tion of marketing. Journal of Business Research, 69(2), 897–904.
Fan, S., Lau, R. Y., & Zhao, J. L. (2015). Demystifying big data analytics for business intelligence
through the lens of marketing mix. Big Data Research, 2(1), 28–32.
Fournier, S., & Avery, J. (2011). The uninvited brand. Business Horizons, 54(3), 193–207.
Gijs, O., Manuel, C., Rand, W., & Weishampel, A. (2019). Letting the computers take over: Using
AI to solve marketing problems. California Management Review, 61(4), 156–185.
Goh, K. Y., Heng, C. S., & Lin, Z. (2013). Social media brand community and consumer behavior:
Quantifying the relative impact of user-and marketer-generated content. Information Systems
Research, 24(1), 88–107.
Gonzalez, J. E., Xin, R. S., Dave, A., Crankshaw, D., Franklin, M. J., & Stoica, I. (2014). {GraphX}:
Graph processing in a distributed dataflow framework. In 11th USENIX symposium on operat-
ing systems design and implementation (OSDI 14) (pp. 599–613).
Gu, S., Holly, E., Lillicrap, T., & Levine, S. (2017, May). Deep reinforcement learning for robotic
manipulation with asynchronous off-policy updates. In 2017 IEEE international conference on
robotics and automation (ICRA) (pp. 3389–3396). IEEE.
Huang, M. H., & Rust, R. T. (2018). Artificial intelligence in service. Journal of Service Research,
21(2), 155–172.
Huang, M. H., & Rust, R. T. (2021). A strategic framework for artificial intelligence in marketing.
Journal of the Academy of Marketing Science, 49(1), 30–50.
Isard, M., Budiu, M., Yu, Y., Birrell, A., & Fetterly, D. (2007, March). Dryad: Distributed data-
parallel programs from sequential building blocks. In Proceedings of the 2nd ACM SIGOPS/
EuroSys European conference on computer systems 2007 (pp. 59–72).
Jarek, K., & Mazurek, G. (2019). Marketing and artificial intelligence. Central European Business
Review, 8(2), 46–55.
Jordan, M. I., & Mitchell, T. M. (2015). Machine learning: Trends, perspectives, and prospects.
Science, 349(6245), 255–260.
Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities
of social media. Business Horizons, 53(1), 59–68.
Kaplan, A., & Haenlein, M. (2019). Siri, Siri, in my hand: Who’s the fairest in the land? On
the interpretations, illustrations, and implications of artificial intelligence. Business Horizons,
62(1), 15–25.
Kolbjornsrud, V., Amico, R., Thomas, R., & J. (2017). Partnering with AI: How organizations can
win over skeptical managers. Strategy and Leadership, 45(1), 37–43.
Kühl, N., Mühlthaler, M., & Goutier, M. (2019). Supporting customer- oriented marketing with
artificial intelligence: Automatically quantifying customer needs from social media. Electron
Market, 11(40), 11–17.
Kumar, V., Bharath, R., Rajkumar, V., & Jim, L. (2019). Understanding the role of artificial intelli-
gence in personalized engagement marketing. California Management Review, 61(4), 135–155.
Kurzweil, R. (2005). The singularity is near: When humans transcend biology (1st ed.). The
Viking Press.
Kwok, L., & Yu, B. (2013). Spreading social media messages on Facebook: An analysis of res-
taurant business-to-consumer communications. Cornell Hospitality Quarterly, 54(1), 84–94.
Legg, S., & Hutter, M. (2007). A collection of definitions of intelligence. In B. Goertzel & P. Wang
(Eds.), Proceedings of the 2007 conference on advances in artificial general intelligence:
Concepts, architectures and algorithms: Proceedings of the AGI workshop 2006 (pp. 17–17).
IOS Press.
Artificial Intelligence in Marketing and Organizational Decision-Making… 21

Lepri, B., Oliver, N., Letouze, E., Pentland, A., & Vinck, P. (2018). Fair, transparent, and account-
able algorithmic decision-making processes. Philosophy & Technology, 31(3), 611–627.
[Link]
Li, S. (2000). The development of a hybrid intelligent system for developing marketing strategy.
Decision Support Systems, 27(4), 395–409.
Li, S., & Li, J. Z. (2009). Hybridizing human judgment, AHP, simulation and a fuzzy expert
system for strategy formulation under uncertainty. Expert Systems with Applications, 36(3),
5557–5564.
Lismont, J., Vanthienen, J., Baesens, B., & Lemahieu, W. (2017). Defining analytics maturity indi-
cators: A survey approach. International Journal of Information Management, 37(3), 114–124.
[Link]
Lobschat, L., Mueller, B., Eggers, F., Brandimarte, L., Diefenbach, S., Kroschke, M., & Wirtz,
J. (2021). Corporate digital responsibility. Journal of Business Research, 122, 875–888.
Lu, V. N., Wirtz, J., Kunz, W. H., Paluch, S., Gruber, T., Martins, A., & Patterson, P. G. (2020).
Service robots, customers and service employees: What can we learn from the academic litera-
ture and where are the gaps? Journal of Service Theory and Practice, 30(3), 361–391.
Makridakis, S. (2017). The forthcoming Artificial Intelligence (AI) revolution: Its impact on soci-
ety and firms. Futures, 90, 46–60.
Malter, M. S., Holbrook, M. B., Kahn, B. E., Parker, J. R., & Lehmann, D. R. (2020). The past,
present, and future of consumer research. Marketing Letters, 31(2), 137–149.
Mariani, M., & Borghi, M. (2021). Customers’ evaluation of mechanical artificial intelligence
in hospitality services: A study using online reviews analytics. International Journal of
Contemporary Hospitality Management, 33(11), 3956–3976.
Marinchak, C. M., Forrest, E., & Hoanca, B. (2018). Artificial intelligence: Redefining marketing
management and the customer experience. International Journal of E-Entrepreneurship and
Innovation, 8(2), 14–24.
Marshall, A. (2018). Is this the world’s first good robot album? BBC Culture [website]. Available
at: [Link]
Martin, C., & Writer, S. (2019). AI marketing companies attract $1 billion in Q2. Retrieved from:
[Link]
billion-in-[Link]
McCarthy, J., Minsky, M., Rochester, N., & Shannon, C. (1955). A proposal for the Dartmouth
summer research project on artificial intelligence. Retrieved from: [Link]
[Link]/jmc/history/dartmouth/[Link]
McCorduck, P. (2004). Machines who think: A personal inquiry into the history and prospects of
artificial intelligence (25th anniversary update). A.K. Peters.
Metaxiotis, K. S., Psarras, J. E., & Askounis, D. T. (2002). GENESYS: An expert system for pro-
duction scheduling. Industrial Management & Data Systems, 102(6), 309–317.
Metcalf, L., Askay, D., & Rosenberg, L. (2019). Keeping humans in the loop: Pooling knowl-
edge through artificial swarm intelligence to improve business decision making. California
Management Review, 61(4), 84–109. [Link]
Migliore, A., & Chinta, R. (2017). Demystifying the big data phenomenon for strategic leadership.
Quarterly Journal S.A.M. Advanced Management Journal, 82(1), 48–58.
Miikkulainen, R., Iscoe, N., Shagrin, A., Rapp, R., Nazari, S., McGrath, P., Schoolland, C.,
Achkar, E., Brundage, M., Miller, J., Epstein, & Lamba, G. (2018). Sentient ascend: AI-based
massively multivariate conversion rate optimization. In Proceedings of the Thirtieth innovative
applications of artificial intelligence conference. AAAI.
Milgrom, P. R., & Tadelis, S. (2018). How artificial intelligence and machine learning can impact
market design. In A. Agrawal, J. Gans, & A. Goldfarb (Eds.), The economics of artificial intel-
ligence: An agenda (pp. 567–585).
Moreno, J. (2009). Trading strategies modelling in Colombian power market using artificial intel-
ligence techniques. Energy Policy, 37(3), 836–843.
Mustak, M., Salminen, J., Plé, L., & Wirtz, J. (2021). Artificial intelligence in marketing: Topic
modelling, scientometric analysis, and research agenda. Journal of Business Research, 124(1),
389–404.
22 H. Anwar et al.

Netzer, O., Feldman, R., Goldenberg, J., & Fresko, M. (2012). Mine your own business: Market-
structure surveillance through text mining. Marketing Science, 31(3), 521–543.
Ng, A. Y., Coates, A., Diel, M., Ganapathi, V., Schulte, J., Tse, B., et al. (2006). Autonomous
inverted helicopter flight via reinforcement learning. In Experimental robotics IX (pp. 363–372).
Springer.
Nilsson, N. J. (2010). The quest for artificial intelligence: A history of ideas and achievements.
Nishihara, R., Moritz, P., Wang, S., Tumanov, A., Paul, W., Schleier-Smith, J., et al. (2017, May).
Real-time machine learning: The missing pieces. In Proceedings of the 16th workshop on hot
topics in operating systems, Association for Computing Machinery, New York, NY, United
States (pp. 106–110).
Paluch, S., & Wirtz, J. (2020). Artificial intelligence and robots in the service encounter. Journal
of Service Management Research, 4, 3–8.
Paschen, U., Pitt, C., & Kietzmann, J. (2019). Artificial intelligence: Building blocks and
an innovation typology. Business Horizons, 63(2), 147–155. [Link]
bushor.2019.10.004
Piscopo, C., & Birattari, M. (2008). The metaphysical character of the criticisms raised against the
use of probability for dealing with uncertainty in artificial intelligence. Minds and Machines,
18, 273–288.
Pitardi, D., Meloni, D., Olivo, F., Loprevite, D., Cavarretta, M. C., Behnisch, P., Brouwer, A.,
Felzel, E., Ingravalle, F., Capra, P., Gili, M., Pezzolato, M., & Bozzetta, E. (2021). Alexa, she’s
not human but... Unveiling the drivers of consumers' trust in voice-based artificial intelligence.
Psychology & Marketing, 38(4), 626–642.
Puntoni, S., Reczek, R. W., Giesler, M., & Botti, S. (2021). Consumers and artificial intelligence:
An experiential perspective. Journal of Marketing, 85(1), 131–151.
Quackenbush, C. (2018). A painting made by artificial intelligence has been sold at auc-
tion for $432,500. Time Magazine [website]. Available at: [Link]
artificial-intelligence-painting-christies/
Rohm, A., Kaltcheva, V., & Milne, G. (2013). A mixed-method approach to examining brand-
consumer interactions driven by social media. Journal of Research in Interactive Marketing,
7(4), 295–311.
Rozga, S. (2018). Introduction to chat bots. Practical bot development (pp. 1–28). Apress.
Russell, S. J., & Norvig, P. (2016). Artificial intelligence: A modern approach. Pearson Education
Limited.
Shan, Q., Liu, Y., Prosser, G., & Brown, D. (2004). Wireless intelligent sensor networks for refrig-
erated vehicle. In Proceedings of the IEEE 6th circuits and systems symposium on emerg-
ing technologies: Frontiers of mobile and wireless communication (IEEE Cat. No.04EX710),
Institute of Electrical and Electronics Engineers (IEEE) (pp. 525–528).
Shankar, V. (2018). How artificial intelligence (AI) is reshaping retailing. Journal of Retailing,
94(4), vi–xi.
Shollo, A., & Galliers, R. (2016). Towards an understanding of the role of business intelligence
systems in organisational knowing. Information Systems Journal, 26(4), 339–367. [Link]
org/10.1111/isj.12071
Simon, A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics,
69(1), 99–118.
Singh, J., Cobbe, J., & Norval, C. (2019). Decision provenance: Harnessing data flow for account-
able systems. IEEE Access, 7, 6562–6574. [Link]
Sterne, J. (2017). Artificial intelligence for marketing: Practical applications. Wiley.
Tabesh, P., Mousavidin, E., & Hasani, S. (2019). Implementing big data strategies: A managerial
perspective. Business Horizons, 62(3), 347–358. [Link]
Terziyan, V., Gryshko, S., & Golovianko, M. (2018). Patented intelligence: Cloning human deci-
sion models for Industry 4.0. Journal of Manufacturing Systems, 48, 204–217. [Link]
org/10.1016/[Link].2018.04.019
Artificial Intelligence in Marketing and Organizational Decision-Making… 23

Turban, E., Outland, J., King, D., Lee, J. K., Liang, T. P., & Turban, D. C. (2018). Intelligent
(smart) e-commerce. Electronic Commerce 2018 (Springer texts in business and economics).
Springer.
Van Den Berg, J., Miller, S., Duckworth, D., Hu, H., Wan, A., Fu, X. Y., et al. (2010, May).
Superhuman performance of surgical tasks by robots using iterative learning from human-
guided demonstrations. In 2010 IEEE international conference on robotics and automation
(pp. 2074–2081). IEEE.
Van Doorn, J., Mende, M., Noble, S. M., Hulland, J., Ostrom, A. L., Grewal, D., & Petersen,
J. A. (2017). Domo arigato Mr. Roboto: Emergence of automated social presence in organiza-
tional frontlines and customers' service experiences. Journal of Service Research, 20(1), 43–58.
Verma, S. K., Sahu, P. K., Kumar, K., Pal, G., Gond, S. K., Kharwar, R. N., et al. (2021). Endophyte
roles in nutrient acquisition, root system architecture development and oxidative stress toler-
ance. Journal of Applied Microbiology, 131, 2161–2177. [Link]
Vlačić, B., Corbo, L., e Silva, S. C., & Dabić, M. (2021). The evolving role of artificial intelligence
in marketing: A review and research agenda. Journal of Business Research, 128, 187–203.
Von-Krogh, G. (2018). Artificial intelligence in organizations: New opportunities for phenom-
enon- based theorizing. Academy of Management Discoveries, 4(4), 404–409. [Link]
org/10.5465/amd.2018.0084
Watson, H. J. (2017). Preparing for the cognitive generation of decision support. MIS Quarterly
Executive, 16(3), 153–169.
Wedel, M., & Kannan, P. K. (2016). Marketing analytics for data-rich environments. Journal of
Marketing, 80(6), 97–121.
Weld, L. (1917). Marketing functions and mercantile organization. The American Economic
Review, 7(2), 306–318.
Whittle, T., Gregova, E., Podhorska, I., & Rowland, Z. (2019). Smart manufacturing technologies:
Data-driven algorithms in production planning, sustainable value creation, and operational per-
formance improvement. Economics, Management and Financial Markets, 14(2), 52–57.
Williams, R. (2018). Uber Eats harnesses AI for $6B in annual bookings. Retrieved from: https://
[Link]/news/uber-eats-harnesses-ai-for-6b-in-annual-bookings/538724/
Wirth, N. (2018). Hello marketing, what can artificial intelligence help you with? International
Journal of Marketing Research, 60(5), 435–438.
Wirtz, J., den Ambtman, A., Bloemer, J., Horváth, C., Ramaseshan, B., Van De Klundert, J., Canli,
Z. G., & Kandampully, J. (2013). Managing brands and customer engagement in online brand
communities. Journal of Service Management, 24(3), 223–244.
Wirtz, J., Patterson, P. G., Kunz, W. H., Gruber, T., Lu, V. N., Paluch, S., & Martins, A. (2018).
Brave new world: Service robots in the frontline. Journal of Service Management, 29(5),
907–931.
Xiang, Z., Schwartz, Z., Gerdes, J. H., Jr., & Uysal, M. (2015). What can big data and text analyt-
ics tell us about hotel guest experience and satisfaction? International Journal of Hospitality
Management, 44, 120–130.
Xu, Z., Frankwick, G. L., & Ramirez, E. (2016). Effects of big data analytics and traditional mar-
keting analytics on new product success: A knowledge fusion perspective. Journal of Business
Research, 69(5), 1562–1566.
Yang, Y., & Siau, K. (2018). A qualitative research on marketing and sales in the artificial
intelligence age. MWAIS 2018 Proceedings, 41. Retrieved from: [Link]
mwais2018/41/
Zaharia, M., Chowdhury, M., Das, T., Dave, A., Ma, J., McCauly, M., et al. (2012). Resilient dis-
tributed datasets: A {Fault-Tolerant} abstraction for {In-Memory} cluster computing. In 9th
USENIX symposium on networked systems design and implementation (NSDI 12), USENIX
Association, 2560 Ninth St. Suite 215 Berkeley, CA, United States (pp. 15–28).
Zhang, Q., Lu, J., & Jin, Y. (2021). Artificial intelligence in recommender systems. Complex &
Intelligent Systems, 7(1), 439–457.
Internet of Things for Healthcare:
Evaluate User’s Acceptance
and Sustainability During Pandemics

K. P. Jaheer Mukthar , C. Nagadeepa , T. K. Satheesh Kumar,

Edwin Ramirez-Asis , Juan Villanueva-Calderón , and J. K. Singh

1 Introduction to IoT

The IoT integrates everyday “Things” with the computer. The term “IoT” (Internet
of Things) refers to collective networks of interconnected devices and the technol-
ogy which helps to communicate between devices and cloud and also between the
devices itself (Kosmatos et al., 2011). The use of software and other technologies to
connect to and exchange data with other systems and devices via the Internet. With
the advancement in technology and also because of cheaper computer chips and
high bandwidth telecommunication, we now have billions of devices connected to
the Internet. This includes everyday physical objects such as toothbrushes, light-
bulbs, vacuums, cars, machines, healthcare assets like medical devices, smart
watches, and now even we have smart cities (Madakam et al., 2015).

1.1 Healthcare IoT or Internet of Medical Things (IoMT)

Prior to the IoT, patient communication with their doctors limited to visits and tele
or text communication. Continuous monitoring of patient health was difficult task
for a doctor. But IoT-enabled devices have made it possible for a doctor to monitor

K. P. Jaheer Mukthar (*) · C. Nagadeepa · T. K. Satheesh Kumar

Kristu Jayanti College Autonomous, Bengaluru, India
e-mail: jaheer@[Link]
E. Ramirez-Asis · J. Villanueva-Calderón
Universidad Señor de Sipán, Chiclayo, Peru
J. K. Singh
Aryabhatta College, University of Delhi, Delhi, India

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 25

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
26 K. P. Jaheer Mukthar et al.

their patient health remotely (Ha & Longnecker, 2010). Patients from remote area
are monitored via IoT sensors. The IoT has a huge impact on lowering healthcare
expenses and enhancing patient outcomes (Razdan & Sharma, 2021).
The Internet of Medical Things (IoMT) is a grouping of medical software and
hardware that communicates with Internet computer networks to link to healthcare
IT systems. Wi-Fi-enabled medical devices provide the machine-to-machine con-
nectivity that forms the core of IoMT (Srivastava et al., 2022). IoMT devices con-
nect to cloud infrastructures like Amazon Web Services, allowing for the storage
and analysis of collected data. IoMT is another name for the IoT in healthcare. The
IoT is revolutionizing the healthcare sector by changing how devices and people
interact while providing healthcare solutions (Ha & Longnecker, 2010). Applications
of the IoT in healthcare are advantageous to patients, families, doctors, hospitals,
and insurance providers.

1.2 IoT for Patients

The IoT has tremendous impact on people’s lives, especially the patients and their
families by constantly monitoring the health condition.
With the use of wearables like fitness bands and other wirelessly connected med-
ical equipment like blood pressure and heart rate monitor cuffs, glucometers, etc.,
patients can receive individualized care (Internet of Healthcare Things, n.d.). These
devices can be set up to remind users to monitor changes in their blood pressure,
appointments, and a variety of other things.
Patients can obtain individualized care with the help of wearable devices like
fitness bands and other wirelessly connected equipment like blood pressure and
heart rate monitor cuffs, glucometers, etc. (Internet of Healthcare Things, n.d.).
These gadgets can be programmed to remind users to keep track of their blood pres-
sure changes, appointments, appointments, and many other things.

1.3 IoT for Doctors

Doctors can monitor patients instead of physical meaning which can be done using
wearables and other monitoring sensors during this COVID-19 pandemic. They can
monitor a patient’s improvement to decide about their treatment regimen or any
urgent medical needs (Javaid & Khan, 2021).
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 27

1.4 IoT for Hospitals

In addition to patient health monitoring, hospitals may use IoT devices in a wide
range of additional applications. The IoT enables the real-time data about the hos-
pital infrastructure availably like wheelchairs, beds, oxygen cylinders, etc. using
IoT cloud data management. Hospital patients are really worried about the spread of
infections. IoT-enabled hygiene monitoring technology can help prevent patient
infection. The usage of IoT devices for asset management functions including man-
aging pharmacy inventories, monitoring refrigerator temperatures, and regulating
environmental humidity and temperature is also beneficial.

1.5 IoT-Based Application in Healthcare Devices

In IoT market, healthcare devices represent one of the fastest growing sectors in this
market. As per studies, the value of this market is estimated to reach 176 billion
dollars by 2026 (IoT Medical Devices Market – Global Forecast to 2026 |
MarketsandMarkets, n.d.). The usage of the IoT is drastically increasing over
the years.
The IoT in healthcare enables real-time health monitoring and data access result-
ing in improved patient’s health, experience, and enhanced healthcare operations.
This way doctors have been empowered to offer healthcare service of better quality.
The following are some examples of how IoT-connected smart devices (Xu et al.,
2014) are helping medical service provider to function more efficiently and patients
to get better treatment.
• Virtual/remote hospitals
• Glucose/heart beat monitoring
• Wearable biosensors (WBs)
• Smart thermometers
• Connected inhalers
• Smart watch monitoring.
• AID (automated insulin delivery system)
• Robotic surgery
28 K. P. Jaheer Mukthar et al.

2 Need for IoT for Healthcare During COVID-19

2.1 Emergencies/Situations During COVID-19

and Other Pandemics

With at least 170 million victims worldwide in 2021, the COVID-19 epidemic is
still wreaking devastation. The WHO designated the coronavirus disease of 2019 as
“COVID-19” in February 2021. Since the first case of COVID-19 was identified,
scientists have been working hard to find strategies to prevent and treat the disease
in more than 30 different nations and areas. There was an emergency situation raised
due to the following reasons, and there is a need for technology to control the
situation.
More of affected people: During the phase, one and two people were affected by
coronavirus; day by day, the no. of affected people was increasing. And moreover,
people are afraid to say that they are affected, as the affected people were isolating
not only the member and the entire house/building/apartment. Healthcare people
who are testing and attending the coronavirus people are also infected and lost their
life also. Hence, there was a critical system needed for the government to find out
the affected people and monitor their movement also.
Shortage of hospital infrastructure facility: The increase no. of affected people
needs more of hospital facility like oxygen, hospital bed (inpatient), doctors, nurse,
etc. But as the resources were very less, the government faced a lot issue regarding
facility. There was a need for a system which matches the demand and supply (avail-
ability of facility). Further, data was required by many people like patients, doctors,
local bodies, and government to accommodate the affected people. Further, a num-
ber of social media organization also need the data to update their sites; hence it can
be used by the followers of the social media.
Shortage of doctors/nurse/attenders: Since doctors, nurse, and healthcare work-
ers are also affected by the virus, there was a shortage of these people. Further,
people were not sure about their deceases. Health workers are not available in some
of the remote place.
Availability of transport facility: There was no availability/shortage of transport
facility which created a situation that people could not reach the hospital on time.
Limited ambulance facility and delay in medical aid are also created an emergency
situation.
Information search/availability: Social media are a source of information for the
normal humans. People use to search the data or information regarding status of
affected people and statistics of present and expected future situation. The statistics
of the coronavirus-affected people and the status regarding the pandemic are
required by the government, researchers in medical field, social media, and apex
bodies of word healthcare. Based on that the concern, authority can take the neces-
sary actions.
Hence, an increase in demand for IoT-related healthcare applications are required
for the people to solve the above issues in the pandemic situations (Fig. 1).
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 29

Fig. 1 Need for IoT for healthcare during the COVID-19 pandemic

3 Key Merits of IoT for Healthcare Application and Devices

to End Users

Before the emergence of the IoT for healthcare applications and devices, people
could communicate physically, face-to-face, or over mobile phones or through text
only. The IoT enabled the medical professional doctors and health workers to attend
in remote area also and eliminated the compulsion of physical examination. Through
these new IoT-enabled devices and apps, remote monitoring in the healthcare sector
is now possible, unleashing the potential to keep patients safe and healthy and
enabling clinicians to deliver exceptional treatment. Further, continuous monitoring
of remote patients health reduces hospital stays and prevents readmissions. The IoT
has a significant impact on reducing healthcare costs and improving treatment out-
comes during the current COVID-19 pandemic. Patients, families, doctors, hospi-
tals, and insurance providers all benefit from IoT applications in healthcare.
IoT device data not only facilitates efficient decision-making but also guarantees
error-free, waste-free, and cost-effective healthcare operations (Javaid & Khan,
2021) (Fig. 2).
• Appropriate Treatment: The IoT makes it possible to monitor patients in real
time, thereby reducing the number of pointless doctor visits, hospital stays, and
readmissions. It enables the appropriate treatment on time.
• Waiting Time: IoT makes it possible to test at home, receive initial diagnosis
from home, and have the results available in a phone app, allowing people to
avoid traveling and waiting for doctors and results.
• Mistake reduction: It gives complete openness and empowers doctors to make
decisions based on the best available data.
30 K. P. Jaheer Mukthar et al.

Fig. 2 Key merits of IoT

for healthcare
Cost
Reduction

Avoidance of Efficient
waiting time Monitoring

IoT for
Healthcare

Exceptional Appropriate
Diagnoses treatment

Mistake
reduction

• Effective monitoring: Real-time data and ongoing patient monitoring aid in early
disease diagnosis—sometimes even before symptoms of the disease appear.
• Exceptional diagnosis: Continuous health monitoring makes it possible to offer
preventive medical care and provide appropriate treatment on time.
• Cost reduction: These technologies are cost-effective for both the patients and
the doctors/hospitals.

4 IoT for Healthcare Applications During

Pandemic Situations

IoT technology provides non-clinical symptom diagnosis and data sharing with cli-
nicians, enabling remote healthcare. IoT scenarios that are useful in pandemic
events include the following (Fig. 3):
• IoT healthcare aids during pandemic situations: IoT technology provides non-
clinical symptom diagnosis and data sharing with clinicians, enabling remote
healthcare. IoT scenarios that are useful in pandemic events include the following:
• Monitoring your breath: Frequency and breathing patterns can be used to gauge
a person’s health, and aberrant breathing patterns in COVID-19 patients may be
a sign of more serious problems. Therefore, respiratory monitoring is crucial in
therapeutic settings. Traditional breath measuring is problematic for those in
need because it necessitates hospital visits and professional medical gear linked
to the body. Breathing monitoring becomes commonplace as IoT technology
develops.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 31

Monitoring Your Breath

Tracking Body Temperature

Blood Oxygen Saturation Monitoring

Quarantine Monitoring

Contact Tracing & Social Distancing

Healthcare management

Vaccine cold chain monitoring

Healthcare delivery drones:

Hospital equipment / facility tracking &
maintenance

Fig. 3 IoT for healthcare applications during pandemics

• Tracking body temperature: A common sign of COVID-19 is fever, and accord-

ing to clinical data, more than 80% of COVID-19 patients experience a fever. In
order to identify eager individuals and separate them from other patients for
additional assessment during the COVID-19 outbreak, many hospitals have
installed infrared temperature sensors at the door. As a result, it’s critical to keep
an eye on fluctuations in body temperature in order to identify and stop
COVID-19. In high-risk locations like hospitals, schools, and airports, infrared
temperature sensors are frequently used to measure body temperature without
making direct contact during continuous and long-term monitoring to prevent
fever. Researchers have suggested employing drones equipped with infrared
thermal imaging to spot COVID-19-infected individuals in outdoor settings.
• Blood oxygen saturation monitoring: Red blood cell oxygen carrying capacity is
gauged by the blood oxygen saturation (SpO2) level. The SpO2 of a healthy
individual is greater than 95%. Hypoglycemic SpO2 in COVID-19 patients is a
symptom of the illness. In clinical settings, a pulse oximeter is applied to a
patient’s finger to assess SpO2 levels constantly. However, daily usage of this
pulse oximeter is not recommended. Other research examines variations in the
absorption of light reflected from wrist blood utilizing wrist oximeters or wrist
photoplethysmography (PPG) sensors to assess SpO2 in blood. You may con-
tinuously track the relative changes in blood SpO2 by incorporating these wrist
sensors into your smartwatch or Fitbit.
• Quarantine monitoring: By isolating those who have contracted the coronavirus,
quarantine works to stop the spread of COVID-19. The body-mounted wearable
32 K. P. Jaheer Mukthar et al.

belt tracks and transmits real-time data to the COVID-19 quarantine facility.
Similarly, during quarantine, COVID-19-related concerns are tracked and identi-
fied using IoT frameworks. Specifically, different biosensors are employed to
identify COVID-19 symptoms in people and send this information to quarantine
for additional assessment.
• Contact tracing and social distancing: The COVID-19 incubation period lasts
from 1 to 14 days. However, it’s also possible for asymptomatic individuals to
spread the infection to others. Finding the persons who had touch with the sick
person during the incubation period has become crucial because this virus has
the ability to spread more quickly and is easily transferred. Social distancing
keeps a safe space between people to prevent the spread of droplets when some-
one speaks or coughs due to an infectious disease such the coronavirus or
influenza virus. For proximity detection, IoT devices with various sensors, like
GPS, microphones, and magnetometers, are frequently employed for social dis-
tancing and contact tracing.
• Healthcare management: Inadequate hospital capacity visualization, particularly
when it comes to bed availability, is frequently linked to poor healthcare man-
agement in underdeveloped nations. The IoT sensors installed on the beds give
medical employees the opportunity to easily determine the availability of the
beds using cloud-based technologies. Utilizing eBMS helped cut down on bed
wait times significantly, giving patients in emergency rooms prompt access to
care. IoT solutions like eBMS can help governments get ready for upcoming
pandemics and provide crucial guidance to healthcare stakeholders.
• Vaccine cold-chain monitoring system: In developing countries, it has proven
difficult to ensure necessary services during COVID-19 through vaccine cold-
chain monitoring. IoT and mobile technology offer the potential to streamline
the supply chain for vaccines. Cold chain data loggers send precise data of condi-
tion records via cellular data networks to the cloud via IoT sensors attached to
the vaccine. The UNDP and the Indian government created the electronic vac-
cine intelligence network (eVIN). This app monitors the location, temperature,
and vaccination stock levels using IoT sensors attached to the vaccine, assuring
a secure and dependable supply.
• Healthcare delivery drones: Patients receiving care at home rather than in a hos-
pital environment could receive medication and supplies via IoT-enabled drones
for healthcare transport blood samples obtained at home to the lab. All through-
out the world, drones are being tested for use in healthcare.
• Smart wheelchairs: These smart devices are invented for the physically chal-
lenged people to access with human attenders. Full automation for disabled peo-
ple is one of the responses from IoT, similar to the acceleration in the pace
of work.
• Hospital equipment/facility tracking and maintenance: In a busy hospital, it’s
common for important equipment to go missing. Because tracking the availabil-
ity of expensive equipment takes up to 20% of a caregiver’s time, automated
track and trace systems are crucial. To provide real-time visibility into the loca-
tion, condition, use, and maintenance of any medical equipment, the asset track-
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 33

ing solution uses IoT intelligence. For analysis and reporting, data is fed into
reports that can be sorted by facility, department, unit, etc. This enables purchas-
ing hospital assets with knowledge.
• Hospital equipment/facility tracking and maintenance: In a busy hospital, it’s
common for important equipment to go missing. Because tracking the availabil-
ity of expensive equipment takes up to 20% of a caregiver’s time, automated
track and trace systems are crucial. To provide real-time visibility into the loca-
tion, condition, use, and maintenance of any medical equipment, the asset track-
ing solution uses IoT intelligence. For analysis and reporting, data is fed into
reports that can be sorted by facility, department, unit, etc.

5 Users’ Challenges While They Use IoT for Healthcare

Applications and Devices

The IoT in healthcare is beneficial for patient, but security of healthcare devices is
a serious concern due to its limited security control around IoT devices.

Technical
Challenges

Financial
Ethical

• Technology-Related Challenges
Technical issues result from the fact that the IoT is still not a common practice.
In the majority of nations, 5G technology is not fully available; it is still under
development process. The introduction of the IoT in healthcare is said to be facing
its first technological challenge, which is 5G. Multiple antennae must be installed in
order to implement 5G, which is a bit expensive and time-consuming process and
has been linked to a health risk.
The integration of data presents the following technical challenge. Multiple data
sources imply several devices. There are numerous wearables and data collection
tools in the healthcare industry, but for technological and financial reasons, it is dif-
ficult to convert them into a unified pattern of data collection. Manufacturers have
still not come to an agreement on communication standards and protocols.
• Finance-Related Challenges
Financially speaking, the IoT falls within the category of remote health applica-
tions. Direct and indirect healthcare expenditures are generally separated. The for-
mer include expenditures for healthcare providers, whereas the latter include costs
for healthcare beneficiaries, such as time away from work, unpaid medical bills, and
involvement of family members or other caregivers in their care. There is little data
34 K. P. Jaheer Mukthar et al.

on the cost-effectiveness of IoT healthcare services because they have not yet been
implemented in a major healthcare system.
• Ethical Challenges
The data/information management is at the center of the ethical debate around
IoT in healthcare. When it comes to the administration of sensitive health-related
data, the primary points of contention are privacy of information, information shar-
ing policy, and copyright of the data (ownership of the data) and questions of uncer-
tain value. The dehumanization and isolation of doctor-patient connection, the
decontextualization of health and well-being, and the danger of unprofessional
treatment are all alarming from an ethical standpoint under the care paradigm.
The major challenges faced by the healthcare industry while implementing IoT
devices are described below:
Technical Challenges:
• Data security and privacy concern
• Integration with multiple devices
• Limited bandwidth and connectivity
Ethical Challenges
• Lack of standardization
• Lack of skilled professionals
Financial Challenges
• High implementation cost
• Data security and privacy concern: In healthcare always, the patient safety and
security are always in priority list. If the IoT devices do not give proper security,
it means that the privacy of patient data is in danger. Regarding ownership and
control of data, there is a lot of confusion. As a result, the data saved in IoT-
enabled devices is vulnerable to data theft and is therefore more accessible to
hackers who want to compromise personal health data (Khan et al., 2018).
• Cybercriminal can misuse the patient electronic health record to purchase drugs
and other medical equipment which they can sell it later.
• Integration with multiple devices: Implementing IoT in healthcare is frequently
hampered by integrating several types of devices. This hurdle exists because, as
was previously stated, device makers have not made equivalent progress in creat-
ing communication standards and protocols.
• Manufacturers create their products independently of one another and within
their own IoT ecosystem. Because of this, their devices are incompatible with
older healthcare apps and systems.
• Lack of standardization: The secret to developing protocols that are universally
approved for interoperability across medical devices is standardization. There
are many different languages, standards, and protocols that are used to connect
IoT devices. The ownership and control of data are unclear because there are no
rules that are widely acknowledged.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 35

• Limited bandwidth and connectivity: Data transfer is slowed down because of

poor connectivity. Limited connectivity is the main issue with the IoT when try-
ing to connect devices. Although the majority of medical IoT devices are Wi-Fi-
connected, many also feature cellular capabilities to mask connection failures in
the event that Wi-Fi is disrupted.
• The consequences of a lost connection are too great in the healthcare industry. It
may have terrible effects on the sufferer. Low latency must be taken into account
because of this.
• High implementation cost: The increase in healthcare cost is concerned for
everybody. The IoT has not yet made healthcare facilities accessible to the
middle-class people. Making IoT healthcare devices affordable is essential for its
successful implementation and complete optimization; otherwise, it will always
be out of reach for everyone, and it will be applicable only for the high class.

6 Technology Acceptance of IoT for Healthcare by

End Users

Many studies are conducted to find out the acceptance of a new technology by the
user of that technology. The results may be helpful for the manufacturer, users, and
researchers to develop further and enhance the technology so that user can be ben-
efitted more.
The IoT for healthcare was less popular before the pandemic, because people use
the traditional method more than the latest technology. But the COVID-19 has over
wheeled this traditional method among the people. The lockdown made the people
to take turn toward the technology. The technology acceptance of the IoT for health-
care was taken for the current study.
In order to identify influential writers and their points of view, a thorough litera-
ture review was done in the field of technological acceptance. A number of models
were looked at, and two of them were selected based on their acceptance and popu-
larity in the healthcare sector. To establish the framework for their comparison and
contrast, the two most popular modern technology acceptance models are presented
in this study:
• The technology acceptance model (TAM)
• The diffusion of innovation theory (DOI)

6.1 Technology Acceptance Model: Methodology

TAM – This model was first developed by Davis, 1989. This model is developed to
measure the user’s acceptance level by measuring the following:
36 K. P. Jaheer Mukthar et al.

• How easy this technology is to handle?

• How much effective this technology is?
• How far this technology is useful?
• Whether the technology is user-friendly.
• Whether people are intending to use the technology now and into the future.
According to the technology acceptance paradigm, consumer adoption of a tech-
nological tool depends on how easy it is for them to use and how valuable it is.
End users’ perceived ease of use and perceived usefulness of the IoT for health-
care were considered for this study to measure their intention to use this technology.

6.2 The Diffusion of Innovation Theory (DOI)

One of the earliest social science theories is the diffusion of innovation (DOI) the-
ory (Sahin, 2006), which was created by E.M. Rogers in 1962. It first appeared in
communication to describe how an idea or product gathers steam and diffuses (or
spreads) within a particular population or social system over time. People eventu-
ally adopt a new idea, habit, or product as a part of a social system as a result of this
dissemination. When someone adopts, they do something that is different from what
they previously did (i.e., purchase or use a new product, acquire and perform a new
behavior, etc.). Adoption depends on a person’s ability to see an idea, behavior, or
product as novel or inventive. This allows for the possibility of dissemination.
End users’ compatibility, trialability, and observability of the IoT for healthcare
were considered for this study to measure their intention to use this technology.
Further, post-COVID scenario was considered for the study to check whether peo-
ple were aware and started accepting this technology because this kind of emer-
gency situations made the people to accept the technology.
The COVID-19 spanned the definition of the IoT in healthcare, as it propagated
for usage for not treating patients and also for other customer. However, the usage
of IoT has benefited the customers across various spheres, reaching even the remot-
est parts and connecting them with health professionals. In this context the research
is carried with the intention to understand the facets of diffusion of IoT technology
in medical and healthcare customers.

6.3 Study Objectives

1. To know the IoT technological transition in healthcare sector due pandemic,

manifested in customer smart devices.
2. To analyze and validate the theories of diffusion of technology and TAM theory
with designated variables.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 37

3. To develop a model and to validate the casual relationship that exists between
endogenous variables with exogenous variables.
The variables, such as perceived ease of use, perceived usefulness, compatibility,
observability, traceability, moderating factors and intention to use, are considered
by end customers when evaluating smart devices, including IoT devices and brands.
With the given parameters, the hypothesis was developed in line with objectives of
the study.
The primary data collected for this study is quantitative, obtained through struc-
tured Likert scale surveys administered to respondents via google forms. The data
is collected using survey method with 220 respondents in the background of random
sampling technique. The collected data are being analyzed using various tools such
as spreadsheet, SPSS, and AMOS.
In this study, the data is being analyzed with a family of statistical tools, viz.,
structural equation modeling, which consists of chi-square test, correlation, covari-
ance, and multiple regression model.
Further, the analysis consists of validating the existing knowledge and reviews
with the collected data; hence the research uses the multiple statistical analysis, viz.,
multiple regression (to know impact), correlation (association between the vari-
ables), and chi-square (observed with expected model). The objective is authenticat-
ing the conceptualized models in pursuant of erstwhile models mentioned. Hence
the conceptualized model is being tested with structured equation model
using AMOS.
The study is conducted in the light of post-COVID/pandemic impacting on the
usage of smart devices, viz., IoT-enabled tools in maintaining the health and well-
ness. As discussed earlier in the reviews and theoretical background (TAM and
technology diffusion), the below conceptual (theoretical) model is developed based
on the synthesis of the literature and research question. This conceptual model is
developed to examine the relationship between the various facets of IoT-enabled
devices among the health-conscious people.

6.4 Conceptual Framework (Fig. 4)

6.5 Concepts of Proposed Model

• Compatibility: Compatibility with previously established concepts. Technology

use is justified as being congruent with previously proposed theories. Considering
the requirements of the client, technology utilization is promoted as being in line
with client needs.
38 K. P. Jaheer Mukthar et al.

Concepts of Proposed Model:

Compatibility

Observability

Post COVID Intention to

Trialability
scenario Use

Perceived Use-
fulness

Perceived Ease
of Use

Fig. 4 Conceptual model of end user acceptance of the IoT for healthcare

• Trialability: There are processes in place that make it simple for people to test out
technology, including free downloads, trial versions, and prototypes.
• Observability: Potential users can quickly see the consequences and advantages
of technology.
• Perceived ease of use: How much a person thinks that using a certain technology
will be simple or effortless.
• Perceived usefulness: The degree to which people think a technology will be
beneficial.
The hypothesis is developed based on the reviews and research question, viz., “is
any relation exists between the variables and impacting on others variables.” In
other words, the first hypothesis is developed as to validate the indicators showing
any relations among the variables, and the hypotheses are as follows:
H1: There is a relation between the measures (indicators) of perceived ease of
use, perceived usefulness, compatibility, observability, trialability, moderating, and
intention to use in post-COVID scenario.
With prevalence of IoT devices in the form of smart band sensors, the respon-
dents were asked how the observability related to each other. The objective of the
study is to measure the correlation between the latent variables (which are not
observed or measured directly); hence below hypothesis is developed.
H2: There is relation between the latent variables, viz., perceived ease of use,
perceived usefulness, compatibility, observability, trialability, moderating, and
intention to use in post-COVID scenario.
In this study, the parameters are considered for developing a synthetic scenario,
wherein researcher striving for building a relationship between the usage intention
and perceived features of the IoT products. With this objective in mind, the below
hypothesis (H3) is formulated.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 39

H3: There is an association between the sample covariance matrix (theoretical

model) and the hypothesized covariance (observed model) matrix.
The other objective is to build the model which can be for representing the causal
relations among several variables. The below hypothesis (H4) is developed for vali-
dating the model, most suitable and appropriate for the given study area.
H4: There is no impact of “compatibility, observability, trialability, intention to
use” on “perceived ease of use, perceived usefulness.”
The ultimate objective is to develop a model which signifies the transition in the
usage and adoption of IoT technology-enabled devices in healthcare sector. To meet
this objective, many variables are identified using TAM and diffusion model. Based
on this objective and variables, the below hypothesis is developed.
H5: The causal relationship exists between endogenous variables with exoge-
nous variables moderated by post-COVID scenario.

6.6 Data Analysis

There are 220 respondents given their view of technology acceptance regarding the
IoT-based healthcare applications. The following table shows the demographic
analysis of the respondents who participated in the survey (Table 1).
The survey is conducted with objective to ascertain the casual relationship among
the variables which constitute the technology adoption in the IoT, i.e., smart devices
in healthcare sector in various place of the globe. The table shows the respondents
composition; for the survey, it can be observed that there are female respondents
who constitute 62% of the total respondents, whereas male contribute 38%.
Similar results can be observed in relation to educational attainment, as it dem-
onstrates that individuals with higher levels of education tend to be less averse to
adopting new technologies. It signifies that gender makes visible approach toward
accepting new technology. The respondents comprise below graduation being 32%
and above graduation 68%.
The similarity is also noticeable in the age group of respondents, viz., the age
group of below 25 year consists of 22% of respondents, 35–45 years constitute

Table 1 Demographic analysis

Demographic feature % Total
Gender Male 38 83
Female 62 136
Education level Below graduation 32 71
Graduation 68 148
Age group Below 25 22 48
25–34 35 77
35–45 25 55
Above 45 18 40
40 K. P. Jaheer Mukthar et al.

Table 2 End user perception of IoT-healthcare applications and devices

IoT for healthcare Means Factor loading Rank
It saves time – no waiting time and travel time 4.1 0.706 1
It helps to maintain social distancing/lockdown time 4.08 0.584 2
It allows contactless work and reduces manual job 3.92 0.633 3
It reduces cost 3.9 0.643 4
Medical services are convenient and available at any time 3.89 0.502 5
Facilitates location-based services 3.8 0.584 6
Reachable to any part of the place/remote place also 3.9 0.574 7

Table 3 Usage of the IoT for healthcare – applications

Usage of IoT for healthcare – applications Means Factor loading Rank
Mobile IoT 3.87 0.634 1
Wearable devices 3.57 0.653 2
Community based health services 3.24 0.534 3
Healthcare information – data information 3.19 0.584 4

25%, whereas 25 to 34 years are 35% of the responses, and the rest are above
45 years old (Table 2).
End users of the IoT for healthcare are given their perception regarding their
usage, plotted in the above table. The average scores are ranked according to their
values. The first advantage of the technology is “Time Saving” by avoiding long
queue and waiting for the report some time people use to go on a number of time to
get results. The technology helps to overcome these barriers. It helps in maintaining
the social distancing and can be accessible at any time from any place. The above
table shows the end users’ ranking of the IoT facilities according to their perception.
These results were supported by the research conducted by researcher (Sultana &
Tamanna, 2021) to explore the benefits and challenges of the IoT for healthcare
(Table 3).
The above table shows the ranking of the usage regarding the IoT for healthcare
application and devices by the respondents. The first and foremost application is
mobile apps for healthcare activities. Further, most of them are health conscious and
started using IoT-based smart devices like watches in their daily life also. That too,
COVID-19 made the people too conscious about their health and their activities. It
enhanced the users to use these kinds of devices more in their daily life.
Some of users’ expectation regarding this IoT and healthcare applications are as
follows:
1. GPS-enabled vehicles – During emergencies, such as accidents, an automatic
alert containing relevant information is sent to nearby hospitals, enabling prompt
ambulance services. Alternatively, users can avail themselves of this facility by
simply clicking a single button.
2. More accurate and integrated information about the availability of hospital facil-
ity and doctor’s availability.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 41

3. A massive information are available in the social media and a lot of health-
related messages are in the social media. The information are just forwarded
(e-wom) by many people. There can be a special IoT-related information center
that can be controlled, and authenticated information can be passed by them.
4. An awareness is needed in the rural and remote area about these technologies.
The users are scared and not so tech-savvy to handle these types of apps and
devices.

6.7 Users’ Technology Acceptance – An Integrated Model

of TAM and DoT

In the next stage, the SEM was conducted to find out the intention to use the tech-
nology. The following figure shows the result and the table shows the abbreviations
of items used in the model (Fig. 5, Table 4).
The path diagram shows the relationship between the measured indicators and
latent variables with construct. This path analysis under the structural equation
model exhibits a group of multiple statistical tools to measure and understand the
variables. This model validated with statistical significance with reference to the
various earlier studies. The below table showcase the validity of the model statisti-
cally (Table 5).
Based on the above path diagram and model fit table, the aforesaid hypothesis
(H4) is validated and analyzed.
H4: There is no impact of “compatibility, observability, trialability, and intention
to use” on “perceived ease of use, perceived usefulness.”
The path analysis indicates that there is significant association between the vari-
ables “compatibility (1.28), observability (1.35), trialability (0.88), and intention to
use” impacting on perceived ease of use (1.03) and perceived usefulness (1.37).
Therefore, the hypothesis is “There is a significant impact of ‘compatibility, observ-
ability, trialability, and intention to use’ on ‘perceived ease of use, perceived
usefulness.”

x
i 1
i x yi y
COVxy
n

where Cov = covariance, with x and y variables and n being no. of observations.
The above indices show starting with “Absolute Fit Indices”, wherein the relative
to degrees of freedom with an insignificant p value (p > 0.05) is considered. The
result so obtained consists of 1.064468 (Wheaton et al., 1977; Tabachnick & Fidell,
2007) and signifies that there is no difference between the observed (theoretical)
and expected model. This also magnified with p value >0.05 (Schermelleh-Engel
et al., 2003; Vandenberg, 2006).
42 K. P. Jaheer Mukthar et al.

Fig. 5 Model result – user’s acceptance of the IoT for healthcare

Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 43

Table 4 Abbreviations and description of the items in the model

Sl. Abbreviation and
no. name Description
1 C1 Indicators for compatibility
2 C2 Indicators for compatibility
3 Compatibility A latent exogenous variable to measure the IoT devices
compatibilities
4 OB1 Observability indicator
5 OB2 Observability indicator
6 Observability A latent exogenous variable to measure the how respondents observe
the IoT devices
7 TR1 Trail-ability indictor
8 TR2 Trail-ability indictor
9 Trialability A latent exogenous variable, to measure the how respondents strives
for using the IoT enabled devices
10 PEOU1 Perceived ease of use indicator
11 PEOU2 Perceived ease of use indicator
12 Perceived ease of A latent endogenous variable, which is for measuring how
use respondents perceive for ease of use
13 PU1 Perceived usefulness indicator
14 PU2 Perceived usefulness indicator
15 Perceived A latent endogenous variable, which is for measuring the perceived
usefulness usefulness of IoT devices.
16 PCS Post-COVID scenario indictor
17 Post-COVID A construct developed for understanding the impact of IoT devices
indicator on the users in the post-COVID scenario
18 e1 to e 13 Error term which demonstrates the unexplained variance the model

In the same category, standardized root mean square residual (SRMR) calculated
value of 0.0659, which also signifies residual of co-variance matrix of hypothesis
model, in other words the difference between the hypothesized model and actual
model is very minimal, hence the model is fit.
The above test result, i.e., model chi-square (χ2/df), p value, and SRMR, reiter-
ates the significance of theoretical model with observed model are similar; hence it
promulgates the hypothesis 5 (H5). Hence, H5 is accepted.
H5: The causal relationship exists between endogenous variables with exoge-
nous variables moderated by post-COVID scenario.
Root mean square error of approximation (RMSEA) explains the how model
optimally explains with given parameters. In this model, the RMSEA with 0.041
exemplifies the selected parameters are optimally explaining the construct with
variables.

2
RMSEA 1
df
N 1
44 K. P. Jaheer Mukthar et al.

Table 5 Model fit and result of the model

Sl. Acceptable threshold Actual level
no. Fit index levels derived Description
1 Absolute fit Model chi-square Value 1 to 5 = 50.03/47 Model fit
indices (χ2/df) (Wheaton et al., 1977; = > 1.064468
Tabachnick & Fidell,
2007)
2 P value p > 0.05; if the 0.354 Model fit
chi-square level is
significantly less
(Schermelleh-Engel
et al., 2003,
Vandenberg, 2006)
3 Root mean square Value < 0.07 0.041 Model fit
error of (Hu & Bentler, 1999;
approximation Steiger, 2007)
(RMSEA)
4 Standardized root SRMR < 0.08 (Hu & 0.0659 Model fit
mean square residual Bentler, 1999; Kline,
(SRMR) 2005)
5 Incremental Non-normed fit >0.95 0.980 Model fit
fit indices index (NNFI, also (Sharma et al., 2005;
known as the McDonald & Marsh,
Tucker-Lewis index) 1990)
TLI
6 CFI (comparative fit >0.95 0.978 Model fit
index) (Fan et al., 1999; Hu &
Bentler, 1999;
Tabachnick & Fidell,
2007)
7 Parsimony Parsimonious = ~ 0.5 0.510 Mediocre
fit indices normed fit index (Mulaik et al., 1989; fit
(PNFI) Crowley & Fan, 1997)

This RMSEA test result paves way for accepting H3; thereby the researcher
infers that the selected parameters are optimally explaining the construct with
variables.
H3: There is an association between the sample covariance matrix (theoretical
model) and the hypothesized covariance (observed model) matrix.
In the second category, the non-normed fit index (NNFI, also known as the
Tucker-Lewis index) TLI, having derived value of 0.980, indicates that all measured
variables are correlated. It also assesses the comparison between the χ2 of model
with χ2 of null model.
This NNFI (TLI) validates hypothesis one (H1), where the correlation of indica-
tors of variables is examined. By accepting H1, it could be inferred that the selected
indicators which measures the latent variables are significantly correlated.
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 45

H1: There is a relation between the measures (indicators) of “perceived ease of

use, perceived usefulness, compatibility, observability, trialability, and intention to
use” in post-COVID scenario.
It can reiterate that there exists a strong relation between the indicators of IoT
device, viz., perceived ease of use, perceived usefulness, compatibility, observabil-
ity, trialability, and intention to use in post-COVID scenario.
The CFI (comparative fit index) is the indicator for measuring the correlation
between the latent variables, viz., “perceived ease of use, perceived usefulness,
compatibility, observability, trialability, moderating, and intention to use.” The test
result shows there exists high correlation between the latent variables. By this CFI
indicator, the researcher validates and accepts hypothesis two (H2).
H2: There is relation between the latent variables, viz., perceived ease of use,
perceived usefulness, compatibility, observability, trialability, and intention to use
in post-COVID scenario.
This deduce that there exists a strong correlation among the six latent variables
and also corroborate with H1 (latent variables) and H2 (measured indicators).
Parsimonious normed fit index (PNFI), also known for narrowing the model esti-
mation depending on the sample data. However, the result shown is not overwhelm-
ing since the sample size signifies the calculation of PNFI. Nevertheless, the model
is mediocre fit.

7 Conclusion

During the COVID-19 pandemic, the IoT makes significant strides to improve med-
ical facilities and information systems. It helped to improve management of hospital
facilities, further medical operations, and the digitalization of healthcare can enable
the users to overcome the difficulties faced during this period. New medical applica-
tions are made possible by the IoT when equipment and devices are connected to the
Internet. Web-based tools are made available to patients in a variety of ways to
improve patient health monitoring. Further, the COVID-19 pandemic made the peo-
ple to use this technology to the core. The SEM model signifies the existence of
casual relationship, in various model fit indices (all three categories). This model
also identifies the moderating factor, i.e., “Covid scenario,” which accelerates and
amplifies the usage of IoT products especially in healthcare sector. Thus, this study
contributes to the body of knowledge in the way how the unexpected health scenario
transforms the usage of technological products (IoT and smart devices).
Notwithstanding, the model also reiterate and confirm the DoT and TAM model
with data being analyzed in the current study. These technologies offer quick infor-
mation and communication to improve the patient’s quality of life. This technology
will help patients in the future receive better care and will be used in the event of a
COVID-19 pandemic.
46 K. P. Jaheer Mukthar et al.

8 Implication for Researchers

This study provides academics with a framework for comprehending how users
perceived their experiences with IoT-based healthcare services during COVID-19
and after the emergence of the post-new normal. Regarding IoT service experiences
and adoption utilizing a combined TAM and DoI model during a pandemic crisis,
there are surprisingly few researches available. This study may be useful to identify
the advantages and difficulties IoT users in various industries faced during the epi-
demic. By expanding the sample size and include the rural population, additional
study may be feasible. This may reflect a range of end users’ experiences with IoT
services during this pandemic period. Future studies can also take into account more
variables and different range of respondents.

9 Technical/Practical Implication

Our research assists enterprises in making quick adjustments and prompt responses
to the expansion of Internet-enabled healthcare services and applications via IoT-
based healthcare equipment. It also aids in examining the drawbacks and advan-
tages of IoT adoption across various industries. The IoT has made it possible to
upgrade important facilities in the fields of hospitals, financial institutions, educa-
tion, utilities, and other sectors, which provides a new framework for technological
growth. The study’s findings might aid various industries in enhancing their positive
aspects and serve as a starting point for addressing their negative ones. Further
applications and a rise in technology utilization will result from the IoT’s use and
effects in several areas during the pandemic.

References

Crowley, S. L., & Fan, X. (1997). Structural equation modelling: Basic concepts and applications
in personality assessment research. Journal of Personality Assessment, 68(3), 508–531.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of informa-
tion technology. MIS Quarterly, 13(3), 319–340. [Link]
Fan, X., Thompson, B., & Wang, L. (1999). Effects of sample size, estimation methods, and model
specification on structural equation modeling fit indexes. Structural Equation Modelling,
6(1), 56–83.
Ha, J. F., & Longnecker, N. (2010). Doctor-patient communication: A review. The Ochsner
Journal, 10(1), 38–43.
Hu, L. T., & Bentler, P. M. (1999). Cut-off criteria for fit indexes in covariance structure analysis:
Conventional criteria versus new alternatives. Structural Equation Modelling, 6(1), 1–55.
Internet of Healthcare Things. (n.d.). Retrieved September 11, 2022, from [Link]
com/blog/internet-of-healthcare-things
Internet of Things for Healthcare: Evaluate User’s Acceptance and Sustainability… 47

IoT Medical Devices Market—Global Forecast to 2026 | MarketsandMarkets. (n.d.). Retrieved

September 11, 2022, from [Link]
device-market-[Link]
Javaid, M., & Khan, I. H. (2021). Internet of things (IoT) enabled healthcare helps to take the chal-
lenges of COVID-19 pandemic. Journal of Oral Biology and Craniofacial Research, 11(2),
209–214. [Link]
Khan, W., Aalsalem, M., & Khan, K. (2018). Communal acts of IoT consumers: A potential threat
to security & privacy. IEEE Transactions on Consumer Electronics, 1. [Link]
TCE.2018.2880338
Kline, R. B. (2005). Principles and practice of structural equation modelling (2nd ed.). The
Guilford Press.
Kosmatos, E. A., Tselikas, N. D., & Boucouvalas, A. C. (2011). Integrating RFIDs and smart
objects into a unifiedInternet of things architecture. Advances in Internet of Things, 1(1), 5–12.
[Link]
Madakam, S., Ramaswamy, R., & Tripathi, S. (2015). Internet of things (IoT): A literature
review. Journal of Computer and Communications, 3(5), 164–173. [Link]
jcc.2015.35021
McDonald, R. P., & Marsh, H. W. (1990). Choosing a multivariate model: Noncentrality
and goodness of fit. Psychological Bulletin, 107, 247–255. [Link]
0033-2909.107.2.247
Mulaik, S. A., James, L. R., Van Alstine, J., Bennet, N., Lind, S., & Stilwell, C. D. (1989).
Evaluation of goodness-of-fit indices for structural equation models. Psychological Bulletin,
105(3), 430–445.
Razdan, S., & Sharma, S. (2021). Internet of medical things (IoMT): Overview, emerging technol-
ogies, and case studies. IETE Technical Review, 0(0), 1–14. [Link]
2.2021.1927863
Sahin, I. (2006). Detailed review of Rogers’ diffusion of innovations theory and educational
technology-related studies based on Rogers’ theory. The Turkish Online Journal of Educational
Technology, 5(2), 10.
Schermelleh-Engel, K., Moosbrugger, H., & Müller, H. (2003). Evaluating the fit of structural
equation models: Tests of significance and descriptive goodness of-fit measures. Methods of
Psychological Research Online, 8(2), 23–74.
Sharma, S., Mukherjee, S., Kumar, A., & Dillon, W. R. (2005). A simulation study to investigate
the use of cutoff values for assessing model fit in covariance structure models. Journal of
Business Research, 58(1), 935–943.
Srivastava, J., Routray, S., Ahmad, S., & Waris, M. M. (2022). Internet of Medical Things
(IoMT)-based smart healthcare system: Trends and progress. Computational Intelligence and
Neuroscience, 2022, 7218113. [Link]
Steiger, J. H. (2007). Understanding the limitations of global fit assessment in structural equation
modelling. Personality and Individual Differences, 42(5), 893–898.
Sultana, N., & Tamanna, M. (2021). Exploring the benefits and challenges of Internet of Things
(IoT) during Covid-19: A case study of Bangladesh. Discover Internet of Things, 1(1), 20.
[Link]
Tabachnick, B. G., & Fidell, L. S. (2007). Using multivariate statistics (5th ed.). Allyn and Bacon.
Vandenberg, R. J. (2006). Statistical and methodological myths and urban legends. Organizational
Research Methods, 9(2), 194–201.
Wheaton, B., Muthen, B., Alwin, D. F., & Summers, G. (1977). Assessing reliability and stability
in panel models. Sociological Methodology, 8, 84–136. [Link]
Xu, B., Xu, L. D., Cai, H., Xie, C., Hu, J., & Bu, F. (2014). Ubiquitous data accessing method
in IoT-based information system for emergency medical services. IEEE Transactions on
Industrial Informatics, 10(2), 1578–1586. [Google Scholar].
Fintech and the Changing Competitive
Environment of Retail Finance: A Study
on the Development of a Cross-Functional
and Cross-Sectoral Financial Regulatory
System

Raj Bahadur Sharma , Ijaz Ali , and Imran Ahmad Khan

1 Introduction

Fintech is an acronym for financial technology. Although academic definitions are

not always clear, such as referring to advanced financial technology, advanced
financial services, or a group of companies with advanced technology, depending on
the context, this paper defines fintech as new business models, application methods,
processes, and product innovations made possible by technological advances that
have a significant impact on financial markets, financial institution management,
and financial services. The term “fintech company” will be used when referring to a
company with advanced technology.
It has been said for a long time that fintech will have a devastating impact on the
management of financial institutions. This may be due in part to Bill Gates’ state-
ment “Banking is necessary, but banks are not” (1994), but it is also due to the state-
ment of Jamie Dimon, CEO of JPMorgan Chase, one of the world’s leading financial
institutions “We’re one of the largest payments systems in the world and We’re
going to have competition from Google and Facebook and somebody else” (2014).
The leading US platformers are called GAFA, an acronym for Google, Apple,
Facebook, and Amazon. Although GAFA’s full-fledged entry into the financial
industry has not yet become apparent, the fact that Amazon’s e-commerce and home

R. B. Sharma
Department of Accounting, College of Business Administration, University of Bahrain,
Sakhir, Kingdom of Bahrain
I. Ali
College of Business and Management, Fahad Bin Sultan University, Tabuk, Saudi Arabia
I. A. Khan (*)
Pacelile Corporate Consulting, Aligarh, India

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 49

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
50 R. B. Sharma et al.

delivery services have devastated the retail industry, for example, makes it easy to
speculate that financial institutions will suffer a similar fate.
In the world of board games, AI has surpassed humans, with world chess cham-
pion Garry Kasparov losing to IBM’s “Deep Blue” (May 1997), Go master Lee
Sedol losing to “AlphaGO” (March 2016), and Shogi master Tenhiko Sato losing to
“Ponanza” (May 2017). In particular, the deep learning technology used in
“AlphaGO” shook the world, and the outstanding technical capabilities of its devel-
oper, Google DeepMind, became known to the world.
As we can see, it is an undeniable fact that the evolution of technology is drasti-
cally changing the conventional wisdom and the competitive environment of com-
panies, but this does not mean that there is a logical necessity for advanced financial
technology to benefit only fintech companies and platformers. It is important to
calmly assess the changes in the competitive environment.
The development of fintech shows historical path dependency. For example, in
the USA, the financial crisis of 2008 is said to have lowered confidence in existing
financial institutions, leading to the rapid rise of fintech companies, while in emerg-
ing economies such as China and Africa, where financial institutions are still under-
developed, there are cases where fintech companies occupy the position of the
frontier of financial services. Service providers, types of services, and financial
technologies vary from country to country. And the biggest difference in the social
positioning of fintech companies in developed and emerging countries can be
explained by the reversal of the development process of the financial system and
communication and financial technology. That is to say, in developed countries,
where industrial development has historically taken place early, the development of
financial systems and the improvement of consumers’ living standards preceded the
development of communication and financial technologies, while in emerging
countries, where industrial development has historically taken place lately, the
development of communication and financial technologies preceded the develop-
ment of financial systems. It is not uncommon for consumers to own mobile phones
while not owning bank accounts.
The World Bank estimates that 1.7 billion adults do not own bank accounts,
mainly in emerging and developing countries, and payment and remittance services
using the capabilities of telecommunications devices have expanded rapidly in
some of these countries. In the USA, there are also significant numbers of low-
income people and immigrants who have given up on bank accounts because they
are unable to pay account maintenance fees, and it is emotionally understandable
that these consumers, who cannot get the services they need from traditional finan-
cial institutions, would support the services of fintech companies.
In India, consumer demand for advanced financial technology has been limited
because there has not been the same earnest social demand for financial service
innovation as in the US and emerging economies, and also because of the ATM
network, and the public’s preference for cash-oriented settlement and deposit-
oriented asset management. The tendency for consumer needs to materialize has
been limited, and while financial institutions have emphasized digital in their busi-
ness strategies, there have been few drastic changes. Also, the amount of investment
in fintech companies was far below that of other developed countries.
Fintech and the Changing Competitive Environment of Retail Finance… 51

Under these circumstances, the Cabinet approved the “Future Investment

Strategy 2020: Reforms to Realize Society 5.0” in June 2020, which aims to incor-
porate the innovations of the Fourth Industrial Revolution into the industry and
social life to break through the “long-term stagnation” caused by sluggish produc-
tivity growth and lack of new demand creation common to advanced countries. The
Future Investment Strategy designates fintech as one of the five strategic areas and
aims to (i) introduce an open API (application programming interface) at more than
80 banks within the next three years (by June 2023); (ii) double the percentage of
cashless payments to around 40% within the next 10 years (by June 2030); (iii) over
the next five years (by June 2025), the ratio of small and medium-sized enterprises
(SMEs) that streamline their back-office operations by utilizing cloud services, etc.,
while responding to the shift to IT, is expected to quadruple from the current level
to around 40%; and (iv) improve the efficiency of cash circulation in India’s supply
chain by 5% by FY2023, as a KPI (Key Performance Indicator).
In response to the government policy, the Financial System Study Group was
established by the Financial Stability and Development Council on November 16,
2020. Minister consultations include a “Study on the desirable form of the financial
system in light of progress in information technology and other changes in the envi-
ronment surrounding India’s financial system, including the development of
function-based and cross-sectional financial regulations.” The study group did not
necessarily focus on the competitive environment of the financial services industry,
but its ideas and the process of its deliberations have a great deal to suggest, so this
paper examines the changes in the competitive environment that fintech will bring
to the Indian megabank groups (HDFC Bank, SBI, and ICICI Bank) with the delib-
erations of the group in mind.

2 Changes in the Competitive Environment Brought About

by Fintech

2.1 Competitive Environment for Retail Financial Institutions

To examine the impact of fintech on the competitive environment for retail finance,
we first conduct a SWOT analysis of India’s megabank groups (Table 1).
Regarding strengths and weaknesses as internal conditions of a company, the
VRIO framework emphasizes economic value, rarity, the difficulty of imitation, and
organization. In addition to a customer base supported by a nationwide network of
branches, a megabank group can provide a wide variety of products and services
that meet customer needs through commercial banks, securities companies, and
trust banks under the umbrella of a financial holding company. This means that the
group has economic value that enables it to adapt to changes in the external environ-
ment. Financial soundness that meets the standards of international financial regula-
tions is also an economic value and enables us to gain a relative advantage in
investments and alliances with other companies in the financial industry, where
52 R. B. Sharma et al.

Table 1 SWOT analysis for megabanks (retail)

Strengths
Nationwide store network (customer convenience)
Customer base with full coverage of segments
Diverse products and services in banking, securities, and trust
Extensive quantitative and qualitative customer data
Financial soundness
Weaknesses
Fixed costs (stores, systems, personnel costs)
Organizational and human capability in the digital domain
Ease of imitation of products and services
Opportunities
Increasing awareness of the need to shift from saving to asset building
Expansion of investment tax incentives
Room to pursue business efficiency using digital technology
Threats
The decline in demand due to declining birthrate, aging population, and population decline
Decline in funding revenue due to negative interest rate policy
Rise of fintech companies and Internet banks
Possibility of ROE decline due to international financial regulations

there is a high degree of uncertainty about market conditions, customer demand,

and technological innovation. However, it should be noted that the slump in funding
revenues due to negative interest rates has led to a decline in expected revenues from
the store network, and traditional strengths are turning into weaknesses as compa-
nies begin to reduce stores and store weight to curb fixed costs (stores, systems, and
labor costs).
From the perspective of fintech, big data on deposits, loans, investments, settle-
ments, etc. obtained from customer transactions can be a major weapon, as it is rare
and difficult for other companies to obtain. However, it remains to be seen whether
they will be able to accumulate sufficient organizational and human capabilities to
accurately analyze the big data and link it to sustainable competitive advantage. The
outcome of the competition with fintech companies is unpredictable. In addition,
legally speaking, personal data cannot be freely shared among different business
types within the same group. Even if a financial conglomerate is formed, it is neces-
sary to recognize that there are restrictions on the utilization of customer data and
cross-selling across business categories.
One of the characteristics of the products and services offered by financial insti-
tutions is that they are rarely protected by patents and can be easily copied or imi-
tated directly. While this is a weakness of existing financial institutions, fintech
companies are expected to use advanced financial technology to obtain business
model patents, making their capability in the digital domain more important
than ever.
Fintech and the Changing Competitive Environment of Retail Finance… 53

Next, we will examine the opportunities and threats in the competitive market as
external conditions for companies. The megatrends of declining demand due to the
declining birthrate, aging population, declining population, declining returns on
funds due to negative interest rate policies, and alternative products and services
from fintech companies and Internet banks are all threats that stand out. However,
the aging of the population, together with the expansion of preferential investment
taxation schemes, is increasing the need for individuals to plan their asset forma-
tion, and this could provide an opportunity for financial institutions to earn profits
by promoting “asset formation instead of savings.” In addition, while “fintech com-
panies” are positioned as a threat to financial institutions, “fintech” as financial tech-
nology is not necessarily a threat but rather an opportunity for financial institutions
to increase their operational efficiency.
International financial regulations, while leading to financial soundness, can also
be a factor in lowering ROE in the sense that a given level of capital must be secured
regardless of profitability.

2.2 Depiction of the Competitive Environment: Technology

and Services

When a fintech firm enters the financial industry, it naturally chooses an area where
it believes it has a technological competitive advantage. In examining the competi-
tive environment between financial institutions and fintech firms, one possible
approach is to classify them based on technology and services. Technologies and
services will emerge that stand in a “compete/substitute” relationship or a “comple-
ment/support” relationship from the perspective of traditional financial services
businesses. Virtual currency and blockchain as new services are neither “competing/
substituting” nor “complementing/supporting” (Table 2).
This classification method is close to the general terms used by financial institu-
tions and fintech companies in practice and is easy to verify with a concrete image
of business operations. On the other hand, “technology” and “services,” which are
inherently different in dimension, are mixed on the same axis, which is not suitable

Table 2 Technologies, services, and competitive environment

Competitive environment Technology and services
Supplementation and support AI (artificial intelligence)
RPA (robotic process automation)
Big data, agile, fraud prevention
Supplementation and support P2P payment and remittance, mobile remittance
Competition and substitution PFM (personal financial management)
Robo-advisor
Competition and substitution Social lending
Balance sheet lending
New services Virtual currency, blockchain
54 R. B. Sharma et al.

for highlighting differences in the competitive environment by dividing them into

technology and services.
AI, RPA, big data, etc., which are considered to be “complementary and sup-
portive,” are generic terms for generalized technologies and system development
methods, and in many cases, it would be closer to the reality if they were positioned
as “business improvement tools” rather than advanced financial technologies. In
other words, the implementation of these tools alone will not provide a sustainable
competitive advantage but will only be a source of competitive advantage if the
tools are combined with advanced strategy and marketing.

2.3 Describing the Competitive Environment: Innovation

SWOT is a framework for analyzing the external environment and the internal environ-
ment of a company. However, SWOT is not necessarily optimal when business is
changing rapidly due to innovation, uncertainty is high, and it is difficult to predict the
future business environment. This kind of sudden and unpredictable change in threats
and opportunities is called Schumpeterian transformation, and the situation retail finan-
cial institutions are facing due to the development of fintech may be a case in point.
Schumpeter, known as the father of innovation, categorized the leadership func-
tions of entrepreneurs that bring about economic development into five categories: (i)
creation and realization of new products or new qualities of products, (ii) introduc-
tion of new production methods, (iii) creation of new organizations, (iv) development
of new sales markets, and (v) development of new buyers. The Centre for Advanced
Financial Research and Learning, with similar inspiration, presents the concept of
four financial innovations by fintech (process innovation, product innovation, infra-
structure innovation, and social innovation) and three gaps as challenges that finan-
cial innovation can solve (Tables 3 and 4). We want to review these one by one.

Table 3 Types of financial innovation

Innovation The existence of gaps
Process Within and among financial institutions
Product Between customers and financial institutions
Infrastructure Cross-cutting infrastructure for each financial institution
Social Society as a whole, including the financial industry

Table 4 Gaps in financial innovation

Types of gaps Overview
Functions and The fulfillment of the various functions of a financial institution is
business law inadequate
Business model The business model of financial institutions is a loss of sustainable
competitive advantage
Technology The technology used by financial institutions is inferior in terms of added
value such as customer convenience
Fintech and the Changing Competitive Environment of Retail Finance… 55

1. Process innovation is considered to be an extension of the traditional IT industri-

alization of the financial industry. While the introduction of new technologies
can be expected to improve business operations, the creation of processes that
are different from those of competitors is required to lead to a sustainable com-
petitive advantage. On the other hand, if process improvement is insufficient,
there is a high possibility that the company will immediately fall into an inferior
competitive position. In the field of fintech, process innovation is considered to
be one of the essential conditions.
2. Regarding product innovation, as shown in the SWOT analysis, financial prod-
ucts and services are characterized by the ease with which they can be imitated.
Therefore, even if a company does not succeed in developing a product or ser-
vice on its own, it can mitigate the competitive environment by imitating the new
products and services of its competitors, as long as they have not obtained pat-
ents. However, in an environment where financial technology is constantly
evolving, it is unrealistic to rely on the ease of imitation as a “second-best strat-
egy” and strategies should be considered with a view to forming alliances with
other companies.
3. Virtual currency and blockchain are examples of infrastructure innovation. It is
possible to assume that they will not have a significant impact on the competitive
environment of financial institutions because they bring about changes equally
to all firms in the same business category. On the other hand, if the new infra-
structure technology is pioneering, the level of organizational and human
capacity required will certainly increase, so it will be necessary to ensure that
appropriate and sufficient resources are available at the time of transition to the
new infrastructure.
4. Social innovation has the potential to take away the functions of traditional
financial institutions in one fell swoop, as seen in the expansion of payment and
remittance services using cell phone and smartphone functions in emerging
countries. With deregulation and other measures in place, it is not unthinkable
for financial institutions to offer their social services to compete with fintech
companies, but this would complicate the organization and make it difficult to
make appropriate decisions. In addition, there is the fundamental question of
whether the managers of financial institutions know social services.
Therefore, if it is difficult to compete head-on with fintech companies, financial
institutions can establish a position as a socially necessary company by forming
alliances with fintech companies, thereby easing the competitive environment.
When adopting this strategy, it should be noted that the position of financial
institutions is weaker than that of other companies’ alliances as described in (2)
product innovation, because fintech companies that engage in social innovation are
assumed to be larger and have more bargaining power in terms of customer interface
than companies that specialize only in financial technology. Strengths indicated in
the SWOT analysis as bargaining chips for financial institutions, for example, “cus-
tomer base with full segment coverage” is likely to be an advantage for fintech
companies. If the “store network,” whose future maintenance is uncertain, is not a
56 R. B. Sharma et al.

factor in negotiations, then we can look for factors in “diverse products and ser-
vices,” “quantitative and qualitative customer data,” and “financial soundness.” In
addition, although not listed as a strength in the SWOT analysis, “brand power,” in
terms of high recognition by consumers, is also considered to be a powerful appeal-
ing factor.
Finally, about the “gaps in financial innovation” (Table 4), it is important to con-
firm that “gaps in functions and business methods” are exactly what it means to
“develop a system of financial regulation by function and across functions.” Also,
the phrase “insufficient performance of various functions” does not necessarily
mean that the efforts of financial institutions are insufficient, but rather how they
perform their functions should be upgraded using digital technology in light of
advances in advanced financial technology.

2.4 Depiction of the Competitive Environment: Convergence

Scenario of Business Restructuring

How will the changes in the competitive environment for retail financial institutions
eventually converge? BIS illustrates five scenarios for banks, using (i) customer
interface providers and (ii) service providers as cutoffs (Table 5).
The first scenario is the survival of existing banks through business model trans-
formation and digitalization, the second is the emergence of new banks with digital
advantages, the third is the modularization (decentralization) of financial services
including existing banks, the fourth is the decline of banks due to the oligopoly of
fintech/big tech customer interfaces, and the fifth is the extinction of banks due to
the entry of fintech/big tech.
The historical path dependence of fintech development means that the most
likely scenario will vary from country to country, but the fact that the BIS, a public
institution, has already envisioned a scenario of bank extinction is a testament to the
innovative and disruptive power of fintech. However, the government has

Table 5 Five scenarios of fintech development

Customer interface
Scenario Service provider provider
Bank retention Digitization of existing banks →
New Bank The emergence of a new, digitized bank →
Banking functions Existing banks → digital → Look at
Dispersion Fintech → digital
Big tech → digital
Bank recession Existing banks → financial services → Customer
Fintech → intermediary
Big tech → (tech companies)
Bank extinction Fintech (full service provided) →
Big tech (full service provided) →
Fintech and the Changing Competitive Environment of Retail Finance… 57

introduced various policies, including deregulation, to achieve a cashless society as

soon as possible, and it is natural to assume that there will be a significant change in
the competitive environment between financial institutions and fintech companies,
at least in the field of payments. The opening up of interbank remittance systems to
fintech companies is beginning to be considered.
The BIS separates fintech from big tech and states that big tech may become an
important part of the financial system by increasing its influence on the financial
system through alliances with financial institutions and fintech companies.
Therefore, we would like to examine the possibility of GAFA, one of the big techs,
entering the financial industry in earnest, taking into account the BIS perspective.
For example, Amazon could enter the banking business because financial institu-
tions are the main source of growth for Amazon Web Services (AWS), which is the
company’s main source of revenue. On the other hand, if it is necessary to improve
customer convenience, there is a possibility of introducing financial services. Thus,
a decision to consider entering the banking business based on overall gain or loss
and business philosophy is possible, but if AWS is a superior system, not adopting
it will directly lead to the financial institution’s inferiority in competition, so it
seems unlikely that a financial institution would decide not to adopt AWS in retali-
ation for competition in its core business. Therefore, we expect that Amazon’s entry
into the banking business will be considered honestly based on its business philoso-
phy, but in this case, the impact of international financial regulations such as the
designation of G-SIBs will be one of the key factors. In other words, if the direct and
indirect regulatory costs associated with entry into the banking business are expected
to constrain flexible investment in e-commerce and other areas and not lead to total
customer service improvement, there seems to be no reason not to enter the market.
We suspect the same is true for other GAFAs.

3 Development of a Cross-Functional and Cross-Sectoral

Financial Regulatory System

3.1 Functional Perspectives

The functional perspective is a conceptual framework for analyzing the financial

environment in terms of basic financial functions. It is based on two basic assump-
tions: (1) financial functions are more stable and less likely to change with time and
region than the financial services firms that embody them, and (2) the form of a
financial institution is defined by the way it performs its financial functions.
Assumption (2) implies that innovation and competition among financial institu-
tions will enable them to perform their financial functions more efficiently, which is
a powerful perspective when examining the impact of fintech on the competitive
environment for retail finance.
58 R. B. Sharma et al.

The functional perspective can be applied at the financial system level, the finan-
cial services firm level, the business level, and the product level. For example, it can
be applied to the competitive environment between financial institutions and fintech
companies, the performance of functions in settlement and lending operations, and
comparisons of the performance of functions among settlement and lending prod-
ucts. Financial functions can be categorized in various ways depending on the pur-
pose of the analysis, but it is relatively common for them to be classified into six
types: (1) settlement of funds, (2) pooling and parceling of resources, (3) transfer of
resources across time and place, (4) management of risk, (5) provision of informa-
tion, and (6) addressing incentive problems associated with information asymmetry.
The Financial System Study Group focused on the development of a cross-
functional and cross-sectoral financial regulatory system, not only because of the
academic and practical effectiveness of a functional perspective but also because a
functional perspective made sense when analyzing the actual business development
of fintech companies. The Secretariat’s briefing paper explains three case studies,
mainly from other countries, from a functional perspective. (i) E-commerce compa-
nies that operate Internet malls check the business conditions of the businesses that
have opened stores and use the data to provide online loans with credit scoring; (ii)
social network service providers provide electronic money and mobile money trans-
fers as part of their services; and (iii) E-commerce companies issue prepaid cards,
which users store in a custodial service called an “account” and use for prepaid
payments in online malls and money transfers between individuals. The prepaid
cards can also be used to purchase MMFs. In addition, using the big data accumu-
lated in the Internet malls operated by this company, loans will be provided to
mall owners.
The Secretariat also points out that, under India’s current legal system, money
lending, prepaid card, funds transfer, and financial instruments business are all sub-
ject to registration, which effectively allows them to conduct the same business as
banks without a license.
The effectiveness of the functional perspective is widely recognized. Taking into
account the rise of fintech companies, it can be said that financial theory emphasizes
the importance of the “functional approach,” which starts from the functions of
financial systems and financial institutions, rather than the “institutional approach,”
which considers better systems based on the premise that existing systems and
financial institutions exist.
However, the changes in the competitive environment for retail finance brought
about by fintech cannot be explained from a functional perspective alone. The chair-
person of the study group said, “There is not much precedent in other countries for
having a function-based legal system.” This can be interpreted to mean that the
development of fintech in other developed and emerging countries has not necessar-
ily required a function-based legal system.
As a methodology for studying the financial system, the most promising approach
is “comparative institutional analysis” which should be contrasted with the
“function-oriented perspective” proposed by the Global Financial System Project at
Harvard University. Comparative Institutional Analysis grasps the economic pro-
cess as an application of “Repeated Game Theory” and conceptualizes institutions
Fintech and the Changing Competitive Environment of Retail Finance… 59

as to how social games are continuously played as commonly understood among

people. Specifically, society is in a state where even if you try to play the game dif-
ferently, you will not gain as long as other people follow the conventions, and a
so-called Nash equilibrium is established. In this equilibrium, various institutions,
including financial institutions, reinforce each other’s existing values, and thus the
institutions are robust and self-binding. In examining economic systems and institu-
tions, we emphasize historical path dependence.
In Sect. 1, we mentioned that the development of fintech is historically path
dependent and that it is not possible to apply pioneering examples from other
advanced and emerging economies directly to India. However, when examining the
changes in the competitive environment for retail financial institutions, which per-
spective should we focus on: the functional perspective or the perspective of com-
parative institutional analysis? The authors believe that the “functional perspective”
is more effective for the following reasons. First, when a fintech company enters the
financial industry, it is likely to choose areas and functions in which it has a techno-
logical competitive advantage, and the three cases presented by the Financial
Institutions Study Group suggest this.
In addition, in fintech, which is undergoing a Schumpeterian transformation, it
will be difficult to accurately grasp actual social phenomena if strategies and institu-
tions are examined based on the assumption of the existence of equilibrium points
with robustness and self-binding properties.
Furthermore, when considering management strategies for financial institutions,
it is natural that they should take a proactive stance to overcome the equilibrium
point and gain a competitive advantage, rather than starting with a system that is at
the equilibrium point. If it is foreseeable that fintech companies will use their finan-
cial technology to enter a particular area or function, it makes sense for financial
institutions to think about their strategies from a functional perspective.
However, the importance of a functional perspective does not mean that historical
path dependency can be ignored. While understanding the historical differences in
the penetration of fintech compared to other developed and emerging countries, it is
important to take a bird’s-eye view of government and private sector efforts to help
Indian society break out of its inherent “equilibrium” and reflect this in the strategy.

3.2 Financial Regulation and the Peculiarities

of the Banking Industry

Based on the premise that the same rules should be applied to the same functions
and risks, the study group took into account the capture of functions and the sim-
plicity of the regulatory system and categorized them into four functions: (1) settle-
ment (e.g., foreign exchange transactions), (2) provision of funds (e.g., loans), (3)
asset management (e.g., activities regulated across the board by the Financial
Instruments and Exchange Law), and (4) risk transfer (e.g., insurance and other
guarantee functions). These four categories are described in “3”. These four
60 R. B. Sharma et al.

categories differ from the perspective of economics (finance) as explained in Sect.

3.1, and the participating members had a variety of opinions.
This classification is “similar to actions or operations, such as lending under the
Money Lending Business Act and the Banking Act, and investment and manage-
ment under the Financial Instruments and Exchange Act,” and that inherently,
“informational” functions such as interest rates and stock prices should be listed
independently as important functions that determine resource allocation.
Thus, although the functions were classified into four categories, taking into
account their relationship with current law and brevity, the challenge was to deal
with the accumulation of risks in the combination of multiple functions. The per-
spective is how to reconcile this with the fact that full-line banks are subject to strict
regulation. If strict regulation is to be considered, a combination of 4 functions →
15 types must be considered.
Corrigan (1983) cites three special characteristics of banking: (1) settlement
deposits, (2) provision of liquidity, and (3) conduit of monetary policy. He argues
that such special characteristics permit the provision of a safety net and necessitate
the separation of banking and commerce. This issue was also discussed in the study
group, and the view was expressed that the nature of settlement deposits has changed
over the past 35 years in light of the current situation where fintech companies are
providing new services with high settlement potential and that the traditional way of
thinking may no longer be in line with the trends of the times.
Concerning the peculiarities of the traditional banking industry, while “com-
pleteness of information” is increasing through the use of big data, etc., banks that
have converted their maturities from short-term deposits to long-term loans should
be able to hedge against the possibility of mounting turmoil, including rumors, but
it is difficult to structure such financial products, making it difficult to achieve “mar-
ket completeness.” Regarding systemic risk, if the bankruptcy of one financial insti-
tution leads to the bankruptcy of other financial institutions, companies, etc., or to a
decline in economic activity beyond the level that should be expected (negative
externality), economic theory says that the financial institution needs to be bailed
out, and the conclusion is that there can be no reason for regulation except for mis-
matches in maturity and problems that are too big to be crushed.
In the study group’s discussion on the regulation of fund transfer companies, it was
proposed to eliminate the upper limit of one million rupees for fund transfers, a limit on
the length of time funds can be held in competition with settlement deposits, and con-
sideration of the impact of rising interest rates on the business of fund transfer companies.

3.3 Fintech Companies’ Requests for Deregulation

We have discussed the impact of fintech mainly from the standpoint of financial
institutions, but we will also check the responses of fintech companies to get a full
picture of the competitive environment.
Fintech and the Changing Competitive Environment of Retail Finance… 61

Table 6 Requests of the fintech association

What to expect Contents
Services for users Bank agency, financial products brokerage
Crossing the financial institution Integration of bank agency, financial products
connection of brokerage, and insurance agency businesses
Cross-functional registration review Standardization of registration items
Organization of common and individual items
Removal or relaxation of upper limit Not seen in other countries
regulations for money transfer operators Removal of the upper limit of one million rupees
Elimination or relaxation of
Refund of prepaid means of payment Eliminating the hesitation of charging
Prohibited regulations Spread of payment methods
Source: Fintech Association of India, “Regulatory Issues Related to Fintech,” October 25, 2020

The four requests of the India Fintech Forum are included in the study group
materials for the second session of the 2020 administrative year, conducted on
October 25, 2020 (Table 6).
Two of these requests, the cross-connecting of services for users with financial
institutions and the removal of upper limits for money transfer companies, were
discussed in the study group and passed into law on June 5, 2021, to enhance the
Convenience and Protection of Users of Financial Services, etc.
It is difficult to predict with a high degree of certainty the impact that this deregu-
lation will have on the management of financial institutions. For example, we can-
not deny the possibility that the financial services intermediary business will
increase the sales of financial products and services, which will have a rather posi-
tive impact on the earnings of financial institutions. On the other hand, it is difficult
to assume that the government will consider financial institutions in the fintech area,
and it is necessary to recognize that the competitive environment may change in the
future due to various deregulations.
In this case, changes in payment and cashless transactions, which are lagging
behind other countries, are expected to be the most drastic. However, cashless trans-
actions also have the merit of reducing fixed costs for financial institutions (ATMs,
etc.) through a decrease in cash transactions, so it is important to examine this issue
from a broad perspective.

3.4 Utilization of Information by Financial Institutions

In Sect. 2.1, “The Competitive Environment for Retail Financial Institutions,” we

identified “quantitatively and qualitatively rich customer data” as one of the
strengths of megabanks, but on January 16, 2021, the Study Group published a
report on the development of systems for the use of information by financial
institutions.
62 R. B. Sharma et al.

The report states that banks and insurance companies, which are subject to strict
regulations, are under pressure to change as the use of information by general busi-
ness companies progresses and that it is appropriate to review the scope of business
regulations to appropriately respond to such changes in society as a whole. The
report suggested that it is necessary to take into account the purpose of the regula-
tions, such as (1) prevention of transactions with conflicts of interest, (2) prevention
of abuse of dominant positions, and (3) elimination of risks in other industries while
paying attention to the effectiveness of supervision. On May 1, 2021, with the enact-
ment of the Act for Partial Revision of the Law Concerning Funds Settlement, etc.,
banks and insurance companies were allowed to provide customer information held
by them to third parties as an incidental business.
Furthermore, the Financial Stability and Development Council was asked by the
General Meeting on June 11, 2021, to consider how the banking system should be
organized, and the Working Group on the Banking System was convened on June
30. As we have repeatedly stated, it is no exaggeration to say that “quantitatively
and qualitatively rich customer data” is one of the greatest sources of strength for
financial institutions. It will be necessary for megabank groups, especially those
that operate globally, to proactively offer their opinions to the extent they can, tak-
ing into account the status of the use of personal data by G-SIBs in other countries.

4 Conclusion

As we have seen, the competitive environment for financial institutions brought

about by fintech is changing rapidly, and news related to fintech, including the
aforementioned reconsideration of India’s banking system, is being reported daily.
The establishment of the Digital Agency by the new cabinet is a sign of the gov-
ernment’s determination to promote digital technology seriously and will have a
significant impact on the management of financial institutions through the imple-
mentation of policies related to fintech.
On the other hand, as the source of added value for fintech is an advanced finan-
cial technology and quantitatively and qualitatively rich customer data, it goes with-
out saying that financial institutions should not only keep pace with the government’s
leadership but also make their efforts to provide innovative financial services to
their customers through research and innovation.
However, if a financial institution, which is exposed to declining demand due to
the declining birthrate and aging population, declining funding revenues due to
negative interest rate policies, and faced with fixed costs such as store costs and
financial regulatory costs, makes a large investment in fintech, where business is
changing rapidly, uncertainty is high, and the future business environment is diffi-
cult to predict, it may exceed its financial capacity.
One way to maximize strategic flexibility in such an uncertain environment is
from the perspective of real options. Real options assume that if the uncertainty
present in a transaction is uncertainty about the value of the investment, then there
Fintech and the Changing Competitive Environment of Retail Finance… 63

Table 7 Capital and business alliances of megabank groups (example)

Banks Fintech partners
HDFC MobME, PayZapp, Zeta, Google Assist, Amazon’s Alexa, Talview, Locobuzz, Google
Tez, [Link], Money View, etc.
SBI Cashfree, Rupeek, etc.
ICICI Visa, Marg ERP, Zoho Books, Paybooks, Greytip, Decentro, Sqrrl, etc.

is a high probability that more non-hierarchical governance will be preferred. This

assumption is based on the fact that, under uncertain conditions, it is highly valuable
to retain the ability to change the form of governance quickly and at a low cost.
Looking at the digital strategies of megabank groups, capital and business alli-
ances with fintech companies, etc. are more prominent than the development of
their financial technology, and the concept of real options seems to be adapted
(Table 7).
And given the speed at which fintech is evolving, including the government’s
response, the success or failure of such a strategy will become apparent sooner
rather than later.

References

Corrigan, E. G. (1983). Are Banks Special? Federal Reserve Bank of Minneapolis. Retrieved
from [Link]
annual-report-1982-18309.
Impact of Digital Marketing and IoT Tools
on MSME’s Sales Performance
and Business Sustainability

D. Ravindran , K. P. Jaheer Mukthar , Eva Zarzosa-Marquez ,

Julián Pérez Falcón , Robert Jamanca-Anaya ,
and Liset Silva-Gonzales

1 Introduction

The marketing industry is always evolving. Modern marketing executives must

have a reliable system in place for gathering timely and accurate data on consumers,
competitors, and the external setting. The process of advertising and selling a prod-
uct or service via the World Wide Web is known as “Internet marketing” (IM). The
Internet and electronic commerce have made product distribution and promotion
feasible. The term “electronic commerce” (or “e-commerce”) is used to describe
any type of market that exists solely online. E-commerce, or electronic commerce,
is the practice of doing business transactions over the Internet. The discipline of
Internet marketing is a subset of e-commerce as a whole.
Ikramuddin et al. (2021) identified the factors that affect MSMEs’ performance
in the North Aceh Regency. His study examined the connections between factors
such as the existence of MSMEs during the COVID-19 epidemic, the use of the IoT
by MSMEs for marketing, and the involvement of MSMEs in social media to adver-
tise their goods and services. The capability of the marketing section heavily influ-
ences how MSME performs. According to the study’s findings, marketing orientation
techniques, such as customer orientation, competitor orientation, and cooperation
among MSME management functions, had a greater effect on MSMEs’ marketing
performance in North Aceh Regency. The findings of this study are consistent with

D. Ravindran · K. P. Jaheer Mukthar (*)

Kristu Jayanti College Autonomous, Bengaluru, India
e-mail: jaheer@[Link]
E. Zarzosa-Marquez · J. Pérez Falcón · R. Jamanca-Anaya
Universidad Nacional Santiago Antúnez de Mayolo, Huaraz, Peru
L. Silva-Gonzales
Universidad Señor de Sipán, Chiclayo, Peru

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 65

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
66 D. Ravindran et al.

those of other studies that found that implementing a market orientation strategy has
the greatest impact on the growth of business performance. Entrepreneurial and
market orientations can boost marketing effectiveness by putting to the test the use
of digital marketing technologies that have a big impact on marketing. He talked
about how few MSMEs use digital marketing tools like social media and merely
have generic social media profiles for business promotion. Based on their skills and
visibility in social media channels, digital connections, and digital technologies, the
majority of businesses utilize digital marketing media as their primary marketing
tools. The findings advise management to keep an eye on service commitment to
clients, client contentment, and rising superior value. Online advertising, affiliate
marketing, email marketing, and social media marketing are all examples of digital
marketing platforms.
The purpose of digital marketing is to broaden businesses’ opportunities to reach
a wider audience through more effective forms of promotion and advertising.
Advertisers may contact potential customers 24/7, no matter where they are, and
businesses of all sizes can utilize this tool to spread the word about their business
online (Agostini et al., 2020; Maduku et al., 2016; Samoilenko & Osei-Bryson,
2017). Since then, digitalization has been connected to small business expansion,
productivity, and competitiveness. Using digital marketing and social media, small
businesses may attract new clients and retain existing ones (Taiminen & Karjaluoto,
2015). Small and medium-sized enterprises (SMEs) can benefit greatly from digita-
lization due to its simplicity in facilitating information sharing and customer con-
nections (Wonglimpiyarat, 2015; Eze et al., 2018). For modern businesses, digital
platforms are an essential marketing tool since they allow them to more effectively
connect and communicate with their target audience, evoke emotions in consumers,
and facilitate transactions between businesses and consumers.
In their research of MSMEs in Indonesia, Redjeki and Affandi (2021) concluded
that these companies may grow and continue operating even in the event of a pan-
demic. MSMEs must adopt digital marketing, he said. During the COVID-19 epi-
demic, he suggested introducing the deployment of small and medium-sized firms
in the MSME sector. According to the research, digital marketing is highly benefi-
cial for MSME operators in Indonesia since it may raise their sales turnover thanks
to its many advantages. Therefore, experts suggest a few straightforward steps for
establishing a business with digital marketing, such as deciding on the digital plat-
form to employ, setting a budget, and developing content that will grab customers’
interest. The authors of this study also discuss the benefits that customers who
employ digital marketing receive. However, due to several factors—including a lack
of technology literacy, insufficient support services, and Indonesia’s challenging
geographic conditions—digital marketing has not been substantially adopted by the
MSME sector there.
This paper has the standard structure of abstract, introduction, review of litera-
ture, objectives, research methodology, analysis and discussions, conclusion, and
future scope for research.
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 67

2 Literature Review

Online advertising is a great way to build awareness for a brand and increase traffic
to a website, two of a company’s most crucial objectives (Song, 2001). Traditional
forms of public relations and advertising have given way to the more modern strate-
gies of digital marketing. Therefore, it can revitalize the economy and make govern-
ment agencies more efficient (Munshi, 2012). According to Internet World Stats,
there will be more than 4.5 billion Internet users in the world by March 2020. The
Internet’s velocity and influence have increased as a result of developments in tech-
nology and the expansion of digital infrastructure. The Internet has largely replaced
more conventional means of communication. The effects of Industry 4.0 and new
information and communication technologies (ICTs) including the Internet of
Things, machine learning, artificial intelligence (AI), robots, and cloud computing
were compared. Companies that rely on digital technology to create money believe
that the three most essential marketing aspects of digital material are (1) its acces-
sibility (2), its navigability, and (3) its speed. As a result, people’s buying and con-
sumption patterns have changed over time. Midha (2012) argues that the amount
and manner in which people consume are affected by the ever-evolving psychology
of consumption in response to consumer demands. So, companies in the sector must
respond to the evolving demands of consumers and provide their products and ser-
vices promptly (Pencarelli, 2020). As consumer expectations rise, it’s natural that
some businesses may struggle to stay up and eventually fall behind (Ungerman
et al., 2018). There have to be strict new rules and regulations in place for traditional
marketing to keep up with the rapid growth of the digital economy and the variety
of new opportunities and difficulties it brings (Midha, 2012).
According to Purwanti et al. (2022), MSMEs may create digital marketing skills
characterized by customer information, customer demands, customer interactions,
and customer communication to enhance their business performance. As environ-
mental dynamism grew, so did the strength of the association between digital mar-
keting capability and MSMEs’ performance. Environmental dynamism moderates
the impact of digital marketing skills on MSMEs’ performance. It has been demon-
strated that environmental dynamism might reduce the performance impact of digi-
tal marketing skills on MSMEs. He emphasized that the success of MSMEs may be
significantly influenced by digital marketing skills thanks to customer demand,
technology, and innovation.
As a consequence of the different advantages that digital marketing provides,
Redjeki and Affandi (2021) found that MSME players in Indonesia may enhance
their sales turnover. Technology literacy and insufficient infrastructure to meet
Indonesia’s geographical circumstances were noted as barriers. He advised begin-
ning a firm with digital marketing after deciding which digital platform to employ,
setting a budget, and producing content that will draw in customers. The advent of
digital technology has caused a sea change in conventional marketing strategies
(Caliskan et al., 2021). Constantly staying ahead of the competition in today’s mar-
ket is challenging because of the way people’s attitudes and habits have shifted in
68 D. Ravindran et al.

response to technological developments (Vidili, 2021). Strategic sales decisions are

required to grow digital sales in the long term and use them as a competitive advan-
tage. Sales techniques that focus on the needs of the consumer are, therefore, more
vital than ever in the current economic climate (Zhu & Gao, 2019).
Digital marketing has supplanted conventional marketing and communication
tactics, according to Cutinha and Mokshagundam (2022). Internet advertising is
increasingly commonplace, and it is feasible to determine the objectives and advan-
tages of digital marketing that those businesses see and use as a successful market-
ing channel. To properly penetrate this new market, business organizations must
first understand the lives of their clients. Digital marketing has evolved into a
dependable online venue for small-company communication. Due to the use of the
IoT and e-commerce in recent technologies, both customers and suppliers are more
productive. Despite geographic differences, there is no denying that the frequency
of digital transactions is increasing. People of all ages believe that online transac-
tions are secure and safe, and male and female purchasing behaviors are comparable
in terms of the frequency of purchases, urbanity, and perceptions of online security.
Digital platforms are common in contemporary society and are recognized as the
greatest market for all companies, despite considerable security and privacy hazards.
B. Sivathanu (2019) explored the technology has fundamentally changed how
goods are produced or processed in business. One of the main drivers of this shift is
the industrial Internet of Things (IoT). According to its definition, the Internet of
Things (IoT) is a “global network and service infrastructure of variable density and
connectivity with self-configuring capabilities based on standard, interoperable
policies and procedures and formats consisting of heterogeneous things that have
identities, physical and virtual attributes, and are seamlessly and securely integrated
in to the Internet. The Internet of Things (IoT) is a very comprehensive technology
with cross-disciplinary uses in communication, computer science, sensor technol-
ogy, and other fields. IoT with a network of computers, physical objects, software
programs, platforms, and other things that can exchange intelligence and interact
with one another as well as with people inside and outside of an organization. The
IoT makes it possible for several linked industrial systems to coordinate and com-
municate data and data analytics, and it catalyzes to enhance industrial
performance.
Javed et al. (2021) analyzed how the growing complexity of human demands has
forced many facets of life and society to confront difficult issues and be considered.
According to his research, industrial businesses must embrace technologies like the
Internet of Things (IoT) and blockchain to expedite the transition from sustainabil-
ity to focus. Designing incentive and tokenization mechanisms to encourage green
consumer behavior, increasing visibility throughout the product life cycle, increas-
ing system efficiency while lowering development and operating costs, and strength-
ening the monitoring of sustainability and performance reporting in supply chain
networks are some of the capabilities of the blockchain. He offered a paradigm that
would describe the interactions and outcomes of the various components of a secure
supply chain system based on the Internet of Things and blockchain. To implement
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 69

a sustainable supply chain based on technology, he emphasized sustainability, coop-

eration, and management.
Many companies have jumped on the bandwagon of digital marketing by adopt-
ing e-commerce. Traditional stores that haven’t invested in an online presence have
been hit particularly hard by this upswing. This connection is crucial for the suc-
cessful transition from classic to digital advertising (Dong & Wang, 2018).
Successful firms are finding that digitally sustainable sales provide them with an
edge in the marketplace. The operational sales procedures and external environment
should both be factored into a company’s market positioning strategy. According to
Chaffey and Smith (2008), every company serious about Internet marketing must
prioritize the 5S of Internet marketing (Sell, Serve, Speak, Save, Sizzle)—sales,
service, communication, savings, brand creation, and diffusion.
Some of the many benefits of online advertising include cost-effectiveness, spec-
ificity in reaching an intended audience, ease of use, and the opportunity to do one’s
product research before purchasing (Durmaz & Efendioglu, 2016).
Cloud computing, security, big data analytics, omnipresent data, intelligent
machines, and a seamless user experience are characteristics of the IoT. The indus-
trial, transportation and utility industries all employ IoT. The IoT is mostly employed
in field service, production, asset management, and manufacturing processes.
Automation technologies like manaufacturing execution system (MES), distributed
control system (DCS) are programmable. Logic controllers (PLC) are widely used
by firms. Robots, conveyors, and motors are managed and controlled by program-
mable logic controllers (PLC) during production. Manufacturing firms may benefit
from the Internet of Things in several ways, including linked factory applications,
asset and vehicle monitoring, air quality management, access control (security),
smart measurement of radiation gases and liquid levels, and risk assessment.
Manufacturing companies may exploit the power of the IoT by fusing real-time sen-
sor data, machine learning, big data, and machine-to-machine connectivity. The sec-
tor of manufacturing and warehousing has done substantial research on IoT
technology. The IoT is an emerging technology that may successfully assist next-
generation industrial businesses, according to earlier studies.
For business continuation, Gabelaia and Tchelidze (2022) discovered a require-
ment for digital marketing knowledge. He also understood how crucial it was to find
out the where, when, what, why, who, and how (6Ws marketing model) to make
wise choices about the kinds of digital marketing methods to use. Whether small or
large, digital marketing tools influence business continuity. The goal of the study
was to examine the impact of particular digital marketing technologies on customer
interaction, product lifecycle, sales growth, and buyer decision-making. A strong
online presence is advised to connect with the intended audience, according to the
study and in-depth interviews. Mirmahdi and Afshari (2022) researched the use of
the IoT in business and concluded that it gives managers a useful tool for gaining a
durable edge. It was discovered that factors influencing the adoption of the IoT for
company sustainability were perceived utility, the convenience of use, trust, social
acceptance, enjoyment of usage, and controllability. Routine and sustainable mar-
keting techniques have a strategy for planning and controlling decisions that are in
70 D. Ravindran et al.

line with the expansion of competitive intelligence and the influence of environmen-
tal effects. The IOT energizes the organization’s information and knowledge flow
and enhances the efficiency of group thinking and decision-making. Along with
competitive intelligence, IoT-based solutions may also contribute to further corpo-
rate expansion and customer perception of their utility.
For enhancing a company’s digital marketing capabilities, Masrianto et al. (2022)
proposed a model that focuses on the development of an innovation ecosystem by
using adoption of digital marketing technology and digital transformation. The
innovation ecosystem readiness demonstrates the degree to which the company’s
ecosystem is prepared to adapt to changes in its internal and external business envi-
ronment. Comparatively speaking, businesses that can establish innovation ecosys-
tem preparedness typically have stronger digital marketing skills. The degree of
organizational usage of digital marketing technology is indicated by the adoption of
digital marketing. Businesses that can use efficient digital marketing technologies
will often have greater levels of capability. He added that the process of integrating
technology into a company’s business operations is known as “digital transforma-
tion,” and it is directly tied to both technological and leadership competencies.
Companies that can accomplish digital transformation typically have higher levels
of capacity for digital marketing than other businesses.
Using digital marketing strategies like social media can help small businesses
reach more people for less money. Competition for micro, small, and medium enter-
prises (MSMEs) is fierce. Many of the rivals provide products that are essentially
the same, but at a lesser price. In exchange, they offer a wide range of benefits to
their clientele. With the use of digital technologies, businesses may enhance their
customer-facing processes and provide better responses to customers’ requests.
Digital technology is beneficial for both consumers and businesses since it increases
efficiency and productivity while decreasing overhead costs (Foroudi et al., 2017).
Sun (2022) outlined the current state of the industry, the potential for future mar-
ket growth in the sales profession, and the development space for digital marketing.
He indicated that it may be conceivable to use decision-making for other firms to
execute to improve automotive digital marketing management.

3 Objectives

• To analyze the effect of digital marketing practices on the sales performance

of MSMEs
• To examine the effect of digital marketing practices on the business sustainabil-
ity of MSMEs
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 71

4 Research Methodology

Descriptive surveying was used as the primary research approach for this study.
Researchers often use questionnaires as a tool for data collection from the study
population. This research tool was developed after reviewing the relevant literature
and previous studies (Wanjiru Mobydeen, 2021). A Google Docs questionnaire was
created, and its link was sent to the CEOs and managers of MSMEs, as well as any
other executives with a stake in the strategy and execution of digital marketing. The
first section of the survey asks for basic personal and professional information about
respondents. In the second section, you’ll answer questions about the study’s depen-
dent and independent variables. Respondents were given a 5-point Likert scale on
which to rate their opinions, from 1 (strongly disagree) to 5 (strongly agree).
Respondents were chosen from among various MSMEs in Hyderabad using a com-
bination of expert judgment and practical considerations. After data screening, 142
out of 152 questionnaires were chosen for further research since they contained all
of the necessary information.

5 Hypotheses

H1: Digital marketing practices have a significant influence on the sales perfor-
mance of MSMEs.
H1a: Mobile marketing has a significant effect on the sales performance of MSMEs.
H1b: Social media marketing has a significant effect on the sales performance
of MSMEs.
H1c: Search engine marketing has a significant effect on the sales performance
of MSMEs.
H2: Digital marketing practices have a significant influence on the business sus-
tainability of MSMEs.
H2a: Mobile marketing has a significant effect on the business sustainability
of MSMEs.
H2b: Social media marketing has a significant effect on the business sustainability
of MSMEs.
H2c: Search engine marketing has a significant effect on the business sustainability
of MSMEs.
A combination of SPSS version 24 and AMOS was used to analyze the survey
data collected from the participants. Descriptive statistics include summing up the
study’s variables by calculating their means and standard deviations. Cronbach’s
alpha was used to check the data’s consistency. Structure equation modelling was
used for the hypothesis testing (SEM).
72 D. Ravindran et al.

6 Analysis and Interpretations (Tables 1 and 2)

The descriptive statistics of various statements related to predictor variables mainly

mobile marketing, social media marketing, and search engine optimization indicate
all the values of mean above 3 inferred agreements of respondents for these state-
ments. The dependent variables, measured using sales performance and business
sustainability, have mean values above 3 and standard deviation values near 1.
The above table also mentioned Cronbach’s alpha values for research constructs,
as per Nunnally (1978) the alpha value above 0.7 indicates the reliability of data.
For the current study, the alpha value is higher than the threshold value of 0.7 rang-
ing from 0.861 to 0.915.

Table 1 Details of respondents and MSMEs

Measures Items Percentage (%)
Gender Male 84
Female 16
Age Below 24 3
25–30 62
30–35 12
35–40 23
40 & above 8
Education Secondary 4
Undergraduate 54
Postgraduate 2
Others 21
Occupation Business 64
Salaried 27
Others 9
Type of business Micro 12
Small 32
Medium 66
Activities of business Manufacturing 43
Transport 3
Construction 7
Trade and commerce 10
Service 23
Others 14
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 73

Table 2 Descriptive and reliability of the constructs

SI. No. Items Mean Standard deviation Cronbach’s alpha
1 MM1 3.32 0.894 0.874
2 MM2 3.45 0.965
3 MM3 3.45 0.941
4 SM1 3.47 1.000 0.915
5 SM2 3.36 0.974
6 SM3 3.41 0.967
7 SEM1 3.19 0.938 0.875
8 SEM2 3.18 0.909
9 SEM3 3.18 0.946
10 SP1 3.45 0.947 0.867
11 SP2 3.44 0.964
12 SP3 3.62 0.872
13 BS1 3.29 0.979 0.861
14 BS2 3.38 0.946
15 BS3 3.37 0.921

7 Structural Equation Modelling (SEM)

for Hypothesis Testing

SEM is a multivariate technique where the structural model shows the link between
the latent variables or constructs that the research model hypothesized. For the cur-
rent study, mobile marketing (MM), social media marketing (SM), and search
engine marketing (SEM) were considered as an exogenous variable, and their
impact was tested on sales performance and business sustainability of MSMEs
(endogenous variables).
The data shown in Table 3 and Fig. 1 are utilized for hypothesis testing. If the
crucial ratio (t value) was more than 1.96 and the probability of a false discovery
was less than 0.05 at the 5% level of significance, then the null hypothesis would be
accepted. Standardized regression weights for the routes or relationships between
independent and dependent variables are represented by the path coefficients. The
magnitude of an independent variable’s effect on a dependent variable is propor-
tional to the square root of its beta value (the standardized regression weights).
The results showed that mobile marketing had a favorable and substantial effect
on MSMEs’ sales performance (beta = 0.227, p = 0.019). Therefore, H1a was
accepted against the null hypothesis because the p-value was less than 0.05.
Similarly, the influence of social media marketing (beta = 0.392, p = 0.000) and
search engine marketing (beta = 0.321, p = 0.000) on sales performance is positive
and statistically significant. These pathways have t-values more than 1.96 and p-
values less than 0.05, supporting hypotheses H1b and H1c.
In addition, the study studied the effect of three marketing strategies on the busi-
ness sustainability of micro, small, and medium-sized enterprises (MSMEs), and
the results supported the favorable effect of digital marketing practices on company
74 D. Ravindran et al.

Table 3 Path coefficients of the structural model

Independents Regression
Outcome variable variables C.R. P weights Hypothesis
Sales performance <--- Mobile marketing 2.343 0.019 0.227 Supported
Sales performance <--- Social media 4.771 *** 0.392 Supported
marketing
Sales performance <--- Search engine 4.113 *** 0.321 Supported
marketing
Business <--- Mobile marketing 2.199 0.028 0.243 Supported
sustainability
Business <--- Social media 2.967 0.003 0.274 Supported
sustainability marketing
Business <--- Search engine 3.027 0.002 0.268 Supported
sustainability marketing
Note: P refers to the differential probability. ***: p < 0.000

Fig. 1 SEM model: causal structure. Note: Here, MM mobile marketing, SM social media market-
ing, SEM search engine marketing

sustainability, hence supporting hypothesis H2. The path from mobile marketing to
business sustainability has a beta value of 0.243 with a p-value of 0.028, demon-
strating the validity of hypothesis H2a.
With beta = 0.274, p = 0.003 (p-value 0.05), social media marketing has a con-
siderable impact on business sustainability, as indicated by H2b (beta = 0.274,
p = 0.003; p-value 0.05). Likewise, this effect of search engine marketing on firm
sustainability is substantial as beta = 0.268, p = 0.002, so H2c is accepted.
Moreover, the generated R square value of 0.58 as presented in Fig. 1 depicted
that digital marketing practices (mobile marketing, social media marketing, and
search engine marketing) accounted for 58% of the variation in sales performance.
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 75

The R square value for business sustainability is 0.41 indicating 41% of the variance
is explained by three digital marketing practices. Thus, it can be concluded that
digital marketing had a moderately positive effect on the performance of MSMEs.

8 Discussion and Implications

In this study, we looked at how various digital marketing strategies affected the suc-
cess of small and medium-sized businesses. Some examples of digital marketing
strategies employed by chosen MSMEs are discussed in this study. The research
results showed that these three digital marketing strategies do have a good and sig-
nificant effect on MSMEs’ sales performance and business sustainability.
Effectiveness can be best predicted by using social media marketing. Previous stud-
ies have looked at how various forms of digital advertising affect business out-
comes. The results of this study are consistent with those of the other studies. Mail
marketing, social network marketing, mobile phone marketing, and website market-
ing are only some of the digital marketing tactics that Mobydeen (2021) examined
in his research of their effects on business outcomes.
The importance of these results lies in the fact that they demonstrate how digital
marketing, in any of its forms, can have a positive impact on the performance of
MSMEs and that its aims are attainable. All MSME managers/CEO/directors can
benefit from the study’s findings. Owners and managers are encouraged to adopt a
variety of digital marketing strategies to boost the company’s bottom line. There
isn’t a single marketing strategy that doesn’t have some kind of impact on revenue
growth and company viability.
According to the findings, using many social media platforms to spread a com-
pany’s message to a wide audience is highly effective. Instagram and WhatsApp
were also mentioned as potential tools for maintaining contact with clients.

9 Conclusion

Small and medium-sized businesses (SMBs) can choose from a variety of digital
marketing tools. Websites, electronic mail, short message services, search engine
optimization, social networking sites, microblogging platforms, and micro-
messaging apps like WhatsApp, Twitter, Instagram, and Telegram are all on the list.
From this study, researchers can infer that digital marketing and usage of the IoT
through the methods like mobile marketing, social media marketing, and search
engine marketing are having a positive influence on the sales performance and busi-
ness sustainability of MSME companies. Facebook, WhatsApp, and Instagram are
the three most widely used social networking sites today. In the 5G telecom era and
Industry 4.0, business and technology are inseparable irrespective of the place,
nature of business, and customer segment. Companies should be continuous
76 D. Ravindran et al.

learners to analyze and adopt suitable IoT and digital marketing tools in sustaining
their business and planning for their business expansion or product innovations.
Though investing in digital tools and training the resources and customers to adopt
in business are challenging tasks, the efforts and investments will yield better returns
and efficiency in any business.

10 Scope for Future Research

This study is limited to research on digital marketing tools in business performance

in MSMEs. Further studies can be on performance in different functional areas like
marketing, human resource, finance, exports, etc. Here study was limited to selected
companies in Hyderabad only, so future studies could be from MSMEs from differ-
ent states, comparative performance of different businesses, and influential studies
of different tools in different areas and regions for further micro understanding
which may give inputs to future entrepreneurs and SMEs’ growing as MSMEs.

References

Agostini, L., Nosella, A., Sarala, R., Spender, J. C., & Wegner, D. (2020). Tracing the evolu-
tion of the literature on knowledge management in inter-organizational contexts: A biblio-
metric analysis. Journal of Knowledge Management. ahead-of-print. [Link]
JKM-07-2019-0382
Caliskan, A., Özen, Y. D. Ö., & Ozturkoglu, Y. (2021). Digital transformation of traditional mar-
keting business model in new industry era. Journal of Enterprise Information Management,
34(4), 1252–1273.
Chaffey, D., & Smith, P. (2008). E-marketing excellence: Planning and optimizing your digital
marketing (EMarketing Essentials). 3rd Edition, Routledge, Abingdon-on-Thames.
Cutinha, Z. P., & Mokshagundam, S. S. (2022). Opportunities and challenges of digital marketing
in Indian context. International Journal of Research Publication and Reviews, 3(10), 261–268.
Durmaz, Y., & Efendioglu, I. H. (2016). Travel from traditional marketing to digital marketing.
Global Journal of Management and Business Research, 16(2), 34–40.
Dong, X., & Wang, T. (2018). Social Tie formation in Chinese online Social commerce: The role
of IT Affordances. International Journal of Information Management, 42, 49–64. [Link]
org/10.1016/[Link].2018.06.002
Eze, S. C., Chinedu-Eze, V. C. & Bello, A. O. (2018). The utilisation of e-learning facilities in the edu-
cational delivery system of Nigeria: a study of M-University. International Journal of Educational
Technology in Higher Education, 15(34). [Link]
Foroudi, P., Gupta, S., Nazarian, A., & Duda, M. (2017). Digital technology and marketing man-
agement capability: Achieving growth in SMEs. Qualitative Market Research: An International
Journal, 20(2), 230–246.
Gabelaia, I., & Tchelidze, L. (2022). The significance of digital marketing strategies for continu-
ity of SMEs. International Journal of Management, Knowledge and Learning, 11, 187–196.
Ikramuddin, I., Matriadi, F., Iis, E. Y., & Mariyudi, M. (2021). Marketing performance devel-
opment: Application of the concept of digital marketing and market orientation strategy in
the MSME sector. International Journal of Educational Review, Law and Social Sciences
(IJERLAS), 1(2), 181–190.
Impact of Digital Marketing and IoT Tools on MSME’s Sales Performance and Business… 77

Javed, A., Aamir, F., Gohar, U. F., Mukhtar, H., Zia-Ui-Haq, M., Alotaibi, M. O., et al. (2021).
The potential impact of Smog Spell on Humans’ Health Amid COVID-19 Rages. International
Journal of Environmental Research and Public Health, 18, 11408.
Maduku, D., Mpinganjira, M., & Duh, H. (2016). Understanding mobile marketing adoption
intention by South African SMEs: A multi-perspective framework. International Journal of
Information Management. 36, 711–723. [Link]
Masrianto, A., Hartoyo, H., Hubeis, A. V. S., & Hasanah, N. (2022). Digital marketing utilization
index for evaluating and improving company digital marketing capability. Journal of Open
Innovation: Technology, Market, and Complexity, 8(3), 153.
Midha, V. (2012). Impact of consumer empowerment on online trust: An examination across gen-
ders. Decision Support Systems, 54(1), 198–205, ISSN 0167-9236. [Link]
dss.2012.05.005
Mirmahdi, E., & Afshari, D. (2022). Automotive fire control by designing and launching a
new intelligent system:experimental results, Automotive Notification Design, New Design
Comparison Chart. Journal of The Institution of Engineers (India): Series C, 103, 293–299.
[Link]
Mobydeen, W. A. O. (2021). The impact of digital marketing practices on the organizational per-
formance of the mobile phone companies in Jordan.
Munshi, P. (2012). The 5 principles of communicating for innovation. NHRD Network Journal,
5(4), 45–51. [Link]
Nunnally, J. C. (1978). Psychometric theory. 2nd Edition, McGraw-Hill, New York.
Pencarelli, T. (2020). The digital revolution in the travel and tourism industry. Information
Technology & Tourism, 22(3), 455–476.
Purwanti, I., Lailyningsih, D. R. N., & Suyanto, U. Y. (2022). Digital marketing capability and
MSMEs performance: Understanding the moderating role of environmental dynamism.
Journal of Theoretical & Applied Management, 15(3), 432–448.
Redjeki, F., & Affandi, A. (2021). Utilization of digital marketing for MSME players as value
creation for customers during the COVID-19 pandemic. International Journal of Science and
Society, 3(1), 40–55.
Samoilenko, S., & Osei-Bryson, K.-M. (2017). An analytical framework for exploring context-spe-
cific micro-economic impacts of ICT capabilities. Information Technology for Development.
24, 1–25. [Link]
Sivathanu, B. (2019). Adoption of industrial IoT (IoT) in auto-component manufacturing SMEs in
India. Information Resources Management Journal (IRMJ), 32(2), 52–75.
Song, C., Woodcock, C. E., Seto, K. C., Lenney, M. P., & Macomber, S. A. (2001). Classification
and change detection using Landsat TM Data: When and how to correct atmospheric effects?
Remote Sensing of Environment, 230–241.
Sun, Y. (2022). Research on the application of digital marketing in business operation. Highlights
in Business, Economics and Management, 1, 18–23.
Taiminen, H. M., & Karjaluoto, H. (2015). The usage of digital marketing channels in SMEs.
Journal of Small Business and Enterprise Development, 22(4), 633–651.
Ungerman, O., Dedkova, J., & Gurinova, K. (2018). The impact of marketing innovation on the
competitiveness of enterprises in the context of industry 4.0. Journal of Competitiveness,
10(2), 132.
Vidili, I. (2021). Customer experience: the new competitive advantage for companies that want
their customer at the center of their business. In Handbook of research on user experience in
Web 2.0 technologies and its impact on universities and businesses (pp. 83–209).
Wonglimpiyarat, J. (2015). Challenges of SMEs innovation and entrepreneurial financing. World
Journal of Entrepreneurship, Management and Sustainable Development, 11(4), 295–311.
Zhu, G., & Gao, X. (2019). Precision retail marketing strategy based on digital marketing model.
Science Journal of Business and Management, 7(1), 33–37.
The Higher Education Students’
Perception on IoT Acceptance
as an Educational Facilitating Medium:
Perception from Omani Context

Ghilan Al-Madhagy Taufiq-Hail, Maryam Juma Ahmed Al Farsi, Adel Sarea,

and Ibrahim Rashid Humad Al Shamsi

1 Introduction

One of the prominent changes that our generation had the pleasure of witnessing is
the technological revolution. This revolution keeps changing many aspects of our
life at such speed that it is sometime had to catch up with. The technological evolu-
tion is going in a fast pace and affected all aspects of our lives that included the
learning and teaching methods. This evolution had drastically changed many areas
including how individuals learn and teach. The rapid advancement in technology
has led to the communication of devices using the Internet of Things (IoT) instead
of communication between humans as was the case in the past decades. On the other
hand, educational institutions are no exception as they are competing to adopt the
IoT to cope with the new advancements in technology as it is a new requirement for
the future of education worldwide. IoT technologies’ solutions allow universities
and colleges to acquire data via various sources such as wearables, sensors, and
actuators that can help in the provision of personalized contents and enhance the
student outcome through engaging students with variety of Internet connected
devices (Majeed & Ali, 2018; McKinney, 2004). Moreover, as a result of the
COVID-19 pandemic and related consequences of lockdown, the online education
and distance learning were intensively utilized in order to survive the pedagogical
process (Taufiq-Hail et al., 2021). Thousands of training packages in different fields
in addition to degrees and technical or commercial certificates were offered online

G. A.-M. Taufiq-Hail · M. J. A. Al Farsi · I. R. H. Al Shamsi

University of Buraimi, Al Buraimi, Sultanate of Oman
e-mail: taufiq.h@[Link]; maryam.f@[Link]; ibrahim.r@[Link]
A. Sarea (*)
Ahlia University, Manama, Kingdom of Bahrain
e-mail: asarea@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 79

M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
80 G. A.-M. Taufiq-Hail et al.

globally. Therefore, the Internet with its related technologies such as IoT-enabled
devices has become are the locus of acquiring training, education, and knowledge.
Based on the importance of the IoT and the expected huge and widespread of this
technology and its applications in all aspects of our life, the study aims to shed light
on the intention to use this technology among university students in Oman based on
its importance and promising advantages that can affect the way we teach and learn.
Additionally, IoT social science studies that cover the perceptions of university stu-
dents, especially the millennials, are lacking in the context of higher education in
Oman. Hence, getting some insights in this regard could enhance the understanding
of this technology among university students from heterogeneous backgrounds
especially with the millenniums who are technology savvy. Based on this, the main
objectives of the study are as follows:
Based on the perceptions of the university students:
1. Does ease of use of the IoT-enabled devices drive the intention to use and adopt
the IoT in-campus and outside campus of different learning activities?
2. Does the usefulness of the IoT as perceived by the students drive their intention
to use or adopt this innovative technology in- or outside campus as a way of
learning?
3. Does the ease of use of IoT-enabled devices and applications impact the per-
ceived usefulness perceptions of the university students toward the intention to
use and adopt this technology and its applications?
The reset of the study is organized as follows: the infiltration of the IoT and its
advantages are explained. The hypotheses developed to achieve the objectives of the
study are demonstrated. Then, methodology followed to achieve the objectives is
explained. Afterward, the data analysis and discussion is further explained. Finally,
the conclusion is drawn from the results obtained.

2 Literature Review

2.1 IoT Infiltration and Advantages at Higher

Education Sector

The IoT is an emerging technology that connects different Internet-enabled objects

(or things) in order to collect data and relaying it to specialized applications in order
to create usable and actionable information (Majeed & Ali, 2018; Dutton, 2014).
Devices such as digital displays, audio recorders, cameras, smartwatches, and any
smart device can communicate with one another across Internet networks (Majeed
& Ali, 2018). The ability to send and receive packets of data through IoT applica-
tions are widely used in a variety of fields that include education, security, indus-
trial, agriculture, transportation, business, management, and health sectors in private
or public sectors (Majeed & Ali, 2018; Ban et al., 2017; Jasim et al., 2021).
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 81

Obviously, the Internet has controlled almost everything in our life. Proliferation
of smart and intelligent devices emerged where they are Internet-enabled made
them part of the IoT space. The IoT has many advantages such as saving cost and
time, protect environment through proper management of resources such as power
and water consumption, achieve parking efficiency, and protect the environment
(Abuarqoub et al., 2017). However, what is the role of the IoT in the academic field?
To answer this question, we have to recognize how technology advancement and the
smart and intelligent algorithms embedded in devices such as tablets, laptops, wear-
ables, and cellphones are becoming increasingly popular among students at univer-
sities, which could enhance the teaching process. These devices are connected to the
Internet as a service offered in campus. Hence, campuses must integrate IoT tech-
nology in order to establish a smart atmosphere that involves different stakeholders.
Implementation of the IoT in campus has been witnessed in many campuses glob-
ally through its application in controlling lights, energy consumption, surveillance,
marking attendance through smart ID cards, and access to various parts of the lec-
ture halls through intelligent applications and appliances. As the IoT became ubiq-
uities with all Internet-enabled devices, the method of teaching/learning has changed
dramatically, and the student can now be part of participating in the knowledge base
of different syllabus.
There are many advantages related to the usage of the IoT such as the increase in
energy efficiency by controlling different appliances and devices, the communica-
tion between students and instructors, and the overall reduction in operational costs
(Majeed & Ali, 2018). Moreover, the IoT is implemented in universities to automate
the pedagogical process, to augment the students’ learning outcomes, to enhance
the teaching methods, to manage the surveillance in the campus, to monitor health
and general hygiene of students by measuring their temperature, and to control
purity and humidity of air inside classes and in the corridors (Ban et al., 2017).
Additionally, the IoT can enhance and support the education process by facilitat-
ing access to multiple resources which will help the student as well as other stake-
holders in the university. More importantly, the IoT can better serve universities in
terms of early warnings of any natural or unexpected human catastrophic events by
notifying students and the academic staff of such emergencies.
Recent research highlighted the vital role of the IoT in imparting knowledge and
developing cultures (Shaikh et al., 2019). In addition, the IoT is an intermediary
medium that facilitated the communication and collaboration among students – as
well as lecturers – to develop creative and innovative ideas. Saeed et al. (2021) in a
recent article encouraged the move toward the digital campus that has the advantage
of offering efficient educational tools to students as well as the academic and teach-
ing staff. The authors classified the digital campus into two categories: one is an
existing IT services delivery platform that offers network connectivity and security
and IoT applications that support university professionals and help in improving the
students’ overall university experiences. They explained the role of IoT application
in digital campuses as a facilitator in the location and attendance system, security
and access control, energy efficiency, management information systems, and cam-
pus building control and management. Other scholars have also asserted on the
82 G. A.-M. Taufiq-Hail et al.

importance of the IoT in the automation of education process that can be improved
significantly in smart campus within universities which the positive outcome would
be upon the educators and the learners (Ban et al., 2017). Facilitating the educators’
efforts could immensely improve students’ satisfaction by using IoT devices. For
example, when using QR codes in education, the enabled devices that has special
sensors can translate these codes into meaningful information that would help the
educators as well as the students in searching and finding the information requested
in a marginal time (Majeed & Ali, 2018).
There are various benefits of IoT technologies that can be used in educational
institutions to improve the collaboration of students among themselves and with
their educators’ decisions (Bagheri & Movahed, 2016). COVID-19 has created
many promising opportunities, despite its negative impact on various aspects of our
lives. The pandemic indeed wrecked some havoc in the educational sector due to the
hasty and sudden changes in the education process. However, it has also trans-
formed education into a different platform that could make the IoT a key player in
delivering educational services.
The IoT is expected to have tangible improvements in all educational institutions
starting from students at school toward higher education students. It is estimated
that the IoT will have an impactful role on educators and the students as indicated
in literature. In this regard, McRae et al. (2018) explained that smart and IoT-
enabled devices are communicating with each other, exchange information and
data, process the collected data, operate based on specific conditions, and send this
information to humans to take proper action or gain insights of specific information
that deems necessary to his/her interest. Majeed and Ali (2018) indicated that vari-
ous educational institutions benefited from the IoT to gain valuable information and
perform meaningful actions based on the collected data from the actuators, sensors,
as well as other smart devices.
The rapid growth of technology has transformed the paradigm of higher educa-
tion. This has influenced colleges to update their teaching and learning models. The
Internet and IoT support education in many ways that made different stakeholders
to elevate the traditional way of teaching. These include, but not limited to, virtual
reality, immersive reality, QR code, and the most innovative and recent technologies
that rely on artificial intelligence. To sum up, the IoT is a promising technology that
would be an essential part of our educational system, and with the rapid develop-
ment of artificial intelligence and deep learning algorithms, the future of education
can change fundamentally, and a new era of education would change the way we
live, learn, communicate, and adapt.

2.2 Hypotheses Development and Theoretical Framework

Technology Acceptance Model (TAM) The current research focuses on the inten-
tion to use or adopt IoT technology in higher education sector in Oman within the
university community by evaluating the intention to use this technology as the
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 83

dependent variable, which in turn is affected by perceived ease of use and perceived
usefulness, the independent variables. The technology acceptance model (TAM)
which was developed by Davis (1989) and widely spread in the academia to study
innovation and technology acceptance, behavior, or usage was mainly focusing on
the study of human behavior (Mendell & Heath, 2005). The TAM model has a vali-
dated instrument that is applied in various contexts. Moreover, perceived ease of use
and perceived usefulness are of the main focus of the current research which TAM
covers these two constructs extensively to predict the intention to use the innovative
technology of the IoT. Therefore, this model has been utilized to examine students’
intention toward IoT technology in Omani contexts at higher education institution.
Based on the aforementioned justifications, the researcher presumes the importance
of TAM and takes into consideration using it as the basis of the conceptual model of
the current study to find out the role of perceived usefulness and perceived ease of
use on the intention to use the IoT in the higher education sector in Omani context
from the students’ viewpoints and perception.
Behavior Intention (BI) Reviewing the literature, BI appears to be a crucial factor
in influencing the behavior (Shin, 2013). The definitions of BI can be said to be
“The degree to which a person has formulated conscious plans to perform or not
perform some specified future behavior” (Warshaw & Davis, 1985). However, for
the purpose of this research, BI is defined as the degree in which the students using
the IoT formulated sentiments to either use or not to use the services of the IoT. Many
theories support the role of BI in influencing the behavior in question such as the
theory of reasoned actions (TRA) (Fishbein & Ajzen, 1975), the theory of planned
behavior (TPB) (Ajzen, 1991), and the decomposed theory of planned behavior
(DTPB) (Taylor & Todd, 1995). Hence, BI is added to the model to reveal the per-
ceptions of higher education students’ intention to use the IoT in the academic and
non-academic activities and inside or outside campus in Omani context. Former
works in different contexts revealed BI’s significant role on usage, adoption, or
acceptance of technology (Alalwan et al., 2017; Sarea & Taufiq-Hail, 2021;
Velázquez, 2014). Based on the above literature and supporting theories, the
researchers assume the importance of BI in the area of the IoT and regard it as the
dependent variable of the current research.
Perceived Ease of Use (PEOU) PEOU is defined in TAM by Davis et al. (1989) as
“the degree to which a person believes that using a particular system would be free
of effort” and further added “This follows from the definition of ‘ease’: freedom
from difficulty or great effort” (Davis, 1989). In other words, the easier the task in
using the IoT to achieve a specific academic or non-academic task, the more likely
this technology is intended to be used in academic and non-academic life of stu-
dents based on being free of burden in using the technology. Additionally, former
works in exploring the effect of PEOU on BI to use or adopt innovative technology
appear to support the significant role of PEOU on using innovative technologies
(Hamid et al., 2016; Richad et al., 2019; Tahar et al., 2020); hence, the following
hypothesis is assumed:
84 G. A.-M. Taufiq-Hail et al.

H1: PEOU is expected to have a direct and positive effect on behavior intention to
use or adopt the IoT inside or outside campus to achieve academic and non-
academic tasks at the Omani universities.
It is worthwhile to drive the attention to the relationship between PEOU and
perceived usefulness (PU). Drawing on TAM, PEOU is believed to have a strong
and significant relationship with PU. In other words, the easier to use an innovative
technology such as the IoT, the more useful the students would perceive its useful-
ness (Venkatesh, 2000). Moreover, many former works ensure the association
between PEOU and PU such as the study conducted by Venkatesh (2000). Further,
a large body of literature supports this association (Hamid et al., 2016; Richad et al.,
2019; Arpaci, 2016). On the other hand, other findings contradict with the previous
findings and found no association between PEOU and PU such as the study con-
ducted by Agarwal and Karahanna (2000). Also, a study conducted by Smith (2008)
found no significant relationship between PEOU and PU. These inconsistencies and
contradicting findings revealed have driven the researchers to test this relationship
in the area of the IoT and in the context of the higher educational institutes.
Moreover, when a technology is perceived difficult to be understood, used, or
accessed, it is unlikely to be used, accepted, or adopted, as a negative perception is
created. In contrast, when it is easy, accessible, and understandable, it would likely
increase the students’ acceptance and productivity in their tasks and assignments in
academic life. Consequently, this creates a positive perception on them of its useful-
ness. Therefore, the following is hypothesized:
H1-2. PEOU is expected to have a significant positive relationship with PU toward
the intention to use or adopt the IoT inside or outside campus to achieve aca-
demic and non-academic tasks at the Omani universities.
Perceived Usefulness (PU) Perceived usefulness (PU) is defined by Davis as “the
degree to which a person believes that using a particular system would enhance his
or her job performance” (Davis, 1989). This means that when the usefulness of a
technology is highly perceived, then it is more likely that the user of the innovative
technology, such as the IoT, will have a strong feeling and intention to use this tech-
nology to achieve the perceived tasks and activities. In the context of the current
research, PU is defined as the degree to which students at Omani universities believe
that using the IoT would improve their academic performance and it would have a
positive and strong impact on the intention to use this innovative technology that
started to spread rapidly in the few recent years.
In reviewing the literature, PU has been found as one of the influential factors to
predict BI. Some of these works indicated a positive and significant relationship
between PU and BI confirming the strong correlations between the two (Dong et al.,
2017; Venkatesh & Davis, 2000). Based on the aforementioned explanation, the
researcher finds herself to postulate the following:
H2. PU is believed to have a direct and significant positive relationship on behavior
intention to use or adopt the IoT inside or outside campus to achieve academic
and non-academic tasks by the Omani students.
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 85

3 Methodology

The current research is explorative in nature and based on quantitative research

method utilizing purposive and snow balling techniques to collect the data from
respondents. The unit of sampling is university student of different majors. That is,
the targeted responses collected from university students with heterogeneous back-
ground, age, field of study, and gender. It is well-established that majority of young
generation, the millennials, are the most category using the Internet heavily in
Oman and the university students represent this category of the community. A ques-
tionnaire survey instrument was used to collect the perceptions of the students
toward the intention to use the IoT. The items were under scrutinized process in
terms of its wording, content reflecting the research topic, the language, and the
easiness of the questions. The instrument was evaluated by three university doctors
in the field of information system. Out of 100 responses, the total valid responses
were 95, after eliminating the incomplete responses. SmartPLS version 3.3.9 statis-
tical package was used to evaluate the measurement and structural model (i.e., the
hypotheses testing).

4 Data Analyses Results and Discussion

4.1 Description of Demographics Profile

Demographics included in the questionnaire are gender, age, academic degree,

institution type, governorate of permanent residence, and university type. Referring
to Table 1, gender results revealed that female participants are more than male par-
ticipants, 81% and 19%, respectively. The age of participants was checked, and it is
found that majority of participants fall on the second category, i.e., category 20–22
(56%), followed by category 23–25 (36%), and then 17–19 (5%). In terms of aca-
demic degree, the majority of participants were from bachelor’s degree (56%), fol-
lowed by general diploma (32%), and then diploma (12%).

Table 1 Demographic Frequency/

characteristics of respondents Characteristic Selection percentage
Gender Male 18 (19%)
Female 77 (81%)
Age 17–19 5 (5%)
20–22 56 (56%)
23–25 34 (36%)
Academic degree Diploma 11 (12%)
General diploma 30 (32%)
Bachelor 54 (56%)
86 G. A.-M. Taufiq-Hail et al.

4.2 Measurement Model Assessment Procedure

There are two types of constructs: reflective and formative constructs. In this
research, the reflective measurement construct is used. The path models are devel-
oped based on two theories: the measurement theory and the structural theory (Hair
et al., 2017, 2011).

4.3 Reflective Measurement Model Assessment

The assessment of the reflective measurement model consists of the convergent

validity (i.e., the outer loadings of the latent variables, their reliability, and the aver-
age variance extracted (AVE)), the internal consistency reliability (i.e., composite
reliability (CR), and Cronbach’s alpha), and discriminant validity.
Convergent Validity The convergent validity is measured by the assessment of the
outer loadings, the construct reliability, and AVE. The outer loadings equal or above
the cut-off value of 0.7 are acceptable and indicate that the items have much share
in common that is captured by the same construct (Hair et al., 2017). Previous litera-
ture suggests outer loadings in the range of 0.5 (Hair et al., 2010) to 0.7 or higher
(Hair et al., 2017; Henseler & Chin, 2010) are acceptable and meet the thresholds of
reliability and validity. In the current research, the researcher stick to the rule of
thumb in the cut-off value of 0.7 as it is more applicable to confirm its strengths in
most previous works (Hair et al., 2017). By examining the values, it is revealed no
violations to the criteria in majority of the items except for items PEOU1 (0.56),
PEOU2 (0.57), PU4 (0.58), and PU10 (0.60). Hence, these items were eliminated
from the model.
It is worth mentioning that in reflective model, any item could be removed or
eliminated if it has loadings less than the thresholds indicated above or if removing
it increases the composite reliability/AVE of the related construct (Hair et al., 2017).
Besides, items in reflective model are interchangeable and are viewed as equivalent
manifestations of the same construct and removing these items is possible as long
as the remaining items have sufficient content that the construct is capturing (Hair
et al., 2017; Podsakoff et al., 2006). Moreover, AVE of all constructs met the crite-
rion and exceeds the threshold of (0.5), refer to Table 2.
Measurement Model Internal Consistency Reliability Assessment Here, the
assessment of internal consistency and reliability consists of the CR and Cronbach’s
alpha. The cut-off values that are acceptable fall in the range of 0.6–0.9 (Hair et al.,
2010). Looking at the range of CR, we found that they fall in the range recom-
mended values. Also, Cronbach’s alpha are within the recommended values.
Additionally, in explorative research – such as the current study – the cut-off
values in the range 0.6–0.7 are considered acceptable, values in the range of 0.7–0.95
are satisfactory, whereas values below 0.6 are considered to indicate lack of internal
Table 2 Results’ summary of the measurement models
Composite Cronbach’s
Latent Loadings reliability alpha
variable Indicators >0.7 AVE > 0.5 0.6 –0.9 0.6–0.9
BI BI1: Intend to use IOT technology 0.79 0.65 0.90 0.87
services in my academic studies and
beyond.
BI2: I am planning to use the IOT in 0.85
communicating within my campus
and at my residence smart IoT
appliances.
BI3: I plan to use IOT technology 0.75
frequently this term and onward
in-campus and outside campus as
long as the connection is available.
BI4: I am planning to use the IoT in 0.80
communicating within my campus as
well as my home smart appliances
BI5: I plan to convince my 0.84
colleagues in my campus as well as
friends and relatives to use and adopt
IoT-enabled devices.
PEOU PEOU1: I believe that using IoT 0.56* 0.65 0.92 0.89
technology through smart devices is
easy for me
PEOU2: I will often use IoT 0.57*
technology.
PEOU3: I think that someday 0.79
universities and educational
institution will use the electronic
education instead of the traditional
education because it is easy to
operate and compatible with IoT
technology.
PEOU4: Using mobile screens to 0.74
operate the equipment of laboratories
will be much easier for me by using
IoT Technology.
PEOU5: In my opinion, the easiness 0.81
of using the IoT will have a positive
impact on my academic
achievements.
PEOU6: In my opinion using 0.88
Internet of Things connected devices
is easy
PEOU7: I find it interesting and easy 0.82
to have technologies connected to the
Internet using the smart phone/watch
to find a lecture’s hall and labs.
PEOU8: I will strongly recommend 0.80
using IoT services to others inside
my university (e.g., my colleagues) or
outside in my social network because
it is easy to use.
(continued)
88 G. A.-M. Taufiq-Hail et al.

Table 2 (continued)
Composite Cronbach’s
Latent Loadings reliability alpha
variable Indicators >0.7 AVE > 0.5 0.6 –0.9 0.6–0.9
PU PU1: I feel that using IoT technology 0.74 0.57 0.91 0.89
is important to improve my academic
attainment.
PU2: Using IoT technology will 0.71
improve education performance
through a variety of applications.
PU3: I am thinking of using IoT 0.77
devices and applications as they are
useful when used to communicate
with my home smart appliances and
the university IoT-enabled devices.
PU4: I find it helpful to use IoT 0.58*
technology during learning activities
in lecture halls and laboratories.
PU5: The IoT technology will save 0.78
my time to acquire information
relevant to my syllabus and
performing well in my courses
PU6: The IoT will help me perform 0.77
well in my academic courses
PU7: Using Internet-connected 0.71
technologies will increase the
security inside my campus.
PU8: I believe that the flexibility in 0.80
accessing the information presented
by the IoT will be highly useful
PU9: IoT technology may provide 0.73
me with individual attention and
address my own needs
PU10: The credibility of the 0.60*
information presented by the IoT
will be considerably useful.
Note: *Item removed as its loading is less than the cut-off value of 0.7

consistency reliability, and values above 0.95 are not desirable (Hair et al., 2010).
The results reveal no violations of the cut-off values; see Table 2 for details.
Therefore, the internal consistency and reliability is established for the model
proposed.
Discriminant Validity Assessment In discriminant validity evaluation, the indica-
tors of each construct are examined against another construct to ensure that they are
loaded only in the intended construct. To do so, the cross-loadings validation and
the Fornell and Larcker criterion (Hair et al., 2010) tests are performed. For the
cross-loading validation, the loadings of items in an intended construct are tested
against other loadings with other constructs. The results revealed no violations of
the criterion. For the second test, Fornell-Larcker (Sarstedt et al., 2014) criterion
was used to evaluate different constructs and the results reveal that the square root
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 89

Table 3 Fornell-Larcker criterion

Construct BI PEOU PU
BI 0.865
PEOU 0.84 0.808
PU 0.766 0.846 0.752

Table 4 Cross-loadings
BI PEOU PU
BI1 0.792 0.645 0.704
BI2 0.848 0.664 0.57
BI3 0.749 0.583 0.584
BI4 0.797 0.661 0.576
BI5 0.842 0.805 0.649
PEOU3 0.642 0.79 0.73
PEOU4 0.626 0.741 0.575
PEOU5 0.615 0.812 0.644
PEOU6 0.667 0.877 0.724
PEOU7 0.655 0.815 0.764
PEOU8 0.842 0.805 0.649
PU1 0.692 0.726 0.739
PU2 0.445 0.518 0.712
PU3 0.579 0.632 0.773
PU5 0.595 0.725 0.778
PU6 0.496 0.582 0.769
PU7 0.567 0.527 0.71
PU8 0.581 0.619 0.803
PU9 0.599 0.699 0.729

of AVE of each construct in the diagonal is higher than all correlations with other
constructs in all directions of the table (i.e., in the same row and same column of
each construct) (Sarstedt et al., 2014). Tables 3 and 4 demonstrate the results. To
conclude, the results revealed show an establishment of discriminant validity of all
constructs. Therefore, proceeding to the structural model evaluation can be made.
The following is a diagram, Fig. 1, of the outcome of the measurement model
evaluation of the proposed conceptual model.

4.4 Structural Model Assessment Procedure

In the previous sections, the evaluation is conducted for the measurement model,
and now it is the second step of evaluation of the structural model (the hypotheses
testing) or the inner model. Each step of the evaluation process is explained thor-
oughly in the following subsections.
90 G. A.-M. Taufiq-Hail et al.

Fig. 1 Measurement model

Table 5 Collinearity assessment of the latent constructs with VIF values

BI PEOU PU
BI
PEOU 3.521 1.000
PU 3.521

Collinearity Assessment First of all, in evaluation of the structural model is to

start the investigation of the collinearity of the model through checking the threshold
of VIF (variance inflation factor) that should be less than 5 to avoid collinearity
issues of the constructs. Each set of predictor constructs are examined against their
outcome constructs (Hair et al., 2014, 2017). As can be seen in Table 5, all predic-
tors meet the criteria of having a VIF value less than 5, so the researchers proceed
to the next step of the evaluation process.
Structural Model Path Coefficients Assessment The estimates for the hypothe-
sized relationships for the structural model are obtained by running the PLS algo-
rithm, which is the standardized values of path coefficients. The values of path
coefficients close to (+1 or −1) are considered strong relationship either positive or
negative. On the contrary, the values near (0) are considered weak and normally not
significant (Hair et al., 2010). To estimate the significance of the path coefficients
bootstrapping routine is run, which computes the t and p values in addition to con-
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 91

Table 6 Structural model significance results: path coefficient

Path Sample p 95% confidence Significant? Yes/
Relationship coefficient mean t value value interval No
PEOU -> BI 0.674 0.664 5.854 0.000 [0.43–0.88] Yes
PEOU -> 0.846 0.848 25.557 0.000 [0.77–0.90] Yes
PU
PU -> BI 0.196 0.206 1.336 0.182 [−0.10–0.48] No

fidence intervals. Further, the statistical significance is accomplished when the t

values are larger than a threshold, which are for the two-tailed tests: 1.65 (at signifi-
cance level of 10%), 1.96 (at significant level of 5%), and 2.57 (at significance level
of 1%). On the other hand, the one tail critical values are: 1.28 (at significance level
of 10%), 1.65 (at significant level of 5%), and 2.33 (at significance level of 1%).
Moreover, the significance level for the studies that have explorative nature is 10%
(Hair et al., 2010). In the current study, however, the significance level is selected
to be of 10%. Besides, the 95% confidence interval (CI) provides additional infor-
mation about the significance of the path coefficients. If the range of CI revealed
does not include a zero value, it indicates that the statistical significance of the
value under consideration. By referring to Table 6, the values for different hypoth-
esized relationships between the latent constructs are presented. We only find that
the relationship between PU and BI is not significant as there is a zero value in the
range of CI, which indicate no statistically significant relationship between
PU and BI.
Coefficient of Determination (R2) Assessment The coefficient of determination
or R2 is particularly important to evaluate the model and testing the hypotheses, and
it is called predictive power of the model. It is the amount of the combined effects
of all independent constructs on the dependent construct. R2 represents the in-
sample predictive power (Rigdon, 2012; Sarstedt et al., 2014). The R2 cut-off values
suggested by Chin (1998), which are widely used in reporting the R2, are as follows:
0.19 (weak), 0.33 (moderate), and 0.67 (substantiate). Referring to Table 7, the two
constructs BI and PU have R2 values of (0.72) and (0.72) that can be described as
substantial values and therefore the predictive power of the model is substantial.
Effect Size (f2) Assessment R2 of each dependent construct was assessed and now
the effect size f2 of each independent construct is to be evaluated. This is to ensure
whether the effect of the independent construct is substantive on the considered
dependent construct (Hair et al., 2010). Actually, there are two existing guidelines
for evaluating f2 size of R, (McKinney, 2004); one is taken from (Hair et al., 2010)
in which the values of 0.02, 0.15, and 0.35 represent small, medium, and large. The
guideline of the effect size values are the following: f2 (0.02), which is considered
small, (0.13) is medium, and (0.26) is large effect size (Loeser et al., 2017; Wetzels
et al., 2009). Consequently, values less than 0.01 indicate that there is no effect of a
specific independent construct on a specific dependent construct.
92 G. A.-M. Taufiq-Hail et al.

Table 7 Coefficient of Endogenous latent variable R2 value

determination R2
BI 0.72
PU 0.72

Table 8 f effect size of R squared

BI PEOU PU
BI
PEOU 0.45 2.52
PU 0.04

Table 9 Summary of Hypothesis Relationship Findings

hypotheses H1 PEOU -> BI Supported
H1-2 PEOU -> PU Supported
H2 PU -> BI Not supported

Smart PLS M3 calculates the effect size automatically and the results are shown
in Table 8. For instance, the f2 effect size of PEOU on BI (f2PEOU ---BI) has a pro-
nounced large effect (0.45) and higher than the f2 effect size of PU on BI (f2PU---BI),
which is small (0.04). This tells us that the effect of PEOU is much stronger than the
effect of PU on BI. Moreover, the f2 effect size of PEOU on PU (f2PEOU---PU) is
large (2.52).
Table 9 provides a summary of the hypotheses’ findings and Fig. 2 illustrates the
output of the structural model.

5 Discussion

The use of the IoT in the pedagogical process is beneficial for both, the students and
the lecturers. First, it will enable educational institutions to streamline data collec-
tion and process. Besides, it can improve the feedback process on different policies
enacted through actionable information generation. Such benefits can increase the
efficiency of all stakeholder and campus activities and provide holistic solutions to
common education management problems. More importantly, to enhance the effi-
ciencies in processing data and provide actionable information to achieve energy
saving, facilitate the accessibility to variety of information, increase safety and pro-
ductivity, find the intended lecture halls and laboratories, and control access to sen-
sitive areas, the IoT is the solution to all these aspects. To evaluate the intention of
students toward IoT usage and adoption, this research employed TAM model to
evaluate the students’ intention toward the adoption and usage of the IoT in Omani
context.
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 93

Fig. 2 Structural model

5.1 Hypothesis Discussion

The Relationship PEOU → BI The results revealed of the analyses that PEOU
has a positive and statistically significant relationship with BI in the relationship
PEOU -> BI. This gives support to the hypothesis H1.
Also, this means that the students feel positively about the IoT in that it could
help in their academic life. Besides, it refers to the fact that PEOU is a prominent
factor that has a strong effect on the future intention to adopt or use the IoT. University
students are open to innovative technologies as they are technology savvy. Also,
such results suggest that students believe that the IoT could contribute to improving
their academic journey and their campus experience. It also indicates that Omani
students welcome innovative technological tools into their knowledge-gaining jour-
ney. The relationship PEOU → PU. The results of the relationship PEOU -> PU is
statistically significant and supports hypothesis H1-2. We could interpret the find-
ings as the students perceive that the easiness of using IoT services and facilities
make using them useful as no difficulties are expected to use these services or
devices. Such findings indicate that Omani students factor the easiness of using IoT
services into its perceived usefulness. They accept new technological tool as long as
it has what they perceive to be an easy manual on how to use IoT services and facili-
ties. The findings of the current research are aligned with previous research in the
94 G. A.-M. Taufiq-Hail et al.

relationship between PEOU and BI (Richad et al., 2019; Arpaci, 2016; Dong
et al., 2017).
The Relationship PU → BI As can be understood from the results revealed, PU
showed no statistical significance with BI. The findings contradict with hypothesis
H2 that states PU is believed to have a direct and significant positive relationship on
behavior intention to use or adopt the IoT inside or outside campus to achieve aca-
demic and non-academic tasks by the Omani students. This result contradicts with
the findings obtained from previous works that stress on the significant and positive
relationship between PU and BI (Dong et al., 2017; Besbes et al., 2016).
The finding can be interpreted as university students do not have enough infor-
mation and adequate understanding on the usefulness of IoT services and its devices
on their academic attainment. In other words, the finding can be interpreted as uni-
versity students not having adequate information on how IoT services can maximize
their academic experience.
This result triggers the researchers to call for more research on the topic of the
IoT in the context of human-computer interaction in Oman and surrounding Gulf
Cooperative Council (G.C.C.). More importantly, this gained result might be
referred to the fact that the students do not really know the real benefits of the IoT,
and this might reflect that more information on this technology should be conveyed
to students by the academic staff through courses in the curriculum or as webinars
and activity at the university. Additionally, the management should pay more atten-
tion to inculcate the importance of IoT technology to students because the trend is
going toward it in a fast pace.

5.2 Practical Implications

IoT as a New Area of Study Reviewing the literature, the researcher concedes that
there is a dearth of studies that cover the IoT in higher education sector especially
topics related to the human-computer interaction in the Omani universities context.
Therefore, the researcher encourages the continual research in this area. Besides,
IoT implementation strategies should be the center and the cornerstone objective for
the management inside the universities as it is a focal point of interest in the mod-
ern world.
Inculcate IoT Culture at Omani Universities By taking into consideration the
results revealed, the researcher encourages the authorities at the Ministry of Higher
Education to include a subject in the syllabus on how to deal with IoT-enabled
devices and how to benefit from this technology to facilitate the pedagogical pro-
cess at the universities.
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 95

5.3 Managerial Implications

The results revealed in this research should draw the attention of the management at
the universities in Oman on the importance to inculcate the IoT culture among the
students as the results show that the students do not feel that the IoT are useful in
driving their intention to adopt or use this technology. The management should ask
the academic staff to covey the knowledge of this promising technology to studies
in terms of its benefits on their academic achievements and future use of this tech-
nology in our near-future life. Also, the government should initiate IoT-related proj-
ects’ funds for the universities to enable them join the herd to create innovative
ideas that would eventually create revenue for the university and the country as
a whole.

5.4 Limitations and Future Directions

The IoT is a growing area of research in recent years that captured the attention of
the academia to cope with the need to employ the IoT in the academic life and dif-
ferent businesses. This trend is basically crucial to facilitate the communication
between different stockholders in the academic process and to find better environ-
ment for the students and lecturers as well. However, in academia, the research of
the IoT on the students’ intention was not focused upon and was not given sufficient
research in order to get the students’ opinions toward adopting and using the IoT at
university campuses extensively. This is apparent in the Omani context.
Generally speaking, the students are the building blocks in any academic life,
and they are technology savvy, so using them as respondents of this study was justi-
fied. This research contributes to the body of knowledge and literature by providing
empirical support of the model suggested with its hypotheses. However, there are a
number of limitations such as not including the academic and teaching staff in this
research. Furthermore, the sample size was not large enough to generalize the
results obtained. Therefore, it is suggested in future studies to include the academic
and teachings staff as respondents and to extend the number of respondents from
different universities in Oman. Also, making a comparison between the perceptions
of the academic staff and students’ perception may draw more attention on how
each group perceives the IoT as a crucial element in the pedagogical process at
higher education sector in Oman. Another possible direction for future research is
the replication of this study in other Gulf Cooperative Council countries.
Another limitation of the study is that the number of constructs is small; how-
ever, the number of items used in the survey was 25 in addition to the demographic
questions, which make it challenging in requesting the respondents to answer more
questions. Hence, the study recommends including other variables such as compat-
ibility, security, and risk as elements that can influence the intention to use or adopt
the IoT in the academic life. Also, subjective norms or social influence are
96 G. A.-M. Taufiq-Hail et al.

particularly important possible moderators that can increase or decrease the above-
mentioned relationships of those variables on the intention to use the IoT in educa-
tion process in Oman. Furthermore, the study was based on cross-sectional
quantitative research, which is conducted once and for a short time span. As we
know, the human nature is changing; therefore, extending the research for longer
times in longitudinal research is highly recommended to cope with human change-
able nature. Extraneous variables such as gender, experience, level of education,
and age can be a wealthy area of research in future studies in the area of the IoT.

6 Conclusion

The Internet is becoming a necessity for every living thing on this globe. However,
the Internet of Things, which is an extension of the use of the Internet, is the lan-
guage which things can communicate with each other in the era of artificial intelli-
gence (AI). The devices communicate to pave the way to elevate the educational
process in the AI era. The main purpose of the study was to probe the perceptions of
university students from a heterogeneous backgrounds, age, gender, and major of
study toward the intention to use the IoT at universities in Oman. In other words, to
highlight the role and usefulness of IoT-enabled devices on the intention to use IoT
at universities in Oman. Further, the effect of PEOU was explored to find out if it
has a direct effect on PU. Based on the results found, the suggested model achieved
its predictive accuracy and predictive relevance in the area of the IoT. Moreover, the
investigation of the role of PEOU on BI was tested and proven to be an excellent
influencer on BI, which is one of the objectives of the study. Another objective of
the study is to investigate the role of PU on BI. The results emerged emphasize no
significant role of this construct on BI, which contradicts with many studies found
in literature. Therefore, more research has to be conducted to reveal the real reasons
on these results and whether it is the same in other contexts. The last objective,
which is related to the relationship between PEOU and PU, is evaluated and con-
firmed its positive and significant relationship. In sum, the current research has
achieved the objectives.

References

Abuarqoub, A., Abusaimeh, H., Hammoudeh, M., Uliyan, D., Abu-Hashem, M. A., Murad, S.,
Al-Jarrah, M., & Al-Fayez, F. (2017). A survey on internet of things enabled smart campus
applications. In Proceedings of the international conference on future networks and dis-
tributed systems (ICFNDS ‘17) (pp. 1–7). ACM, Cambridge United Kingdom. [Link]
org/10.1145/3102304.3109810
Agarwal, R., & Karahanna, E. (2000). Time flies when you’re having fun: Cognitive absorp-
tion and beliefs about information technology usage. MIS Quarterly, 24, 665. [Link]
org/10.2307/3250951
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 97

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision
Processes, 50, 179–211. [Link]
Alalwan, A. A., Dwivedi, Y. K., & Rana, N. P. (2017). Factors influencing adoption of mobile
banking by Jordanian bank customers: Extending UTAUT2 with trust. International Journal of
Information Management, 37, 99–110. [Link]
Arpaci, I. (2016). Understanding and predicting students’ intention to use mobile cloud storage ser-
vices. Computers in Human Behavior, 58, 150–157. [Link]
Bagheri, M., & Movahed, S. H. (2016). The effect of the internet of things (IoT) on education busi-
ness model. In 2016 12th international conference on signal-image technology & internet-based
systems (SITIS) (pp. 435–441). IEEE, Naples, Italy. [Link]
Ban, Y., Okamura, K., & Kaneko, K. (2017). Effectiveness of experiential learning for keep-
ing knowledge retention in IoT security education. In 2017 6th IIAI international congress
on advanced applied informatics (IIAI-AAI) (pp. 699–704). IEEE, Hamamatsu. [Link]
org/10.1109/IIAI-AAI.2017.206
Besbes, A., Legohérel, P., Kucukusta, D., & Law, R. (2016). A cross-cultural validation of the tour-
ism web acceptance model (T-WAM) in different cultural contexts. Journal of International
Consumer Marketing, 28, 211–226. [Link]
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In
G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Lawrence
Erlbaum Associates.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of informa-
tion technology. MIS Quarterly, 13, 319. [Link]
Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technol-
ogy: A comparison of two theoretical models. Management Science, 35, 982–1003. [Link]
org/10.1287/mnsc.35.8.982
Dong, X., Chang, Y., Wang, Y., & Yan, J. (2017). Understanding usage of Internet of Things (IoT)
systems in China: Cognitive experience and affect experience as moderator. Information
Technology & People, 30, 117–138. [Link]
Dutton, W. H. (2014). Putting things to work: Social and policy challenges for the internet of
things. Info, 16, 1–21. [Link]
Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention, and behavior: An introduction to the-
ory and research. Addison-Wesley Publishing Company.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (Eds.). (2010). Multivariate data analysis:
A global perspective. Pearson.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. The Journal of
Marketing Theory and Practice, 19, 139–152. [Link]
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2014). A primer on partial least squares
structural equation modeling (PLS-SEM). SAGE Publications.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares
structural equation modeling (PLS-SEM). SAGE Publications.
Hamid, A. A., Razak, F. Z. A., Bakar, A. A., & Abdullah, W. S. W. (2016). The effects of perceived
usefulness and perceived ease of use on continuance intention to use e-government. Procedia
Economics and Finance, 35, 644–649. [Link]
Henseler, J., & Chin, W. W. (2010). A comparison of approaches for the analysis of interaction effects
between latent variables using partial least squares path modeling. Structural Equation Modeling:
A Multidisciplinary Journal, 17, 82–109. [Link]
Jasim, N. A., Salim AlRikabi, H. T., & Farhan, M. S. (2021). Internet of things (IoT) applica-
tion in the assessment of learning process. IOP Conference Series: Materials Science and
Engineering, 1184, 012002. [Link]
Loeser, F., Recker, J., Brocke, J. V., Molla, A., & Zarnekow, R. (2017). How IT executives cre-
ate organizational benefits by translating environmental strategies into Green IS initiatives:
Organizational benefits of Green IS strategies and practices. Information Systems Journal, 27,
503–553. [Link]
98 G. A.-M. Taufiq-Hail et al.

Majeed, A., & Ali, M. (2018). How Internet-of-Things (IoT) making the university campuses
smart? QA higher education (QAHE) perspective. In 2018 IEEE 8th annual computing
and communication workshop and conference (CCWC) (pp. 646–648). IEEE, Las Vegas,
NV. [Link]
McKinney, K. (2004). The scholarship of teaching and learning: Past lessons, current chal-
lenges, and future visions. To Improve the Academy, 22, 3–19. [Link]
4822.2004.tb00399.x
McRae, L., Ellis, K., & Kent, M. (2018). Internet of things (IoT): Education and technology. The
relationship between education and technology for students with disabilities. National Centre
for Student Equity in Higher Education, Curtin University.
Mendell, M. J., & Heath, G. A. (2005). Do indoor pollutants and thermal conditions in schools
influence student performance? A critical review of the literature. Indoor Air, 15, 27–52. https://
[Link]/10.1111/j.1600-0668.2004.00320.x
Podsakoff, P. M., Bommer, W. H., Podsakoff, N. P., & MacKenzie, S. B. (2006). Relationships
between leader reward and punishment behavior and subordinate attitudes, perceptions, and
behaviors: A meta-analytic review of existing and new research. Organizational Behavior and
Human Decision Processes, 99, 113–142. [Link]
Richad, R., Vivensius, V., Sfenrianto, S., & Kaburuan, E. R. (2019). Analysis of factors influ-
encing millennial’s technology acceptance of chatbot in the banking industry in Indonesia.
International Journal of Management, 10. [Link]
Rigdon, E. E. (2012). Rethinking partial least squares path modeling: In praise of simple methods.
Long Range Planning, 45, 341–358. [Link]
Saeed, M. K., Munir, A., Mahmood, K., Hassan, M. U., Khan, J., & Nawaz, B. (2021). Usage
of internet of things (IoT) technology in the higher education sector. Journal of Engineering
Science and Technology, 16, 4181–4191.
Sarea, A., & Taufiq-Hail, G. A. (2021). Evaluation of compatibility of cloud-based applica-
tions, credibility, and trust perceptions on the adoption of cloud technology: A review.
In A.-E. Hassanien, K.-C. Chang, & T. Mincong (Eds.), Advanced machine learning tech-
nologies and applications (pp. 889–907). Springer International Publishing. [Link]
org/10.1007/978-3-030-69717-4_83
Sarstedt, M., Ringle, C. M., Smith, D., Reams, R., & Hair, J. F. (2014). Partial least squares struc-
tural equation modeling (PLS-SEM): A useful tool for family business researchers. Journal of
Family Business Strategy, 5, 105–115. [Link]
Shaikh, H., Khan, M. S., Mahar, Z. A., Anwar, M., Raza, A., & Shah, A. (2019). A conceptual
framework for determining acceptance of internet of things (IoT) in higher education insti-
tutions of Pakistan. In 2019 international conference on information science and commu-
nication technology (ICISCT) (pp. 1–5). IEEE, Karachi, Pakistan. [Link]
CISCT.2019.8777431
Shin, D. H. (2013). User centric cloud service model in public sectors: Policy implications of
cloud services. Government Information Quarterly, 30, 194–203. [Link]
giq.2012.06.012
Smith, T. J. (2008). Senior citizens and e-commerce websites: The role of perceived usefulness,
perceived ease of use, and web site usability. Informing Science: The International Journal of
an Emerging Transdiscipline, 11, 59–83.
Tahar, A., Riyadh, H. A., Sofyani, H., & Purnomo, W. E. (2020). Perceived ease of use, perceived
usefulness, perceived security and intention to use e-filing: The role of technology readiness.
The Journal of Asian Finance, Economics and Business, 7, 537–547. [Link]
JAFEB.2020.VOL7.NO9.537
Taufiq-Hail, G. A., Sarea, A., & Hawaldar, I. T. (2021). The impact of self-efficacy on feelings and
task performance of academic and teaching staff in Bahrain during covid-19: Analysis by SEM
and ANN. Journal of Open Innovation: Technology, Market, and Complexity, 7, 224. https://
[Link]/10.3390/joitmc7040224
The Higher Education Students’ Perception on IoT Acceptance as an Educational… 99

Taylor, S., & Todd, P. A. (1995). Understanding information technology usage: A test of compet-
ing models. Information Systems Research, 6, 144–176. [Link]
Velázquez, M.O. (2014). Trust in the cloud: A cognitive-behavioral framework of technology
adoption for cloud computing in organizations.
Venkatesh, V. (2000). Determinants of perceived ease of use: Integrating control, intrinsic motiva-
tion, and emotion into the technology acceptance model. Information Systems Research, 11,
342–365. [Link]
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model:
Four longitudinal field studies. Management Science, 46, 186–204. [Link]
mnsc.46.2.186.11926
Warshaw, P. R., & Davis, F. D. (1985). Disentangling behavioral intention and behavioral expecta-
tion. Journal of Experimental Social Psychology, 21, 213–228.
Wetzels, M., Odekerken-Schröder, G., & van Oppen, C. (2009). Using PLS path modeling for
assessing hierarchical construct models: Guidelines and empirical illustration. MIS Quarterly,
33, 177–195. [Link]
Artificial Intelligence in Marketing:
Concerns and Solutions

Abdulrahman Hesham Alammal and Muneer Al Mubarak

1 Introduction

Artificial intelligence (AI) is the intelligence of machines. It is a computer science

and engineering field that is concerned with creating smart machines that are able to
perform activities and tasks which need human intelligence to be performed. AI
cannot be defined as a single technology as it includes different types of software
and hardware associated with machine learning, natural language understanding
and processing, and computer vision. An example of AI is in maps and navigation
when AI guides car travelers on how to travel to a specific destination, where it uses
machine learning to recognize roads and building numbers to direct the user with
the correct direction. It can also detect any changes in the flow of traffic and recom-
mend the best route to avoid congestion. Another example is the AI chatbots in
customer services websites, where AI machines use algorithms to answer frequently
asked questions by customers, receive orders, and track orders (Sabouret, 2020).
According to Ertel (2018), there are four types of AI. The first type is the reactive
machines type, which is the most basic type that is not capable of using past experi-
ences or memories for decision-making. This type, however, functions by reacting
to received inputs with a programmed output. The second type is the limited mem-
ory type, which stores previous data and use it for decision-making. This type, how-
ever, cannot be implemented directly; it requires monitoring specific data over time.
An example of that is when sensors are used for self-driving cars to collect data of
traffic lights, traffic signals, people crossing the road, and other related data to make

A. H. Alammal
The George Washington University, Washington, DC, USA
M. Al Mubarak (*)
College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 101
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
102 A. H. Alammal and M. Al Mubarak

better decisions in driving the vehicle and prevent road accidents. The third type is
the theory of mind type. In this AI type, machines are able to make decisions similar
to humans by understanding the emotions of humans they interact with. However,
this type is still under development as AI developers did not reach the stage where
machines are able to make decisions exactly the same as humans because the
machines are not able to fully understand the way humans are thinking. The fourth
type is the self-awareness type. It involves self-aware machines that are aware of
themselves and have the same human level of self-consciousness. This type is con-
sidered as the future of AI since self-aware machines are not available yet and
experts are working on the development of such machines for the future.
AI is associated with the Internet of Things (IoT), which is the concept of con-
necting interrelated computing devices, electronic components, machines, objects,
and living creatures with the Internet to communicate, interact, and perform auto-
mated functions in our daily lives. Both AI and IoT are considered as the backbone
of Industry 4.0, which is the fourth industrial revolution. Industry 4.0 refers to the
digitalization of manufacturing and the transformation to cyber-physical systems in
the industry. It is associated with automation, remote monitoring, smart systems,
cloud computing, cyber security, renewable energy, big data analytics, and artificial
intelligence (Sergi et al., 2019). The idea of AI ignited in 1950 when Alan Turing
published a paper on creating thinking machines (Turing, 1950). In 1956, the defini-
tion of AI was presented by John McCarthy. From 1956 to 1974 the natural lan-
guage processing was developed, which provided with the ability of solving complex
mathematical expressions and the ability of creating logics rules that can form sen-
tences. It also initiated the gaming theory, which was previously used in developing
computer games. In the 1980s, algorithms and logic rules were used to develop
complex systems that can mimic human reasoning. From 1993 to 2009, the neural
networks software was launched, which is capable of imitating the way humans are
identifying complex patterns. After 2010, big data science and advanced machine
learning were applied to mimic the way humans are categorizing simple patterns to
complex patterns. Today, research is conducted to increase the productivity of AI
technologies and reduce error. Researchers are exploring AI technology that can be
used to create other AI technologies without human interference (National Institute
of Justice, 2018).

1.1 Research Problem

AI is an effective tool to improve marketing as it is more efficient and less expensive

than traditional marketing practices. AI can be used to collect data from customers
and recommend relevant products based on the collected data. It can also be used for
real-time customer services, sales forecasting, ad targeting, and improving person-
alization for customers. According to Jim (2017), AI has many benefits, such as
availability, reducing errors, exploring hazardous, and the ability to handle multiple
jobs simultaneously. However, using AI in marketing comes with some issues and
Artificial Intelligence in Marketing: Concerns and Solutions 103

risks. The main problem associated with AI in marketing is the lack of privacy of the
data collected from the customers. Unfortunately, AI can be used unethically, such
as private data sharing and privacy leakage of sensitive data. Therefore, marketers
should take the responsibility of researching the privacy issues and figuring out
solutions to use marketing in an ethical way. This research uses a literature review
to conclude the main privacy concerns and problems associated with AI in market-
ing and highlight the solutions that can be used to solve these issues.

1.2 Research Significance

This research explores the privacy concerns related to AI in marketing in order to

figure out the best practices for ethical AI marketing. This research will benefit
product-based and service-based organizations to improve their marketing prac-
tices. It will also benefit software developers to reduce privacy concerns in AI mar-
keting. Last but not least, the research will benefit marketers to use marketing in an
ethical way and increase the efficiency of their marketing by relying on automation
instead of manpower, which saves time and money.

2 Literature Review

2.1 Applications of AI

According to Jia et al. (2019), AI can be applied to support our daily activities, such
as agriculture, education, healthcare, gaming, social media, marketing, national
defense, data security, finance, etc. Below are examples of these applications.
• Education: In traditional classrooms, teachers cannot figure out if the students
are listening and understanding the lecture or not unless they monitor them and
participate with them in the class. Therefore, AI has been utilized for classroom
monitoring to ensure that all students are listening to the lecture. The technology
uses face recognition and motion recognition to automate class monitoring.
Moreover, speech recognition technology is used to monitor the lecturer and
evaluate his/her teaching.
• Traffic: AI image recognition is used to control traffic lights. It can also collect
real-time data from the vehicles and the roads, which can be used for self-driving
cars. For example, it can collect data from sensors mounted on the roads and on
other cars in order to command the car to drive in the most optimum route while
preventing accidents.
• Intelligent society: The aim of the intelligent society is to provide high-quality
services for society through AI. It is done mostly to reduce the risk of dangerous
jobs or to save time in repetitive activities. The enhancement of smart societies is
104 A. H. Alammal and M. Al Mubarak

continuing to grow by developing smart buildings, smart hospitals, automated

factories, and robots for human activities and customer services.
• Social governance: In social governance, AI is used to develop smart courts and
smart cities. A database can be built for smart courts to combine trials, case
analysis, evidence collection, and legal documents. Moreover, AI machines are
used for decision-making in social governance. For example, AI can be used to
predict public requirements by continuously gathering data from the public
through surveys. It can also be used for risk assessment and emergency response.
• Public security: The development of AI has promoted intelligent safety monitor-
ing and control systems. AI safety and security products, such as face recognition
security cameras and detection technologies, are being introduced in the market.
Moreover, AI is implemented in food safety systems, and it is also used as a
warning system for natural disasters.
According to Xiang et al. (2020), the demand for AI has increased in the medical
sector. AI can be used for many applications in the medical sector, such as imaging,
pathology, surgery, and other medical services. A study by Patra et al. (2021) dem-
onstrated applications of AI that can be used to provide protection in the COVID-19
pandemic. The author suggests that AI can be used as a replacement for the poly-
merase chain reaction (PCR) swab test that requires sufficient manpower to meet
the demand of patients. AI-based tools can be used for healthcare management in
the pandemic. The AI technology of machine learning is combined with an advanced
bio-computational methodology to precisely detect the diagnosis of COVID-19. It
can also predict the spread of the disease and send warning notifications. Moreover,
the research found that AI can also be used for the development of COVID-19 vac-
cines. By providing the machine with worldwide data related to the disease, it can
provide proposals and suggestions for the vaccines.

2.2 AI in Marketing

According to Dilmaghani et al. (2019), AI in marketing is designed to collect data

from customers as the input and develop an advanced marketing tool or technique
based on the input. There are many methods to implement AI in marketing. The
most commonly used method of AI in marketing is machine learning. In the machine
learning method, algorithms and mathematical models of computer systems are
used to achieve tasks without logic-based programming or human interference. The
mathematical models are developed based on the collected data, which is also called
in that case, the training data. The AI machine uses the training data to learn and
improve from customer experiences. Consequently, the machine will be able to
detect, predict, and make strategic marketing decisions.
According to Li et al. (2021), the application of AI has a positive impact on
enterprise marketing. The implementation of AI can push accurate information on
targeted customers and enhance customer interaction. Customers today do not
Artificial Intelligence in Marketing: Concerns and Solutions 105

usually have enough time to browse products and services regularly. AI has the abil-
ity to understand their searching habits and most commonly used products to send
relevant information. After the customer purchases a product, AI can enhance cus-
tomer interaction by sending surveys to evaluate the level of customer satisfaction.
AI has the ability to receive feedback from customers, analyze it, and process it
much faster than the traditional marketing approach. To increase the efficiency of
adopting AI in marketing, it is advised to combine it with the thinking of staff. This
can significantly save time in the detailed planning of marketing activities, and it
can be edited and modified by the staff. AI should also be used to manage the rela-
tionship between marketing and user needs. For example, using the function of
closing unrelated or repeated marketing advertisements makes the marketing plat-
form more convenient for users. Moreover, enterprises should improve the knowl-
edge of their marketing staff in AI by providing them with proper training from
experienced and qualified organizations.
A study by Lee (2021) examined changes in the marketing industry through the
development of AI where marketing strategies are applied in order to meet market
development in the future. One of these strategies is the development of the chatbot,
which improves the communication with customers by relying on bots that are pro-
grammed to provide communication services for customers. By using the chatbots
as a marketing tool, organizations can reduce manpower, save time, and save cost.
AI has also improved customer services by allowing computers to study customers’
behavior and analyze the current marketing strategies. This technology can custom-
ize ads for customers, learn from past behavior, and discover best marketing prac-
tices to implement in the future. Since using smart phone applications for advertising
can significantly increase the revenues of a company, the demand for marketing
purposes has increased, especially for Instagram application. On the other hand,
some companies can utilize AI to improve search engine optimization and create the
best and most relevant hashtags and pop-ups to easily target the customers.
According to Park (2018), medical companies are implementing AI in marketing by
collecting medical data such as drug purchases from their smart phone applications.
Then they use machine learning to analyze the data and sell the data to medical
insurance companies. This way they can understand customers’ needs and target
customers in different locations and different age groups.
According to Lai and Yu (2021), the development of AI has a major influence on
the transformation from traditional media into digital media. The digital media
changed the advertising industry, and it also changed the demand for communica-
tion talents in digital marketing and AI. For example, currently, there is more
demand on communication talents with visualization ability in digital marketing, as
marketers rely on tables, graphs, images, and videos, to present their products infor-
mation. Another example is the demand for communication talents with the ability
of scene construction in digital marketing. This ability is related to situational
advertising, where interactive experience with users is added to the traditional
instant attention. Scene construction is also implemented by converting static graph-
ics into dynamic graphics to gather more of the customers’ attention. The use of AI
can support these talents in finding the best data and content. However, the
106 A. H. Alammal and M. Al Mubarak

industries are facing difficulties in cultivating these talents. The main difficulties are
the lack of training in AI and digital marketing, the lack of AI and digital marketing
teaching equipment, and the lack of a dynamic measurement and evaluation system
for the required talents. Therefore, the author suggests several strategies to cultivate
these talents, including creating an experienced teaching team, creating a curricu-
lum for AI in digital marketing, and building a training platform for AI and digital
marketing courses and lectures.
Research by Eriksson et al. (2020) suggests that AI can be utilized as a tool for
creating and formulating marketing strategies by replacing humans in the decision-
making process. The research concludes that AI can create marketing strategies in
two steps. The first step is searching and reviewing relevant data. The second step is
the decision-making. The authors implied that AI could contribute to the rational
process by identifying and analyzing the relevant data or by replacing managers in
the final decision-making. In addition to the rational process, AI can also be used for
creative thinking. Moreover, the authors recommend the process of communicating
and coordinating between AI machines and company managers for future studies.
According to Arsenijevic and Jovic (2019), the use of AI in marketing signifi-
cantly increases the opportunity for marketers by tracking customers’ behavior and
creating personalized products or services. The author interviewed marketers about
AI, where 72% of them implied that the implementation of AI has a positive advan-
tage in business and marketing. In order to obtain better results from AI, the authors
recommend focusing on data collection as the most valuable element for a company
to get better results from AI is the collected data. The more amount and quality of
data a company collects, the better results it will get from AI. The authors also rec-
ommend chatbots as the most efficient AI tool, which is a computer software that
implements automated tasks in the messaging platforms. These tasks include com-
municating with customers, understanding their questions and requests, and auto-
matically responding to them. The authors found that the advantage of chatbots over
other AI methods is that it is easy to implement, easy to use, and the provision of fast
information. However, there is also a small probability that customers will get false
information from chatbots, which is a problem that should be solved in the future.

2.3 Privacy Issues and Concerns in AI

According to Zhu et al. (2020), the main concerns of AI from the customers’ per-
spective are the privacy and security problems, especially that AI relies on data
collection and some of the data is personal and confidential. In that case, some
companies prevented implementing AI in their marketing process in order to pre-
vent privacy and security problems and obtain customers’ trust. On the other hand,
other companies are implementing AI while taking these problems into consider-
ation in order to stay relevant and gain a competitive advantage in the market.
A study by Dilmaghani et al. (2019) summarizes machine learning of AI in mar-
keting into four phases, where each phase can be a target of privacy attacks (see
Artificial Intelligence in Marketing: Concerns and Solutions 107

Fig. 1 Workflow of AI machine learning (Dilmaghani et al., 2019)

Fig. 1). The first phase is the training phase, where the collected data is transferred
to the machine learning model in order to start the learning process. The privacy
concern in the first phase is that the input data can be attacked and leaked when it is
transmitted from the customer to the machine learning model. The second phase is
the model phase, where a model is developed by the AI machine based on the trained
data. Some attackers aim to target the trained data as it is more valuable. The third
phase is the apply phase, where the new and untrained data is transferred to the
training model. This phase can be penetrated by attackers where they can modify
the output based on their needs. The fourth phase is the inference phase, which
consists of the output of the machine learning model.
According to Dilmaghani et al. (2019), the following are the main privacy and
security attacks of big data in AI.
• Data breach: This attack occurs when attackers obtain unauthorized access to
personal and confidential data. Even though this attack is not limited to AI, it is
a big threat to AI since it relies on big data to perform its operations. This type of
attack can specifically occur in the training phase, the model phase, and the inter-
ference phase.
• Bias in data: If not used ethically, decision-making in AI can support injustice in
the system. Bias in data specifically attacks the training phase because it is based
on bias attitude toward an individual or a group, where the AI machine will learn
this attitude and implement it in its operations. In simple terms, the injustice of
humans will be learned and performed by AI machines.
• Data poisoning: This attack aims to sabotage and manipulate the training data in
order to sabotage the output of the model. This attack can be used in marketing
to suggest products that could harm an individual or a society.
• Model extraction: Sensitive and confidential data can be extracted from the
machine learning model by reverse engineering, where another machine learning
model can be created based on learning from how the inputs and outputs interact
with each other. This newly created model can leak confidential data from the
customers.
• Evasion: In this method, the system will not be able to detect the attacks toward
the AI machine. This is done by tricking the system that it is not an attack and
108 A. H. Alammal and M. Al Mubarak

classifying the attack as a non-threatening activity. Evasion occurs in the apply

phase where the untrained data is transferred to the training model.
A research conducted by Sachdev (2020) studied security and privacy issues
associated with AI in marketing. The following are the main privacy problems men-
tioned in the paper.
• Cloud-based AI models are suffering from a lack of privacy because the data col-
lected from customers for marketing purposes is stored on a machine that is
owned by another company or individual.
• If the device authentication is expansive and not used properly, the data that is
collected from the customers will be at risk because more people will have access
to it, especially since some of the data is personal, which is collected from the
customers to provide them with personalized products.
• Privacy and confidentiality of customers’ data can be compromised when AI
machines are attacked by malicious software like ransomware.
• Data from sensors that are connected with AI and IoT can be leaked when one of
the nodes in the control system is attacked.
• Availability of the marketing system is at risk when it is attacked by a Denial of
Service (DoS) attack, which is a cyber-attack that intends to disrupt or limit
access to specific websites or online applications.
• Social engineering can lead to privacy issues, where attackers can trick the cus-
tomers into accessing their devices or accounts. Consequently, the attackers can
steal their data and use it for offensive marketing aspects.
• Email spoofing is another security risk where the customer is not able to differ-
entiate between real or fake marketing notifications. Fake email notifications can
lead to customers losing their money to fake accounts or leaking some of their
private data.

2.4 Suggested Solutions to Solve AI-Related Privacy Problems

A study by Zhu et al. (2020) suggests a mathematical model called differential pri-
vacy as a solution to the privacy problems in AI. Differential privacy works on the
principle of measuring data leakage from the AI machines and figuring out a solu-
tion to prevent it from happening in the future. The study concluded that differential
privacy can be beneficial especially in machine learning and multi-agent learning.
However, it should be also implemented in other AI methodologies, such as robot-
ics, natural language processing, etc.
According to Dilmaghani et al. (2019), the following table summarizes the main
solutions that can be used to defend the privacy and security attacks of big data in
AI, which were explained in Sect. 2.3 (Table 1).
A research conducted by Sachdev (2020) suggests the following as a solution for
security and privacy issues associated with AI in marketing.
Artificial Intelligence in Marketing: Concerns and Solutions 109

Table 1 Summary of privacy and security attacks on big data in AI and the solutions to defend
these attacks
Attack Solution
Data Data privacy protection techniques were developed to maximize data protection by
breach encrypting sensitive data so that the attackers are not able to identify and
differentiate between the records in different datasets
Bias in This attack is defended by identifying the bias metrics in the model and mitigating
data the biases by machine learning of fair representation. Moreover, bias in data can be
mitigated by developing tools that can identify biases in the machine learning
model and removing them from the system
Data To defend against data poisoning attacks, the poisoned data is detected by anomaly
poisoning detection, which is designed to identify data points and observations that are
deviating from the normal behavior, which may be caused by a data poisoning
attack
Model To defend the machine from model extraction, the learning model should be
extraction protected. This is mostly done by training each part of the model individually so
that the attacker will not be able to extract all modes at the same time
Evasion Defending against evasion attacks is done by developing a program that can be
used to ensure that any small changes in the input cannot significantly change the
output. Hence the system will still be able to detect attacks

• Governments should formulate rules and regulations to ensure the proper and
ethical use of AI in marketing, especially that AI is rapidly growing in the market.
• To prevent the risk associated with cloud-based AI models, edge AI can be used
instead, which processes the AI algorithms on a local hardware device instead of
connecting to the Internet or the cloud.
• The use of recommender systems can mitigate the risk. In recommender sys-
tems, marketers can develop algorithms to provide advertising recommendations
based on product features and customers’ interests, while keeping the customers’
data local to ensure privacy.
• Privacy problems can be mitigated by isolating the sensitive data only. This can
be done by keeping most of the customers’ data on the cloud except for the con-
fidential data; it should be isolated from the cloud.
• Marketers should make sure that all the software that are interacting with AI
devices are secure. Marketers can use a system security manager, which can
defend the software and the data from security threats and alert the cyber security
engineers.
• Authentication methods such as face recognition or fingerprints can be used so
that no one can access the device or account except for the individual customer.
• Marketing firms should limit the access of customers’ data and allow only spe-
cific employees to access it.
• AI service providers should provide privacy-related training for marketers and
customers that deal with AI in marketing.
• AI marketers should obtain consent from customers to use their data for market-
ing purposes. AI marketers should also obtain consent from the customers to
automate their data for AI marketing. By obtaining consent from the user, AI
marketing firms can reduce or prevent marketing-related privacy violations.
110 A. H. Alammal and M. Al Mubarak

2.5 Literature Summary

AI machines can be used to automate our daily traditional and non-traditional tasks,
including education, traffic, public security, social governance, and building smart
societies. Moreover, AI had a positive outcome after implementing it in healthcare.
It can be used for many applications in the medical sector, such as imaging, pathol-
ogy, surgery, and other medical services. Furthermore, the spread of the coronavirus
required researchers to study the possibility of using AI to support healthcare
employees in the pandemic. The success of AI in many sectors encouraged market-
ers to use it in marketing. AI can be used to replace humans in decision-making
processes in marketing by searching and reviewing the relevant data and then mak-
ing decisions based on the collected data. The most commonly used method in AI in
marketing is the machine learning method, which is used to build a mathematical
model that collects data from customers and uses it to make strategic marketing
decisions. Another method is the chatbot, which relies on bots to communicate with
customers, answer their questions, and solve their problems. Moreover, AI can be
used to improve marketing in websites and smartphones by improving search engine
optimization and recommending relevant hashtags to easily target the customers.
Since AI depends on data collected from customers, the main problem that is
facing AI is that customers are concerned about their privacy and security. The main
attacks on big data in AI are data breaches, data poisoning, bias in data, model
extraction, and evasion. Several companies prevented using AI and relied on the
traditional way for marketing. However, other companies used AI to support them
in their marketing and other human intelligence functions in order to gain a com-
petitive advantage, while taking the privacy and security problems into consider-
ation. To solve the privacy and security problems in AI, researchers suggested
several solutions, including formulating rules and regulations by governments to
ensure that AI is used ethically, keeping the customers’ data local while advertising,
isolating the confidential data only from the cloud, ensuring that all software inter-
acting with AI are secure, using authentication methods, and limiting access for
customers confidential data for certain employees only.

3 Conclusion

AI is a new technology that allows machines to perform activities that require

human intelligence. It includes different types of software and hardware that are
associated with machine learning. AI has been used in marketing to replace the less
efficient and more expensive traditional marketing methods. However, with all the
advantages associated with implementing AI in marketing, some privacy risks
should be considered in order to ensure that AI is implemented in an ethical way.
This paper studied the applications of AI, the implementation of AI in marketing,
privacy issues and concerns in AI, and suggested solutions to solve AI-related
Artificial Intelligence in Marketing: Concerns and Solutions 111

privacy problems. AI can be used in many applications to assist us in our daily

activities, including education, traffic, intelligent society, social governance, and
public security. AI has also been implemented in the medical sector. It can assist
medical staff in imaging, pathology, and surgery. Moreover, AI can be utilized to
support medical staff in the COVID-19 pandemic. It can be used to reduce man-
power for the PCR swab test, and it can be used for general healthcare management
during the pandemic. The advanced bio-computational methodology is combined
with AI machine learning to detect the diagnosis of the coronavirus and send notifi-
cations and warnings to prevent the spread of the virus. Moreover, AI can collect
global data of the virus and provide suggestions for developing coronavirus vaccines.
The success of AI in many fields encouraged marketers to use it as a replacement
for traditional marketing methods. Marketers are working with software developers
to use machine learning algorithms and mathematical models in order to build
advanced marketing tools and strategies based on data collected from customers. By
gathering data on searching habits and purchases of customers, marketers use AI to
target customers and enhance customer interaction based on the input data. However,
to increase the efficiency of implementing AI in marketing, it is advised to combine
it with the thinking of staff, which can save time in planning marketing activities,
and it can be modified and updated by the staff in the future instead of creating a
new marketing plan from scratch. One of the most successful AI in marketing appli-
cations is the chatbot, which uses bots that are programmed to provide communica-
tion services with customers. Another successful application is utilizing AI to
improve search engine optimization for social media marketing, where it can rec-
ommend the best hashtags or pop-ups to easily target relevant customers.
The development of AI had a major influence on the transformation from the
traditional media into the digital media, as AI can be utilized as a tool for creating
and formulating marketing strategies by replacing humans in the decision-making
process. AI can create marketing strategies in two steps. The first step is searching
and reviewing relevant data, and the second step is the decision-making step.
Furthermore, AI can contribute to the creative thinking and rational process by iden-
tifying and analyzing the relevant data as it can replace the managers’ final decision-
making. In order to get better results from AI, it is suggested to focus more on data
collection as the results depend on the quality and relevance of the collected data.
The implementation of AI in marketing has many advantages, such as availabil-
ity, reducing errors, reducing manpower, saving time, using more advanced tech-
nologies, and the ability to handle multiple jobs simultaneously. On the other hand,
there are disadvantages and concerns associated with implementing AI in market-
ing. The main disadvantage is that it suffers from some privacy and security issues.
Since AI focuses on the collection of big data, there is a risk of the data being
attacked. The main privacy and security attacks of big data in AI are data breaches,
bias in data, data poisoning, model extraction, and evasion. Furthermore, AI in mar-
keting is facing other privacy and security problems, such as leakage of data from
cloud-based AI models, attacks from malicious software, denial of service attacks,
social engineering, and email spoofing.
112 A. H. Alammal and M. Al Mubarak

4 Recommendations

Based on the literature review, the following recommendations are to prevent pri-
vacy and security problems of AI in marketing.
1. Developing data privacy protection techniques to encrypt sensitive data and
prevent data breaches.
2. Identifying the bias metrics in the model and mitigating the biases by machine
learning of fair representation to prevent bias in data.
3. Using anomaly detection to detect and prevent poisoned data.
4. Protecting the AI learning models to prevent model extraction.
5. Developing a program that can be used to ensure that any small changes in the
input cannot significantly change the output to defend against evasion attacks.
6. Formulating governmental rules and regulations to ensure the proper and ethi-
cal use of AI in marketing.
7. Replacing cloud-based AI with edge AI, which is more secure.
8. Isolating the sensitive data only from the AI model to mitigate data privacy
problems.
9. Ensuring that all software interacting with AI are secure.
10. Using authentication methods such as face recognition or fingerprints to maxi-
mize data security.
11. Limiting the access of customers’ data and allowing only specific employees to
access it.
12. Providing privacy-related training for marketers and customers that deal with
AI in marketing.

5 Study Limitations and Future Studies

To make the study more accurate, data privacy protection techniques and edge AI
should be tested at a large scale. Data privacy rules and regulations are not up to date
in many countries making it difficult to implement ethical AI in marketing. It is
recommended to study the total cost of implementing AI in marketing and compare
it to the return on investment while taking maintenance and operational cost into
consideration. Also, to study the development of anti-virus software that is con-
cerned with protecting AI systems from data leakage and malicious attacks. New
protocols and standards for AI in marketing are to be considered in order to increase
reliability and transparency and prevent security problems.
Artificial Intelligence in Marketing: Concerns and Solutions 113

References

Arsenijevic, U., & Jovic, M. (2019). Artificial intelligence marketing: Chatbots (pp. 19–193).
[Link]
Dilmaghani, S., Brust, M. R., Danoy, G., Cassagnes, N., Pecero, J., & Bouvry, P. (2019). Privacy
and security of big data in AI systems: A research and standards perspective. In 2019 IEEE
international conference on big data (big data) (pp. 5737–5743). IEEE. [Link]
BigData47090.2019.9006283
Eriksson, T., Bigi, A., & Bonera, M. (2020). Think with me, or think for me? On the future role
of artificial intelligence in marketing strategy formulation. TQM Journal, 32, 795–814. https://
[Link]/10.1108/TQM-12-2019-0303
Ertel, W. (2018). Introduction to artificial intelligence (2nd ed.). Springer.
Jia, Y., Liu, S., & Jiang, S. (2019). Analysis of the development status of artificial intelligence tech-
nology at home and abroad. In Proceedings – 2019 international conference on virtual reality
and intelligent systems (pp. 195–198). Institute of Electrical and Electronics Engineers. https://
[Link]/10.1109/ICVRIS.2019.00055
Jim, S. (2017). Artificial intelligence for marketing: Practical applications (illustrated ed.).
J. W. Sons, Ed.
Lai, Z., & Yu, L. (2021). Research on digital marketing communication talent: Cultivation in the
era of artificial intelligence. Journal of Physics: Conference Series, 1757(1), 012040. https://
[Link]/10.1088/1742-6596/1757/1/012040
Lee, J. -H. (2021). Changes in marketing brought by AI. In 21st ACIS international winter con-
ference on software engineering, artificial intelligence, networking and parallel/distributed
computing (SNPD-winter). [Link]
Li, R., Cao, Z., Ye, H., & Yue, X. (2021). Application and development trend of artificial. Journal
of Physics: Conference Series, 1881. [Link]
National Institute of Justice. (2018). A brief history of artificial intelligence. NIJ Journal, (280).
Retrieved from [Link]
Park, S. (2018). AI changes the future of marketing. AI Summit 2018, Digital Marketing Summit.
Patra, R., Das, N. C., Bhattacharya, M., Shit, P. K., Patra, B. C., & Mukherjee, S. (2021).
Applications of artificial intelligence (AI) protecting from COVID-19 pandemic: A clinical and
socioeconomic perspective. [Link]
Sabouret, N. (2020). Understanding artificial intelligence (Illustrated ed.). CRC Press.
Sachdev, R. (2020). Towards security and privacy for edge AI in IoT/IoE. In 2020 5th interna-
tional conference on fog and mobile edge computing, FMEC 2020 (pp. 341–346). Institute of
Electrical and Electronics Engineers Inc. [Link]
Sergi, B. S., Popkova, E. G., Bogoviz, A. V., & Litvinova, T. N. (2019). Understanding industry
4.0: AI, the internet of things, and the future of work. Emerald Group Publishing.
Turing, A. (1950). Computing machinery and intelligence. Mind, 49, 433–460.
Xiang, Y., Zhao, L., Liu, Z., Wu, X., Chen, J., Long, E., et al. (2020). Implementation of artificial
intelligence in medicine: Status analysis and development suggestions. Artificial Intelligence
in Medicine, 102, 101780. [Link]
Zhu, T., Ye, D., Wang, W., Zhou, W., & Yu, P. (2020). More than privacy: Applying differential
privacy in key areas of artificial intelligence. IEEE Transactions on Knowledge and Data
Engineering. [Link]
The Impact of Emerging Technologies
on Accounting and Promises to Minimize
Operational Costs

Mahmood Mohamed Mansoor, Rami Mohammad Abu Wadi,

and Ruaa Binsaddig

1 Introduction

Emerging technologies bring numerous benefits to companies after implementation

and may impact many areas across departmental functions. However, the accounting
system is one of the most important foundations for the success of any company, as
“the correct and efficient application of the accounting system contributes to
enhancing the economic efficiency of the company, reduces the excess costs, and
reduces the risks that the company can face” (Kamal, 2015). Therefore, the focus in
this research will be to analyze the impacts on accounting functions after emerging
technologies are implemented and the operational cost relationships. At the same
time, accounting systems still face many obstacles due to poor implementation or
delay by accountants (Jasim & Raewf, 2020) while performing their operational
activities.
Conventional cost and management accounting practices were criticized for their
lack of insight and their inability to support management accounting innovation to
cope with the requirements of changing environments (Kamal, 2015). Moreover,
the academic literature has been critical of conventional management accounting
and control systems, particularly for their lack of efficiency, their inability to present
comprehensive and current information, and their inability to assure decision
makers and potential users of the quality of such information (Ghandour, 2021;
Kamal, 2015).

M. M. Mansoor · R. M. A. Wadi (*)

Ahlia University, Manama, Bahrain
e-mail: rwadi@[Link]
R. Binsaddig
Department of Finance, College of Business Administration, University of Business and
Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 115
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
116 M. M. Mansoor et al.

The adoption of emerging technologies is no longer avoidable for many compa-

nies, and accounting functions are not an exception to this reality. Many researchers
have pointed out the benefits derived by companies after emerging technologies are
employed in their accounting functions, but no proper focus has been placed on the
potential inverse impacts on their operations after the adoption, especially with
regard to personnel, financial, productivity, procurement, and information technol-
ogy costs.
Therefore, it is essential to establish a solid and proper integration between the
accounting functions and the emerging technologies, which will be referred to in
this research as the Enterprise Resource Planning (ERP) systems. Such interactions
are required to facilitate and enhance both elements and will lead to the ultimate
utilization of the benefits of the employed emerging technologies in companies, the
recognition of their positive contributions, and the favorable impacts on overall
operational costs.

1.1 The Research Problem

Technologies bring numerous benefits to companies, and efficiencies of operations

are continuously improved through the deployment of new technologies that
enhance the current processes within overall functions (Estefania et al., 2018). The
accounting function is one of the functions that is impacted by such technological
implementations (Jasim & Raewf, 2020). However, technologies may add burdens
and layers that increase operational costs while performing accounting operations,
hence creating drawbacks (Sar & Santoso, 2021).
The current study attempts to answer the general research questions:
• Does the implementation of emerging technologies (ERP systems) in companies
affect the operational costs of the accounting functions?
• Does the implementation of emerging technologies (ERP systems) in companies
affect the personnel costs, financial cycles, productivity, procurement costs, and
information and communication technology costs of the accounting functions?

1.2 Research Hypotheses

In order to assess and validate the impact of the ERP system on the operational costs
of the accounting functions, five hypotheses were developed based on the relationship
established for the ERP implementation for the objective of this research. Most ERP
systems support the accounting functions, as pointed out in Fig. 1, “ERP Finance
Module Features.”
The developed hypotheses are listed below.
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 117

Fig. 1 ERP finance module features. (Source: ERP Finance Module, 2022)

• H1: There is no impact of emerging technologies on personnel costs of the

accounting functions.
• H2: There is no impact of emerging technologies on the financial cycle of the
accounting functions.
• H3: There is no impact of emerging technologies on the productivity of the
accounting functions.
• H4: There is no impact of emerging technologies on the procurement costs of the
accounting functions.
• H5: There is no impact of emerging technologies on the information and com-
munication technology costs of the accounting functions.

2 Literature Review

This part of the research will begin by defining emerging technologies, accounting
functions, operational costs, and ERP systems. Then it will address the related
studies that participate in assessing the impacts of ERP systems on the operational
costs of the accounting functions.
118 M. M. Mansoor et al.

2.1 Definitions

2.1.1 Emerging Technologies

In order to narrow down the discussion and establish more focus on the research
aspects, the emerging technologies in this research will be discussed and explained
in the context of technologies incorporated into the ERP systems. The terms
emerging technologies and ERP will be used interchangeably since ERP brings the
latest technology to companies under one umbrella for its core functions and for the
best practices for handling accounting activities.
Rotolo et al. (2015) attempted to define emerging technologies by first defining
the context of “emerging” in technology and then identifying the measures of the
technological attributes. This ended in their defining five attributes of emerging
technologies: (i) radical novelty, (ii) relatively fast growth, (iii) coherence, (iv)
prominent impact, and (v) uncertainty and ambiguity. They ultimately defined an
emerging technology as “A relatively fast growing and radically novel technology
characterized by a certain degree of coherence persisting over time and with the
potential to exert a considerable impact on the socio-economic domain(s) that is
observed in terms of the composition of actors, institutions and the patterns of
interactions among those, along with the associated knowledge production
processes” (Rotolo et al. 2015).
Day and Schoemaker (2000) and Srinivasan (2008) state that emerging technolo-
gies (ETs) are science-based innovations with the potential to create a new industry
or transform an existing one.
To summarize, it is noticeable that there is no apparent unique definition that
represents the ultimate meaning of ETs; to some extent, it may change continuously
and vary across industries.

2.1.2 Accounting Functions

Accounting has been well known since inception as the recording of economic
events that occur within companies over periods of time. The economic events that
are registered and tracked through the accounting function ultimately feed into the
preparation of the financial statements.
Accounting is a very old discipline; it has existed and has been practiced by
companies in various forms for many years (Wood & Sangster, 2007).
According to Wood and Sangster (2007), accounting can be defined as “the pro-
cess of identifying, measuring, and communicating economic information to permit
informed judgments and decisions by users of information.” In other words, two
main elements can be identified for the accounting function:
1. Process economic information through identifying, measuring, and communi-
cating economic information
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 119

2. Provide economic information for decision-making to permit informed judg-

ments and decisions by users of information
The first element is dealt with and managed under financial accounting, while the
second element is dealt with and managed under management accounting.
According to Petkov (2020), there are two important elements that should be
considered by companies when they are preparing financial statements. The first
element is time, because it addresses the necessary time to prepare the financial
statements. The second element is human, because it addresses the time needed to
make decisions and record economic events.
Companies should consider these main elements before they deploy any ETs in
their environments. They should also assure that efficiencies and advancements
needed for their reporting in the accounting function are properly achieved by the
deployed ETs.
Accounting as a discipline has changed over time, and the need has become more
essential for ETs to be introduced into accounting. These advances in digital
technology are quickly changing the way we record, store, and manage data,
perform audits, and deliver other accounting services (Appelbaum et al., 2017).
On the other hand, researchers realize that changes in ETs are bringing benefits
to companies: “As business information is managed by accounting, any change in
this sector will have a positive impact on the company, especially in the accounting
department” (Jasim & Raewf, 2020).
Most functions within an organization are currently performed by humans. Their
jobs are to identify the economic events and properly record them via journal entries
in accordance with the established criteria or framework, such as US GAAP or
IFRS (Jasim & Raewf, 2020; Petkov, 2020).
Therefore, the assessment in this research will be devoted to examining the
impact of the ERP system on the operational costs of the accounting functions.
Those functions are accounts payables, accounts receivables, fixed assets
management, and general ledger reporting, as shown in Fig. 1, “ERP Finance
Module Features,” since those areas are considered to be the core features of any
ERP system.

2.1.3 Operational Costs

According to the Corporate Finance Institute (CFI), operating expenses refer to the
costs incurred by a business while performing its operational activities. This is
commonly referred to by businesses as operational expenditure (OPEX).
“In information technology, operational costs document the price of running of
IT services on a day-to-day basis. Operational costs may include expenditures for
staffing, hardware maintenance, electricity, software procurement, storage rental,
and security. Operational costs are usually calculated quarterly or annually”
(TechTarget, 2022).
120 M. M. Mansoor et al.

In the context of this research, the focus of the operational costs will be addressed
as the functions being operated for the accounting department.

2.1.4 Enterprise Resource Planning (ERP) System

An ERP system integrates several business domains of an organization into one by

combining different business strategies with IT-supported solutions (Shtub &
Karni, 2010).
Another comprehensive definition noted by Oracle Company covers the related
elements of the ERP system; they state that “Enterprise resource planning (ERP)
refers to a type of software that organizations use to manage day-to-day business
activities such as accounting, procurement, project management, risk management
and compliance, and supply chain operations. A complete ERP suite also includes
enterprise performance management software that helps plan, budget, predict, and
report on an organization’s financial results. ERP systems tie together a multitude of
business processes and enable the flow of data between them. By collecting an
organization’s shared transactional data from multiple sources, ERP systems
eliminate data duplication and provide data integrity with a single source of truth”
(Oracle, 2022).
Additionally, the definition of the ERP system can be expanded to include the
aspects of its capability to link and integrate the functions of the organization to
ultimately allow the users to access the software through an integrated and unified
database (Salmeron & Lopez, 2010).

2.2 Related Studies

Since ERP systems have been adopted globally, numerous published studies are
focused on addressing the benefits that are brought to organizations when they
implement ERP systems. However, limited studies are devoted to examining the
relationship between an ERP system and its impact on the accounting functions and
the interlinked benefits. This is noted because most ERP systems are basically
equipped with modules that support the operations of the accounting functions.
“When implementing ERP, the company hopes to increase productivity, access
through information and company management performance in decision making”
(Estefania et al., 2018).
“Not only the benefits can be seen from the implementation of the ERP system,
but there is also evidence of project failure in the implementation of the ERP system.
Competitively and technically, on the one hand the implementation of an ERP
system must still be done, but on the other hand there are high enough costs that
must be incurred for the ERP system implementation process. If the implementation
of an ERP system is successful, of course this is very significant for the development
of company resources” (Sar & Santoso, 2021).
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 121

For instance, Shuai et al. (2007) investigated the relationships between the ben-
efits of ERP implementation and the impacts on supply chain management. Their
study concludes that ERP implementation can streamline internal business pro-
cesses to achieve the supply chain performance. They also add that ERP system
capabilities improve information accessibility and visibility across the enterprise
and allow them to make more effective operational and strategic decisions such as
better manpower planning, enhanced inventory control, and radical improvement of
on-time delivery.
According to Mohamed (2009), the major benefits of the ERP systems are the
unified and automated business processes and functions and up-to-date information.
However, there are some major difficulties associated with ERP system
implementations. The software is quite expensive and requires intensive personnel
training, it can be very complex and difficult to customize to fit the business
processes, and centralized data stores could be a security risk (Mohamed, 2009).
A study done by Annamalai and Ramayah (2011) aims to examine the tangible
and intangible benefits of the resource planning systems of two famous enterprises
(SAP and Oracle). The study concluded that ERP system implementations generate
tangible benefits to organizations, and those benefits are revealed in procurement
costs, financial cycles, productivity, personnel costs, and information and
communication technology (ICT) costs.
Based on the findings of that study, the benefit elements that were achieved by
implementing ERP systems will be considered throughout this research as the basis
for assessing and analyzing the impact of ERP systems on the operational costs of
firms in their accounting functions.
Furthermore, the accounting industry has been tremendously transformed in the
past two decades due to the implementation of ERP systems (Kanellou & Spathis,
2013). According to Fig. 1, most common ERP financial systems are equipped with
features that support, at minimum, the accounting functions (accounts payables,
accounts receivables, fixed assets management, and general ledgers).
In a related article, Essex (2022) explains the key features of ERP systems by
stating that the ERP finance module is the main element in every ERP product, since
every company needs to have the ability to record and process their financial
transactions. Also, it is aimed at automating their basic accounting, invoicing,
financial analytics, forecasting, and reporting transactions. Furthermore, he
identifies the purchasing and procurement functions as the most commonly used
ERP modules.
In another case study done by Matengu and Swami (2011), the National
Development Bank was selected to validate the impact of ERP systems and the
implementation of such systems in accounting aspects in general and specific terms.
For data collection techniques, the researcher used both qualitative and quantitative
approaches. A survey method was adopted for the primary data by targeting 60
Oracle users, and the secondary data was collected through books and peer-reviewed
articles. The end users of the ERP systems have established a good reliance on the
systems for handling and managing their accounting activities because they provide
a centralized database, fast access to financial information, and streamlined
122 M. M. Mansoor et al.

management of data as and when deemed necessary. The limitations and drawbacks
of the ERP systems in accounting are mainly due to the low budgets allocated during
implementation phases of the ERP systems. This, in turn, impacts the required
training and utilization of system capabilities by the system users.
In light of this, a study conducted by Kanellou and Spathis (2013) is aimed at
investigating the accounting benefits entailed to the end users of ERPs after they
adopt the systems. Their study assesses the ERP systems’ impacts on accounting
information and its practices. This study also examines the observed benefits of the
ERP systems from two aspects; they have assessed the ERP accounting benefits in
terms of accountants and IT professionals for end-user satisfaction. Accordingly, a
group of 271 participants were surveyed from multiple companies in Greece. The
results of their study proved that some of the ERP accounting benefits were perceived
by companies mainly from the aspect of the accounting processes and not because
of their expectations as IT professionals or accountants. The study also identified
other factors relative to the cost of the ERP system and the accounting benefits that
affect the satisfaction level of ERP users. It illustrates the importance of conducting
additional studies in this field to further examine and determine the accounting
benefits that result from the implementation of ERP systems and their impacts on
satisfaction.
In the context of ERP and organizational changes and for the purpose of examin-
ing the implementation of accounting modules in public service organizations that
operate in an emerging economy, Hassan and Mouakket (2016) conducted a study
to explore the processes of implementing an ERP system by utilizing Laughlin’s
(1991) model of organizational change. The purpose was to highlight how the
implementation of the accounting modules of an ERP system can disrupt the adop-
tion of an organization’s modes of thinking and the practices of its members. A case
study approach was used, and data were collected from an organization that oper-
ates in the United Arab Emirates through interviews, documentary evidence, and
personal observation. Together with implementation and customization issues, the
study revealed that employees were forced to use the ERP system. As a result, some
members have formed absorption groups that question the organizational change
due to the accounting-based ERP system.
This study provides further insights to help top management when they are
developing organizational change strategies and to address emerging regulations
that could affect the implementation of ERP systems in organizations. This lays the
foundation for ensuring proper implementation and use of ERP systems.
Considering this era of business globalization and due to the fast advancements
in information technologies and communication aspects, as well as the efforts that
have been made by accountants to improve the advancements and performance of
their accounting processes, a study was done by Bejjar (2017) to review “the impact
of the ERP on the performance of the accounting processes.” It was based on an
empirical study of 103 accountants who are working in the banking sector and who
use ERP systems; 50% of the participants in the questionnaire have more than 5
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 123

years of experience in their field. The study concludes that the impact of the ERP on
the performance of the accounting processes is valid, but it is not significant, and the
analyses differ among different levels. Furthermore, it involves cost reductions of
processes, results in productivity gains, and improves the quality of services and
accountant work. Also, the ERP system provides accurate and timely information
that meets the requirements and the needs of the respective accountants and ERP
system users.
Of equal importance in the context of advantages and benefits of the ERP system
to the respective users, another study was done by Nur and Irfan (2020) to examine
the effects of ERP-based accounting information system implementations on users
and organizations. The study focused on companies listed on the Indonesian Stock
Exchange, and a sample of employees who use ERP accounting information systems
were selected to meet the objective of the study. A structured equation modeling
technique was used to analyze the gathered data. As a result of the analyzed data, it
has been concluded that the implementation of high-quality information systems
generates a high quality of information that satisfies the respective users.
Furthermore, it contributes to the performance of the organization by improving
personal skills.
This raised the implication that organizations may implement high-quality ERP-
based accounting information systems to positively impact organizational
performance.

3 Research Methodology

3.1 Population and Sample

Before conducting the survey, it was important to identify the targeted population.
The purpose of this study is to assess the impact of the ERP system on the operational
costs of the accounting functions. Statistics published by Statista Research
Department (Schwandt & Jakob, 2022) identified and described the number of
enterprises in Bahrain in 2018 by size. The statistics revealed that, out of 92,000
enterprises in Bahrain, approximately 176 and 950 enterprises were considered to
be large- and medium-sized businesses, respectively. So, assuming that all of those
businesses had adopted the ERP system in their accounting functions, a 10%
targeted sample of those businesses would be around 112 companies.
For this research, a questionnaire survey was distributed to multiple companies
in the private sector. Appropriate well-known users of the ERP system who are
working in the accounting functions and/or who have experienced a role in such
accounting functions were selected; 95 responses were subsequently obtained.
124 M. M. Mansoor et al.

Table 1 Reliability of the questionnaire

Factor name Number of questions Cronbach’s alpha Conclusion
Personnel 5 0.8480 Reliable
Financial 5 0.8243 Reliable
Productivity 4 0.8325 Reliable
Procurement 4 0.7601 Reliable
ICT 4 0.8989 Reliable
ERP 6 0.7287 Reliable

3.2 Reliability Test

In this study, it is essential that the questionnaire’s validity and reliability should be
checked. To eliminate the occurrence of unrelated wrong answers, validity must be
taken into consideration.
Cronbach’s alpha reliability coefficient usually ranges from 0 to 1; a value close
to 1.0 indicates a better internal consistency of the variables in the scale. In other
words, this indicates that the survey is more reliable. Consequently, a value of
Cronbach’s alpha greater than 0.7 is acceptable (Khalid et al., 2012). When multiple
Likert-type scale questions are used in the questionnaire, this type of statistical test
is usually applied (Gliem & Gliem, 2003). Therefore, Cronbach’s alpha reliability
test will be applied to the six factors of the questionnaire that included Likert-type
scale questions. Table 1 presents the results of the conducted statistical reliability
test and confirms that all factors are reliable since their Cronbach’s alpha values are
greater than 0.70.

4 Findings and Analysis

4.1 Data Statistical Description

Descriptive statistics were followed by the researcher in order to measure variables

and explain the mean of the dependent and the independent variables. Descriptive
statistics are measures of central tendency and variability such as the mean and
standard deviation measures. Overall, the mean of all factors is around 4, which
specifies that, on average, the mean is close to agreeing. The standard deviation of
all factors is between 0.38 and 0.55. Table 2 shows the value of the mean is 3.61 for
personnel and the standard deviation is 0.50, while the mean value for financial is
4.19 and the standard deviation is 0.47. The mean value of productivity is 3.92 and
the standard deviation is 0.48, whereas for procurement, the mean value is 3.97 and
the standard deviation is 0.41. The mean value for ICT is 3.80 and the standard
deviation is 0.55; finally, the mean value for ERP is 3.74 and the standard deviation
is 0.38 (Table 2).
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 125

Table 2 Descriptive statistics

Factor name N Minimum Maximum Mean Std. deviation
Personnel (DEP) 95 2.4 4.8 3.611 0.4980
Financial (DEP) 95 3.0 5.0 4.189 0.4743
Productivity (DEP) 95 2.8 5.0 3.924 0.4825
Procurement (DEP) 95 3.0 5.0 3.974 0.4101
ICT (DEP) 95 2.5 5.0 3.800 0.5489
ERP (IND) 95 2.7 5.0 3.739 0.3787
Valid N (listwise) 95

4.2 Correlation

Pearson’s correlation coefficient was applied by the researcher; it is used to measure

the strength of the relationship between two variables (Mcalister et al., 2016). The
statistical test will produce values that range between −1.0 and + 1.0. Values below
0 indicate a negative correlation, which means if one value increases, the other value
decreases. The statistical results of values that are −0.5 or below indicate that there
is a strong negative correlation between the variables. Statistical values above 0
indicate that there is a positive correlation between the variables; therefore, if one
value increases, the other value also increases. If the value is 0.5 or greater, there is
a strong positive correlation between the variables (Mcalister et al., 2016). Table 3
illustrates the Pearson’s correlation coefficients for all variables.
In reference to Table 3, it can be concluded that all tested variables have positive
relationships with ERP and are significant at 5%. Furthermore, the tests indicate
that there is a positive relationship between ERP and procurement, and the second
highest relationship is between ERP and productivity at 0.35. It can also be seen that
the strongest relationship is between procurement and financial, with a result of
0.54. Therefore, it can be noted that procurement and productivity are the factors
most impacted by the implementation of ERP systems. Furthermore, the review
indicates that there is a strong positive relationship between productivity and
financial, with a result of 0.53. Procurement and productivity are the next factors,
with a result of 0.51, but still considered as a strong positive relationship. Lastly, the
lowest value of Pearson’s correlation coefficients test in this survey is 0.20, which
illustrates the relationship between ICT and personnel, followed by ICT and
financial, with a result of 0.24, and between ERP and financial, with a result of 0.29
(Table 3).

4.3 Regression

In order to achieve the objectives of this research, simple linear regressions were
used by the researcher to show how strong the relationships are between each
independent and dependent variable. This was achieved by testing the impact of the
126 M. M. Mansoor et al.

Table 3 Results of Pearson’s correlation

Personnel Financial Productivity Procurement ICT ERP
Personnel Pearson 1 0.503** 0.493** 0.488** 0.197 0.323**
correlation
Sig. 0.000 0.000 0.000 0.056 0.001
(2-tailed)
N 95 95 95 95 95 95
Financial Pearson 0.503** 1 0.533** 0.535** 0.239* 0.291**
correlation
Sig. 0.000 0.000 0.000 0.020 0.004
(2-tailed)
N 95 95 95 95 95 95
Productivity Pearson 0.493** 0.533** 1 0.514** 0.298** 0.351**
correlation
Sig. 0.000 0.000 0.000 0.003 0.000
(2-tailed)
N 95 95 95 95 95 95
Procurement Pearson 0.488** 0.535** 0.514** 1 0.458** 0.420**
correlation
Sig. 0.000 0.000 0.000 0.000 0.000
(2-tailed)
N 95 95 95 95 95 95
ICT Pearson 0.197 0.239* 0.298** 0.458** 1 0.217*
correlation
Sig. 0.056 0.020 0.003 0.000 0.035
(2-tailed)
N 95 95 95 95 95 95
ERP Pearson 0.323** 0.291** 0.351** 0.420** 0.217* 1
correlation
Sig. 0.001 0.004 0.000 0.000 0.035
(2-tailed)
N 95 95 95 95 95 95
**Correlation is significant at the 0.01 level (2-tailed)
*Correlation is significant at the 0.05 level (2-tailed)

independent variable (ERP) on the dependent variables (personnel, financial, pro-

ductivity, procurement, and ICT).
The results of the simple linear regressions are presented and illustrated in the
following sections for each variable.

4.3.1 Impact of ERP on Personnel (Model 1)

The value of R square is 0.104, which indicates that 10.4% of the variation in the
dependent variable can be explained by the independent variable. In other words,
the impact on personnel that can be explained through ERP represents 10.4%.
The standard error of the estimate is 0.4738. The statistics and summary data are
shown in Table 4.
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 127

Table 4 Model summary – Model (1)

Model R R square Adjusted R square Std. error of the estimate
1 0.323a 0.104 0.095 0.4738
Predictors: (Constant), ERP
a

Table 5 ANOVA – Model (1)

Model Sum of squares df Mean square F Sig.
1 Regression 2.434 1 2.434 10.843 .001a
Residual 20.876 93 0.224
Total 23.309 94
Predictors: (Constant), ERP
a

The informational statistics on the significance of the model are presented in

Table 5 with F statistic value of 10.84. This suggests that at least one of the variables
is significant at the 1% level. Furthermore, the analysis of variance statistical test
(ANOVA) indicates that the model is good (Table 5).
The values of the t-statistic are significant at 1% for personnel. Thus, the change
in personnel can be explained by the implementation of ERP.
According to Kline (2005), “the regression coefficients of a value less than 0.10
could indicate a small effect; values about 0.30 could indicate a medium effect; and
values more than 0.50 indicate a large effect.” In this context, Model 1 shows that
the coefficient β = 0.425, which indicates that ERP has a medium impact on
personnel. Accordingly, there is evidence that the implementation of ERP does
affect personnel costs in the accounting functions, so we reject the null hypothesis
that states that ETs do not affect personnel costs of the accounting functions. This
result is consistent with the studies (Annamalai & Ramayah, 2011; Petkov, 2020)
(Table 6).

4.3.2 Impact of ERP on Financial (Model 2)

The value of R square is 0.084, which indicates that 8.4% of the variation in the
dependent variable can be explained by the independent variable. In other words,
the impact on financial that can be explained through ERP represents 8.4%. The
standard error of the estimate is 0.4563. The statistics and summary data are shown
in Table 7.
The informational statistics on the significance of the model are presented in
Table 8 with F statistic value of 8.57. This suggests that at least one of the variables
is significant at the 1% level. Furthermore, the analysis of variance statistical test
(ANOVA) indicates that the model is good (Table 8).
The values of the t-statistic are significant at 1% for financial. Thus, the change
in personnel can be explained by the implementation of ERP. Model 2 shows that
128 M. M. Mansoor et al.

Table 6 Regression coefficients – Model (1)

Unstandardized
coefficients Standardized coefficients
Model B Std. error Beta t Sig.
1 (Constant) 2.022 0.485 4.170 0.000
ERP 0.425 0.129 0.323 3.293 0.001

Table 7 Model summary – Model (2)

Model R R square Adjusted R square Std. error of the estimate
1 0.291a 0.084 0.075 0.4563
Predictors: (Constant), ERP
a

Table 8 ANOVA – Model (2)

Model Sum of squares df Mean square F Sig.
1 Regression 1.785 1 1.785 8.572 0.004a
Residual 19.365 93 0.208
Total 21.149 94
Predictors: (Constant), ERP
a

Table 9 Regression coefficients – Model (2)

Unstandardized
coefficients Standardized coefficients
Model B Std. error Beta t Sig.
1 (Constant) 2.829 0.467 6.058 0.000
ERP 0.364 0.124 0.291 2.928 0.004

the coefficient β = 0.364, which indicates that ERP has a medium impact on the
financial cycle according to Kline’s (2005) ranking. Accordingly, there is evidence
that the implementation of ERP does affect the financial cycle in the accounting
functions, so we reject the null hypothesis that states that ETs do not affect the
financial cycle of the accounting functions. This result is consistent with the studies
discussed in the literature review chapter, i.e., Appelbaum et al. (2017) and Jasim
and Raewf (2020) (Table 9).

4.3.3 Impact of ERP on Productivity (Model 3)

The value of R square is 0.123, which indicates that 12.3% of the variation in the
dependent variable can be explained by the independent variable. In other words,
the impact on productivity that can be explained through ERP represents 12.3%.
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 129

Table 10 Model summary – Model (3)

Model R R square Adjusted R square Std. error of the estimate
1 0.351a 0.123 0.113 0.4543
a
Predictors: (Constant), ERP

Table 11 ANOVA – Model (3)

Model Sum of squares df Mean square F Sig.
1 Regression 2.690 1 2.690 13.032 0.000a
Residual 19.195 93 0.206
Total 21.884 94
a
Predictors: (Constant), ERP

Table 12 Regression coefficients – Model (3)

Unstandardized
coefficients Standardized coefficients
Model B Std. error Beta t Sig.
1 (Constant) 2.254 0.465 4.847 0.000
ERP 0.447 0.124 0.351 3.610 0.000

The standard error of the estimate is 0.4543. The statistics and summary data are
shown in Table 10.
The informational statistics on the significance of the model are presented in
Table 11 with F statistic value of 13.03. This suggests that at least one of the vari-
ables is significant at the 1% level. Furthermore, the analysis of variance statistical
test (ANOVA) indicates that the model is good (Table 11).
The values of the t-statistic are significant at 1% for productivity. Thus, the
change in personnel can be explained by the implementation of ERP. Model 3 shows
that the coefficient β = 0.447, which indicates that ERP has a medium impact on
productivity according to Kline’s (2005) ranking. Accordingly, there is evidence
that implementation of ERP does affect productivity in the accounting functions, so
we reject the null hypothesis that states that ETs do not affect productivity of the
accounting functions. This result is consistent with the studies explained in the lit-
erature review chapter and more specifically in the study by Estefania et al. (2018)
(Table 12).

4.3.4 Impact of ERP on Procurement (Model 4)

The value of R square is 0.177, which indicates that 17.7% of the variation in the
dependent variable can be explained by the independent variable. In other words,
the impact on procurement that can be explained through ERP represents 17.7%.
130 M. M. Mansoor et al.

Table 13 Model summary – Model (4)

Model R R square Adjusted R square Std. error of the estimate
1 0.420a 0.177 0.168 0.3741
a
Predictors: (Constant), ERP

Table 14 ANOVA – Model (4)

Model Sum of squares df Mean square F Sig.
1 Regression 2.795 1 2.795 19.972 0.000a
Residual 13.014 93 0.140
Total 15.809 94
a
Predictors: (Constant), ERP

Table 15 Regression coefficients – Model (4)

Unstandardized
coefficients Standardized coefficients
Model B Std. error Beta t Sig.
1 (Constant) 2.271 0.383 5.933 0.000
ERP 0.455 0.102 0.420 4.469 0.000

The standard error of the estimate is 0.3741. The statistics and summary data are
shown in Table 13.
The informational statistics on the significance of the model are presented in
Table 14 with F statistic value of 19.97. This suggests that at least one of the
variables is significant at the 1% level. Furthermore, the analysis of variance statisti-
cal test (ANOVA) indicates that the model is good (Table 14).
The values of the t-statistic are significant at 1% for procurement. Thus, the
change in procurement can be explained by the implementation of ERP. Model 4
shows that the coefficient β = 0.455, which indicates that ERP has a medium impact
on procurement according to Kline’s (2005) ranking. Accordingly, there is evidence
that implementation of ERP does affect procurement costs in the accounting
functions, so we reject the null hypothesis that states that ETs do not affect procure-
ment costs of the accounting functions. This result aligns with the studies illustrated
under the literature review chapter, i.e., Shuai et al. (2007) and Annamalai and
Ramayah (2011) (Table 15).

4.3.5 Impact of ERP on ICT (Model 5)

The value of R square is 0.047, which indicates that 4.7% of the variation in the
dependent variable can be explained by the independent variable. In other words, the
impact on ICT that can be explained through ERP represents 4.7%. The standard
error of the estimate is 0.5387. The statistics and summary data are shown in Table 16.
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 131

Table 16 Model summary – Model (5)

Model R R square Adjusted R square Std. error of the estimate
1 0.217a 0.047 0.037 0.5387
Predictors: (Constant), ERP
a

Table 17 ANOVA – Model (5)

Model Sum of squares df Mean square F Sig.
1 Regression 1.335 1 1.335 4.599 0.035a
Residual 26.990 93 0.290
Total 28.325 94
Predictors: (Constant), ERP
a

Table 18 Regression coefficients – Model (5)

Unstandardized
coefficients Standardized coefficients
Model B Std. error Beta t Sig.
1 (Constant) 2.624 0.551 4.759 0.000
ERP 0.315 0.147 0.217 2.144 0.035

The informational statistics on the significance of the model are presented in

Table 17 with F statistic value of 4.60. This suggests that at least one of the variables
is significant at the 1% level. Furthermore, the analysis of variance statistical test
(ANOVA) indicates that the model is good (Table 17).
The values of the t-statistic are significant at 1% for personnel. Thus, the change
in ICT can be explained by the implementation of ERP. Model 5 shows that the
coefficient β = 0.315, which indicates that ERP has a medium impact on ICT
according to Kline’s (2005) ranking. Accordingly, there is evidence that
implementation of ERP does affect ICT costs in the accounting functions, so we
reject the null hypothesis that states that ETs do not affect ICT costs of the accounting
functions. This result is consistent with the major studies explained under the litera-
ture review, such as Sar and Santoso (2021) and Appelbaum et al. (2017) (Table 18).

5 Conclusion and Recommendation

5.1 Conclusion

The findings of this research were basically built to test the impact of the ERP sys-
tem on five sub-factors: personnel costs, financial cycles, productivity, procurement
costs, and information and communication technology costs. The impact is then
further formulated on the main factor (operational costs).
132 M. M. Mansoor et al.

The purpose for testing those factors is to validate and quantify the impact that is
brought into companies upon implementing ERP systems, since the providers of
such systems promise companies that essential benefits will be noticed in their
environments. The impact on reducing the operational costs is not an exception to
those benefits. The researcher chose this topic due to his involvement with three
implementation teams that implemented ERP systems in private sector companies.
Ultimately, based on the primary data gathered through the distributed questionnaire,
the results of this research could be generalized across the population.
In this research, the researcher analyzed the data that were collected through the
responses to the circulated questionnaire. Based on the analysis, the researcher
concludes that the operational costs of all of the considered sub-factors are impacted
by the ERP system. Those factors are personnel costs, financial cycles, productivity,
procurement costs, and information and communication technology costs, and those
factors cumulatively impact the operational costs of the accounting functions. The
reliability level of the outcomes was measured through Cronbach’s alpha. All tested
factors have positive correlations with the ERP, and the correlation values are
between 0.20 and 0.54, so this suggests that implementation of ERP systems affects
the operational costs of the accounting functions. Regression results reveal that
procurement is the factor most impacted by the implementation of the ERP, with a
value of 0.455, then productivity, with a value of 0.447. ICT is the factor that is least
impacted by the ERP, with a value of 0.315. As a result, there is evidence that
implementation of ERPs does affect personnel costs, financial cycles, productivity,
procurement costs, and information and communication technology costs in the
accounting functions, so we reject the null hypothesis that states that ETs have no
impact on all sub factors. The results are consistent with most of the related studies
demonstrated under the literature review.

5.2 Recommendations

The following are recommendations based on the research findings. First, users of
ERP systems should be trained extensively to grasp the ultimate beneficial impact
of the ERP system on operational costs. Furthermore, attention should be allocated
to other factors that impact the operational costs of the accounting functions. Finally,
the benefits that were promised before the implementation of the ERP system should
be assessed regularly after implementation to ensure the existence of such benefits,
consider any required improvements, and resolve any issues encountered.

References

Annamalai, C., & Ramayah, T. (2011). Enterprise Resource Planning (ERP) benefits survey of
Indian manufacturing firms: An empirical analysis of SAP versus Oracle package. Business
Process Management Journal, 17(3), 495–509.
The Impact of Emerging Technologies on Accounting and Promises to Minimize… 133

Appelbaum, D., Kogan, A., & Vasarhelyi, M. A. (2017). Big data and analytics in the modern audit
engagement: Research needs. A Journal of Practice & Theory, 36(4), 1–27.
Bejjar, M. A. (2017). The impact of Enterprise Resource Planning (ERP) on the performance
of accounting processes. International Journal of Information Technology & Management
Information System, 8(1), 22–39.
Day, G. S., & Schoemaker, P. (2000). Avoiding the pitfalls of emerging technologies. California
Management Review, 42(2), 8–33.
ERP Finance Module. (2022, June 1). Retrieved from Techtarget: [Link]
searcherp/definition/ERP-finance-module
Essex, D. (2022, June 1). The_Ultimate_Guide_to_ERP.pdf. Retrieved from Techtarget: https://
[Link]/digitalguide/images/Misc/EA-M arketing/Eguides/The_Ultimate_
Guide_to_ERP.pdf
Estefania, T. V., Samir, L., Robert, P., Patrice, D., & Alexandre, M. (2018). The integration of ERP
and inter-intra organizational information systems: A literature review. IFAC PapersOnLine,
51(11), 1212–1217.
Ghandour, D. (2021). Analytical review of the current and future directions of management
accounting and control systems. European Journal of Accounting, Auditing and Finance
Research, 9(3), 42–73.
Gliem, J. A., & Gliem, R. R. (2003). Calculating, interpreting, and reporting Cronbach’s alpha reli-
ability coefficient for Likert-type scales. In Midwest research to practice conference in adult,
continuing, and community education, Columbus (pp. 82–88).
Hassan, M., & Mouakket, S. (2016). ERP and organizational change: A case study examining
the implementation of accounting modules. International Journal of Organizational Analysis,
24(3), 487–515.
Jasim, Y., & Raewf, M. (2020). Information Technology’s impact on the accounting system. Cihan
University-Erbil Journal of Humanities and Social Sciences, 4(1), 50–57.
Kamal, S. (2015). Historical evolution of management accounting. The Cost and Management, 43(4).
Kanellou, A., & Spathis, C. (2013). Accounting benefits and satisfaction in an ERP environment.
International Journal of Accounting Information Systems, 14(3), 209–234.
Khalid, K., Hilman, H., & Kumar, D. (2012). Get along with quantitative research process.
International Journal of Research in Management, 2(2), 15–29.
Kline, T. (2005). Psychological testing: A practical approach to design and evaluation. Sage
Publications, Inc..
Laughlin, R. C. (1991). Environmental disturbances and organizational transitions and transforma-
tions: Some alternative models. Organization Studies, 12(2), 209–232.
Matengu, K., & Swami, B. (2011). Impact of Enterprise Resource Planning (ERP) in accounting
systems: A case study. International Journal of Management & Business Studies, 1(3).
Mcalister, C., Schmitter-Edgecombe, M., & Lamb, R. (2016). Examination of variables that may
affect the relationship between cognition and functional status in individuals with mild cogni-
tive impairment: A meta-analysis. Archives of Clinical Neuropsychology, 31(2), 123–147.
Mohamed, A. (2009, July 23). Enterprise Resource Planning (ERP) software suppliers –
Essential Guide. Retrieved from Computerweekly: [Link]
Enterprise-Resource-Planning-ERP-software-suppliers-Essential-Guide
Nur, E. D., & Irfan, M. (2020). ERP-based accounting information system implementation in orga-
nization: A study in Riau, Indonesia. The Journal of Asian Finance, Economics and Business,
7(12), 147–157.
Oracle. (2022, June 1). What-Is-ERP. Retrieved from Oracle: [Link]
what-is-erp/
Petkov, R. (2020). Artificial intelligence (AI) and the accounting function – A revisit and a new per-
spective for developing framework. Journal of Emerging Technologies in Accounting, 99–10.
Rotolo, D., Hicks, D., & Martin, B. (2015). What is an emerging technology? Research Policy,
44(10), 1827–1843.
Salmeron, J., & Lopez, C. (2010). A multicriteria approach for risks assessment in ERP mainte-
nance. Journal of Systems and Software, 83(10), 1941–1953.
134 M. M. Mansoor et al.

Sar, M. W., & Santoso, B. (2021). Analysis of Enterprise Resource Planning (ERP) system
implementation for manufacturing in Indonesia. Journal of Physics: Conference Series,
1823(1), 012116.
Schwandt, F., & Jakob, H. (2022, June 1). Statistics/943018/Bahrain-number-of-enterprises-
by-size. Retrieved from Statista Research Department Web Site: [Link]
statistics/943018/bahrain-number-of-enterprises-by-size/
Shtub, A., & Karni, R. (2010). The dynamics of supply chain and process management (2nd ed.).
Springer.
Shuai, J., Su, F., & Yang, C. (2007). The impact of ERP implementation on corporate supply chain
performance (pp. 1644–1648). Institute of Electrical and Electronics Engineers (IEEE).
Srinivasan, R. (2008). Characteristics and effects of emerging technologies: Research opportuni-
ties in innovation. Industrial Marketing Management, 37, 633–640.
TechTarget. (2022, June 1). Operational-Costs. Retrieved from TechTarget: [Link]
[Link]/whatis/definition/operational-costs
Wood, F., & Sangster, A. (2007). Business accounting (10th ed.). Financial Times/Prentice Hall.
Understanding Artificial Intelligence
Through Its Applications and Concerns

Hussain Abbas Maki, Muneer Al Mubarak, and Ali Bakir

1 Introduction: Background and AI Definitions

Artificial intelligence is a widely used term although what AI exactly is and knowl-
edge of how it works remain elusive. AI is a broad field and has been described as
technologies that imitate human intellect, human intelligence being exhibited by
machines, machines that perform tasks that humans would perform, human intelli-
gence manifested by computers, and artifacts that can carry out tasks in the real
world without human involvement (Helm et al., 2020). Many authors view AI as a
development that “replicates” the intelligence of humans (e.g., Brooks, 1991;
Clancey, 2018; Silverman, 2018), while others view it as a development that
“exceeds” the human intelligence (e.g., Monett & Lewis, 2017). The most common
reference to AI is machines’ ability to perform tasks that normally require human
intelligence (Cohen-Mekelburg et al., 2021; Fjelland, 2020). However, as there is no
common understanding of AI (see Monett & Lewis, 2017), the best way to under-
stand AI is by looking at its various forms in applications.
Artificial intelligence is changing the world that we live in, revolutionizing the
future of industries and every aspect of human life. AI is linked with smartness and
how machines can think, learn, act, and react as humans do. Today with the huge
advancement of technology and increase of data and information, tech companies

H. A. Maki
GW University, Washington, DC, USA
M. Al Mubarak (*)
College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]
A. Bakir
University of Business and Technology, KSA, Jeddah, Saudi Arabia
e-mail: [Link]@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 135
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
136 H. A. Maki et al.

are using this large information in many applications. AI is now incorporated in,
among other fields, transportation, healthcare, education, travel, business, and
finance. This research explores AI’s embeddedness in industry, focusing on the
application of its various facets. The intention in this study is to present a clearer
picture of AI and its applications in people’s life, contribute to enhancing their
knowledge about AI systems’ applications, and remove the prevalent elusiveness
around AI. The research will also be useful for professionals working in technology
industries as it provides potential solutions and advancements offered by AI which
can further improve their work practices and performance. Several AI system appli-
cations will be discussed, providing technical explanation and insights into AI.

2 Approaches to AI System Developments: Handcrafted

Knowledge and Machine Learning

Technological breakthroughs over the last decade have greatly increased the diver-
sity of applications where AI is shown to be practical, powerful, and performance
enhancing. AI systems can be developed following many different approaches,
grouped into two broad categories: handcrafted knowledge AI and machine learning
AI (Blasch et al., 2021). Machine learning (ML) systems are the more recent of the
two approaches and are responsible for the leapfrog improvements in AI capabilities
and for much of the excitement (e.g., Liu et al., 2019; Lwakatare et al., 2019;
Sevakula et al., 2020).
Handcrafted knowledge systems are AI that use traditional rules-based program-
ming languages to codify knowledge of human experts about a subject into a long
series of programmed rules of the “if given x input, then provide y output” type
(Allen, 2020; Pruinelli & Michalowski, 2021). These systems attempt to represent
human knowledge into programmed sets of rules that computers can use to process
information. Combining millions of these domain-specific rules into “the program”
results in a smart and useful machine, such as tax preparation software; Deep Blue,
IBM-developed, chess-playing AI; language translation; and auto-pilot and feed-
back control system (Apte et al., 2000; Mualla et al., 2019; Pei et al., 2019).
Knowledge in the machine learning (ML) systems, on the other hand, is not pro-
grammed by humans. Rather, these systems are trained from large sets of data: a
machine learning algorithm runs on a training dataset and produces an AI model
(Ray, 2019). The ML systems learn from the trained datasets, and the trained system
is then used operationally to produce predicted outcomes given new operational
data. By running a human-generated algorithm on the training dataset, the ML sys-
tem generates rules such that it can receive input x and provide correct output y
(Kulagin et al., 2021). The system learns from examples (training data), making
data vital in the context of AI, as it is the raw material for building high-performing
ML systems. Thus, the quality, quantity, representativeness, and diversity of data
directly impact the operational performance of the ML system (Jain et al., 2020).
Understanding Artificial Intelligence Through Its Applications and Concerns 137

Hence, having enough of the right data tends to be crucial. Algorithms and comput-
ing hardware are also important, but nearly all ML systems run on ordinary comput-
ing hardware, and most of the best algorithms are freely available.
Although ML systems program themselves, humans still have a critical role to
play in guiding this learning process (Zhou & Chen, 2018), choosing algorithms,
formatting data, setting learning parameters, and troubleshooting (Maadi
et al., 2021).
Because of the increased performance and enhanced productivity which ML pro-
duces, there are currently many practical applications throughout the economy and
industry. Pattern recognition, image analysis, language translation, content genera-
tion, and speech transcription are just few examples of the high performance of
machine learning AI (Ammar & Ayed, 2018; Berg et al., 2019; Risi & Togelius,
2020; Wieland & Pittore, 2014; Zhou et al., 2020). Furthermore, the performance
and practicality of using ML systems have witnessed a marked enhancement
because of the increasing availability of huge datasets, immense computing power
(both from using GPU chips as accelerators and from the cloud), open-source code
libraries, and software development frameworks (Tyagi & Chahal, 2022).

3 Families of Machine Learning Algorithms

and Deep Learning

There are four different families of ML algorithms, based on aspects of the data they
are trained on; these are supervised learning, unsupervised learning, semi-supervised
learning, and reinforcement learning (Mohammed et al., 2016). Panch et al. (2018)
stressed the importance of understanding the different AI families, as knowing
which family an AI system is using has implications for effectively enabling and
managing the system’s development.
Supervised learning uses example data that has been labeled by human supervi-
sors; this type of data has very high performance; however, getting sufficient labeled
data can be difficult, time-consuming, and expensive. Unsupervised learning, on the
other hand, uses data that are not labeled; such data produces lower performance
than supervised learning for many applications, but it can also be used to solve
problems where supervised learning is not viable (Adorf et al., 2019). Semi-
supervised learning is of great interest in ML and data mining because it can use
readily available unlabeled data to improve supervised learning tasks when the
labeled data is scarce or expensive (Zhu & Goldberg, 2009).
Reinforcement learning has autonomous AI agents that gather their own data and
improve based on their trial-and-error interaction with the environment; this type of
data appears to be promising, but so far reinforcement learning has been harder to
use in the real world and remains less common than supervised and unsupervised
learning applications (Mahesh, 2020). This is because the real world is not as heav-
ily bounded as video games in terms of inputs, outputs, and interactions; time
138 H. A. Maki et al.

cannot be speeded up in the real world; and consequences of failure (Dulac-Arnold

et al., 2021). Nevertheless, reinforcement learning systems have been increasingly
used in research settings, where many researchers expect that usage to grow rapidly,
and many tech companies are using reinforcement learning in operational applica-
tions (see Ostheimer et al., 2021; Zhang et al., 2018).
In summary, supervised ML systems can deliver very high performance but
acquiring labeled data may be challenging (Osisanwo et al., 2017). In unsupervised
ML systems, while not requiring labeled data, their performance is generally more
limited than supervised ML systems (Alloghani et al. 2020). Reinforcement learn-
ing systems can generate their own data but currently they are only used for the few
applications that offer access to simulators which closely resemble the operational
environment (Jordan et al., 2020; Mahesh, 2020; Sarker, 2021).

4 Neural Networks and Deep Learning

Recent research breakthroughs and far-reaching improvements in the performance

of AI systems have mainly been enabled by algorithms that make use of neural net-
works (Mirjalili, 2019). Neural networks are algorithms that are named after the
biological neurons in the brain (Maind & Wankar, 2014). These algorithms require
initial human training and supervision to link things together (Abiodun et al., 2018).
Each algorithm consists of group of nodes that are able with time to mimic human
brain in linking things that see or hear to things from previous experience. It is an
algorithm which continuously, overtime builds up new information from correlated
data (Kang et al., 2020). Neural network algorithms are mainly used in the robotics
and IT industry, and they have several other applications that will also be discussed
in this study.
Deep learning (deep neural networks) is a powerful ML technique; it is mainly
associated with supervised learning, providing the best performance for many appli-
cations (see Canziani et al., 2016). With the right architecture, it can also be applied
to unsupervised, semi-supervised, and reinforcement learning (Canziani et al.,
2016; Siar & Teshnehlab, 2019). Deep neural networks merely refer to those neural
networks that have many layers of connected neurons in sequence (Miikkulainen
et al., 2019). Unlike ML which mainly involves solving linear algorithms, deep
learning works in a hierarchical way involving the machine to make complex and
efficient decisions which require solving more complex algorithms. An application
of deep machine learning is self-driving car, virtual assistance, and many more
important applications.
For many applications, achieving the required performance will require using
neural networks (Samek et al., 2021). However, while using the most advanced
algorithm is important for the research community; factors like feasibility, perfor-
mance, and reliability are more important for policy making, applied R&D, and
operations (Pan et al., 2022). Despite the challenges of safety and reliability stan-
dards for the development, testing, and operation, ML AI systems have already been
Understanding Artificial Intelligence Through Its Applications and Concerns 139

considered safer and better performing than what they replace (Pan et al., 2020). It
is expected that with R&D and improved program management standards, ML will
also be reliably used in safety-critical and more diverse sets of applications
(Li, 2021).
Program management would be mainly concerned with whether the system uses
ML and whether the selected algorithm requires labeled data (Sener & Savarese,
2017). As system performance is directly influenced by data quantity, quality, and
representativeness, obtaining sufficient high-quality training data is one of the big
challenges in developing an operational ML AI system (Hamada et al., 2020).
Furthermore, improving organizational productivity requires taking full advantage
of the high-performing AI model’s capability by integrating the AI model into oper-
ational technology systems, changing organizational processes, and staff workflows
(Sjödin et al., 2021).

5 AI Applications

A plethora of studies using different approaches were devoted to developing a better

understanding of AI. Monett and Lewis (2018) conducted a survey administered to
400 AI experts around the world, presenting statements that define AI and asking
the participants to select the most appropriate definition. Their aim was to integrate
the different responses of professionals in the AI field and provide a better under-
standing of the concept. Borana (2016) investigated the meaning of AI by relating it
to real-world applications. However, he focused on the early roots of AI and how it
evolved using the disciplines of philosophy, logic/mathematics, computation, and
psychology/cognitive science. Recently, AI algorithms have been the central focus
of researchers in finding industrial solutions for complex engineering problems that
have been challenging in the past. Zhang et al. (2016) investigated the use of AI
algorithms in innovative applications that solve complex problems within time and
limited resource constrains. AI in all its various forms and families has applications
in almost all human activities, invading most of industries. It is taking over some of
human daily work or replacing the human intelligence in making complex risky
decisions, using deep analysis within very short time.
This study will explore some of these AI applications, where AI algorithms had
been used to build them, and how they work. The focus will be on the most rapidly
developing industries and sectors with the most innovative technological advance-
ments, namely, transportation, social media, sport, healthcare, and banking.
Technically explained below are some these AI applications in the most developing
industries of the twenty-first century.
140 H. A. Maki et al.

5.1 Artificial Intelligence in the Transportation Industry

The transportation industry is currently one of the fastest developing industries,

where AI is revolutionizing its services and products into faster, more efficient,
more reliable, and safer ones (Abduljabbar et al., 2019; Sharma & De, 2022). The
race for developing a smart electric car started more than 10 years ago with a fierce
competition between the largest car companies like Toyota, Ford, Mercedes, and
Tesla, the latter being the most advanced company in this area. AI is used in the
commercial as well as the private transportation industry. Though relatively expen-
sive at this stage, AI can automate jobs, can make decisions instead of drivers, and
is soon expected to become a standard feature in the industry (Agrawal et al., 2019;
Englund et al., 2021).
Self-Driving Vehicles Self-driving vehicles are equipped with automated driving
systems that can take care of all aspects of the driving task, which are currently
managed by a human driver, under all roadway and environment conditions (Daily
et al., 2017; Rak et al., n.d.). Self-driving vehicles have moved from the domain of
science fiction movies to become a technological reality. All the tasks performed by
the car driver such as acceleration, steering, monitoring the road, and selecting the
suitable driving mode (eco, sport, snow) are now performed using AI. Moving from
point A to point B can now be accomplished with the highest level of safety, using
the technique of deep machine learning, which utilizes a huge amount of data pro-
vided by the car sensors (e.g., approximate radar, video cameras, GPS, ultrasonic,
pressure sensors, infrared sensors). The vehicle’s AI system can make sophisticated
drive or stop decisions based on the traffic light color, distance of the car in front of
it, road speed limit and many other affecting factors. From this data, using deep
machine learning AI, cars can self-learn, analyze information, and make all the
complex decisions, outperforming the human mind and, arguably, rendering these
self-driving cars relatively safer than a manned car.
Traffic Management Traffic management is one of the most important applica-
tions of AI in the transportation industry. Without a rigged traffic management sys-
tem, there would be a high number of accidents and much wasted resources.
Chowdhury et al. (2006) investigated AI simulation models to achieve a decision
support for real-time traffic management to improve public and private transporta-
tions services. Data can be collected from traffic sensors, traffic cameras, and other
devices that are connected to the Internet of Things (IoT) platform. ML AI algo-
rithm can then be applied to this data to develop a smart traffic management system
to predict traffic pattern changes and identify congested roads. Google Maps, one of
the most advanced technologies, predict the traffic by using ML AI to analyze loca-
tion data, historical traffic patterns, and user feedback. So, for example, when a
person asks Google for the time taken to travel from point A to point B, Google
Maps uses ML AI algorithm to retrieve the stored historical data for the time taken
for a person to travel the same route and predicts the live traffic of the route. The
historical data is stored on a server in Google and continuously receives more data
Understanding Artificial Intelligence Through Its Applications and Concerns 141

from other users and learns new information. AI, using deep machine learning tech-
nique, is deployed in the self-driven vehicle because of the complexity of the task
that requires huge amount of data, fast decisions, and feedback. While real-time
traffic management uses the normal machine learning AI, it continuously learns new
information and builds up experience leading to the high potential of development
of traffic management in the coming years.
To sum up, AI has many applications in the transportation industry ranging from
self-driving vehicles, traffic management, sustainable transportation, to unmanned
cargo ships. Transportation is crucial in our daily life, and its AI applications will
continue to develop in the coming years.

5.2 Artificial Intelligence in the Social Media

and Entertainment Industry

Social media have dramatically changed in the past 10 years. Today social media
have become, through ML AI algorithms, one of the most powerful tools and sub-
stantial revenue earners for large companies like Facebook, Twitter, and Instagram.
Through social media, news spread faster at low cost and with easy accessibility
(Ozbay & Alatas, 2020). Some social media large players use AI that gathers the
large information available in their social media space to predict presidential elec-
tions in countries. There are different types of AI systems, and it is very important
to know which type of AI system describes the technology. Most social media AI
systems use the power of machine learning to develop into an automated smart vir-
tual space that can predict, recommend, and make decisions to display products or
services to match individual preferences.
Social Advertising Social advertising has become the most efficient way of influ-
encing people’s purchasing behavior; advertisement is now only a click of a finger
away from the targeted audience. Receiving the advertisement that is customized to
suit an individual’s interests is not a coincidence; it is because of the deployment of
AI by large companies to target the exact current needs of customers. Facebook,
Instagram, and YouTube are the world largest players in this field; they use AI sys-
tems to generate enormous amount of money from targeted advertisements that grab
the audience attention. Facebook relies on machine learning based on the user his-
torical use of their services to capture the most visited product item, referred to by
a simple #hashtag. These #s are stored in the user profile server and can be accessed
for several purposes. Facebook uses machine learning algorithm to accumulate all
the #hashtags that identify the user’s interest. It would then learn and predict the
advertisement’s type that would attract the user and display it in the user customized
platform, where there is a high probability that the user would click on it. Like
Facebook, Instagram uses the same ML algorithm to display customized advertise-
ments that would grab the user’s attention. In a similar manner, YouTube continues
142 H. A. Maki et al.

serving people the content and advertisements that they like to watch. There is also
a plethora of fake advertisements on social media that negatively affect the audience
as well as the service providers. Facebook uses AI to identify advertisements that
spread fake information, narrow the search by tracking the IP address of the most
common fake advertisements, and ban them automatically.
Social Content Creation and Management Social content creation and manage-
ment is the process of studying and evaluating the users of social media to come up
with a tailor-made strategy that targets all users’ interests. Today Netflix has more
than 160 million members in more than 190 countries around the world (Netflix
Research, n.d.). Netflix uses ML AI system to optimize the original movie and TV
shows production, enabling them to develop the company’s movies and TV shows
catalogue. The process is triggered automatically by the AI algorithm using proba-
bilistic graphical models that analyzes the huge data. These models and other ML
algorithms are used to predict audience size who would like to watch a particular
type of movie from the AI-generated analysis of audience preference.
AI has thus significantly changed the social media industry. It enabled producing
targeted advertisements, creating content based on audience preferences, removing
harmful and fake media and advertisement, and cleaning up the space for legitimate
information. Machine learning AI systems have become the most deployed algo-
rithms in this industry. It utilizes the huge amount of data that users provide such as
selection of videos, advertisements that they click on, websites they visit, music
they hear, and pictures they view, which are all used to continuously teach the
machine about each person’s preferences. The machine can process this data and
build up an experience which is customized with a categorized content for each
audience, and this has revolutionized the user experience and generated huge reve-
nues for the AI social media companies.

5.3 Artificial Intelligence in the Sports Industry

Sport has been transformed from a community past time to lucrative commercial
enterprises with the increasing professionalization of the game. Today sports are
characterized by fierce competitions, generating substantial amount of money for
the sport clubs and related businesses. Much research had discussed the impacts of
AI and its influence in changing the face of the sport industry. Human action recog-
nition (HAR) systems are becoming very popular in sports. Fok et al. (2018) devel-
oped a HAR project for the application in the surveillance system to minimize the
manpower for providing security to the citizens such as public safety and crime
prevention. They applied deep learning network using recurrent neural network
(RNN) with long short-term memory (LSTM) to analyze dynamic video motion of
sport actions and classify different types of actions and their performance. Their
Understanding Artificial Intelligence Through Its Applications and Concerns 143

system could classify different types of human motion with a small number of video
frames. They claimed to have achieved up to 92.9% accuracy with high potential of
further improvement. Hucaljuk and Rakipović (2011) used AI to predict the results
of football matches. Their model reached nearly 65% accuracy in performing cor-
rect predictions, and that had affected the gambling agencies. So today, AI had
become pervasive in all sports, and because the technology is becoming cheaper,
most clubs are using it.
Player Performance Player performance is the most important aspect that football
and other sports managers focus on, simply because the player is the most valuable
asset in a team formation. Understanding player performance helps managers to
know the strength and weakness of their players and focus on improving their per-
formance. Fok et al. (2018) used neural networks AI algorithms which collect data
from cameras that detect the raw posture key points in human body in real time.
These photos are then divided into many frame matrices, and the key pose positions
of the human skeleton are determined automatically using seven cameras. The neu-
ral network algorithms, using 1080-time space posture points, can then determine
the weak points of the human body. AI can also track players’ performance during
live matches. Each player’s identity could be identified during the match; using
motion and color detectors, the player’s movement and the color of his/her team can
be determined and their performance tracked. The camera detects the player’s tra-
jectories with boxes for each player as shown in Fig. 1 and using neural network
algorithm (Fok et al., 2018); each player’s capabilities and performance are evalu-
ated using the tracked statistical information collected by the camera during the
match. This valuable data helps managers in improving their players’ abilities and
advises them to decide the next match team formation.
Predicting Games Scores Predicting games scores have spread and become popu-
lar in the sports industry for fast money gains and for the adrenaline of gambling.
However, with AI, betting money on football games and races is no more considered
as gambling. Although it is difficult as there are many factors that cannot be quanti-
tatively modeled, software using combination of neural networks of live informa-
tion data about the players, ML from previous historical data about the team scores
and player performance, prediction of a game score have since become relatively
accurate. Determining the factors that have the greatest impact on the outcome is the
best possible way to have accurate prediction of the match scores. Hucaljuk and
Rakipović (2011) studied and classified 30 factors and then reduced them to 20 to
get a prediction of 65% accuracy for game scores.
To sum up, AI in the sports industry is not simple as expected. Neural network is
extensively applied in many sports industry applications, starting from player per-
formance evaluation to live tracking of players inside the field. With all its advan-
tages, some major clubs fear that AI sport applications might one day affect humans’
abilities and make them perform similarly to robots, and that would kill the excite-
ment of sport.
144 H. A. Maki et al.

Fig. 1 Bounded boxes for player tracking

5.4 Artificial Intelligence in the Healthcare Industry

With the COVID-19 pandemic in 2019, investment in AI in healthcare has boomed.

Yu et al. (2018) investigated the long history of AI in the healthcare. This started
with medicine in the mid-twentieth century, where clinical decision support systems
were developed. In 1970, AI was employed to diagnose diseases, select the appro-
priate treatment, and analyze patient’s conditions. However, at that time AI was very
expensive and not mature enough to perform these tasks automatically without
human intervention. According to Yu et al. (2018), recent AI in the healthcare indus-
try have leveraged from basic ML algorithms. The machine collects large number of
training cases of patients and identifies the common symptoms, treatment program,
and the patients’ reactions to this program. Having this information, the AI system
can diagnose the new patient’s disease and suggest the best treatment. Below are
some examples of AI application in the healthcare sector.
Genome Interpretation Terabytes of raw data are created by genome investiga-
tions. It is critical to analyze this statistic and recognize the differences between
individuals since these differences help in the selection of the most appropriate
treatment. However, because the understanding of the human genome is continu-
ously improving, it is impossible to compare a patient’s genome to known cases.
Deep neural networks outperform the traditional approaches like logistic regression
in identifying the roles of DNA. Neural network-based methods would convert the
genome to a picture that can be used to classify individuals. Also, AI employing
neural network has been used to identify complex illnesses that contain a genetic
component such as cancer. This raises the hope that one day with the aid of AI
advancement in genome, AI machines will be able to find cure to cancer and other
diseases.
Understanding Artificial Intelligence Through Its Applications and Concerns 145

Health Status Wearable Devices Health status wearable devices represented in

the modern watches and bracelets that are developed by companies such as Apple,
Samsung, and Huawei. These wearable devices have several sensors that measure
the heart rate, voice, skin temperature, and body movement. The huge data that
these watches collect from individual health records are used in AI research to iden-
tify signs of early heart attack or infectious disease. Recently these smart wearable
watches sensors have been able to detect Parkinson disease by applying machine
learning that compares an individual’s hand movement and speech patterns to previ-
ous people who were infected by the disease. The smart wearable devices have
leveraged from AI in creating value for human that changed human behavior. Smart
watches, available at affordable prices, are replacing traditional watches. People
now can track their health status from applications on their phones that continuously
measure in real time their health status and compare it with other people, analyze
the information, and trigger alarm if something is abnormal. AI ML algorithms have
made this a reality.

5.5 Artificial Intelligence in the Banking Sector

The banking sector is rapidly changing with the development of artificial intelli-
gence. Banks use AI to detect frauds and understand and track customer behavior
from their transactions in order to recommend more customized and personalized
service to enhance the customer experience. Shouval et al. (2021) investigated the
application of AI and ML in the banking industry focusing on the financial technol-
ogy that has been innovative for several years. They claimed that ML and AI tech-
nologies were taking over the banking sector and that there was nothing one can do
about it. A brief description exploring the application of AI and ML in the banking
industry is given below.
Risk Management of Credit Cards Over the past years, banks would simply
offer credit cards to individuals based on their salary, earnings, and any loans paid
back. By using AI and especially ML, banks can collect data about everyone’s habit
on repaying their loans, by analyzing thousands of records using the ML algorithms,
enabling them to recommend a sensible loan credit offering. Thanks to AI, banks
will be able to offer customized interest rates on cards and loans and hence improve
the banking business.
Personalized Banking and Automation In the banking industry today, AI appli-
cation systems record personal income, monthly costs, and spending patterns and
then make recommendations with an optimum plan and financial advice. The indus-
try leaders are currently considering robotic process automation as part of their
long-term strategy for lowering operating costs and increasing productivity through
intelligent character recognition which uses neural network algorithms that analyze
the biometrics of the customers. As such, the application of AI and ML in the bank-
ing industry can now decrease human error in high-frequency repetitive jobs.
146 H. A. Maki et al.

AI ML is redefining our relationship with money. It has offered the banking

industry a new approach to satisfy the expectations and needs of its consumers, who
want smarter, more accessible, and safer ways to access, save, spend, and invest
their money. Also, customers nowadays have realized that technology is not expen-
sive or hard to learn; and everything is now available on a smartphone.

6 Concerns and Challenges over Deploying AI

The excitement over the opportunities of deploying AI is dampened by several ethi-

cal and human rights concerns and challenges, such as bias and discrimination;
transparency, accountability, and explainability; technical accuracy; and legality
and due process (e.g., Access Now, 2018; Latonero, 2018; Hashmi et al., 2019;
Desouza, 2019; Fjeld et al., 2020; Mittelstadt et al., 2016).
Although the allure of algorithmic objectivity and neutrality is widespread, in the
context of the use of AI, empirically based concerns about bias around gender, sex,
race, and ethnicity are well documented in all aspects and walks of life (Allen,
2019; Bacchini & Lorusso, 2019; Benjamin, 2019; Gillespie, 2014; Horton, 2016).
These bias outcomes arguably result from the training data that may be incomplete,
inaccurate, or reflecting historical structural inequalities that get fed to the AI sys-
tems to train and build their algorithms. Similarly, technical accuracy can be a con-
cern with the use of AI, particularly when used in a probabilistic decision-making
or predictive manner, such as maltreatment and crime decision (Henman, 2017;
Carney, 2019). This is because, perceived as objective, these algorithmic decisions
are accepted without question.
With AI, the algorithm develops its own very complex approach to process the
input data. Hence, a key issue being investigated is creating explainable AI (Adadi
& Berrada, 2018). While not new, software development processes are increasingly
using a “privacy by design” approach (Cavoukian, 2012), whereby legal consider-
ations of data protection and privacy are built into the architecture of algorithmic
decision-making systems rather than left to the end of the product development
process. Such approaches can be made more widespread and can also be extended
to incorporate other ethical considerations in AI development (Morley et al., 2019).

7 Conclusion

Many studies are devoted to explaining AI, each having a different approach of
explaining the meaning of AI. The aim of this study is to provide a fuller, more
comprehensive understanding of the construct. Two main AI system approaches
were identified, namely, handcrafted knowledge AI and the more recent and preva-
lent machine learning AI. The study’s focus was on machine learning AI, where
most of the technological breakthroughs are taken place. Four different families of
Understanding Artificial Intelligence Through Its Applications and Concerns 147

ML algorithms were recognized based on type of data they are trained on: super-
vised learning, unsupervised learning, semi-supervised learning, and reinforcement
learning. Furthermore, deep learning (deep neural networks) algorithm was pre-
sented as a powerful ML technique that was shown to provide the best performance
for many supervised learning AI applications but can also, with some modifications,
be deployed in the other AI families. AI has further been linked to its industry appli-
cations, focusing on today’s most developing industries (transportation, social
media, sports, healthcare, and banking). It was found that most of the applications
use machine learning AI. AI applications, such as traffic management, social adver-
tisement, social content creating, predicting sport games scores, health status wear-
able devices, and risk management of credit cards, all depend on processing large
number of live and historical data, obtaining common patterns and coming up with
recommendations, predictions, or decisions.
Due to its simplicity, machine learning AI is currently the most mature AI tech-
nology and that explains the growing number of its applications in many industries.
The second most widely used AI is the neural networks; this form of AI is applied in
analyzing athletes’ performance, genome interpretation studies, and banking auto-
mation. Using sensory information such as video pictures and voice, neural networks
are designed to interpret information and link them together mimicking the biologi-
cal neurons in human brains. The rarest AI is the deep machine learning AI, deployed
in complex applications and still has not matured. The only example discussed in this
paper, self-driving vehicles; they have been technologically built and are currently
available. However, it is still subjected to security issues as it could be hacked. Deep
machine learning in self-driven cars implementation is still highly expensive tech-
nology and is subjected to machine error which possess significant safety concerns.
As a concluding statement, there is no perfect definition of AI. However, under-
standing AI applications throughout its various approaches, families, and algorithms
provides a fuller understanding of what AI is.
The prospects of AI in business and government agencies are generating consid-
erable concern about its possibilities for accountability, control, and the impact on
social relationships. The challenge is shaping and using AI to enhance and protect
social and economic objectives. To date, much of the discussion has occurred at a
highly abstract level. AI, as machine learning, represents a paradigmatic shift in
computer science and information systems possibilities. Yet, the many ways AI is
being used, or envisaged for use, is not dissimilar to non-machine learned algo-
rithms. Consequently, the ethical, legal, and social challenges are not unique to AI
but exacerbated by it. Where AI and non-AI algorithms are generating new ethical,
legal, and social challenges is in their deployment to automate current human activi-
ties (e.g., chatbots, automated vehicles) or to do things that were not previously
possible at all (e.g., make decisions in human service delivery). This continuity,
rather than disruption, is seen as beneficial as insights, experiences, and responses
of past deployment of algorithms in government and businesses can be drawn upon,
and learnings can be transferred from use of AIs in one location to another. That
said, there is still many unmet or poorly managed challenges that AI is now
highlighting.
148 H. A. Maki et al.

References

Adadi, A., & Berrada, M. (2018). Peeking inside the black-box: A survey on Explainable
Artificial Intelligence (XAI). IEEE Access, 6, 52138–52160. [Link]
ACCESS.2018.2870052
Abiodun, O. I., Jantan, A., Omolara, A. E., Dada, K. V., Mohamed, N. A., & Arshad, H. (2018).
State-of-the-art in artificial neural network applications: A survey. Heliyon, 4(11), e00938.
Abduljabbar, R., Dia, H., Liyanage, S., & Bagloee, S. A. (2019). Applications of artificial intel-
ligence in transport: An overview. Sustainability, 11(1), 189.
Access Now. (2018). Human rights in the age of artificial intelligence. [Link]
org/cms/assets/uploads/2018/11/AI-and-Human-[Link]
Adorf, C. S., Moore, T. C., Melle, Y. J., & Glotzer, S. C. (2019). Analysis of self-assembly path-
ways with unsupervised machine learning algorithms. The Journal of Physical Chemistry B,
124(1), 69–78.
Agrawal, A., Gans, J. S., & Goldfarb, A. (2019). Artificial intelligence: The ambiguous labor mar-
ket impact of automating prediction. Journal of Economic Perspectives, 33(2), 31–50.
Allen, J. A. (2019). The color of algorithms. Fordham Urban Law Journal, 46, 219–270. [Link]
[Link]/HOL/Page?handle=[Link]/frdurb46&id=234&collection=journals&index=
Alloghani, M., Al-Jumeily, D., Mustafina, J., Hussain, A., & Aljaaf, A. J. (2020). A systematic
review on supervised and unsupervised machine learning algorithms for data science. In
Supervised and unsupervised learning for data science, pp. 3–21.
Allen, G. (2020). Understanding AI technology. Joint Artificial Intelligence Center (JAIC) Report.
US Department of Defense.
Ammar, R. B., & Ayed, Y. B. (2018, October). Speech processing for early Alzheimer disease diag-
nosis: Machine learning based approach. In 2018 IEEE/ACS 15th International Conference on
Computer Systems and Applications (AICCSA) (pp. 1–8). IEEE.
Apte, C., Morgenstern, L., & Hong, S. J. (2000). AI at IBM research. IEEE Intelligent Systems and
Their Applications, 15(6), 51–57.
Bacchini, F., & Lorusso, L. (2019). Race, again. How face recognition technology reinforces racial
discrimination. Journal of Information, Communication and Ethics in Society, 17(3), 321–335.
[Link]
Benjamin, R. (2019). Race after technology. Wiley.
Berg, S., Kutra, D., Kroeger, T., Straehle, C. N., Kausler, B. X., Haubold, C., et al. (2019). Ilastik:
Interactive machine learning for (bio) image analysis. Nature Methods, 16(12), 1226–1232.
Blasch, E., Pham, T., Chong, C. Y., Koch, W., Leung, H., Braines, D., & Abdelzaher, T. (2021).
Machine learning/artificial intelligence for sensor data fusion–opportunities and challenges.
IEEE Aerospace and Electronic Systems Magazine, 36(7), 80–93.
Borana, J. (2016). Applications of artificial intelligence & associated technologies, No. March,
pp. 5–6.
Brooks, R. A. (1991). Intelligence without representation. Artificial Intelligence, 47(1–3), 39–159.
Canziani, A., Paszke, A., & Culurciello, E. (2016). An analysis of deep neural network models for
practical applications. arXiv preprint arXiv:1605.07678.
Carney, T. (2019). Robo-debt illegality. Alternative Law Journal, 44(1), 4–10. [Link]
0.1177/1037969X18815913
Cavoukian, A. (2012). Privacy by design. In G. O. M. Yee (Ed.), Privacy protection measures
and technologies in business organizations: Aspects and standards (pp. 170–208). IGI Global.
Chowdhury, M., Sadek, A., Ma, Y., Kanhere, N., & Bhavsar, P. (2006). Applications of artificial
intelligence paradigms to decision support in real-time traffic management. Transportation
Research Record, No. 1968, pp. 92–98.
Clancey, W. J. (2018). A boy scout, Toto, and a bird: How situated cognition is different from
situated robotics. In The artificial life route to artificial intelligence (pp. 227–236). Routledge.
Understanding Artificial Intelligence Through Its Applications and Concerns 149

Cohen-Mekelburg, S., Berry, S., Stidham, R. W., Zhu, J., & Waljee, A. K. (2021). Clinical appli-
cations of artificial intelligence and machine learning-based methods in inflammatory bowel
disease. Journal of Gastroenterology and Hepatology, 36(2), 279–285.
Daily, M., Medasani, S., Behringer, R., & Trivedi, M. (2017). Self-driving cars. Computer,
50(12), 18–23.
Desouza, K. C. (2019). Delivering artificial intelligence in government. IBM, Center for the
Business of Government.
Dulac-Arnold, G., Levine, N., Mankowitz, D. J., Li, J., Paduraru, C., Gowal, S., & Hester,
T. (2021). Challenges of real-world reinforcement learning: Definitions, benchmarks and anal-
ysis. Machine Learning, 110(9), 2419–2468.
Englund, C., Aksoy, E. E., Alonso-Fernandez, F., Cooney, M. D., Pashami, S., & Åstrand, B. (2021).
AI perspectives in Smart Cities and Communities to enable road vehicle automation and smart
traffic control. Smart Cities, 4(2), 783–802.
Fjelland, R. (2020). Why general artificial intelligence will not be realized. Humanities and Social
Sciences Communications, 7(1), 1–9.
Fjeld, J., Achten, N., Hilligoss, H., Nagy, A., & Srikumar, M. (2020). Principled artificial intelli-
gence: Mapping consensus in ethical and rights-based approaches to principles for AI. Berkman
Klein Center Research Publication No. 2020-1. [Link]
Fok, W. W. T., Chan, L. C. W., & Chen, C. (2018). Artificial intelligence for sport actions and
performance analysis using Recurrent Neural Network (RNN ) with Long Short-Term
Memory(LSTM).
Gillespie, T. . (2014). The relevance of algorithms. In T. Gillespie, P. J. Boczkowski, & K. A. Foot
(Eds.), Media technologies: Essays on communication, materiality, and society (pp. 167–194).
MIT Press.
Hamada, K., Ishikawa, F., Masuda, S., Myojin, T., Nishi, Y., Ogawa, H., et al. (2020, July).
Guidelines for quality assurance of machine learning-based artificial intelligence. In SEKE
(pp. 335–341).
Hashmi, A., Lalwani, R., Senatore, A., Perricos, C., & Clemancon, V. (2019). AI ethics: The next
big thing in government – Anticipating the impact of AI ethics within the public sector. https://
[Link]/docs/default-source/default-document-library/deloitte-
[Link]?sfvrsn=1acfc90b_0
Helm, J. M., Swiergosz, A. M., Haeberle, H. S., Karnuta, J. M., Schaffer, J. L., Krebs, V. E.,
Spitzer, A. I., & et al. (2020). Machine learning and artificial intelligence: Definitions, applica-
tions, and future directions. Current Reviews in Musculoskeletal Medicine, 13(1), 69–76.
Henman, P. (2017, September 6–7). The computer says’ DEBT’: Towards a critical sociology of
algorithms and algorithmic governance. Data for Policy. [Link]
WcTlEsh97IU
Horton, H. (2016, March 24). Microsoft deletes ‘teen girl’AI after it became a Hitler-loving sex
robot within 24 hours. The Telegraph. [Link]
microsofts-teen-girl-ai-turns-into-a-hitler-loving-sex-robot-wit/
Hucaljuk, J., & Rakipović, A. (2011). Predicting football scores using machine learning tech-
niques. In MIPRO 2011 - 34th International Convention on Information and Communication
Technology, Electronics and Microelectronics - Proceedings (Vol. 48, pp. 1623–1627). IEEE.
Jain, A., Patel, H., Nagalapatti, L., Gupta, N., Mehta, S., Guttula, S., … & Munigala, V. (2020,
August). Overview and importance of data quality for machine learning tasks. In Proceedings
of the 26th ACM SIGKDD International Conference on Knowledge Discovery & Data Mining
(pp. 3561–3562).
Jordan, S., Chandak, Y., Cohen, D., Zhang, M., & Thomas, P. (2020, November). Evaluating the
performance of reinforcement learning algorithms. In International Conference on Machine
Learning (pp. 4962–4973). PMLR.
Kang, J., Wang, H., Yuan, F., Wang, Z., Huang, J., & Qiu, T. (2020). Prediction of precipitation
based on recurrent neural networks in Jingdezhen, Jiangxi Province, China. Atmosphere,
11(3), 246.
150 H. A. Maki et al.

Kulagin, K., Leksashov, A., Bolsunovskaya, M., & Shirokova, S. (2021). Development of a human
flow generation module for testing machine learning algorithms. Transportation Research
Procedia, 54, 783–792.
Latonero, M. (2018). Governing artificial intelligence: Upholding human rights & dignity. https://
[Link]/wp-content/uploads/2018/10/DataSociety_Governing_Artificial_Intelligence_
Upholding_Human_Rights.pdf
Li, X. (2021). Digitalizing R&D in manufacturing sector: Machine learning, infrastructure, sys-
tem architecture and knowledge management (Doctoral dissertation, Massachusetts Institute
of Technology).
Liu, Y., Bi, S., Shi, Z., & Hanzo, L. (2019). When machine learning meets big data: A wireless
communication perspective. IEEE Vehicular Technology Magazine, 15(1), 63–72.
Lwakatare, L. E., Raj, A., Bosch, J., Olsson, H. H., & Crnkovic, I. (2019, May). A taxonomy of
software engineering challenges for machine learning systems: An empirical investigation. In
International Conference on Agile Software Development (pp. 227–243). Springer.
Maadi, M., Akbarzadeh Khorshidi, H., & Aickelin, U. (2021). A review on human–AI interac-
tion in machine learning and insights for medical applications. International Journal of
Environmental Research and Public Health, 18(4), 2121.
Mahesh, B. (2020). Machine learning algorithms-a review. International Journal of Science and
Research (IJSR) [Internet], 9, 381–386.
Maind, S. B., & Wankar, P. (2014). Research paper on basic of artificial neural network.
International Journal on Recent and Innovation Trends in Computing and Communication,
2(1), 96–100.
Miikkulainen, R., Liang, J., Meyerson, E., Rawal, A., Fink, D., Francon, O., et al. (2019). Evolving
deep neural networks. In Artificial intelligence in the age of neural networks and brain comput-
ing (pp. 293–312). Academic Press.
Mirjalili, S. (2019). Evolutionary algorithms and neural networks. In Studies in computational
intelligence (Vol. 780). Springer.
Mittelstadt, B. D., Allo, P., Taddeo, M., Wachter, S., & Floridi, L. (2016). The ethics of algo-
rithms: Mapping the debate. Big Data & Society, 3(2), 2053951716679679. [Link]
org/10.1177/2053951716679679
Mohammed, M., Khan, M. B., & Bashier, E. B. M. (2016). Machine learning: Algorithms and
applications. CRC Press.
Monett, D., & Lewis, C. W. (2017, November). Getting clarity by defining artificial intelligence—
A survey. 3rd Conference on Philosophy and Theory of Artificial Intelligence (pp. 212–214).
Springer, Cham.
Monett, D., & Lewis, C. W. P. (2018). Getting clarity by defining artificial intelligence—A survey.
In: Müller, V. (eds) Philosophy and Theory of Artificial Intelligence 2017. PT-AI 2017. Studies
in Applied Philosophy, Epistemology and Rational Ethics, vol 44. Springer, Cham. [Link]
org/10.1007/978-3-319-96448-5_21
Morley, J., Floridi, L., Kinsey, L., & Elhalal, A. (2019). From what to how: An initial review of
publicly available AI ethics tools, methods and research to translate principles into practices.
Science and Engineering Ethics, 1–28. [Link]
Mualla, Y., Najjar, A., Galland, S., Nicolle, C., Tchappi, I. H., Yasar, A.-U.-H., & Främling,
K. (2019). Between the megalopolis and the deep blue sky: Challenges of transport with UAVs
in future smart cities. In AAMAS (pp. 1649–1653).
Netflix Research. (n.d.). Available at: [Link]
Accessed 18 Dec 2021.
Ostheimer, J., Chowdhury, S., & Iqbal, S. (2021). An alliance of humans and machines for machine
learning: Hybrid intelligent systems and their design principles. Technology in Society,
66, 101647.
Osisanwo, F. Y., Akinsola, J. E. T., Awodele, O., Hinmikaiye, J. O., Olakanmi, O., & Akinjobi,
J. (2017). Supervised machine learning algorithms: Classification and comparison. International
Journal of Computer Trends and Technology (IJCTT), 48(3), 128–138.
Understanding Artificial Intelligence Through Its Applications and Concerns 151

Ozbay, F. A., & Alatas, B. (2020). Fake news detection within online social media using super-
vised artificial intelligence algorithms. Physica A: Statistical Mechanics and Its Applications,
Elsevier B.V., 540, 123174.
Pan, X., Zhao, T., Chen, M., & Zhang, S. (2020). Deepopf: A deep neural network approach for
security-constrained dc optimal power flow. IEEE Transactions on Power Systems, 36(3),
1725–1735.
Pan, X., Chen, M., Zhao, T., & Low, S. H. (2022). DeepOPF: A feasibility-optimized deep neural
network approach for AC optimal power flow problems. IEEE Systems Journal.
Panch, T., Szolovits, P., & Atun, R. (2018). Artificial intelligence, machine learning and health
systems. Journal of Global Health, 8(2).
Pei, W., Dibeklioğlu, H., Baltrušaitis, T., & Tax, D. M. (2019). Attended end-to-end architecture
for age estimation from facial expression videos. IEEE Transactions on Image Processing, 29,
1972–1984.
Pruinelli, L., & Michalowski, M. (2021). Toward an augmented nursing-artificial intelligence
future. CIN: Computers, Informatics, Nursing, 39(6), 296–297.
Rak, J., Politechnika Gdańska, Polish Association of Telecommunication Engineers, Institute of
Electrical and Electronics Engineers and IEEE Poland Section. (n.d.). Proceedings of 2017
15th International Conference on ITS Telecommunications (ITST), May 29–31, 2017, Warsaw,
Poland, pp. 1–5.
Ray, S. (2019, February). A quick review of machine learning algorithms. In 2019 International
Conference on Machine Learning, Big Data, Cloud and Parallel Computing (COMITCon)
(pp. 35–39). IEEE.
Risi, S., & Togelius, J. (2020). Increasing generality in machine learning through procedural con-
tent generation. Nature Machine Intelligence, 2(8), 428–436.
Samek, W., Montavon, G., Lapuschkin, S., Anders, C. J., & Müller, K. R. (2021). Explaining deep
neural networks and beyond: A review of methods and applications. Proceedings of the IEEE,
109(3), 247–278.
Sarker, I. H. (2021). Machine learning: Algorithms, real-world applications and research direc-
tions. SN Computer Science, 2(3), 1–21.
Sener, O., & Savarese, S. (2017). Active learning for convolutional neural networks: A core-set
approach. arXiv preprint arXiv:1708.00489.
Sevakula, R. K., Au-Yeung, W. T. M., Singh, J. P., Heist, E. K., Isselbacher, E. M., & Armoundas,
A. A. (2020). State-of-the-art machine learning techniques aiming to improve patient out-
comes pertaining to the cardiovascular system. Journal of the American Heart Association,
9(4), e013924.
Sharma, N., & De, P. K. (2022). Climate change and AI in the financial, energy, domestic, and
transport sectors. In Towards net-zero targets (pp. 1–21). Springer.
Shouval, R., Fein, J. A., Savani, B., Mohty, M., & Nagler, A. (2021). Machine learning and artifi-
cial intelligence in haematology. British Journal of Haematology, 192(2), 239–250.
Siar, M., & Teshnehlab, M. (2019, October). Brain tumor detection using deep neural network
and machine learning algorithm. In 2019 9th International Conference on Computer and
Knowledge Engineering (ICCKE) (pp. 363–368). IEEE.
Silverman, E. (2018). Making the artificial real. In Methodological investigations in agent-based
modelling (pp. 39–59). Springer.
Sjödin, D., Parida, V., Palmié, M., & Wincent, J. (2021). How AI capabilities enable business
model innovation: Scaling AI through co-evolutionary processes and feedback loops. Journal
of Business Research, 134, 574–587.
Tyagi, A. K., & Chahal, P. (2022). Artificial intelligence and machine learning algorithms. In
Research anthology on machine learning techniques, methods, and applications (pp. 421–446).
IGI Global.
Wieland, M., & Pittore, M. (2014). Performance evaluation of machine learning algorithms
for urban pattern recognition from multi-spectral satellite images. Remote Sensing, 6(4),
2912–2939.
152 H. A. Maki et al.

Yu, K. H., Beam, A. L., & Kohane, I. S. (2018). Artificial intelligence in healthcare. Nature
Biomedical Engineering, Springer US, 2(10), 719–731.
Zhang, D., Han, X., & Deng, C. (2018). Review on the research and practice of deep learning
and reinforcement learning in smart grids. CSEE Journal of Power and Energy Systems, 4(3),
362–370.
Zhang, Y., Balochian, S., Agarwal, P., Bhatnagar, V., & Housheya, O. J. (2016). Artificial intel-
ligence and its applications 2014. Mathematical Problems in Engineering, 2016.
Zhou, J., & Chen, F. (Eds.). (2018). Human and machine learning. Springer International
Publishing.
Zhou, Z., Chen, K., Li, X., Zhang, S., Wu, Y., Zhou, Y., et al. (2020). Sign-to-speech translation
using machine-learning-assisted stretchable sensor arrays. Nature Electronics, 3(9), 571–578.
Zhu, X., & Goldberg, A. B. (2009). Introduction to semi-supervised learning. Synthesis Lectures
on Artificial Intelligence and Machine Learning, 3(1), 1–130.
Fintech Adoption in Palestine: Bank
Customers’ Perspectives

Bahaa Sobhi Awwad

1 Introduction

One of the key characteristics of the human mind is creativity and innovation. A
mind whose owner does not look for everything new, or at least deal with scientific
progress positively, is considered by people as a negative mind, or that its owner is
not qualified to live in an advanced society, on the one hand, and is unable to keep
pace with the development that the world is experiencing every day, on the other
hand. The world of today is experiencing a tremendous technological revolution
that is developing constantly with an amazing speed; this revolution has affected
almost all aspects of everyday life, including financial institutions, in general, and
the banking sector, in particular (Bomod et al., 2020; Derbali, 2021).
One of the most important outputs of the current technology revolution is the
concept of Fintech, which resonated and spread quickly at the global level until it
swept over the Arab world. Fintech has originated in China, New York, London,
Singapore, and Hong Kong. It provides various, useful services to many individuals
and companies in rapid, easy, safe, and less expensive ways compared to the
traditional financial services. Fintech paves the way to achieving the desired level of
efficiency in different sectors (Bin Fadda & Bin Hassan, 2020).
In general, Al-Hafiz (2019) has postulated that Fintech is any technological
invention and/or innovations that are employed in the financial services and banking
industry; these innovations are used in this vital sector and have developed a serious
technology that competes with traditional financial markets. It is worth noting that
a lot of emerging companies have had a major role in the process of creating new
technologies. Abdul Aziz (2017) has added that Fintech represents a set of supply
and demand markets for goods and services through which companies use electronic

B. S. Awwad (*)
Palestine Technical University – Kadoorie, Tulkarm, Palestine

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 153
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
154 B. S. Awwad

applications and digital platforms to achieve communication between providers of

goods and services and their consumers and thus support trade based on demand.
According to the Reserve Bank of India (2017), Fintech is a set of financial
innovations that can produce new business models, applications, processes, or
products that directly affect financial markets, institutions, and the provision of
financial services. Fintech has created a new field that has attracted banks that
sought to increase their profits and achieve an economic position within a new world
of competing banking systems; most of these banks have extensive experience in
this field; they constantly try to create a business plan that combines software and
technology to provide a distinct variety of financial services (Abdul Rahim & Bin
Kaddour, 2018; Adeosun et al., 2023).
Among the most important sectors that financial institutions adopt in the field of
Fintech are payments and money transfers, insurance, digital financing, lending,
wealth management, and block chains and cryptocurrencies; it is worth saying that
the payments sector is the most significant sector that uses Fintech the most within
global markets.
Based on the foregoing, the technological revolution witnessed by all economic
sectors, in general, and the banking sector, in particular, has made the necessity
employing or even dealing with technology the cornerstone of all transactions in a
way that contributes to survival, growth, and continuity. The current study tries to
identify the barriers, advantages, components, and dangers or risks of adopting
Fintech in Palestine from the perspective of bank customers (Razzaque & Hamdan,
2020). This study constitutes a strong scientific basis for potential, prospective, or
future research because there is a noticeable shortage or lack of similar studies in
the Palestinian field; consequently, the current study is meant to contribute to guide
decision-makers toward the risks and barriers of Fintech in the Palestinian banking
sector from the point of view of customers.

2 Literature Review

Abad-Segura et al. (2020) conducted a study to analyze the productivity of scientific

research on Fintech worldwide during the period 1975–2019; the study findings
revealed a growing and dynamic international interest and care in scientific research
activity in the subject of financial technology at the global level. These findings
were confirmed by Sanjiv R. Das (2019) who stated that the growing field of Fintech
and various Fintech models and technologies is currently acquiring a high and
advanced position scientific research domains at the international level. Schindler
(2017) tried to answer two significant questions related to Fintech; the first question
relates to the reason for using financial technology now. In his attempt to answer
this question, Schindler stated that a lot of the technologies that support financial
technology as innovations are not new, but financial institutions and entrepreneurs
are now applying them only to improve and develop financial products and services.
The reason could be related to the tendency to analyze the rapidly moving supply
Fintech Adoption in Palestine: Bank Customers’ Perspectives 155

and demand factors; furthermore, the “traditional” financial innovation stresses its
need for a set of factors that require a large amount of cooperation. The second
question was an attempt to find out why is Fintech getting more attention than
traditional innovation. Schindler argued that this could be linked with the necessity
of activating the “depth” of innovation for financial technology. The deeper the
innovation, the greater its ability to transform and change financial services for the
better (Razzaque et al., 2020).
Accordingly, many recent studies have emerged that dealt with the merits of
Fintech from a general perspective. Hussein (2020), for example, carried out a study
which aimed to measure the impact of Fintech on economic justice. The study found
that Fintech positively affects economic growth and the process of financial
inclusion and supports and affects it whereas the principles of the liberal growth
theory negatively impact the economic justice; the study recommended the need for
governments and international organizations to focus on the appropriate use of
technology by the poorest and most marginalized people in order to achieve the
goals of economic development. Another study was conducted by Bin Fadda and
Bin Hassan (2020) to investigate and scrutinize the reality and challenges of the use
of technology in the Arab world in order to propose some solutions and suggestions
that will contribute to activating its use. The researchers concluded that the countries
of the world, such as America and China, have made great strides in this field despite
its modernity while the Arab world is still behind despite the efforts made to expand
its use. This could be attributed to the inadequacy of the economic and legal climate
and the resistance of the financial system to the changes resulting from the use of
Fintech. Therefore, Arab countries are supposed to provide the appropriate
environment to benefit from the advantages of this field.
With regard to financial institutions, the study of Purnomo and Khalda (2019)
aimed to analyze whether the impact of Fintech is good or bad on national financial
and banking institutions. The study concluded that Fintech may hinder the
development of banking business, but it may also be an opportunity that can be
exploited by the banking sector itself. It can digitize banks and encourage
engagement with Fintech. This is due to the fact that Fintech has captured a large
part of the market share of the banking industry. Another study conducted by Ngari
and Muiruri (2014) showed the extent to which the banking industry in Kenya
during the past ten years participated in financial innovations, and its transition from
traditional banking services to Fintech technologies to better meet the increasingly
complex needs of its customers. The study was guided by the following specific
objectives to determine whether credit card and banking operations, mobile phone,
and Internet banking affect the financial performance of commercial banks in
Kenya. The study results showed that financial innovations had significant impacts
on the financial performance of banks. Furthermore, Hasan (2019) carried out a
study in Sudan and sought to identify the uses of electronic banking, the reasons for
its non-proliferation, and the failure to meet the needs of customers in obtaining
electronic banking services with the required efficiency; the researcher also meant
to find out the most important barriers and risks they face. The study concluded that
banks should update and expand their electronic services and identify and prioritize
156 B. S. Awwad

the wishes as well as ambitions of customers to achieve them in order for the bank
to obtain customer satisfaction; these banks are also required to conduct marketing
campaigns to increase banking awareness with the need to focus on the security and
confidentiality elements in electronic banking services.
On the other hand, Jerene and Sharma (2020) showed that developing countries
such as Ethiopia are striving to adopt Fintech in order to modernize the financial
system. However, the acceptance of Fintech by consumers faces many challenges.
Fintech includes electronic platforms designed by bankers to allow their customers
to access financial services, mobile banking, and bank cards. The study revealed the
intent of bank customers to positively adopt Fintech; it also revealed customers’
awareness toward subjective standards and the perceived usefulness of these
technologies. Purba et al. (2019) also attempted to develop a framework for assessing
Fintech adoption in a number of Indonesian companies and banks. The study
emphasized that the emergence of technology-assisted innovations in financial
services has resulted from the confluence of ambitions and customer preferences,
particularly among millennials and digital native citizens regarding the convenience,
speed, and cost of increasingly needed financial services. The results indicate that
Fintech represented by modern technologies, especially those related to the Internet,
large data, mobile technology, and computing power, has become the engine of
innovations in financial services. There are also many business opportunities that
have allowed new entrants in the financial sectors to use IT collaboration systems.
Within the Islamic banking domain, Bomod et al. (2020) meant to shed some
light on the positive impact of Fintech innovations on developing the performance
of Arab Islamic banks; Fintech technologies and innovations enable banks to easily
introduce their financial products and provide their services with efficiency and high
quality, which is positively reflected on their competitiveness in various financial
markets. The study concluded that Arab Islamic banks have gained great
achievements especially those which relate to the wide spread of these banks in
various Arab countries, the continuous development in their work, and their tireless
quest to avoid past mistakes, look forward to future developments, as well as face
the challenge of applying Fintech innovations due to the specificity of these Islamic
banks as they are supposed to handle or deal with their customers in accordance
with the Islamic laws. In another study carried out by Al-Amrawi (2019), the
researcher aimed to find out the extent to which Fintech platforms can be used as a
means to promote the growth of the Islamic financial industry; the researcher
conducted a case study of the Nasdaq Dubai CSD Murabaha platform with the aim
of demonstrating its importance in promoting Islamic finance through managing the
liquidity of Islamic banks and promoting the growth of the Islamic Sukuk market on
Nasdaq Dubai. The study concluded that the Nasdaq Dubai Murabaha platform
efficiently manages the liquidity of Islamic banks while enhancing the activity of
listing sukuk on the Nasdaq Dubai stock exchange, which led to an increase in
demand from local and international investors and consequently the growth of the
size of the sukuk market. The study recommended Islamic banks to manage their
liquidity through the Nasdaq Dubai Murabaha platform to take advantage of its
components, on the one hand, and to avoid legal violations of transactions on the
Fintech Adoption in Palestine: Bank Customers’ Perspectives 157

London Metal Exchange, on the other hand. It also took up a study by Bilal Khan,
M., Ahmad Ghafoorzai, S., Patel, I., and Mohammed Shehbaz, D. (2021) that
addresses major challenges and financial problems faced by Indonesian farmers.
Inadequate level of working capital and inability to access funding sources constitute
major constraints to the agricultural sector. It proposes a new financing solution: the
waqf-based Islamic Fintech model to fund farmers’ long-term and short-term
projects. The study is based on a qualitative approach. The study concludes to
important recommendations. The adoption of an integrated Waqf-based Islamic
Fintech model, which provides halal financing alleviates Indonesian farmers’
problems in rural areas.
With regard to emerging companies, Abdul Rahim’s study (2018) presented a
modern concept related to the field of Fintech that attracts emerging companies,
which are now competing with other financial institutions and banks especially by
adopting software and technology to provide a distinguished variety of financial
services. The study findings showed that the emerging companies face a number of
barriers and difficulties such as the security and confidentiality of information and
deceptive electronic transactions, in addition to legalizing and diverting the loyal
customer’s behavior to traditional institutions and trying to attract him. The
researcher also found that despite the failure of all emerging companies to replace
banks, they still posed a threat to the existence of a segment of customers who long
for technology and digital use, especially after they have gained a lot of support by
the largest universal institutions around the world such as Facebook.
In light of the growing interest in Fintech and its technical applications, it was
necessary to address the barriers, advantages, components, and risks of adopting
Fintech in Palestine from the perspective of bank customers in order to try to come
up with appropriate recommendations that support the decisions of these banks.

3 Study Methodology

3.1 Study Population and Sample

The researcher of the current study adopted the descriptive approach to describe the
study sample and its variables, in addition to the analytical approach in order to
identify the barriers, advantages, components, and risks of adopting Fintech in
Palestine from the perspective of bank customers. The study population consisted of
customers of the largest Palestinian banks including the Arab Bank, Bank of
Palestine, and Palestine Islamic Bank. The study was conducted on a random sample
of (500) customers of commercial and Islamic banks that make up the study
population. Table 1 below shows the distribution of the study sample based on the
various study demographic variables.
158 B. S. Awwad

Table 1 Distribution of the study sample based on demographic variables

Sample distribution based on demographic variable
Variable Frequency Percentage
Distribution based on gender
Male 356 71%
Female 144 29%
Distribution based on age
Less than 30 years 91 18.20%
Between 30–40 years 289 57.80%
More than 40 years 120 24.00%
Distribution based on city
Tulkarm 125 25%
Nablus 125 25%
Ramallah 125 25%
Qalqilyah 125 25%
Distribution based on bank
Arab Bank 125 25%
Bank of Palestine 125 25%
Arab Islamic Bank 125 25%
Palestine Islamic Bank 125 25%
Distribution based on educational level
Diploma or less 81 16%
Bachelor degree 297 59%
Higher Studies 122 24%
Total 500 100%

3.2 Study Questions

The current study aimed to identify the adoption of Fintech in Palestine from the
perspective of bank customers. To achieve this goal, the main question of the study
can be formulated as follows:
What are the dimensions of Fintech adoption in Palestine from the perspective of
bank customers?
To answer the main question, the researcher raised a number of sub-questions
which appear as follows:
–– What are the barriers the use of Fintech face from the perspective of Palestinian
bank customers?
–– What are advantages of using Fintech from the perspective of Palestinian bank
customers?
–– What are components of using Fintech from the perspective of Palestinian bank
customers?
–– What are the dangers or risks of using Fintech from the perspective of Palestinian
bank customers?
Fintech Adoption in Palestine: Bank Customers’ Perspectives 159

–– Are there differences in the adoption of Fintech in Palestine from the perspective
of bank customers that could be attributed to the demographic variables?

3.3 Study Tool

In this study, the researcher used a questionnaire which was developed to suit the
purpose of the study; the five-point Likert scale was used, so that each answer was
given relative importance. The validity and reliability of the tool were measured as
follows:

3.3.1 Validity of the Tool

The study tool was given to a group of specialized arbitrators. The arbitrators were
asked to express their opinion on the paragraphs of the questionnaire in terms of the
formulation of the paragraphs, and their suitability for the field in which they were
placed, either by approving, modifying their wording, deleting them for lack of
importance, or adding new paragraphs. The opinion of the majority of the arbitrators’
committee members was taken into consideration in the arbitration process, and
thus the validity of the content of the questionnaire was achieved. For more
information about the study tool in its final form.

3.3.2 Reliability of the Tool

The reliability coefficient of the tool has been extracted using Cronbach’s alpha
equation. Table 2 below shows the reliability coefficients of the study tool and
its fields.
It is clear from Table 2 that the validity of the various fields of the survey para-
graphs ranges between 0.704 and 0.746, where the total stability is 0.718, which
makes it suitable and applicable for scientific research purposes as recommended
for use by other economic and human studies; this means that the validity of the
study tool is universally accepted.

Table 2 Cronbach’s alpha coefficient

Variable Number of paragraphs Cronbach’s alpha coefficient
Barriers of using Fintech 5 0.705
Advantages of using Fintech 5 0.704
Components of using Fintech 5 0.746
Danger or risks of using Fintech 5 0.719
Adoption of Fintech 20 0.718
160 B. S. Awwad

4 Analysis of the Study Questions

To determine the paragraphs, arithmetic means and standard deviations were calcu-
lated, and consequently, the total score was determined; the results in the subse-
quent tables will show this. In order to interpret the results, means were calculated
as follows:

Relative importance Mean

High degree 3.67–5
Medium degree 2.34–3.66
Low degree 1–2.33

4.1 Analysis of the Relative Importance of the Dimensions

of Using Fintech

Table 3 shows the relative importance of the paragraphs/items of barriers of finan-

cial technology were high as the arithmetic mean was 3.686; the paragraph that
relates to “ A preference for traditional banking operations over the use of electronic
services” got the highest rank with an arithmetic mean of 3.79 and a standard
deviation of 0.809. The paragraph “One feels lack of confidence in electronic
banking transactions or operations” got the lowest rank with an arithmetic mean of
3.41 and a standard deviation of 0.931. This indicates that there were real barriers
that hinder the use and the adoption of financial technology in Palestine.
Table 4 shows the relative importance of the paragraphs related to the advantages
of using Fintech. It is clear from the table that the score was low as the mean is 2.22;

Table 3 Mean, standard deviation, and the relative importance of the barriers of using Fintech
Paragraph Standard Relative
No. Paragraph Means deviations Rank importance
1 One feels lack of confidence in 3.41 0.931 5 High
electronic banking transactions and
operations
2 The cost of electronic banking 3.69 1. 0.683 2. 3 Medium
services is considerably high
3 There is not enough technical 3.76 3. 0.695 4. 4 High
infrastructure in Palestine
4 A preference for traditional banking 5. 6. 0.809 7. 1 High
operations over the use of electronic 3.79
services
5 There is a slowdown in Internet 8. 9. 0.912 10. 2 High
services by providers, which affects 3.78
use of financial technology
Barriers of using Fintech 3.686 0.432 High
Fintech Adoption in Palestine: Bank Customers’ Perspectives 161

Table 4 Mean, standard deviation, and the relative importance of the advantages of Fintech
Paragraph Standard Relative
no. Paragraph Means deviations Rank importance
6 There is ease in using electronic 2.21 0.961 2 Low
banking services
7 There is speed in obtaining the 2.1 0.878 3 Low
electronic banking service
8 The electronic banking service is 2.07 0.889 4 Low
available around the clock
9 The electronic banking service is 1.97 1.134 5 Low
implemented anywhere
10 The electronic banking service 3.92 1.021 1 Low
reduces transaction costs
Advantages of using Fintech 2.22 0.769 High

Table 5 Mean, standard deviation, and the relative importance of the components of Fintech
Paragraph Standard Relative
no. Paragraph Means deviations Rank importance
11 Government and financial institutions 2.15 0.894 2 Low
seek to provide basic infrastructure
12 There are videos and brochures 2.11 0.894 3 Low
guiding customers on how to use
electronic banking services
13 There must be exemptions for 3.12 0.826 1 Medium
electronic banking services from any
fees so that they become free
14 Your bank’s website is constantly 1.87 0.979 4 Low
improving
15 There are laws and legislations that 1.69 1.07 5 Low
promote working in electronic
banking services
Components of using Fintech 2.188 0.730 Low

and the paragraph “The electronic banking service reduces transaction costs” was
considered the first and its mean is 3.92 and standard deviation is 1.021. As for the
paragraph “The electronic banking service is implemented anywhere,” it got the last
rank with a mean as 1.97 and a standard deviation as 1.134.
Table 5 shows the relative importance of the paragraphs that relate to the compo-
nents of financial technology; it had a low score with a mean of 1.69. The paragraph
that states “There must be exemptions for electronic banking services from any fees
so that they become free” was ranked first with an arithmetic mean of 3.12 and a
standard deviation of 0.826. As for the paragraph “there are laws and legislations
that promote working in electronic banking services,” it got the last rank with an
arithmetic mean of 1.69 and standard deviation of 1.07.
Table 6 shows the relative importance of the paragraphs that relate to the risks
and dangers of using financial technology; it was high with a mean of 3.74. The
162 B. S. Awwad

Table 6 Mean, standard deviation, and the relative importance of the dangers and risks of Fintech
Paragraph Standard Relative
no. Paragraph Means deviations Rank importance
16 The risks of dealing with electronic 3.57 0.891 5 High
banking services are high
17 The degree of security in electronic 3.77 0.882 3 High
banking services is low
18 There is a possibility that the privacy 3.78 0.862 2 High
of the bank’s customers may be
breached by a third party
19 There are no clear laws to protect 3.89 0.997 1 High
banking dealings with electronic
services
20 There is a fear that the bank will take 3.69 1.11 4 High
advantage of the lack of paper copies
and deduct commission amounts from
customers
Dangers and risks of using Fintech 3.74 0.739 High

Table 7 Mean, standard deviation, and the relative importance of adopting financial technology
Dimension Mean Standard deviation Rank Relative importance
Barriers to using Fintech 3.68 0.432 2 High
Advantages of using Fintech 2.22 0.769 3 Low
Components of using Fintech 2.18 0.730 4 Low
Dangers and risks of using Fintech 3.74 0.739 1 High
Using or adopting Fintech 2.95 0.557 Medium

paragraph “There are no clear laws to protect banking dealings with electronic
services” was ranked first with an arithmetic mean of 3.89 and a standard deviation
of 0.997. The paragraph “The risks of dealing with electronic banking services are
high” got the last rank with an arithmetic mean of 3.57 and a standard deviation
of 0.891.
Table 7 shows the relative importance of the dimensions of adopting and using
financial technology in Palestine. All of them came in a medium degree with a mean
of 2.95 and a standard deviation of 0.557. The results show that the financial
technology risk dimension was in the first place with an arithmetic mean of 3.74 and
a standard deviation of 0.739, while the components of financial technology
dimension was ranked last with a mean of 2.18 and a standard deviation of 0.730.
To answer the question: Are there differences in the adoption of financial tech-
nology in Palestine from the perspective of bank customers based on demographic
variables? The following tables show the results of the t-test and one-way analysis
of variance (ANOVA) to indicate the adoption of financial technology according to
the demographic variable (gender, age, city, bank, and educational level).
Fintech Adoption in Palestine: Bank Customers’ Perspectives 163

Table 8 T-test results for adopting and using Fintech based on gender variable
Male (n = 365) Female (n = 144) t. p.
Mean Standard deviation Mean Standard deviation 1.087 0.844
3.79 0.214 3.72 0.297

Table 9 Numbers, means, and standard deviations for the adoption of financial technology in
Palestine based on the age variable
Age Number Means Standard deviations
Less than 30 years 91 3.79 0.239
Between 30–40 years 289 3.79 0.156
More than 40 years 120 3.71 0.177

Table 10 One-way analysis of variance (ANOVA) for the adoption of financial technology in
Palestine based on the age variable
Source of variance Df Mean square SS F P
Between groups 2 0.138 0.069 0.290 0.748
Among groups 484 115.15 0.238
Total 486 115.288

Table 11 Numbers, means, and standard deviations for the adoption of financial technology in
Palestine based on the city variable
City Number Means Standard deviations
Tulkarm 125 3.78 0.179
Nablus 125 3.61 0.393
Ramallah 125 3.86 0.242
Qalqilyah 125 3.69 0.652

It is evident from Table 8 that there are no statistical differences for the adoption
of financial technology in Palestine based on the gender variable, because the total
degree of the calculated significance level (p = 0.844) is higher than 0.05 (Table 9).
It is clear from Table 10 that there are no differences for the adoption of financial
technology in Palestine based on the age variable because the significance level
is 0.748.
It is clear based on the results shown in Table 11 above that there are differences
among respondents’ perspectives toward adopting Fintech in Palestine based on the
city variable. To find out whether these differences were significant or not, ANOVA
was carried out.
It is clear from Table 12 that there are statistically significant differences at the
significance level (a ≤ 0.05) in the averages of financial technology adoption in
Palestine based on the city variable. This is because the significance level is 0.018.
It is evident from Table 13 that there is a difference in the averages of financial
technology adoption in Palestine, in favor of the city of Ramallah compared to other
cities in the overall field (Table 14).
164 B. S. Awwad

Table 12 One-way analysis of variance (ANOVA) for the adoption of financial technology in
Palestine based on the city variable
Source of variance Df Mean square SS F P
Between groups 3 3.135 1.045 7.987 0.018
Among groups 492 269.402 0.546
Total 495 272.536

Table 13 LSD dimensional comparison analysis

Tulkarm Nablus Ramallah Qalqilyah
Tulkarm 0.16 −0.08 0.02
Nablus −0.16 −0.25* 0.13
Ramallah 0.08 0.25 0.09
Qalqilyah 0.02 0.13 0.09
Means significant at the level (a ≤ 0.05)
*

Table 14 Numbers, means, and standard deviations for the adoption of financial technology in
Palestine based on the bank variable
Bank Number Means Standard deviations
Arab Bank 125 3.25 0.178
Bank of Palestine 125 3.88 0.168
Arab Islamic Bank 125 3.18 0.198
Palestine Islamic Bank 125 3.87 0.173

Table 15 One-way analysis of variance (ANOVA) for the adoption of financial technology in
Palestine based on the bank variable
Source of variance Df Mean square SS F P
Between groups 3 0.114 0.038 0.160 0.923
Among groups 483 115.174 0.238
Total 486 115.288

It is clear from Table 15 that there are no differences for the adoption of financial
technology in Palestine based on the bank variable because the significance level
is 0.923.
It is clear based on the results shown in Table 16 above that there are differences
among respondents’ perspectives toward adopting Fintech in Palestine based on the
educational level variable. To find out whether these differences were significant or
not, ANOVA was carried out.
It is clear from Table 17 that there are statistically significant differences at the
significance level (a ≤ 0.05) in the averages of financial technology adoption in
Palestine based on the educational level variable. This is because the significance
level is (0.007).
It is evident from Table 18 that there is a difference in the averages of financial
technology adoption in Palestine, in favor of holders of the bachelor degree
compared to other educational levels in the overall field of the study.
Fintech Adoption in Palestine: Bank Customers’ Perspectives 165

Table 16 Numbers, means, and standard deviations for the adoption of financial technology in
Palestine based on educational level variable
Bank Number Means Standard deviations
Diploma or less 81 3.81 0.211
Bachelor degree 297 3.69 0.286
Higher studies 122 3.74 0.165

Table 17 One-way analysis of variance (ANOVA) for the adoption of financial technology in
Palestine based on the educational level variable
Source of variance Df Mean square SS F P
Between groups 2 0.233 0.116 9.876 0.007
Among groups 484 115.055 0.238
Total 486 115.288

Table 18 LSD dimensional comparison analysis

Diploma or less Bachelor degree Higher studies
Diploma or less 0.12 0
Bachelor degree −0.12 0
Higher studies 0 0
Means significant at the level (a ≤ 0.05)
*

5 Discussion, Recommendations, and Future Studies

The aim of the study was to show the extent to which financial technology is adopted
in Palestine from the perspective of bank customers; the researcher meant to do so
by analyzing the dimensions represented by barriers or obstacles, advantages,
components, and risks of adopting Fintech from the perspective of the customers of
the four most important commercial and Islamic banks in Palestine. The results
concluded that the level of total adoption of financial technology in Palestine is
medium; furthermore, the results showed a high relative importance of two
dimensions, i.e., barriers and risks especially with regard to the preference of
traditional banking operations and transactions over the use of electronic services,
due to the fact that there are no clear laws that help to protect banking dealings with
electronic services. The researcher believes that the risks and the general culture of
not accepting everything that is new, especially in an environment characterized by
instability such as the Palestinian environment, may be reflected in the adoption of
financial technology (Fintech). The researcher also noticed that the relative
importance of the two dimensions of the advantages and components of financial
technology was low despite the reduction in transaction costs by exempting
electronic banking services from any commissions and/or fees. The researcher
believes that the average/medium level of financial technology adoption in Palestine
could be attributed to the balance between barriers and risks, on the one hand, and
the advantages and components, on the other hand.
166 B. S. Awwad

With regard to demographic variables, the study found that there are no differ-
ences in the adoption of financial technology in Palestine that could be attributed to
the variables of gender, age, and bank, while there are differences attributed to the
city and educational level variables. The researcher believes that the competitive
banking environment in Palestine worked to create a general convergence in elec-
tronic services between banks for the two genders irrespective of their ages, while
the large cities that have strong and large commercial and financial influence have
sought to adopt financial technology in banking transactions due to its low costs and
high speed. Furthermore, the high educational level of the study respondents reflects
a greater level of knowledge of the Fintech system used in the banking industry; it
also helps keep pace with the rapid developments.
Based on the foregoing results, the study recommends that banks should enhance
the confidence of their customers in electronic banking services by providing an
adequate technical infrastructure to motivate and hasten the adoption of financial
technology in Palestine. In addition, the various bank managements are required to
set and develop strategic plans that aim to educate customers about financial
technology and electronic banking services. There is also an urgent need to develop
laws and legislations that contribute to strengthening the legal process of electronic
transactions while working to provide high levels of security in electronic banking
services.
Finally, this study presented a general picture of the adoption of financial tech-
nology in Palestine from the perspective of bank customers. Since financial technol-
ogy has become of increasing global interest, future studies – especially those that
may be conducted in the Palestinian arena – should deepen the research about the
various aspects of Fintech by focusing on electronic service providers in financial
institutions, other sectors, and emerging companies in the field of financial technol-
ogy. Finally, future studies are likely to discuss the major challenges that may hin-
der the complete adoption as well as implementation of Fintech in Palestine.

Acknowledgements The author is thankful to Palestine Technical University—Kadoorie for

funding this research.

References

Abad-Segura, E., González-Zamar, M.-D., López-Meneses, E., & Vázquez-Cano, E. (2020).

Financial technology: Review of trends, approaches and management. Mathematics, 8(6), 951.
[Link]
Abdul Aziz, S. (2017). The growing economy of sharing via digital platforms. Itijahat Al-Ahdaath:
Future for Studies and Advanced Research, 1(19), 66–69. Retrieved from: [Link]
com//media/gigeconomy_cf8f1148-2670-4d38-b87e-[Link]
Abdul Rahim, W., & Bin Kaddour, A. (2018). The trends of financial technology in the light of
successful companies’ experiences. Al-Ijtihad for Economic and Legal Studies Review, 7(3),
11–35. Retrieved from: [Link]
Adeosun, O. T., Shittu, A. I., & Ugbede, D. (2023). “Disruptive financial innovations: the case of
Nigerian microentrepreneurs”, Journal of Business and Socio-economic Development, 3(1).
17–35. [Link]
Fintech Adoption in Palestine: Bank Customers’ Perspectives 167

Al-Amrawi, H. (2019). The financial technology platforms as a mechanism to enhance the growth
of Islamic financial industry: A case study: NASDAQ Dubai Murabaha platform. Journal of
Investment and Strategy, 9(3), 343–363. Retrieved from: [Link]
BIM-903552
Al-Hafiz, H. (2019). What is Financial Technology? The Arab Academy for Banking and Financial
Sciences, 26(1), 58–59. Retrieved from: [Link]
Bin Fadda, W., & Bin Hassan, H. (2020). The reality of using Fintech in the Arab World. The
Journal of Administrative and Financial Sciences, 4(3), 111–130. Retrieved from: https://
[Link]/en/article/140111
Bomod, I., Awatif, M., & Shafyeh, S. (2020). The positive impact of financial technology innova-
tions in the development of Arab Islamic bank. Roa Iktissadia Review Algeria, 10(1), 333–384.
Retrieved from: [Link]
Das, S. R. (2019). The future of fintech. Financial Management Association International, 48(4),
981–1007. [Link]
Derbali, A. (2021). “Determinants of the performance of Moroccan banks”, Journal of
Business and Socioeconomic Development, 1(1). 102–117. [Link]
JBSED-01-2021-0003
Hasan, A. F. A. (2019). Banking and financial technology: A case study of Sudanese banks for
the period 2000-2018. The Arab Academy for Banking and Financial Sciences, 26(1), 44–51.
Retrieved from: [Link]
Hussein, R. A. M. (2020). The impact of financial technology on economic justice. Scientific
Journal of Economy and Trade, Ain Shams University, Egypt, 8(4), 473–522. Retrieved from:
[Link]
Jerene, W., & Sharma, D. (2020). The adoption of financial technology in Ethiopia: A study of
bank customers’ perspective. Journal of Banking and Financial Technology, 4(1), 53–63.
Retrieved from:. [Link]
Ngari, J., & Muiruri, J. (2014). Effects of financial innovations on the financial performance of
commercial banks in Kenya. International Journal of Humanities and Social Science, 4(7),
51–57. Retrieved from: [Link]
Purba, J. T., Tan, J. D., & Widjaya, A. E. (2019). Financial technology as an innovation strategy
for digital payment services in the millenial generation. Education and Humanities Research,
292(1), 364–373. [Link]
Purnomo, H., & Khalda, S. (2019). Influence of Financial Technology on National Financial
Institutions. IOP Publishing, 662(2), pp. 1–7. Retrieved from: [Link]
article/10.1088/1757-899X/662/2/022037/pdf
Razzaque, A., Hamdan, A. (2020). Role of financial technology FinTech: A survey. In: Hassanien,
A. E., Azar, A., Gaber, T., Oliva, D., Tolba, F. (eds) Proceedings of the International Conference
on Artificial Intelligence and Computer Vision (AICV2020). AICV 2020. Advances in
Intelligent Systems and Computing, vol 1153. Springer, Cham. [Link]
3-030-44289-7_11
Razzaque, A., Cummings, R., Karolak, M., & Hamdan, A. (2020). The Propensity to Use FinTech:
Input from Bankers in the Kingdom of Bahrain. Journal of Information & Knowledge
Management, 19(01), 2040025.
Reserve Bank of India. (2017). Group on fintech and digital banking Reserve Bank of India.
Report of the Working. Retrieved from: [Link]
Pdfs/WGFR68AA1890D7334D8F8F72.
Schindler, J. (2017). Fintech and financial innovation: Drivers and depth. Finance and economics
discussion series. : Board of Governors of the Federal Reserve System, pp. 1–16. Retrieved
from: [Link]
Success Factors of Using Artificial
Intelligence

Shahad Omar Al Hleewa and Muneer Al Mubarak

1 Introduction

The introduction of new information technology has caused a considerable number

of firms to adjust, modify, or create entirely new business models. The most
prominent manifestation of this trend is in conventional brick-and-mortar firms,
which are increasingly depending on information technology to meet the demands
of their customers (Buder et al., 2019). In general, technological innovation has far-
reaching consequences; but there is a substantial body of work that demonstrates
that artificial intelligence (AI) may have a significant influence on companies (e.g.,
Nortje & Grobbelaar, 2020). There are a variety of reasons why artificial intelligence
is getting so much attention. Increasing computer capabilities are becoming
accessible, allowing enterprises to make use of the promise of artificial intelligence.
It has been practical to use algorithms, such as artificial neural network algorithms
or genetic algorithms, in particular, because of the abundant availability of “big
data” (Chen et al., 2012, 2005). As a result, artificial intelligence-based products are
becoming increasingly ubiquitous as they are integrated into widely used software
solutions such as Netflix (for movie recommendations), Amazon (for product
suggestions), Facebook (for friend suggestions), and Google (for personalized
advertising) (Adadi & Berrada, 2018). Even though there are several advantages to
using artificial intelligence-based technologies, there are still significant challenges
that prohibit enterprises from applying them. One explanation for this is that many

S. O. Al Hleewa
The George Washington University, Washington, DC, USA
e-mail: info@[Link]
M. Al Mubarak (*)
College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 169
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
170 S. O. Al Hleewa and M. Al Mubarak

organizations are still in the early stages of implementing artificial intelligence and
are thus mainly focused on acquiring information. Furthermore, several obstacles
make it difficult for enterprises to implement AI technology. While prior literature
has addressed this problem and suggested various research that study (success)
elements that influence the adoption of artificial intelligence, there is still a major
gap in terms of a unified approach on the subject. Because of this gap, it is difficult
for academics to create a theoretical viewpoint on the use of artificial intelligence.
Furthermore, enterprises cannot be appropriately educated about essential elements
that should be taken into account to improve their AI-related activities.
For this research, a systematic analysis of success variables that have been estab-
lished in the context of artificial intelligence adoption will be provided. Our contri-
bution is twofold: first, we provide an overview that assists scholars in expanding
their theoretical perspective on success factors for the adoption of artificial intelli-
gence by integrating the results of several previous studies; and second, we provide
recommendations for future research. Second, our findings are useful to practitio-
ners who are looking for an overview of essential elements to consider while using
artificial intelligence.

2 Literature Review

Even though artificial intelligence (AI) has received a great deal of attention in both
academia and business, there is still no consensus on what AI is. For starters, since
the phrase is used in a variety of domains such as philosophy (Müller, 2013), biology
(Yu et al., 2018), and information systems research, it is a good fit for this context
(Nascimento et al., 2018). As a result, the phrase is employed in a variety of contexts
and with a variety of tastes. Furthermore, there are several comparable and related
phrases, such as “machine intelligence” and “intelligent systems,” that are often
used as synonyms for one another. The last point to mention is that academic
arguments on artificial intelligence stretch back to at least the summer of 1956 when
the first thoughts on the subject were addressed at the Dartmouth Summer Research
Project on Artificial Intelligence (McCarthy et al., 2006). Since then, both technical
improvements and the definition of the word have undergone substantial evolution.
As a result, we may discover several alternative definitions of artificial intelli-
gence in the literature. While there is no universally accepted definition of artificial
intelligence in the literature, there is a growing consensus that AI is a wide (Russell
& Norvig, 2003) and multi-dimensional notion (Brachman, 2006). Furthermore, we
can find similar features that appear in a number of different definitions. Despite the
fact that these topics are not capable of defining all parts of the word, they do assist
in better understanding the major features of AI and how they may be separated
from other technologies. As a result, we will briefly discuss five issues that have
been explored in earlier work starting with identifying and solving complicated
challenges. Scholars of artificial intelligence have recognized the potential of
artificial intelligence approaches to address complicated issues from the inception
Success Factors of Using Artificial Intelligence 171

of the field. For example, Minsky (1988) defines intelligence as the capacity to do
challenging activities successfully and efficiently. Kasemsap (2017) takes a step
further and identifies artificial intelligence as a discipline of research that is
concerned with assisting robots in the discovery of acceptable answers to
complicated situations.
Today, we can discover several instances of artificial intelligence (AI) being used
to tackle issues that could not previously be addressed. The chess skills of IBM
Watson (Hsu, 1999); Google’s AI AlphaGo, which beat the world’s top Go player
(Wang et al., 2016); and modern warning systems connected to COVID-19 based on
camera systems are also notable instances (Dananjayan & Raj, 2020). Processing
that is similar to that of a human. Many artificial intelligence systems are based on
procedures that are connected to human decision-making. Using the human brain as
a template, for example, neural networks may be constructed (Bogdanov et al.,
2017; Jain et al., 1996), which, when combined with increased processing capacity,
enables them to solve complicated issues.
As a result, it should come as no surprise that Kurzweil (1990) defines artificial
intelligence as the art of building machines that do activities that would otherwise
need human intellect. In a similar vein, Rich and Knight (1991) think that artificial
intelligence needs computers to do tasks with the same level of intelligence as
humans. Furthermore, they believe that the ultimate objective of AI research is to
figure out how to program computers to do tasks that humans are now superior at.
The extent to which one is intelligent. In addition to the ability to solve complicated
problems, several definitions of artificial intelligence relate to the level of intellect
that has been attributed to it.
To put it another way, many people believe that artificial intelligence is an essen-
tial prerequisite for a technology to be labeled as artificial intelligence. For example,
Nilsson (2009) describes artificial intelligence as a field of study concerned with the
development of intelligent machines. In addition, he considers intelligence to be the
property that permits an entity to act effectively and predictably in its own context,
according to his definition. Russell and Norvig (2003)) go so far as to suggest that
artificial intelligence is composed of a number of concepts such as “machine intel-
ligence,” “intelligence agents,” “intelligent systems,” and “algorithms,” all of which
are necessary to describe the topic. In more recent years, the phrase “ambient intel-
ligence” has been created to represent a digital environment that proactively assists
humans and is based on artificial intelligence (Ramos et al., 2008).
Examples include the brain intelligence model, which mixes artificial intelli-
gence with artificial life with the goal of developing a superintelligence brain model
that can find issues on its own and autonomously enhance its capabilities in the
future (Lu et al., 2020). The emphasis is on technology. AI is closely intertwined
with technology in a way that is similar to the degree of intelligence. As a result, the
term artificial intelligence (AI) implies that some kind of technology is involved. As
a result, many definitions are quite specific about this element of their meaning. For
example, according to Schalkoff (1990), artificial intelligence is a branch of study
that seeks to explain and replicate intelligent behavior via the use of computing
processes.
172 S. O. Al Hleewa and M. Al Mubarak

The technological factor is also brought to the fore by Alsheibani et al. (2020);
they define artificial intelligence (AI) as a collection of tools and technologies that
have the power to enhance and increase the performance of organizations. Notably,
many writers are quite vague about the sort of technology they are referring to,
leaving it unclear if they are referring to a single piece of software, a set of algorithms,
or a mix of these.
As shown by AI landscapes, there has been a surge in the application of technol-
ogy in the area of artificial intelligence in the industry (Turk, 2020). Handling of
external data is included. The usage and treatment of external data is the subject of
the last topic. In contrast to conventional technologies, artificial intelligence (AI)
systems often relies on external information acquired from the surrounding
environment.
A great focus has been placed on this element by Schäfer et al. (2021), who argue
that artificial intelligence is capable of reading external input and learning from that
data so that it may accomplish previously established objectives and activities.
Crowston and Bolici (2019)) describe artificial intelligence as an application that
learns to make judgments based on incoming data rather than depending on a set of
rules that are clearly stated in the beginning. Current breakthroughs in autonomous
driving have significantly increased the maturity of the technology, allowing for the
reduction of human driver effort while simultaneously increasing the safety of the
technology (Muhammad et al., 2020). Table 1 presents a summary of the topics that
were analyzed. For each subject, we have included examples from the artificial
intelligence area that serve as illustrations for the theme in question.

Table 1 Existing definitions of AI

Theme Representative definition Al examples
Solving “Intelligence … means … the abilky to solve hard IBM Watson (Hsu, 1999),
complex problems.” (Minsky, 1988, p. 70) AlphaGo (Wang et al.,
problems 2016) COVID-19
(Dananjayan & Raj, 2020)
Human-like “[…] the art of creating machines that perform Neuronal networks (Jain
processing functions that require intelligence when performed et al., 1996)
by people […]” (Kurzweil, 1990, p. 117)
Intelligence “[…] artificial intelligence is that activity devoted Ambient Intelligence
to making machines intelligent, and intelligence is (Ramos et al., 2008), Brain
that quality that enables an entity to function intelligence (Lu et al.,
appropriately and with foresight in its 2020)
environment” (Nilsson, 2009, p. 13)
Technology- “A field of study that seeks to explain and emulate AI landscape (Turk, 2020)
focus intelligent behavior in terms of computational
processes” (Schalkoff, 1990)
Handling of “Al refers to systems that are able to correctly Autonomous driving
external data interpret external data, to learn from such data, and (Muhammad et al., 2020)
to use those learnings to achieve specific goals and
tasks through flexible adaptation” (Schäfer et al.,
2021. p. 2)
Success Factors of Using Artificial Intelligence 173

2.1 Technology-Organization-Environment (TOE) Framework

In the opinion of Webster and Watson (2002), literature reviews are especially valu-
able in topics that have previously been examined but in which fresh and additional
study is necessary. A comprehensive analysis is lacking, despite the fact that the
topic of success criteria in AI has previously been examined. Boell and Cecez-
Kecmanovic (2015) make a distinction between a systematic literature review
(SLR) and a narrative literature review (NR). Because we are attempting to provide
answers to a particular issue, a systematic literature review (SLR) is the most prom-
ising method of investigation. Vom Brocke et al. (2009) provided us with guidance
for conducting our review in an organized way.
Hence, we followed their recommendations and implemented all four stages of
the study as described. The scope of this review focuses on success factors and
artificial intelligence. Studies that concentrate on success factors and other
technologies, such as electronic data interchange (EDI) systems, are excluded from
the analysis (Kuan & Chau, 2001). Similarly, research that explore artificial
intelligence without taking into account success factors are excluded (Bengio,
2009). AI is a vast concept that is frequently misunderstood, which is why we
offered a brief review of definitions to help you better understand what we mean by
the term “AI.” Also included is a working definition that will be used throughout this
document. Our literature search technique consists of two complementing search
patterns, namely, a keyword search in three separate databases as well as a manual
backward search to find relevant literature.
The technology-organization-environment (TOE) paradigm proposed by
Tornatzky and Fleischer has been extensively used in the literature on technology
adoption (Tornatzky & Fleischer, 1990). Accordingly, the TOE was frequently
employed as a theoretical lens in research on artificial intelligence adoption. We
conducted a thorough analysis of our data and classified the found success factors
into three categories based on three dimensions: technology, organizational
structure, and environmental conditions. We discovered variables that have distinct
names but are quite similar in their nature because of the varying publishing timings
and the usage of multiple names. According to Bauer et al. (2020)), “Existing ML
know-how” is a concept that is closely similar to the concept of “Competencies”
used by Rana et al. (2014).

2.2 Factors That Influence the Adoption of Artificial

Intelligence (Organizational)

Using the TOE framework, we found 13 success criteria that were connected to the
organizational dimensions of the company (see Table 2). In the eight research
reviewed here, three characteristics were identified as being important for success:
top-tier management support, (technical) expertise, and resources are required.
174 S. O. Al Hleewa and M. Al Mubarak

High-level management has been identified as a critical component in the adoption

of artificial intelligence, in part because it assists in the allocation of resources for
AI initiatives in the organization. Moreover, Alsheibani et al. (2020) demonstrate
that there is a statistically significant association between top management support
and the use of artificial intelligence. Competencies (both technical and non-
technical) have also been identified as crucial success factors. Increasing the skills
of employees via knowledge transfer or training is necessary to fully exploit the
promise of artificial intelligence applications (e.g., Schäfer et al., 2021). Kordon
(2020) thinks that a large amount of competence in applying statistical approaches,
as well as a thorough grasp of mathematics, is essential for the acceptance of
artificial intelligence. Further, he contends that owing to the great complexity of
artificial intelligence, past knowledge and experience may be critical to achieving
success in the adoption of artificial intelligence. Additionally, it has been said that
the capacity to apply algorithms and analyze the results is critical (Rana et al., 2014).
The availability of resources is a third issue that has been examined in eight
research. Resource availability may be determined by the availability of appropriate
data (e.g., Demlehner & Laumer, 2020), a budget (e.g., Kruse et al., 2019) and the
availability of personnel. Moreover, as Pumplun et al. (2019) point out, without
appropriate resources, there is little likelihood of achieving success in artificial
intelligence projects. A large budget may provide financial independence while also
assisting in the development of knowledge inside the company.
Both the topic of organization size and organizational structure came up five and
four times, respectively, in the data. Previous research has shown conflicting
findings, indicating that such elements might have either a favorable or negative
impact on the outcome. For example, huge firms often have more access to resources
while also being burdened by inflexible organizational structures (Demlehner &
Laumer, 2020). As a result, favorable benefits might be reduced or eliminated.
Smaller firms, on the other hand, often have fewer resources at their disposal but
respond in a nimbler manner, which is advantageous.
Using the TOE framework, we found 13 success criteria that were connected to
the organizational dimensions of the company (see Table 2). According to the
findings of the eight research reviewed here, three success criteria were identified:
top-level management support, (technical) competence, and resources. The top
management has been identified as a fundamental aspect that has a beneficial impact
on the adoption of artificial intelligence (AI), in part because it assists in allocating
resources to AI initiatives. Moreover, Alsheibani et al. (2020) demonstrate that there
is a statistically significant association between top management support and the
use of artificial intelligence. Competencies (both technical and non-technical) have
also been identified as crucial success factors. Increasing the skills of employees via
knowledge transfer or training is necessary to fully exploit the promise of artificial
intelligence applications (Chäfer et al., 2021).
Kordon (2020) thinks that a large amount of competence in applying statistical
approaches, as well as a thorough grasp of mathematics, is essential for the
acceptance of artificial intelligence. Further, he contends that, owing to the great
complexity of artificial intelligence, past knowledge and experience may be critical
Table 2 AI success factors (organizational)
Top Organi Organi Perceived Organi Knowledge
management (Technical) Organi zational zational Organizational Interdisciplinary financial zational and
support competencies Resources zational lsize structures Strategy readiness Culture innovativeness collaboration cost secrecy policies information
Rana et al. +
(2014)
Nasirian
et al. (2017)
Alsheibani
et al. (2020)
Eljasik- +
Swoboda
et al. (2019)
Kruse et al. +/−
(2019)
Pumplun +/− +/−
et al. (2019)
Alsheibani +
et al. (2020)
Bauer et al. + +/− + +
(2020)
Demlehner +/−
and Laumer
(2020)
Eitle and +/−
Buxmann
(2020)
Kordon + + +
(2020)
Nortje and
Grobbelaar
(2020)
Schäfer +
et al. (2021)
∑ 8 8 8 5 4 3 3 3 2 1 1 1 1
(+) positive factor; (−) negative factor; (+/−) positive and negative factor
176 S. O. Al Hleewa and M. Al Mubarak

to achieving success in the adoption of artificial intelligence. Additionally, it has

been said that the capacity to apply algorithms and analyze the results is critical
(Rana et al., 2014). The availability of resources is a third issue that has been
examined in eight research, in addition to having adequate data, a budget (Kruse
et al., 2019), and workers (Demlehner & Laumer, 2020). Moreover, as Pumplun
et al. (2019) pointed out, without appropriate resources, there is little likelihood of
achieving success in artificial intelligence projects. A large budget may provide
financial independence while also assisting in the development of knowledge inside
the company. Both the topic of organization size and organizational structure came
up five and four times, respectively, in the data. Previous research has shown
conflicting findings, indicating that such elements might have either a favorable or
negative impact on the outcome.
For example, huge firms often have more access to resources while also being
burdened by inflexible organizational structures (Demlehner & Laumer, 2020). As a
result, favorable benefits might be reduced or eliminated. Smaller firms, on the other
hand, often have less resources at their disposal but respond in a nimbler manner,
which is advantageous and helps people to make the most of their available resources
in a productive manner (Kruse et al., 2019). According to Alsheibani et al. (2020),
the size of the organization has no relevance on the success of implementing the Al.
Finally, we highlighted strategy, organizational preparation, and culture as criti-
cal success variables that were found in three studies and discussed in detail below.
It is expected that all these elements will have a good influence on Al’s adoption. In
addition, two studies investigated organizational innovation, and one investigated
multidisciplinary cooperation. One research investigated perceived financial cost,
one investigated organizational secrecy rules, and one studied knowledge and infor-
mation management.

2.3 AI Adoption Success Factors (Technological)

According to the findings of the study, the most commonly stated element in the
technological dimension is the compatibility of artificial intelligence and the
availability of a sufficient IT infrastructure (ten studies). The degree to which an
invention meets the real requirements and expectations of prospective users is
referred to as compatibility (Pumplun et al., 2019). Architectural considerations
such as a suitable infrastructure platform (Nortje & Grobbelaar, 2020), the
performance of the IT infrastructure (Demlehner & Laumer, 2020), and standardized
data interfaces (Bauer et al., 2020) are thus critical for the adoption of artificial
intelligence. This is supported by Alsheibani et al. (2020), who finds a statistically
significant link between compatibility and the adoption of artificial intelligence.
Seven sources cite relative advantage as a significant aspect in decision-making.
The research by Alsheibani et al. (2020) found that relative advantage is the sec-
ond most important factor impacting AI adoption, behind top management support,
when it comes to influencing adoption. The degree to which artificial intelligence
Success Factors of Using Artificial Intelligence 177

outperforms rival technology is referred to as relative advantage. The relative advan-

tage is related with lower costs, the ability to access new markets, the ability to cre-
ate higher revenues, and the ability to achieve more efficiency and effectiveness.
Five research have indicated data availability and quality as important factors. It is
generally agreed that having a significant amount of training data is essential for the
effective learning process of artificial intelligence. Data quality should be excellent
in general, but how much data is required will depend on a number of variables,
including aspects such as data complexity and what sort of activity will be taken
over by artificial intelligence (AI) (Kruse et al., 2019). Other considerations include
the availability of tools, which is mentioned in three studies. Two studies are being
conducted that are based on the variables described as business requirements, secu-
rity/availability, and complexity. Each of the variables perceived hurdles, generaliz-
ability/scalability, technology management, satisfaction with current systems, and
technology ready to receive are discussed once in this document (Table 3).

2.4 AI Adoption Success Factors (Environmental)

According to the findings of the study, the compatibility of artificial intelligence and
the availability of a sufficient IT infrastructure are the most commonly stated factors
in the technological dimension (ten studies). A measure of how well an invention
meets the real requirements and expectations of prospective consumers is called
compatibility (Pumplun et al., 2019). A proper infrastructure platform (Nortje &
Grobbelaar, 2020), the performance of the IT infrastructure (Demlehner & Laumer,
2020), and standardized data interfaces (Bauer et al., 2020) are thus critical for the
adoption of artificial intelligence. Alsheibani et al. (2020), for example, finds a
significantly significant link between compatibility and the adoption of artificial
intelligence. A total of seven sources considers relative advantage to be a
significant factor.
According to Alsheibani et al. (2020), relative advantage is the second most sig-
nificant factor in promoting AI adoption, following top management support. The
degree to which AI outperforms rival technologies is referred to as relative advan-
tage. The relative advantage is related with lower costs, the ability to access new
markets, the ability to earn higher profits, and the ability to improve efficiency. Five
investigations have identified the availability and quality of data. It is generally
agreed that having a significant amount of training data is necessary for the effective
learning process of artificial intelligence. While data quality should be excellent in
general, the quantity of data required varies on aspects such as the complexity of the
data or the sort of work that the AI should take over once it has been trained (Kruse
et al., 2019). Other considerations include the availability of tools, which has been
mentioned in three studies. Two studies are being conducted in order to address the
aspects indicated as business requirements, security/availability, and complexity.
The elements perceived hurdles, generalizability/scalability, technology
management, satisfaction with current systems, and technological ready to receive
are all discussed once (Table 4).
Table 3 AI success factors (technological)

Compatibilty/ Relative Availability Tool Identified Security / Complexity Perceived Generalizibility / Technology Satisfaction Technology
IT advatange and quality availability business reliability barriers Scalability management with existing readiness
infrastructure of data needs systems
Rana et al. + + + − −
(2014)
Nasirian et al.
(2017)
Alsheibani + +
et al. (2020)
Eljasik- +
Swoboda et al.
(2019)
Kruse et al. + + + +
(2019)
Pumplun et al. + + +
(2019)
Alsheibani + +
et al. (2020)
Bauer et al. +
(2020)
Demlehner + + + + + − +
and Laumer
(2020)
Eitle and + + −
Buxmann
(2020)
Kordon (2020) + + +
Nortje and + + +
Grobbelaar
(2020)
Schäfer et al. + +
(2021)
∑ 10 7 5 3 2 2 2 1 1 1 1 1
(+) positive factor; (−) negative factor; (+/−) positive and negative factor
Table 4 AI success factors (environmental)
Competitive/ Governmental Customer Trust Industry External Perceived Perceived Access to Public Customer
industry regulations readiness requirements / partners / goverment pressure external funding and
presuure characteristics trading pressure from expertise community
partners society support
Rana et al. (2014) +
Nasirian et al. (2017) + +
Alsheibani et al. + +
(2020)
Eljasik-Swoboda +
et al. (2019)
Kruse et al. (2019) + +/− + +
Pumplun et al. + − + +/−
(2019)
Alsheibani et al. + +
(2020)
Bauer et al. (2020) −
Demlehner and + + + +
Laumer (2020)
Eitle and Buxmann + +/− +
(2020)
Kordon (2020)
Nortje and
Grobbelaar (2020)
Schäfer et al. (2021) + + +
∑ 8 7 2 2 2 2 1 1 1 1 1
(+) positive factor; (−) negative factor; (+/−) positive and negative factor
180 S. O. Al Hleewa and M. Al Mubarak

3 Discussion and Implications

In contrast, a lack of management support has a negative influence on AI adoption

since it might prevent management from providing resources and cash, for example,
in addition to a lack of attention on AI (Alsheibani et al., 2020). According to the
general literature on innovation, the size and structure of an organization are two of
the most often discussed aspects in relation to adoption of new technologies.
However, there is still a shaky picture of the extent to which it has influenced society
in general (Zhu et al., 2004) and the extent to which AI has been implemented.
Some studies suggest that large organizations have rigid structures but have a
significant number of resources at their disposal, whereas others suggest that small
organizations have limited resources but are more agile and flexible (Demlehner &
Laumer, 2020; Kruse et al., 2019). This paradox holds true in the realm of artificial
intelligence. For example, hierarchical organizational structures and a lack of cross-
process assistance prohibit firms from gaining the agility required to incorporate
artificial intelligence applications in their operations (Kruse et al., 2019).
As a result, it may be claimed that both big and small organizations can take
advantage of possible advantages associated with their respective scales.
Compatibility is the most commonly mentioned aspect in the technical component,
according to the research that was reviewed. To have a beneficial influence on the
adoption of artificial intelligence in enterprises, it is required for business processes
and applications to be compatible with the technology. For example, if new
technologies cannot be implemented in current infrastructures due to limitations in
their integration, the old infrastructures must be modified to meet the new needs,
which often results in a slowing of the implementation (Pumplun et al., 2019).
Therefore, firms with appropriate IT infrastructures will benefit from the speedier
and more cost-effective deployment of artificial intelligence (AI). As a result,
enterprises should consider upgrading their infrastructure to ensure that it is
compatible with artificial intelligence technologies.
The concept of relative advantage is another crucial success element in the tech-
nological dimension. The greater the (seen) relative benefit of an invention, the
greater the likelihood that it will be accepted. The previous study has given
compelling evidence that choices about the adoption of innovations should be made
with careful consideration of the perception of relative advantage (Choudhury &
Karahanna, 2008). It is possible to determine whether or not an artificial intelli-
gence technology should be deployed based on the evaluation of a relative benefit.
For enterprises seeking to embrace new technologies in the environmental dimen-
sion, a competitive environment is one of the most important factors driving their
decision to do so (Kuan & Chau, 2001; Zhu et al., 2004). In other words, the greater
the market’s adoption of artificial intelligence, the more probable it is that enter-
prises would embrace the same AI technology. Consequently, firms have the chance
to outperform their rivals via the use of new technologies, thereby altering the com-
petitive environment in their favor (Zhu et al., 2004). As an example, Nokia,
although being the market leader, failed to recognize the smartphone trend and, as a
Success Factors of Using Artificial Intelligence 181

consequence, steadily lost market share to rivals such as Apple and Samsung, among
others (Alibage & Weber, 2018). Regulatory compliance is an environmental issue
that may have both a good and a negative impact on the adoption of information
technology breakthroughs (Pumplun et al., 2019; Zhu & Kraemer, 2005).
The government may have an impact on the dissemination of information tech-
nology developments by establishing or eliminating obstacles to the adoption of
new technologies via legislation (Pumplun et al., 2019). On the one hand, regulation
may help to promote consumer confidence in technology, which can lead to greater
adoption of artificial intelligence applications. On the other hand, an excessive
number of laws may result in a significant commitment of financial resources as
well as organizational inertia as a result of the high constraints placed on the use of
artificial intelligence in enterprises (Kruse et al., 2019; Pumplun et al., 2019). From
a theoretical standpoint, we can see that numerous research make use of the TOE
framework to investigate crucial elements for the adoption of artificial intelligence.
The majority of the research discussed here is exploratory in nature, and they are
being undertaken to find new success criteria. However, even though past attempts
have significantly widened the viewpoint on artificial intelligence adoptions, as
shown below, there is currently no cohesive theory that places a focus on the most
crucial aspects. This finding is supported by the fact that most researchers use an
exploratory strategy (interview-based studies) and contact experts from the artificial
intelligence domain to uncover crucial success criteria in the field. In contrast, only
two investigations have been carried out utilizing a quantitative method (Alsheibani
et al., 2020; Nasirian et al., 2017), both of which have been published recently.

4 Conclusion

The study is developed in order to present an overview of success variables that are
significant for the adoption of artificial intelligence in enterprises. We discovered 36
success criteria in the course of our research. Thirteen of the TOE framework’s
dimensions are related to the organization, twelve are related to technology, and
eleven are related to the environment. We will explore some of the most significant
and fascinating findings in the next section, and we will direct you to the original
research for a more in-depth examination of each success component.
In terms of the organizational dimension, top-level management support is one
of the most important criteria for the effective implementation of artificial
intelligence. This is noteworthy because, although senior management support does
not instruct a company on how to embrace AI, it may be seen as a factor that
accelerates the implementation of all other initiatives. Consequently, it is critical for
managers to have a thorough grasp of artificial intelligence, which will help them to
better support and assist AI. In this vein, it has also been proposed that top
management may have a good impact on workers’ faith in artificial intelligence,
which in turn can encourage the adoption of AI.
182 S. O. Al Hleewa and M. Al Mubarak

4.1 Limitations and Suggestions for Further Studies

First and foremost, we made a conscious decision to draw lines between existing
literature and new research. It is important to note that this constraint is specific to
the inclusion and exclusion criteria. As a result, comparable research that explored
success factors for the adoption of various technologies other than artificial
intelligence is not addressed in this study. Future study might build on this body of
work and include characteristics that have been recognized as being important in
other fields. To begin with, we were just concerned with reviewing existing research
and did not go into detail about the elements that had been determined by way of a
statistical analysis.
Future studies might build on this body of work and include characteristics that
have been recognized as being important in other fields. To begin with, we were just
concerned with reviewing existing research and did not go into detail about the
elements that had been determined by way of a statistical analysis. Consequently,
future study may build on the information offered here and go one step further by
evaluating the success characteristics and their applicability in the real world. In
order to do this, a more condensed list of success criteria may be developed, which
would be advantageous both for the development of theory and for practitioners
who wish to implement these aspects in their work.

References

Adadi, A., & Berrada, M. (2018). Peeking inside the black-box: A survey on Explainable Artificial
Intelli-gence (XAI). IEEE Access, 6, 52138–52160.
Alibage, A., & Weber, C. (2018). Nokia phones: From a total success to a total fiasco: A study
on why Nokia eventually failed to connect people, and an analysis of what the new home of
Nokia phones must do to succeed. In Portland International Conference on Management of
Engineering and Tech-nology (PICMET), Honolulu, pp. 1–15.
Alsheibani, S., Messom, C., & Cheung, Y. (2020). Re-thinking the competitive landscape of arti-
ficial intelligence. In Proceedings of the Hawaii international conference on system sciences
(HICSS), Maui, pp. 5861–5870.
Bauer, M., Dinther, C. van, & Kiefer, D. (2020). Machine learning in SME: An empirical study
on enablers and success factors. In Proceedings of the Americas Conference on Information
Systems (AMCIS), Salt Lake City.
Bengio, Y. (2009). Learning deep architectures for AI. Foundations and Trends in Machine
Learning, 2(1), 1–127.
Boell, S. K., & Cecez-Kecmanovic, D. (2015). On being ‘systematic’ in literature reviews in
IS. Journal of Information Technology, 30(2), 161–173.
Bogdanov, A., Degtyarev, A., Guschanskiy, D., Lysov, K., Ananieva, N., Zalutskaya, N., &
Neznanov, N. (2017). Analog-digital approach in human brain modeling. In 17th IEEE/
ACM International Symposium on Cluster, Cloud and Grid Computing (CCGRID), Madrid,
pp. 807–812.
Brachman, R. J. (2006). (AA)AI more than the sum of its parts. AI Magazine, 27(4), 19–19.
Buder, F., Dieckmann, A., Dietrich, H., & Wieting, J. (2019). Technologies turning future brick-and-
mortar stores into data-rich environments. NIM Marketing Intelligence Review, 11(1), 48–53.
Success Factors of Using Artificial Intelligence 183

Chen, W., Wang, Z., Chen, Z, & Chen, Z. (2005). Working mechanism of brain neural network. In
International Conference on Neural Networks and Brain, Beijing, pp. 1307–1309.
Chen, H., Chiang, R. H. L., & Storey, V. C. (2012). Business intelligence and analytics: From big
data to big impact. MIS Quarterly, 36(4), 1165–1188.
Choudhury, V., & Karahanna, E. (2008). The relative advantage of electronic channels: A multidi-
mensional view. MIS Quarterly, 32(1), 179–199.
Crowston, K., & Bolici, F. (2019). Impacts of machine learning on work. In Proceedings of the
Hawaii International Conference on System Sciences (HICSS), Maui, pp. 5961–5970.
Dananjayan, S., & Raj, G. M. (2020). Artificial Intelligence during a pandemic: The COVID-19
example. The International Journal of Health Planning and Management, 35(5), 1260–1262.
Demlehner, Q., & Laumer, S. (2020). Shall we use it or not? Explaining the adoption of artifi-
cial intelligence for car manufacturing purposes. In Proceedings of European Conference on
Information Systems (ECIS), Marrakech.
Eitle, V., & Buxmann, P. (2020). Cultural differences in machine learning adoption: An inter-
national comparison between Germany and the United States. In Proceedings of European
Conference on In-formation Systems (ECIS), Marrakech.
Eljasik-Swoboda, T., Rathgeber, C., & Hasenauer, R. (2019). Artificial intelligence for innovation
readiness assessment. In IEEE International Symposium on Innovation and Entrepreneurship
(TEMS-ISIE), Hangzhou, pp. 1–6.
Hsu, F.-H. (1999). IBM’s deep blue chess grandmaster chips. IEEE Micro, 19(2), 70–81.
Jain, A. K., Mao, J., & Mohiuddin, K. M. (1996). Artificial neural networks: A tutorial. Computer,
29(3), 31–44.
Kasemsap, K. (2017). Handbook of research on manufacturing process modeling and optimization
strategies. IGI Global.
Kordon, A. (2020). Applied artificial intelligence-based systems as competitive advantage. In
IEEE 10th International Conference on Intelligent Systems (IS), Varna, pp. 1541–1672.
Kruse, L., Wunderlich, N., & Beck, R. (2019). Artificial intelligence for the financial services
industry: What challenges organizations to succeed. In Proceedings of the Hawaii International
Conference on System Sciences (HICSS), pp. 6408–6417.
Kuan, K. K. Y., & Chau, P. Y. K. (2001). A perception-based model for EDI adoption in small busi-
nesses using a technology–organization–environment framework. Information & Management,
38(8), 507–521.
Kurzweil, R. (1990). The age of intelligent machines. MIT Press.
Lu, H., Li, Y., Chen, M., Kim, H., & Serikawa, S. (2020). Brain intelligence: Go beyond artificial
intelligence. Mobile Networks and Applications, 23(1), 368–375.
McCarthy, J., Minsky, M. L., Rochester, N., & Shannon, C. E. (2006). A proposal for the
Dartmouth summer research project on Artificial Intelligence, August 31, 1955. AI Magazine,
27(4), 12–14.
Minsky, M. (1988). The society of mind. Simon & Schuster.
Muhammad, K., Ullah, A., Lloret, J., Ser, J. D., & Albuquerque, V. H. C. (2020). Deep learning
for safe autonomous driving: Current challenges and future directions. IEEE Transactions on
Intelligent Transportation Systems, 1–21.
Müller, V. C. (2013). Philosophy and theory of Artificial Intelligence. Springer.
Nascimento, A., da Cunha, M. A. V. C., Meirelles, F., Scornavacca, E., & de Melo, V. V.. (2018).
A literature analysis of research on artificial intelligence in Management Information System
(MIS). In Proceedings of the Americas Conference on Information Systems (AMCIS), New
Orleans.
Nasirian, F., Ahmadian, M., & Lee, O.-K. (Daniel). (2017). AI-based voice assistant systems:
Evaluating from the interaction and trust perspectives. In Proceedings of the Americas
Conference on Information Systems (AMCIS), Boston.
Nilsson, N. J. (2009). The quest for artificial intelligence. Cambridge University Press.
Nortje, M., & Grobbelaar, S. (2020). A framework for the implementation of artificial intelligence
in business enterprises: A readiness model. In IEEE International Conference on Engineering,
Technology and Innovation (ICE/ITMC), Cardiff.
184 S. O. Al Hleewa and M. Al Mubarak

Pumplun, L., Tauchert, C., & Heidt, M. (2019). A new organizational chassis for artificial intel-
ligence – Exploring organizational readiness factors. In Proceedings of European Conference
on Information Systems (ECIS). Stockholm & Uppsala.
Ramos, C., Augusto, J. C., & Shapiro, D. (2008). Ambient intelligence—The next step for artificial
intelligence. IEEE Intelligent Systems, 23(2), 15–18.
Rana, R., Staron, M., Hansson, J., Nilsson, M., & Meding, W. (2014). A framework for adoption
of machine learning in industry for software defect prediction. In 9th International Conference
on Software Engineering and Applications (ICSOFT-EA), Vienna, pp. 383–392.
Rich, E., & Knight, K. (1991). Artificial Intelligence. McGraw-Hill Professional.
Russell, S., & Norvig, P. (2003). Artificial intelligence: A modern approach. Pearson.
Schäfer, C., Lemmer, K., Kret, K., Ylinen, M., Mikalef, P., & Niehaves, B. (2021). Truth or dare?
How can we influence the adoption of artificial intelligence in municipalities? In Proceedings
of the Hawaii International Conference on System Sciences (HICSS), Kauai.
Schalkoff, R. J. (1990). Artificial intelligence: An engineering approach. McGraw-Hill.
Tornatzky, L. G., & Fleischer, M. (1990). Processes of technological innovation. The Free Press.
Turk, M. (2020). The 2020 data and AI landscape, October 21. [Link]
the-2020-data-and-ai-landscape. Accessed 11 Feb 2021.
vom Brocke, J., Simons, A., Niehaves, B., Riemer, K., Plattfaut, R., & Cleven, A. (2009).
Reconstructing the Giant: On the importance of rigour in documenting the literature search
process, presented at the proceedings of European conference on information systems
(ECIS). Verona.
Wang, Y., Xia, L., Tang, T., Li, B., Yao, S., Cheng, M., & Yang, H. (2016). Low power convo-
lutional neural networks on a chip. In 2016 IEEE International Symposium on Circuits and
Systems (ISCAS) (pp. 129–132). IEEE.
Webster, J., & Watson, R. (2002). Analyzing the past to prepare for the future: Writing a literature
review. Management Information Systems Quarterly, 26(2), 13–23.
Yu, M. K., Ma, J., Fisher, J., Kreisberg, J. F., Raphael, B. J., & Ideker, T. (2018). Visible machine
learning for biomedicine. Cell, 173(7), 1562–1565.
Zhu, K., & Kraemer, K. L. (2005). Post-adoption variations in usage and value of E-business by
organizations: Cross-country evidence from the retail industry. Information Systems Research,
16(1), 61–84.
Zhu, K., Kraemer, K. L., & Dedrick, J. (2004). Information technology payoff in E-business envi-
ronments: An international perspective on value creation of E-business in the financial services
indus-try. Journal of Management Information Systems, 21(1), 17–54.
Fintech and Financial Inclusion: Evidence
from MENA Countries

Lubna Khalaf and Rami Abu Wadi

1 Introduction

Developing countries attach great importance to financial inclusion in their eco-

nomic policies to enhance the level of financial stability, increase social and eco-
nomic welfare, and achieve equality. In general, providing financial services makes
everyday life easier, helping families and businesses plan for everything from long-
term goals to unexpected emergencies. As account holders, people are more likely
to use other financial services, such as credit and insurance, to start and expand
businesses, invest in education or health, manage risk, and cope with financial
shocks, which can improve their lives overall. Demir et al. (2022) argue that finan-
cial inclusion is a key channel through which Fintech decreases income inequality,
at all quantile levels, mainly among higher-income countries. Sahay et al. (2015)
defined financial inclusion as access to and use of formal financial services by
households and firms. The United Nations identifies financial inclusion (FI) as com-
prehensive access at an affordable cost to a wide range of financial services and
products offered by different and sustainable institutions.
According to Demirguc-Kunt et al. (2014), a comparison between high-income
and developing countries shows that formal financial services are less accessible in
developing economies than in high-income economies; 90 percent of adults in high-
income countries reported holding accounts at formal financial institutions, while
only 41 percent of adults in developing economies did so. The same database shows
that the region with the highest percentage of unbanked working-age adults is the

L. Khalaf
Middle East University, Amman, Jordan
R. A. Wadi (*)
Ahlia University, Manama, Bahrain
e-mail: rwadi@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 185
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
186 L. Khalaf and R. A. Wadi

Middle East and North Africa (MENA), followed by sub-Saharan Africa and South
Asia. Access to suitable financial instruments may allow these disadvantaged indi-
viduals to invest in diverse asset classes (physical assets, commodities, real estate,
education, etc.), thereby reducing income inequality and boosting economic growth.
This access—and the resultant global innovation (new financial instruments, institu-
tions, markets, products, and processes) and sustained, inclusive growth—is only
possible through financial inclusion. Enhancing financial inclusion also means pro-
viding high-quality, reasonably priced financial services to as many working-age
adults as possible. The Consultative Group to Assist the Poor (CGAP) reports that
improving financial inclusion (FI) can encourage economic development, increase
job opportunities and the stability of monetary systems, and decrease individual
poverty and fluctuations in income (CGAP, 2017). The realization of these gains in
turn boosts social stability, facilitates market access for small and medium-sized
enterprises (SMEs), and, by lessening the importance of informal financing net-
works, helps combat money laundering and terrorism financing.
After the global financial crisis, monetary, financial, and economic decision-
makers realized the importance of financial inclusion, and the important role it plays
in enabling all segments of society to get access to all financial services, without
discrimination. Therefore, it promotes consumer financial protection and the stabil-
ity of society on many different levels, financially, socially, and politically, in addi-
tion to improving economic development. Access to finance allows companies of all
types to invest and facilitates both household consumption and the gradual accumu-
lation of capital—not only increasing employment opportunities but also raising the
standard of living. Access to finance is also essential for individuals and firms to
protect themselves against shocks and better manage risk. Regulators and policy-
makers regionwide are addressing factors that inhibit access to the financial system
and have begun integrating financial inclusion into ongoing work programs in con-
junction with stability and supervisory work. It is crucial to integrate excluded
groups—whether individuals or businesses—into the financial system and support
them with the financial resources necessary to build their capacity to gener-
ate income.
Digital development is one of the most important pillars of the future. Financial
technology (Fintech) has a real ability to change the structure of traditional financial
services, as financial technology can make financial services faster, cheaper, safer,
transparent, and available, especially for the large segment of the population that
does not deal with the banking sector. On the other hand, the speed of development
in financial technology services and emerging companies constitutes a threat that
must be hedged and all precautionary measures are taken to achieve the safety,
integrity, and stability of the banking and financial sector, where the technology
represents finance and its various applications present opportunities and challenges
at the same time for banks and financial institutions. Thus, the current study exam-
ines whether Fintech has positive or negative effect on financial inclusion in MENA
countries for the years 2011, 2014, and 2017. The rest of the paper is structured as
follows: the second part presents the literature review, the third part describes the
Fintech and Financial Inclusion: Evidence from MENA Countries 187

methodology and data of the study followed by the discussion of the results, and the
final part concludes the study.

2 Literature Review

Fintech became a serious competitor since it dominates the traditional financial ser-
vices where customers are increasingly moving toward carrying out their banking
transactions through electronic applications and smart solutions (Bashayreh &
Wadi, 2021). Previous studies refer that the opportunities offered by financial tech-
nology to the financial and banking sector can enhance financial inclusion, provid-
ing better and more convenient banking services to customers. Besides, there is
potential positive impact on financial stability due to increased competition, and the
role of regulatory technology (Reg Tech) can improve compliance processes in
banks. Financial inclusion (FI) refers to the ability of individuals and businesses to
access beneficial and affordable financial products and services that are in line with
their requirements—transactions, savings, payments, insurance, and credit—and
are brought in a responsible and sustainable way (World Bank, 2017). It is a process
that, in the words of Sarma (2010), confirms the ease of access, accessibility, and
usage of the formal financial system for all individuals of an economy. Financial
inclusion (FI) requires that individuals and institutions can access and use financial
services efficiently and responsibly.
Enhancing financial inclusion does not only include increasing financial distribu-
tion to more people, but also includes providing a variety of high-quality financial
services at a reasonable cost, which will, in turn, enhance comprehensive develop-
ment. Adopting Fintech products and improving financial services lead to improve
profit, market share, customers’ confidence, and competitiveness (Amirata &
Alsulimanib, 2021). The solutions provided by financial technology are low-cost
solutions compared to financial services for banks and traditional financial services,
and the prosperity of the field of financial technology helps to put pressure on tradi-
tional methods by reducing fees for money transfers and others, to keep pace with
the development in the field of financial technology, and the tendency of most cus-
tomers to these new methods.
Successfully building an inclusive financial system requires massive effort and
merits more attention worldwide. Many people are excluded from formal financial
services in many countries; in the past few decades, the literature on financial inclu-
sion has taken an interest in the many reasons why this is so. Financial inclusion
efforts attempt to ensure that all families and businesses, in spite of income level,
have access to and can efficiently use financial services suitable for their needs.
Without access to financial services, individuals cannot build up assets or handle
emergencies; and small businesses cannot access working capital, invest, or hire
more employees. Some groups, including women, the rural and urban poor, remote
populations, and informal small firms, are subjected to financial exclusion more
188 L. Khalaf and R. A. Wadi

than others. Microfinance (including not only microcredit but also microsavings and
microinsurance) can help combat these inequities.
By reviewing the related studies, it was found that while most researchers admit
that the impact is positive, others provide negative evidence. Tok and Heng (2022)
found a higher positive effect of Fintech on digital financial inclusion than the effect
of traditional services. Bashayreh and Wadi (2021) also confirmed the significant
effect of Fintech on enhancing the performance of banks and thus financial inclu-
sion. Legowo et al. (2021) revealed that the coordination of the modern bank and the
Fintech is assumed to promote financial inclusion. COVID-19 has been a catalyst
for digital transformation across a range of sectors, and this is particularly true of
financial services and Fintech in MENA countries. Fintech can play a vital role in
enhancing the ability of emerging economies to recover from the consequences of
the economic crisis caused by the spread of the coronavirus pandemic. Because the
ability to provide financial services at affordable prices is important in reducing
poverty, achieving economic growth, and maintaining the pace of economic activ-
ity. Besides, it paves the way for financial inclusion, especially for women, as finan-
cial technology has become one of the most important solutions to advance the
financial and banking sector and it has become one of the most important tools for
promoting financial inclusion. Recently, some studies explore the effect of
COVID-19 on Fintech. During the COVID-19 outbreak, Landry (2020) and Hussein
(2020) concluded that the impact of mobile money on financial inclusion is positive.
Ozili (2020) tested the impact of financial innovation on financial inclusion in a
larger group of countries and find a significant positive effect. Using the Global
Findex data for a panel of 140 countries, Demir et al. (2020) argues that financial
inclusion (FI) is a principal channel through which financial technology decreases
income inequality.
In their paper, Murinde et al. (2022) study the growing literature on Fintech and
Fintech-enabled services, aiming to explain the opportunities and risks for banks in
115 different countries. Murinde et al. (2022) uses high-quality bank level data from
115 countries around the world for the past 16 years, the study calculates statistical
moments of some key indicators of the changing banking landscape in the Fintech
era. Murinde et al. (2022) primary findings indicate that because of the reason that
banks are improving their own Fintech platforms or operating with Fintech start-
ups, it is doubtful that Fintech lenders will replace banks. Moreover, the study
exposes how will the shape of banking future be affected by regulation, global infra-
structures, and geopolitical frictions.
In general, innovation-led growth promotes inclusivity by creating jobs for less
skilled individuals. The World Bank (2014) shows that broader implementation of
digital payments can meaningfully improve the global financial inclusion agenda
and support the priority areas of the Global Partnership for Financial Inclusion
(GPFI). In developing countries, 1.3 billion adults with a bank account pay utility
bills in cash and more than 500 million pay school fees in cash. In addition to being
more convenient, technological innovations and payment digitization would enable
account holders throughout the developing world to pay bills and fees more afford-
ably and securely and reduce opportunities for social services fraud and leakage.
Fintech and Financial Inclusion: Evidence from MENA Countries 189

Moreover, Fouad and Younes (2018) examined data from MENA countries and
concluded that the number of ATMs had a positive effect on financial inclusion and
economic growth. Jagtiani and Lemieux (2018) found that Fintech had a greater
positive effect on financial inclusion than traditional financial services. Khaerunnisa
(2018) argued that the need for mobile money in Indonesia is substantial and that
mobile money boosts financial inclusion more competitively and at a lower cost
than other methods. Rahmi (2018) also confirmed the strong effect of Fintech on
boosting financial inclusion in Indonesia, though noted that the degree of the boost
depended on the government’s efficiency. Ozili (2018) reviewed and discussed
many issues regarding Fintech and financial inclusion and found and concluded that
financial technology has a positive impact on financial inclusion in both emerging
and advanced economies. Sun (2018) demonstrated the important role of Fintech in
increasing financial inclusion by reducing the cost of financial services.
The World Bank (2017) reports that in emerging economies, more than two hun-
dred million formal and informal micro, small, and medium-sized enterprises
(MSMEs) do not have suitable financing. The World Bank (2017), noting that
MSMEs are unable to open or maintain bank accounts, posits that this inability is
caused by the enterprises’ informality, lack of credit history, and inability to put up
collateral. Klapper and Ansar (2017) pointed out that Islamic financial instruments
offered via Fintech can likewise enhance financial inclusion. Scott et al. (2017)
argued that digitizing financial services can boost financial inclusion and enhance
the overall performance of financial institutions. Moreover, Manyika et al. (2016)
confirmed the positive effect of digital technologies on enhancing financial inclu-
sion in Ethiopia, India, and Nigeria.
On the other hand, and unexpectedly, Tidjani (2021) concluded that the effect of
Fintech on financial inclusion is still not clear because Fintech solutions are not yet
matured and unspecified in the future but are mandatory for excluded people from
bank services in MENA countries. Allen (2021) concludes that Arab countries still
lag behind many countries in the world in adopting financial inclusion, due to the
inability to deliver many formal financial services to those who are unable to access
them. Moreover, the study argues that digital technology is beneficial in enhancing
financial inclusion in these countries. Pejkovska (2018) revealed that present regula-
tion of Fintech in the regions of EU, the USA, and India is unsuitable and may lead
to negative impacts on the world financial services sector such as deception of
cybersecurity, contravention of data privacy, and using Fintech services for illegal
purposes.
Using quantitative approach and two self-designed questionnaires which were
examined using the structural equation modeling technique, Chen et al. (2021)
investigate Fintech products (FTPs) effect on commercial bank’s performance in
China. Study results indicate that perceived usefulness (PU) of FTPs has positive
and significant effects on customer satisfaction, low expectation of bank employee
assistance, bank’s service quality, and employee work efficiency. Furthermore, the
perceived difficulty of use (PD) of FTPs has negative and significant effects on cus-
tomer satisfaction and low expectation of assistance. Also, Chen et al. (2021) find
that there is a positive and significant correlation among PD and banks’ service
190 L. Khalaf and R. A. Wadi

quality and work efficiency, suggesting that the service quality and work efficiency
can decrease some weaknesses of using FTPs.
Recently, some countries in MENA region have begun to keep pace with this
rapid development of financial technology, as it is a fast-growing sector that allows
achieving strong investment returns and supports the path of economic development
throughout the region. Technology companies also provide new solutions that the
financial sector can employ to improve the efficiency and effectiveness of its opera-
tions. Our study hopes to be a significant addition to the literature on Fintech and
financial inclusion especially in MENA region countries that suffer from inequality
and weak access to financial services.

3 Methodology

3.1 Target Sample and Its Size

The target population for this study is MENA countries as financial exclusion has
been most common in developing countries. However, in the literature different
studies have shown that (Bashayreh & Wadi, 2021; Tarawali, 2020; Hussein, 2020;
Fouad & El Rahman, 2018). The choice of focusing into MENA countries is to try
to get a specific consideration of countries that have more financial exclusion and
find out how Fintech can help close the gaps in exclusion.
This study samples 11 MENA countries, namely, Algeria, Egypt, KSA, Jordan,
Kuwait, Iran, Sudan, Tunisia, UAE, Yemen, and Palestine. The data covers the years
2011, 2014, and 2017, with the years in question chosen based on data availability.

3.2 Variables with Its Measurement

This study uses panel data collected from the Global Financial Inclusion database
and the World Bank database. The dependent variable is financial inclusion (FI),
and the independent variable is Fintech (FIN). The control variables in our model
are education (EDU) and population growth (POP) which were chosen based on
previous research and data availability. Financial inclusion was assumed to be rep-
resented through three dimensions: accounts, saving and borrowings. Account own-
ership was selected since it is most representative of financial inclusion. Additionally,
ownership of an account from the Global Findex database is considered as being
financially included. Financial inclusion is made up of different dimensions which
can be defined by several indicators. Several models of financial inclusion apply
various indicators for measurement.
In his study, Tarawali’s (2020) three theoretical dimensions for usage, access,
and barriers are considered for financial inclusion with several indicators for each of
Fintech and Financial Inclusion: Evidence from MENA Countries 191

Table 1 Variables measurement

Variable Measures
Dependent Account The percentage of respondents, ages 15+, who report having
(Financial Inclusion an account (by themselves or together with someone else) at a
Indicators) financial institution (a bank or otherwise) or using a mobile
money service by themselves in the last 12 months
Saving The percentage of respondents, ages 15+, who report saving
or setting aside any money by using an account at a financial
institution (a bank or otherwise) in the last 12 months
Borrowing The percentage of respondents, ages 15+, who report
borrowing from a financial institution (a bank or otherwise) in
the last 12 months
Independent FIN Total number of ATMs for every 100,000 adults in a country
EDU School enrolment, secondary (% gross)
POP Population growth (annual %)
Source: [Link]

the theoretical dimensions. Savings or borrowings from a formal financial institu-

tion are considered as methods of usage of financial services. While customers must
have overcome barriers first before one can use formal financial services, lack of
account is considered as barriers that prevent one from getting an account
(Tarawali, 2020).
Table 1 provides information about the variables included in the study and their
measurement.

3.3 Model Specification

This study employs the traditional panel regression analysis to examine the impact
of Fintech on financial inclusion through three models. Account, borrowing, and
saving variables are dependent in each model. Through a literature review, the study
formulates the regression model as follows:

j 1
FI it 0 B j Xit it (1)
k

where Xit is the independent variable for the country “i” at a time “t,” C is constant,
β is the coefficient, and ε is the error term.
Panel data analysis permits the examination of many observations with heteroge-
neous details and provides less data multicollinearity among the independent vari-
ables. Besides, it allows the use of more data and can keep track of each unit of
observation (Baltagi Badi, 2005). Accordingly, this study decides which of the two
growth models, fixed effect (FE) or random effect (RE), is the best appropriate after
using the Hausman test for random effects.
192 L. Khalaf and R. A. Wadi

3.4 Data Diagnostic Tests

3.4.1 Statistical Description of Data

Before regression analysis, it is important to view the descriptive data besides sta-
tistics that show the average, maximum, minimum, and standard deviation for the
variables of the study in 2019. These are shown in Table 2.
As shown in the table, an average of 42.6% of adults hold an account with a
financial institution; a standard deviation of 29.33 suggests that there is extensive
variation between the sample countries/years in the number of account holders. It
can also be noted that the average ACC is higher than the BOR and SAV, as some
countries have higher proportions of traditionally excluded groups (e.g., women,
rural and urban poor, and informal firms) than others. As for borrowing and saving,
it can be seen that the percentage of people who have saving accounts or loans are
less than those who have financial accounts. Only 17.9% and 12.9% of adults in the
sample countries have savings accounts and loans, respectively, with a maximum of
40.344% and 46.12%.
The data also show that MENA countries enjoy a high level of education; around
80% of working-age adults are educated. There is an average of three ATMs per
100,000 residents in MENA countries, which provides a sufficient basis for observ-
ing the machines’ effect on financial inclusion.

3.4.2 Testing Stationery

To test whether the variables are stationary or not, this study applies the two-unit
root tests (Hadri Z-stat and heteroscedastic consistent Z-stat), where the null hypoth-
esis (H0) for these tests states the existence of a unit root (non-stationary) in the
variables. The outcomes of the panel unit root tests are given in Table 3.
The outcomes in Table 3 reveal that all variables are stationary at the level. Thus,
we accept the alternative hypothesis, meaning that there is a unit root in the vari-
ables of the model.

Table 2 Statistical description of MENA variables in 2019

N Minimum Maximum Mean Std. deviation
ACC 33 3.660 93.982 42.668 29.333
BOR 29 0.603 46.127 17.938 13.086
SAV 33 0.693 40.345 12.985 10.231
FIN 33 1.272 4.337 3.009 1.020
EDU 25 37.559 107.694 80.389 19.100
POP 33 0.177 5.722 2.432 1.260
Fintech and Financial Inclusion: Evidence from MENA Countries 193

Table 3 Panel unit root results

Level
Intercept Intercept and trend
ACC Hadri Z-stat *** 3.19808 *** 34.3948
Heteroscedastic Consistent Z-stat *** 4.37474 *** 34.3948
BOR Hadri Z-stat *** 6.62564 *** 31.1112
Heteroscedastic Consistent Z-stat *** 5.96285 *** 31.1112
SAV Hadri Z-stat *** 4.97526 *** 34.3948
Heteroscedastic Consistent Z-stat *** 6.03234 *** 34.3948
EDU Hadri Z-stat *** 2.83569 *** 27.4375
Heteroscedastic Consistent Z-stat *** 3.56853 *** 27.4375
FIN Hadri Z-stat *** 3.91014 ***32.7941
Heteroscedastic Consistent Z-stat *** 4.46931 *** 32.7941
POP Hadri Z-stat *** 4.60135 *** 34.3948
Heteroscedastic Consistent Z-stat *** 4.07042 *** 34.3948
Levels of significance: *p < 0.1, **p < 0.05, ***p < 0.01. Hadri Z-stat; Lin and heteroscedastic
consistent Z-stat

Table 4 Correlation matrix

SAV ACC BOR EDU FIN POP
SAV 1
ACC 0.889 1
BOR 0.823 0.913 1
EDU 0.455 0.503 0.397 1
FIN 0.752 0.838 0.817 0.521 1
POP 0.146 −0.015 0.036 −0.128 0.084 1

3.4.3 Correlation

A correlation matrix finds no multicollinearity problem between the explanatory

variables (Table 4).

3.5 Regression Analysis

We conduct a Hausman test in order to decide which of the two models (FE or RE)
is appropriate for our study. The Hausman test for model specification built on the
variation in coefficients between FE and RE models confirms the suitability of the
random effect model, as the p-value acquired from the test is more than 5%. Tables
5, 6, and 7 show the results.
As stated by Chi-square statistic 3 with the probabilities 0.86, 1, and 0.82. The
Hausman test reveals that RE is suitable for the three regression models. The
194 L. Khalaf and R. A. Wadi

Table 5 Hausman test for random effects

Test summary Chi-Sq. statistic Chi-Sq. d.f. Prob.
Period random 0.747767 3 0.8619
Hausman specification test (dependent: ACC): fixed effect vs. random effect for (ACC model)

Table 6 Hausman test for random effects

Test summary Chi-Sq. statistic Chi-Sq. d.f. Prob.
Period random 0.000000 3 1.0000
Hausman specification test (dependent: BOR): fixed effect vs. random effect for (BORR model)

Table 7 Hausman test for random effects

Test summary Chi-Sq. statistic Chi-Sq. d.f. Prob.
Period random 0.912297 3 0.8225
Hausman specification test (dependent: SAV): fixed effect vs. random effect for (SAV model)

random effects model considers the intercept as a random variable that has a weight
equal to μ, as shown below:

i vi (2)

where the two components of intercept αi are a constant term that is fixed for
each country vi and a random term μ that meets the prerequisites of OLS.
On the other hand, the term vi is a random variable with mean E[vi] and variance
(vi) ≠ 0. The RE model includes a blending error consisting of (vi + εit). Allison
(2009), “In a random-effects model, the unobserved variables are assumed to be
uncorrelated with all the observed variables.” Thus, the RE model is given by:

j 1
COMPG it B j Xit vi it (3)
k

The RE model applies the generalized least squares (GLS) method to evaluate
the model’s coefficients. We note that the random effect model is less stable than the
fixed effect since it includes a compound error, but it is more efficient. The GLS
method supposes the homoscedastic variance and white error (Baltagi Badi, 2005).
The results of the GLS regression analysis are presented in Table 8.
The cross-country outcomes are consistent with preceding research that has dis-
covered a positive link between Fintech and financial inclusion (Hussein, 2020;
Ozili, 2020; Demir et al., 2020; Fouad & El Rahman, 2018; Jagtiani & Lemieux,
2018; Khaerunnisa, 2018; Rahmi, 2018; Ozili, 2018; Scott et al., 2017; Manyika et
al., 2016). Our results reveal that financial inclusion ensures access to a wide array
of financial services throughout society in our selected sample of MENA countries.
Advantages of digital finance to customers consist of more control of customers’
personal finance, rapid financial decision-making, and the capability to make and
get payments within seconds. Fintech would increase individuals’ and business’
Fintech and Financial Inclusion: Evidence from MENA Countries 195

Table 8 Panel RE model (GLS) regression results

Model 1 (ACC) Model 2 (BOR) Model 3 (SAV)
Estimated Estimated Estimated
parameters [Link] parameters [Link] parameters [Link]
Intercept −37.26088 0.0923 −18.38628 0.1338 −15.11550 0.1218
FIN 21.47108 0.0030 12.39482 0.0002 6.975700 0.0232
EDU 0.245476 0.4526 −0.028961 0.8492 0.045446 0.7543
POP −1.549992 0.5190 −0.406365 0.7542 1.351459 0.2650
D-W 1.859000 0.473908 2.123108
R-square 0.627200 0.675236 0.452175
0.571280 0.617925 0.370001
F-statistic 11.21602 11.78191 5.502663
Prob (F-statistic) 0.000156 0.000204 0.006376
Number of 24 21 24
observations
Significance level: *** <0.01; ** <0.05

welfare that it can make financial services provided through financial institution,
more accessible, specially, if digital finance enhance their services to be at negligi-
ble or zero cost. Moreover, Fintech were able to deliver safer digital options to in-
person banking, such as cashless payments and contactless transactions during the
COVID-19 pandemic.
The results also show that a 1% increase in Fintech penetration is likely to cause
an increase of 21.47%, 12.39%, and 6.97% in the number of bank accounts, borrow-
ing accounts, and savings accounts, respectively.
The results affirm that Fintech has a significant positive impact on all determi-
nants of financial inclusion (ACC, BOR, and SAV). The size of the Fintech coeffi-
cient is greater when using accounts as the dependent variable while little when
using savings, meaning that digital finance works better for individuals who deal
with formal financial institutions but not for saving issues. On the other hand, the
positive relationship between Fintech and the percentage of borrowing ensures that
digital finance allow customers to apply for loans more efficiently and directly,
besides affording greater flexibility in the payment schemes. These results confirm
that Fintech provides affordable, convenient, and secure banking services to indi-
viduals in MENA countries, which in turn benefits individuals by affording them
greater control of their finances. Chandran (2011) defines technological innovation
as the provision of an ideal combination of inputs and outputs through a combina-
tion of high technology and capital equipment. We may conclude that MENA coun-
tries enjoy high financial technology as a result of their use of information and
communication technology, their use of electronic payment systems, and their use
of ATMs for administrative and operational purposes. These technologies can
increase entry to beneficial and inexpensive financial products and services that
satisfy individual and company needs, ultimately generating economic activity.
The outcomes in Table 8 show that the values of R-square 62.7%, 67.5%, and
45.2%, respectively, are acceptable, meaning 62.7 percent, 67.5 percent, and 45.2
196 L. Khalaf and R. A. Wadi

percent of the financial inclusion indicators of the MENA countries are explained
by the independent variables, respectively. Durbin-Watson coefficients (DW = 1.85,
2.12) are close to 2 for models 1 and 2, referring that there is no proof of autocor-
relation among the residuals as a rule of thumb. Furthermore, F-statistic and its
probability reveal that the regression model is statistically significant in general.
Besides, the standard error of the regression model, 1%, is very little. Liable to such
circumstances, the random effect model appears to be suitable for the current study.

4 Conclusion

Recently, some countries in MENA region have begun to keep pace with this rapid
development of financial technology, as it is a fast-growing sector that allows
achieving strong investment returns and supports the path of economic development
throughout the region. Technology companies also provide new solutions that the
financial sector can employ to improve the efficiency and effectiveness of its opera-
tions. Our study hopes to be a significant addition to the literature on Fintech and
financial inclusion especially in MENA region countries that suffer from inequality
and weak access to financial services. This study highlights the effect of Fintech on
financial inclusion in MENA countries. The study uses panel data collected from the
Global Financial Inclusion database and the World Bank database. The dependent
variable is financial inclusion (FI), and the independent variable is Fintech (FIN).
The control variables in our model are education (EDU) and population growth
(POP). The data consist of eleven MENA countries and covers 2011, 2014, and
2017. The study’s results show that there is a positive relationship between Fintech
(measured by the number of ATMs per 100,000 residents) and financial inclusion
(measured by the percentage of residents holding various account types at formal
financial institutions). Findings revealed that digital finance increases financial
inclusion in terms of overall account ownership, but not savings account ownership.
Our results reveal that financial inclusion ensures access to a wide array of financial
services throughout society in our selected sample of MENA countries.

References

Allen, F. (2021). Globalization of Finance and Fintech in the MENA Region (Working Paper No.
1489). [Link]
Allison, P. D. (2009). Fixed effects regression models. SAGE publications.
Amirata, A., & Alsulimanib, T. (2021). An empirical study of the adoption of Fintech in the
banking sector of Saudi Arabia. International Journal of Innovation, Creativity and Change,
15(4), 1–12.
Baltagi Badi, H. (2005). Econometric analysis of panel data. Ebook (3rd ed.). John Wiley and
Sons TNC, USA.
Fintech and Financial Inclusion: Evidence from MENA Countries 197

Bashayreh, A., & Wadi, R. M. A. (2021). The effect of Fintech on banks’ performance: Jordan
case. In The importance of new technologies and entrepreneurship in business development: In
the context of economic diversity in developing countries: The impact of new technologies and
entrepreneurship on business development (pp. 812–821). Springer International Publishing.
CGAP. (2017). CGAP Advancing financial inclusion to improve the lives of the poor home what
is financial inclusion and why is it important?. Retrieved from CGAP Website: [Link]
[Link].
Chandran, D. (2011). Financial inclusion strategies for inclusive growth in India. Available at
SSRN: [Link]
Chen, X., You, X., & Chang, V. (2021). FinTech and commercial banks’ performance in China: A
leap forward or survival of the fittest? Technological Forecasting and Social Change, 166(4),
120645, 1–26.
Demir, A., Pesqué-Cela, V., & AltunbasYener, M. V. (2020). Fintech, financial inclusion, and
income inequality: A quantile regression approach. The European Journal of Finance, 28(1),
86–107. [Link]
Demir, A., Pesqué-Cela, V., Altunbas, Y., & Murinde, V. (2022). Fintech, financial inclusion
and income inequality: A quantile regression approach. The European Journal of Finance,
28(1), 86–107.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Oudheusden, P. (2014). Measuring financial inclu-
sion around the world. The Global Findex Database, World Bank Policy Research Working
Paper No. 7255. Available at SSRN: [Link]
Fouad, R., & El Rahman, Y. A. (2018). Financial inclusion and economic growth MENA region.
Scientific Journal for Economic & Commerce, 48(4), 799–819.
Hussein, H. (2020). The impact of financial technology on financial inclusion: The case of Egypt.
Journal of Economics and Finance, 11(6), 35–51.
Jagtiani, J., & Lemieux, C. (2018). Do fintech lenders penetrate areas that are underserved by
traditional banks? Journal of Economics and Business, 100, 43–54. [Link]
jeconbus.2018.03.001
Khaerunnisa, L. H. The role of financial technology toward financial inclusion in Indonesia:
Chance and challenge. In 5th International Conference on New Ideas in Management,
Economics and Accounting. Paris, 2–4 November 2018. [Link]
content/uploads/2019/01/IMEA-5-[Link]
Klapper L., & Ansar S. (2017). Can Islamic finance boost financial inclusion? Brookings insti-
tution. Retrieved from: [Link]
can-islamic-finance-boost-financial-inclusion/.
Landry, J. (2020). Financial inclusion and income inequality in Sub-Saharan Africa: The role
play by mobile money. Global Journal of Management and Business Research, 20(14), 1–7.
Retrieved from: [Link]
Legowo, M. B., Subanidja, S., & Sorongan, F. A. (2021). Fintech and bank: Past, present, and
future. Jurnal Teknik Komputer, 7(1), 94–99.
Manyika, J., Lund, S., Singer, M., White, O., & Berry, C. (2016). Digital finance for all: Powering
inclusive growth in emerging economies. McKinsey Global Institute, McKinsey & Company.
Murinde, V., Rizopoulos, E., & Zachariadis, M. (2022). The impact of the FinTech revolution on
the future of banking: Opportunities and risks. International Review of Financial Analysis, 81,
102103. [Link]
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul
Review, 18(4), 329–340. [Link]
Ozili, P. (2020). Financial inclusion research around the world: A review. In Forum for Social
Economics, Routledge, 50(4), 457–479. [Link]
Pejkovska, M. (2018). Potential negative effects of Fintech on the financial services sec-
tor, Examples from the European Union, India and the United States of America. Helsinki
Metropolia University of Applied Sciences (thesis).
198 L. Khalaf and R. A. Wadi

Rahmi, M. (2018). Fintech for financial inclusion: Indonesia case. 1st International Conference on
Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018) (Vol. 65, pp. 805–807).
[Link]
Sahay, R., Čihák, M., N’Diaye, P., Barajas, A., Mitra, S., Kyobe, A., Mooi, Y., & R. Yousefi.
(2015). Financial inclusion: Can it meet multiple macroeconomic goals?. IMF Staff Discussion
(No. 2015/17).
Sarma , M. (2010). Index of financial inclusion. India: Centre for International Trade and
Development. School of International Studies, Jawaharlal Nehru University, 23(5), 613–628.
Scott, S. V., Van Reenen, J., & Zachariadis, M. (2017). The long-term effect of digital innovation
on bank performance: An empirical study of SWIFT adoption in financial services. Research
Policy, 46(5), 984–1004.
Sun, T. (2018). Balancing innovation and risks in digital financial inclusion – experiences of ant
financial services group. In Handbook of blockchain, digital finance, and inclusion (Vol. 2,
pp. 37–43). Academic Press. [Link]
Tarawali, J. F. (2020). Impacts of FinTech innovations on financial inclusion in developing coun-
tries and the challenges they face – A case study on Sierra Leone. Politecnico di Torino (thesis).
[Link]
Tidjani, C. (2021). COVID-19 and challenges of the fintech industry: A state of the art and out-
looks on the North African region. Abaad Iktissadia Review, 11(2), 696–721.
Tok, Y. W., & Heng, D. (2022). Fintech: Financial inclusion or exclusion? International
Monetary Fund.
United Nations, Department of Economic and Social Affairs Poverty: Retrieved from United
Nations web site: [Link]
issues/[Link]
World Bank. (2014). The Opportunities of Digitizing Payments How digitization of payments,
transfers, and remittances contributes to the G20 goals of broad-based economic growth, finan-
cial inclusion, and women’s economic empowerment. World Bank. G20 Australian Presidency.
World Bank. (2017). Understanding poverty: Topics: Financial inclusion. World Bank. Retrieved
from Web site: [Link]
Impulse Buying Behaviors in a Digital
World

Maryam Husain Almahdi, Jameela Radhi, Faisal Alhawaj,

and Abdulraqeeb Najeeb

1 Introduction

Impulse buying is a widespread and well-researched, albeit quite enigmatic, phe-

nomenon (Kalla & Arora, 2011; Hausman, 2000; Rook, 1987). Research on impulse
buying begun in the context of brick-and-mortar retailers in the early 1950s (Clover,
1950; Muruganantham & Bhakat, 2013) and expanded since then to cover different
types of shopping environments, including electronic commerce (e-commerce) and
social media (Aragoncillo & Orus, 2018). Statistics show that between 40% and
80% of customers’ purchases are impulse purchases, depending on the product type
and store setting (Aragoncillo & Orus, 2018; Jeffrey & Hodge, 2007; Amos et al.,
2014; Verhagen & Van Dolen, 2011). The advent of the COVID-19 pandemic con-
tributed to a spike in customer impulse buying behaviors, especially online (Lee,
2022). This explains why impulse buying is continuously regarded an important
area of research from a marketing perspective (Wang & Chapa, 2022; Chen
et al., 2022).
In a modern digital world, scholars and marketers continue striving to learn how
to boost sales by creating shopping environments that entice impulse buying
behaviors (Kalla & Arora, 2011; Amos et al., 2014; Beatty & Ferrell, 1998; Kacen
& Lee, 2002; Abdelsalam et al., 2020; Parsad et al., 2017; Jones et al., 2003). Paying
attention to emerging and growing shopping environments, such as social
commerce, social media, and e-commerce is thus a key factor to help understand the
wide array of customer impulse buying behaviors, what influences them, and how
to direct them towards acheiving desired marketing outcomes (Dodoo & Wu, 2019;

M. H. Almahdi (*)
American University of Bahrain, Riffa, Kingdom of Bahrain
J. Radhi · F. Alhawaj · A. Najeeb
Ahlia University, Manama, Kingdom of Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 199
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
200 M. H. Almahdi et al.

Liu et al., 2013; Huang, 2016). This gains additional importance, considering the
dynamic, ever-evolving, nature of customers’ online shopping preferences
and experiences (Almahdi, 2018).
In this paper, an overview of the meaning and types of impulsive buying behav-
iors is first presented, followed by a discussion of impulse buying on different digi-
tal platforms. The physical and digital stimuli that encourage impulse buying
behaviors are highlighted after. The paper is concluded with a discussion of relevant
future research directions.

2 An Overview of Impulsive Buying Behavior

Dennis Rook, one of the leading researchers in the field of impulse buying, explains
the concept as a strong and sudden desire by a customer to acquire a product
immediately and with little regard to consequence (Rook, 1987). In other words, an
impulsive buyer will feel a strong and pressing urge to purchase, that seems beyond
their control, and will hence have little time to think between deciding to buy and
carrying out the purchase (Rook, 1987; Wang & Chapa, 2022; Jones et al., 2003;
Faber, 2010).
Impulse buying is thus defined as “a sudden, compelling, hedonically complex
purchase behavior in which the rapidity of the impulse purchase decision precludes
any thoughtful, deliberate consideration of alternatives or future implications”
(Sharma et al., 2010, p. 277). Another, more detailed, definition of impulse buying
is brought forward by Beatty and Ferrell. According to them, it is “a sudden and
immediate purchase with no pre-shopping intentions either to buy the specific
product category or to fulfill a specific buying task. The behavior occurs after
experiencing an urge to buy and it tends to be spontaneous and without a lot of
reflection” (Beatty & Ferrell, 1998, p. 170).
It is key to note that despite, sometimes, being used interchangeably in research
(Stern, 1962; Cobb, 2009), the concepts of impulse buying and unplanned purchasing
are conceptually different (Aragoncillo & Orus, 2018; Beatty & Ferrell, 1998; Jones
et al., 2003). While the first is characterized by the customer’s strong emotional urge
that leads them to buy in order to seek release (Verhagen & Van Dolen, 2011; Beatty
& Ferrell, 1998), the latter is simply about buying something that might not be on
the shopping list, without a lot emotions tied to the purchase (Amos et al., 2014).
Four types of impulse buying are identified in the literature: pure, reminder, sug-
gestion, and planned (Stern, 1962; Han et al., 1991). Pure impulse buying is
observed when “a person breaks a normal buying pattern” (Stern, 1962, p. 59),
purchasing something totally out of impulse, for fun or escapism (Muruganantham
& Bhakat, 2013). Reminder impulse buying is when a buyer’s impulse purchase is
sparked by an external factor they were previously exposed to, like a particular
marketing message, a prior shopping experience, or a product (Muruganantham &
Bhakat, 2013; Stern, 1962). Suggestion impulse buying occurs when a buyer has no
Impulse Buying Behaviors in a Digital World 201

previous knowledge about the product but envisions a possible future need for it
(Stern, 1962). Finally, planned impulse buying happens when a buyer has the
intention of buying certain products when going shopping but expects they might
make other purchases if swayed by offers and promotions (Muruganantham &
Bhakat, 2013; Stern, 1962).

3 Online Impulsive Buying Behavior

Due to the growth of the Internet and social media technologies and their strong
influence on the shopping experience of customers (Almahdi & Archer-Brown,
2022), research on impulse buying has, inevitably, extended to the context of online
shopping (Wells et al., 2011; Chan et al., 2017). This research direction is especially
important as 56% of people report that more than half of their online purchases
are impulsive (Lee, 2022). Still, research on online impulse buying behaviors only
started to gain traction in recent years and is still quite limited in comparison to
research on planned online shopping and that on impulse buying in physical
environments (Verhagen & Van Dolen, 2011; Shen & Khalifa, 2012).
One of the main discussion points regarding online impulse buying in prior
research is whether online environments encourage impulse buying behaviors or
not. One direction of research posits that online environments entice the customers
to buy impulsively (Moran, 2015; Gupta, 2011; LaRose, 2001), due to their
convenience, anonymity, and interactivity (Aragoncillo & Orus, 2018; Verhagen &
Van Dolen, 2011; Dodoo & Wu, 2019; Dawson & Kim, 2010). The wide product
assortment and advanced online marketing strategies utilized are additional reasons
why online environments are thought to encourage impulse buying behaviors
(LaRose, 2001; Greenfield, 1999). Online shopping environments are expected to
relieve the customers from the inconveniences of physical stores and therefore
encourage their impulse shopping behaviors (Chan et al., 2017). As Dodoo puts it,
“impulse buying connotes immediacy in purchase behavior and e-commerce permits
individuals with the ability to exert the minutest expenditure of time and effort”
(Dodoo & Wu, 2019, p. 74).
Still, another line of research establishes that due to the modern customer’s
familiarity with online shopping, the ease of finding product information and
comparisons, and the delayed gratification of having to wait to receive one’s ordered
products, customers are more likely make planned, unemotional purchases online
(Aragoncillo & Orus, 2018; Verhagen & Van Dolen, 2011; Kacen & Lee, 2002; Moe
& Fader, 2004). It is, thus, suggested that physical shopping environments are more
likely to encourage impulse buying due to their immediacy and ability to stimulate
the senses and foster hedonic motivations (Aragoncillo & Orus, 2018; Gupta, 2011;
Peck & Childers, 2006).
Despite this discrepancy, marketers still try to imitate the physical shopping
experience when designing online stores, in an attempt to encourage online impulse
202 M. H. Almahdi et al.

buying (Median News, 2020). This is achieved by designing them in a way that
minimizes barriers to purchase, presenting vivid pictures and videos, sharing
detailed product specifications (Aragoncillo & Orus, 2018), and offering virtual
environmental cues (Dodoo & Wu, 2019), and one-click buying features (Jeffrey &
Hodge, 2007; Shen & Khalifa, 2012). Marketers have also been utilizing the
interactive technologies of social media to encourage impulse buying (Dodoo &
Wu, 2019), which we discuss in further detail in the following section.

4 Impulsive Buying Behavior on Social Media

Despite limited research in this area, it is key to address the influence of social
media on customers’ impulse buying behaviors (Huang, 2016; Zafar et al., 2021;
Baker Qureshi et al., 2019). Unlike the afore-discussed contradicting views on
impulse buying in e-commerce environments, research is consistent in
positively linking social media and impulse buying behaviors (Aragoncillo & Orus,
2018; Zafar et al., 2021; Baker Qureshi et al., 2019). This is due to customers
generally spending extended periods of time using social media and constantly
receiving highly personalized marketing stimuli, which encourage their impulse
buying behaviors (Dodoo & Wu, 2019; Huang, 2016; Nuseir, 2020; Baker Qureshi
et al., 2019). The social experiences of customers while using social media (e.g.,
posting and viewing shopping recommendations, reviews, and product pictures) is
another important difference that sets social media apart from other
online shopping platforms (Baker Qureshi et al., 2019). The impact of friends and
other social media influencers on impulse buying is an additional key factor to con-
sider (Nuseir, 2020; Baker Qureshi et al., 2019). Zafar and colleagues found that the
authenticity of the product-related content posted by online influencers encouraged
their followers’ impulse buying behaviors (Zafar et al., 2021). This is due to their
perceived believability and trustworthiness in the eyes of the customers (Almahdi
et al., 2022). In line with the marketing efforts in manipulating e-shopping environ-
ments to encourage impulse buying, Nuseir recommends utilizing well-designed
advertisements, multimedia formats, and social presence to achieve this goal in
social media shopping environments (Nuseir, 2020).
It is interesting to note here that while the anonymous nature of e-commerce has
been cited in prior research as an encouraging factor of online impulse buying
(Aragoncillo & Orus, 2018), the social capabilities of social media are highlighted
in more recent research as the reason such platforms encourage impulse buying
behaviors (Abdelsalam et al., 2020; Huang, 2016).
This and other influencing factors of impulse buying behaviors, both in physical
and digital environments, are discussed in the following part of the paper.
Impulse Buying Behaviors in a Digital World 203

5 Factors Influencing Impulse Buying Behavior

Various factors are expected to influence impulse buying behavior, including the
location and time of the purchase, buyers’ personality traits, as well as larger
economic and cultural factors (Aragoncillo & Orus, 2018; Stern, 1962; Youn &
Faber, 2000). These factors do not only influence different buyers in a variety of
ways, but can influence the same buyers differently in different situations (Stern,
1962). These influences are organized into four categories in the literature: external
stimuli, internal stimuli, situational factors, and demographic and sociocultural
factors (Muruganantham & Bhakat, 2013). Each category is discussed in more
detail in the following subsections.

5.1 External Stimuli

Impulse buying is described as “buying that presumably was not planned by the
customer before entering a store, but which resulted from a stimulus created… in
the store” (Applebaum, 1951, p. 176). This statement reflects how external stimuli
(e.g., environmental factors, sensory stimuli, and atmospheric cues) can affect the
customers’ impulse buying behavior (Youn & Faber, 2000). Indeed, it was found
that when a shopping environment is stimulating and highly enjoyable (Milliman &
Fugate, 1993), impulse buying is more likely to occur (Donovan & Rossiter, 1982;
Donovan et al., 1994).
External stimuli include marketing mix elements and marketer-controlled cues
that are used to alleviate barriers to purchase and entice customers to buy impulsively
(Stern, 1962; Youn & Faber, 2000; Applebaum, 1951; Piron, 1991). In a physical
shopping setting, such stimuli include store size and ambience (Muruganantham &
Bhakat, 2013), exclusive aromas and sounds (Holbrook & Anand, 1990; Kaur &
Singh, 2007; Mattila & Wirtz, 2008), advertisements and sales promotions (Youn &
Faber, 2000; Applebaum, 1951), colors and other visual in-store elements (Stern,
1962; Valdez & OTROS, 1999), as well as product displays (Hultén & Vanyushyn,
2011). In a digital shopping environment (e.g., an e-commerce website or social
media platform), external cues that encourage impulse buying include website
design quality and visual appeal, interactivity and navigability, clear product
information, and personalized marketing messages (Kalla & Arora, 2011; Dodoo &
Wu, 2019; Shen & Khalifa, 2012; Nuseir, 2020; Parboteeah et al., 2009).
In addition to visual and experiential cues related to the shopping environment,
social cues are considered important external stimuli that affect customers’ impulse
buying (Hausman, 2000; Mattila & Wirtz, 2008). These include the conduct and
friendliness of store employees and customers, social comparison behaviors, and
peer influences (Liu et al., 2013; Huang, 2016; Nuseir, 2020; Zafar et al., 2021;
Mattila & Wirtz, 2008). Finally, the availability, security, and ease of use of credit
204 M. H. Almahdi et al.

cards and other non-cash payment methods are considered an encouraging external
factor of impulse buying (Rook, 1987; Youn & Faber, 2000).

5.2 Internal Stimuli

Internal stimuli are characterized by a shopper’s personality, emotions, motivations,

and decision-making processes (Kalla & Arora, 2011; Muruganantham & Bhakat,
2013; Aragoncillo & Orus, 2018; Argo et al., 2005). A highly researched type of
internal stimuli, tied to impulse buying, is customers’ hedonic motivations
(Hausman, 2000; Argo et al., 2005). In the context of this filed of research, hedonic
motivations are feelings of enjoyment, amusement, and pleasure that result from the
shopping experience (Hausman, 2000; Beatty & Ferrell, 1998). Going through such
feelings often compels customers to buy with little or no prior planning (Hausman,
2000) due to a sense of freedom, novelty, or a desire to reward oneself
(Muruganantham & Bhakat, 2013; Gardner & Rook, 1988). Indeed, Ramanathan
and Menon explain that impulse buying is often “driven by hedonic, or pleasure-
seeking, goals that may cause a person to experience desires for related objects or
products” (Ramanathan & Menon, 2006, p. 629). Interestingly, impulse buying can
also be driven by negative feelings and the customers’ desire to eliminate these
feelings by engaging in spontaneous shopping activities (Chen et al., 2022).
Another type of internal stimuli, which is tied to impulse buying, is customer
personality characteristics, including impulsivity, stress reaction, and trust, in
addition to variety seeking, mood regulating, and escapism behaviors (Rook, 1987;
Liu et al., 2013; Baker Qureshi et al., 2019; Youn & Faber, 2000; Bratko et al., 2013;
Atalay & Meloy, 2011). Scholars have found a relationship between impulsivity and
impulse buying in prior research (Parsad et al., 2017; Dawson & Kim, 2009), where
customers with greater impulsive tendencies were more likely to be influenced by
external shopping stimuli, fueling their impulse buying behaviors (Youn &
Faber, 2000).

5.3 Situational Factors

In addition to external and internal stimuli, situational factors have been found to
similarly influence impulse buying in consumers (Rook, 1987; Aminosharieh &
Mowlaie, 2017). In this sense, situational factors include the time and season of the
shopping trip and types and positioning of the products, along with store location
(Liu et al., 2013; Shapiro, 2001; Yu & Bastin, 2017). To highlight the importance of
situational factors in influencing impulse buying, marketers address the widespread
strategy of placing profitable items clearly near the store’s checkout counter so they
would grab the attention of the customers, who are then left with little time to
deliberate before purchasing them (Shapiro, 2001). Another situational factor
Impulse Buying Behaviors in a Digital World 205

discussed in prior research is time, although findings are contradictory regarding the
effect of time on impulse purchasing. Indeed, it has been suggested that individuals
who have the leisure of more time will be more likely to carry out impulse purchasing
(Jeffrey & Hodge, 2007; Beatty & Ferrell, 1998; Jeon, 1990). However, impulse
buying equally “represents a rational alternative to more time-consuming search
behaviors” (Hausman, 2000, p. 413). A major situational factor that disrupted the
shopping sphere recently is the spread of the COVID-19 pandemic, which has been
linked to increasing impulse buying behaviors in customers (Median News, 2020;
Lahath et al., 2021).

5.4 Demographic and Sociocultural Factors

It has been found by various researchers that socio-cultural and demographic factors
also play an important role in impulse purchase behaviors. For example, Lee and
Kacen found that impulse buying varies across cultures and societies (Lee & Kacen,
2008), with people belonging to individualistic cultures more likely to purchase
spontaneously than those belonging to collectivistic cultures (Lee & Kacen, 2008).
From a demographic perspective, a major difference in the motivations to engage
in impulse purchasing behaviors was found between men and women (Kollat &
Willett, 1967). Dittmar et al. report that men tend to engage in impulse purchasing
to project their independence, while women do the same as a way to express their
emotions (Dittmar et al., 1995). This is in line with an earlier study by Rook and
Hoch, who found that women engage in impulse purchasing due to higher emotional
motivations than those of men engaging in the same behavior (Rook & Hoch, 1985).
Also from a demographic perspective, research indicates that consumers from
different generations practice different buying behaviors. For example, the buying
behavior of baby boomers (born between1946 and 1964) has been found to be
mainly need-driven (Cortes, 2004), while millennials (generation Y, born between
1985 and 1996) have been observed to spend their money as soon as they earn it,
typically on personal services and other consumer goods (Der Hovanesian, 1999).
This means that millennials are more likely than their predecessors to engage in
impulse buying behaviors (Xu, 2007). Other demographic and socio-cultural factors
that affect impulse buying behaviors include income, education, and socio-
economical status (Liu et al., 2013).

6 Summary and Future Research Directions

Based on our overview of impulse buying research in a digital world, we recom-

mend that further research attention is dedicated to understanding customers’ buy-
ing behaviors in both online and social media environments. What gives this
research direction additional importance is the fact that customers are dynamic,
206 M. H. Almahdi et al.

which means that their behaviors and experiences keep evolving over time and with
the introduction of new shopping technologies (Almahdi, 2018). Special attention
should also be paid to investigating impulse buying behaviors on social commerce
platforms (Abdelsalam et al., 2020), as they are an underexplored but promising
novel shopping technology (Almahdi & Archer-Brown, 2022; Almahdi, 2021).
Finally, the long-term effects of COVID-19 on customers’ impulse (online and
offline) buying behaviors is an interesting area of research to consider in the future
(Lee, 2022; Wang & Chapa, 2022).

References

Abdelsalam, S., et al. (2020). Understanding online impulse buying behavior in social commerce:
A systematic literature review. IEEE Access, 8, 89041–89058.
Almahdi, M. (2018). The evolution of interactivity in the context of social commerce: A multi-
faceted investigation. University of Bath.
Almahdi, M. H. (2021). Social commerce: A concept explication. In A. M. A. Musleh Al-Sartawi,
A. Razzaque, & M. M. Kamal (Eds.), Artificial intelligence systems and the internet of things
in the digital era (pp. 398–404). Springer: Proceedings of EAMMIS 2021.
Almahdi, M. H., & Archer-Brown, C. (2022). The role of interactivity in social commerce web-
sites: A content analysis study. In A. M. A. M. Al-Sartawi (Ed.), Artificial intelligence for
sustainable finance and sustainable technology. Springer.
Almahdi, M. H., Alsayed, N., & Alabbas, A. (2022). In influencers we trust? A model of trust trans-
fer in social media influencer marketing. In A. Hamdan et al. (Eds.), Future of organizations
and work after the 4th industrial revolution (pp. 159–173). Springer.
Aminosharieh, S., & Mowlaie, S. (2017). An investigation into individual and situational factors
effective in the level of impulse buying behavior of customers. Journal of Ecophysiology and
Occupational Health, 17(1/2), 68–71.
Amos, C., Holmes, G. R., & Keneson, W. C. (2014). A meta-analysis of consumer impulse buying.
Journal of Retailing and Consumer Services, 21(2), 86–97.
Applebaum, W. (1951). Studying customer behavior in retail stores. Journal of Marketing, 16(2),
172–178.
Aragoncillo, L., & Orus, C. (2018). Impulse buying behaviour: An online-offline comparative and
the impact of social media. Spanish Journal of Marketing-ESIC, 22(1), 42–62.
Argo, J. J., Dahl, D. W., & Manchanda, R. V. (2005). A non-interactive social presence in a retail
setting: An investigation of its impact on consumers’ emotions, cognitive performance, and
self-presentation behaviors. ACR North American Advances.
Atalay, A. S., & Meloy, M. G. (2011). Retail therapy: A strategic effort to improve mood.
Psychology & Marketing, 28(6), 638–659.
Baker Qureshi, P. A., Murtaza, F., & Kazi, A. G. (2019). The impact of social media on impulse
buying behaviour in Hyderabad Sindh Pakistan. International Journal of Entrepreneurial
Research, 2(2), 8–12.
Beatty, S. E., & Ferrell, M. E. (1998). Impulse buying: Modeling its precursors. Journal of
Retailing, 74(2), 169–191.
Bratko, D., Butkovic, A., & Bosnjak, M. (2013). Twin study of impulsive buying and its overlap
with personality. Journal of Individual Differences, 34(1), 8.
Chan, T. K., Cheung, C. M., & Lee, Z. W. (2017). The state of online impulse-buying research: A
literature analysis. Information & Management, 54(2), 204–217.
Impulse Buying Behaviors in a Digital World 207

Chen, S., Zhi, K., & Chen, Y. (2022). How active and passive social media use affects impulse
buying in Chinese college students? The roles of emotional responses, gender, materialism and
self-control. Frontiers in Psychology, 13, 1–15.
Clover, V. T. (1950). Relative importance of impulse-buying in retail stores. Journal of Marketing,
15(1), 66–70.
Cobb, S. C. (2009). Social presence and online learning: A current view from a research perspec-
tive. Journal of Interactive Online Learning, 8(3), 241–254.
Cortes, R. (2004). Generation wars. Caribbean Business, 32(4), 18–22.
Dawson, S., & Kim, M. (2009). External and internal trigger cues of impulse buying online. Direct
Marketing: An International Journal, 3(1), 20–34.
Dawson, S., & Kim, M. (2010). Cues on apparel web sites that trigger impulse purchases. Journal
of Fashion Marketing and Management: An International Journal, 14(2), 230–246.
Der Hovanesian, M. (1999). Spending it, investing it–coming on strong: The children of the baby
boomers are affecting spending and investing as significantly as their parents did; the similarity
ends there. Wall Street Journal, 12(2), 23–28.
Dittmar, H., Beattie, J., & Friese, S. (1995). Gender identity and material symbols: Objects
and decision considerations in impulse purchases. Journal of Economic Psychology, 16(3),
491–511.
Dodoo, N. A., & Wu, L. (2019). Exploring the anteceding impact of personalised social media
advertising on online impulse buying tendency. International Journal of Internet Marketing
and Advertising, 13(1), 73–95.
Donovan, R., & Rossiter, J. (1982). Store atmosphere: An environmental psychology approach.
Journal of Retailing, 58(1), 34–57.
Donovan, R. J., et al. (1994). Store atmosphere and purchasing behavior. Journal of Retailing,
70(3), 283–294.
Faber, R. J. (2010). Impulsive and compulsive buying. Wiley international encyclopedia of
marketing.
Gardner, M. P., & Rook, D. W. (1988). Effects of impulse purchases on consumers’ affective states.
ACR North American Advances.
Greenfield, D. N. (1999). Psychological characteristics of compulsive Internet use: A preliminary
analysis. Cyberpsychology & Behavior, 2(5), 403–412.
Gupta, P. (2011). Shopping impulses, online vs off. The New York Times. p. 2.
Han, Y. K., et al. (1991). Impulse buying behavior of apparel purchasers. Clothing and Textiles
Research Journal, 9(3), 15–21.
Hausman, A. (2000). A multi-method investigation of consumer motivations in impulse buying
behavior. Journal of Consumer Marketing, 17(5), 403–426.
Holbrook, M. B., & Anand, P. (1990). Effects of tempo and situational arousal on the listener’s
perceptual and affective responses to music. Psychology of Music, 18(2), 150–162.
Huang, L.-T. (2016). Flow and social capital theory in online impulse buying. Journal of Business
Research, 69(6), 2277–2283.
Hultén, P., & Vanyushyn, V. (2011). Impulse purchases of groceries in France and Sweden. Journal
of Consumer Marketing, 28(5), 376–384.
Jeffrey, S. A., & Hodge, R. (2007). Factors influencing impulse buying during an online purchase.
Electronic Commerce Research, 7(3), 367–379.
Jeon, J.-O. (1990). An empirical investigation of the relationship between affective states, in-store
browsing, and impulse buying. The University of Alabama.
Jones, M. A., et al. (2003). The product-specific nature of impulse buying tendency. Journal of
Business Research, 56(7), 505–511.
Kacen, J. J., & Lee, J. A. (2002). The influence of culture on consumer impulsive buying behavior.
Journal of Consumer Psychology, 12(2), 163–176.
Kalla, S. M., & Arora, A. (2011). Impulse buying: A literature review. Global Business Review,
12(1), 145–157.
208 M. H. Almahdi et al.

Kaur, P., & Singh, R. (2007). Uncovering retail shopping motives of Indian youth. Young
Consumers. [Link]
Kollat, D. T., & Willett, R. P. (1967). Customer impulse purchasing behavior. Journal of Marketing
Research, 4(1), 21–31.
Lahath, A., et al. (2021). Exploring food waste during the COVID-19 pandemic among Malaysian
consumers: The effect of social media, neuroticism, and impulse buying on food waste.
Sustainable Production and Consumption, 28, 519–531.
LaRose, R. (2001). On the negative effects of e-commerce: A sociocognitive exploration of unreg-
ulated on-line buying. Journal of Computer-Mediated Communication, 6(3), JCMC631.
Lee, B. (2022). 13 online shopping trends for 2022. Available from: [Link]
content/online-shopping-trends/
Lee, J. A., & Kacen, J. J. (2008). Cultural influences on consumer satisfaction with impulse and
planned purchase decisions. Journal of Business Research, 61(3), 265–272.
Liu, Y., Li, H., & Hu, F. (2013). Website attributes in urging online impulse purchase: An empirical
investigation on consumer perceptions. Decision Support Systems, 55(3), 829–837.
Mattila, A. S., & Wirtz, J. (2008). The role of store environmental stimulation and social factors on
impulse purchasing. Journal of Services Marketing, 22(7), 562–567.
Median News. (2020) [cited 2022, 19th of December]. Impulse buying: Will it thrive
in a digital, pandemic world? Available from: [Link]
impulse-buying-will-it-thrive-in-a-digital-pandemic-world/
Milliman, R. E., & Fugate, D. L. (1993). Atmospherics as an emerging influence in the design of
exchange environments. Journal of Marketing Management (10711988), 3(1), 66–75.
Moe, W. W., & Fader, P. S. (2004). Dynamic conversion behavior at e-commerce sites. Management
Science, 50(3), 326–335.
Moran, B. (2015). Effect of stress, materialism and external stimuli on online impulse buying.
Journal of Research for Consumers, 27, 26.
Muruganantham, G., & Bhakat, R. S. (2013). A review of impulse buying behavior. International
Journal of Marketing Studies, 5(3), 149.
Nuseir, M. T. (2020). The extent of the influences of social media in creating 'impulse buying' ten-
dencies. International Journal of Business Innovation and Research, 21(3), 324–335.
Parboteeah, D. V., Valacich, J. S., & Wells, J. D. (2009). The influence of website characteristics on
a consumer’s urge to buy impulsively. Information Systems Research, 20(1), 60–78.
Parsad, C., Prashar, S., & Tata, V. S. (2017). Understanding nature of store ambiance and indi-
vidual impulse buying tendency on impulsive purchasing behaviour: An emerging market per-
spective. Decision, 44(4), 297–311.
Peck, J., & Childers, T. L. (2006). If I touch it I have to have it: Individual and environmental influ-
ences on impulse purchasing. Journal of Business Research, 59(6), 765–769.
Piron, F. (1991). Defining impulse purchasing. ACR North American Advances.
Ramanathan, S., & Menon, G. (2006). Time-varying effects of chronic hedonic goals on impulsive
behavior. Journal of Marketing Research, 43(4), 628–641.
Rook, D. W. (1987). The buying impulse. Journal of Consumer Research, 14(2), 189–199.
Rook, D. W., & Hoch, S. J. (1985). Consuming impulses. ACR North American Advances.
Shapiro, M. F. (2001). Impulse purchases. NPN, National Petroleum News, 93(7), 40.
Sharma, P., Sivakumaran, B., & Marshall, R. (2010). Impulse buying and variety seeking: A trait-
correlates perspective. Journal of Business Research, 63(3), 276–283.
Shen, K. N., & Khalifa, M. (2012). System design effects on online impulse buying. Internet
Research, 22(4), 396–425.
Stern, H. (1962). The significance of impulse buying today. Journal of Marketing, 26(2), 59–62.
Szymkowiak, A., Gaczek, P., & Padma, P. (2021). Impulse buying in hospitality: The role of
content posted by social media influencers. Journal of Vacation Marketing, 27(4), 385–399.
Valdez, G., & OTROS. (1999). Computer-based technology and learning: Evolving uses and
expectations. North Central Regional Educational Laboratory.
Impulse Buying Behaviors in a Digital World 209

Verhagen, T., & Van Dolen, W. (2011). The influence of online store beliefs on consumer online
impulse buying: A model and empirical application. Information & Management, 48(8),
320–327.
Wang, P., & Chapa, S. (2022). Online impulse buying behavior and marketing optimization guided
by entrepreneurial psychology under COVID-19. Frontiers in Psychology, 13, 1–12.
Wells, J. D., Parboteeah, V., & Valacich, J. S. (2011). Online impulse buying: Understanding the
interplay between consumer impulsiveness and website quality. Journal of the Association for
Information Systems, 12(1), 3.
Xu, Y. (2007). Impact of store environment on adult generation Y consumers’ impulse buying.
Journal of Shopping Center Research, 14(1), 39–56.
Youn, S., & Faber, R. J. (2000). Impulse buying: its relation to personality traits and cues. ACR
North American Advances.
Yu, C., & Bastin, M. (2017). Hedonic shopping value and impulse buying behavior in transitional
economies: A symbiosis in the Mainland China marketplace. In Advances in Chinese Brand
Management (pp. 316–330). Springer.
Zafar, A. U., et al. (2021). The impact of social media celebrities’ posts and contextual interactions
on impulse buying in social commerce. Computers in Human Behavior, 115, 106178.
Analyzing the Effects of Digital
Communication on Project Management
in Bahrain During the COVID-19
Pandemic (a Case Study)

Sara Ismaeel, Edward L. Murphree, Allam Hamdan, and Mohammed Kanan

1 Introduction

In 2020, the government of Bahrain faced a difficult situation due to the COVID-19
pandemic. Quick actions were taken, and procedures were altered to comply with
social distancing and ensure the safety of everyone. One of the changes was shifting
to digital communication. As this was a new concept, many managers expressed
their dislike due to the physical absence of their employees. However, some
employees were satisfied with the new situation and felt comfortable and were more
productive working from home. Unfortunately, as people were not used to the new
strategy, some challenges affected the productivity of the government entities in
Bahrain.
This paper focuses on digital communication within public-sector organizations
and the factors that have impacted project management. Digital communication is
highly important nowadays, as it is necessary for the development of any country,
business, or project. Its importance is evident when compared with traditional
methods. There are several factors that have enabled digitalized project management
to be accepted, such as reliability, security, convenience, acceptability, anonymity,
efficiency, scalability, and privacy (Sidek, 2015).
This research shows the main factors of digitalization in Bahrain during the
COVID-19 pandemic. A case study is conducted to identify the effects on
procurement as a part of project management due to the quick transition to

S. Ismaeel (*) · E. L. Murphree

The George Washington University, Washington, DC, USA
A. Hamdan
College of Business & Finance, Ahlia University, Manama, Bahrain
M. Kanan
University of Business and Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 211
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
212 S. Ismaeel et al.

digitalization during the pandemic. We show the effects of digital communication

factors and measure which factor has an impact on e-tendering. We also identify the
challenges that caused a reduction in the number of bids provided by contractors to
help improve the overall situation and participation in e-tendering. Managers can
use the deliverables while setting objectives and plans to strengthen weak areas.
This study provides an overview of the Kingdom of Bahrain’s Tender Board’s
experiment in digitalization in the year 2020, followed by the problem statement.
The aim is to improve project management by using online-based tools, finding
solutions for the limitations faced, and considering adopting the approach of
digitalization on a continuous basis. The Bahrain Tender Board’s operations
witnessed major developments in terms of digital tender applications, which was
the first step in the transition from comprehensive automation to comprehensive
digitalization in line with His Majesty King Hamad bin Isa Al Khalifa’s directives
to adopt and employ artificial intelligence in the production sectors.
The Tender Board is committed to achieving the goals of Bahrain Economic
Vision 2030, which aims to create a more competitive and sustainable economy.
Comprehensive automation processes have contributed to improving and facilitating
work between suppliers, contractors, and government agencies in addition to
increasing the level of participation of suppliers and contractors, especially in the
current circumstances where national efforts are united to mitigate the consequences
of COVID-19 in a manner that preserves the safety of citizens, residents, and
their health.
In April 2020, Bahrain’s Tender Board announced that it was digitalizing its ser-
vices in line with the Cabinet’s directives for all ministries and authorities to make
quick digital shifts for their services. Suppliers would be able to participate with
bids for tenders by uploading them to an integrated central online platform called
the e-tendering system. All tender processes would be conducted in that system, and
the winners announced on it too. During the launch, the secretary general of the
Tender Board stated that the pilot stage, which included full digitalization of all its
services, would allow suppliers and companies to submit their bids easily. The sys-
tem would also allow more establishments to participate in the process, especially
during the COVID-19 pandemic. The full digitalization of the services would begin
with a complete plan designed for this target and implemented in the second half of
2020. As the tendering process would take around 6 months, the results would be
reflected in the first half of 2021.
One of the main challenges faced was communication. For any organization to
succeed and for strong and successful project management, communication is key
to achieving integration between different levels of employees. Goals can be
achieved by having strong relationships and interaction between employees, as it
allows the sharing of knowledge and experiences and creates a friendly environment
where an employee feels comfortable working (Khalifa et al., 2021). These ele-
ments, in addition to strong communication, lead to high productivity and improve-
ment of the organization’s performance (Robbins & Judge, 2007). Digital
communication has some benefits aside from reducing administration costs, and it
can be effective if an organization makes the correct decisions and implements
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 213

strategies to control all the processes involved in adopting a work-from-home

strategy (Bohrer, 2021).
Unfortunately, due to the sudden transition to remote working, communication
problems occurred. Some of the employees were not prepared for working from
home, as they did not have laptops or remote access. This resulted in late submissions,
confusion, and disappointed employees. Professional and social activities and
informal communications, such as communicating with work colleagues, meeting
other ministries’ employees or suppliers, friendly conversations, lunch break talks,
and events that influenced relationships between employees, were affected. Meetings
were conducted online through different applications, such as Zoom and Microsoft
Teams, but the quality and outcomes were different (Khalifa et al., 2021).
Due to transitioning to digital communication (e-tendering system) during the
COVID-19 pandemic, the tender’s value increased by BD 733,300,756 in the first
half of 2021 (Bahrain Tender Board Annual Report, 2020). The number of bids
received was reduced by 24%, from 5555 in 2020 to 4561 bids in 2021, which also
considered a reduction in the options available and price variety. This meant lower
offers to choose from to get a product or service done and avoid work delays. Hence,
the cost to conduct services or products requested increased from BD 1,557,395,691
to BD 2,290,696,447 in the year 2021. Furthermore, a lower number of contractors
applied for tenders in the shift to the e-tendering system during COVID-19 and
increased their prices, while the purchasing authorities were faced with the problem
of a decreased number of participants in their tenders.
Thus, relationships between employees were affected, and some managers
forced their employees to remain in the workplace during working hours to avoid
any limitations. Studies have revealed that there are challenges with working from
home, such as receiving work requests from managers and colleagues after
scheduled work hours and/or at their convenience as well as colleagues not
responding on time, and communication with colleagues can be more difficult by an
average of 42% (Moovala, 2020). The studies illustrate the many aspects of digita-
lization, development, and how users perceive these new changes. As Bahrain
became digitalized and many people started using this type of technology, a research
gap existed in relation to how people in Bahrain were supposed to deal with the
changes.

2 Literature Review

2.1 Effects of COVID-19 on Project Management Processes

The pandemic affected the work-related processes of project management, stressing

employees working on projects as a team. The number of activities that had to be
coordinated and managed during the pandemic could overwhelm management
teams. Proper planning was therefore essential for an organization’s leadership
214 S. Ismaeel et al.

team. However, making quick and correct decisions was challenging due to the abrupt
changes experienced in different sectors of the global economy (Shamim, 2022).
An article was written about this period in Bangladesh in 2022 in which the
author stated that COVID-19 greatly affected various aspects of business, including
strains on the entire process of managing projects from the initiation phase of a
project to the end or closing stage of the project. Some of the changes that affected
essential project management processes included a shift in communication, extra
pressure on project teams, a need for creativity and workarounds, delays in project
delivery, and vendor management risks. To solve these issues, a clear communication
strategy and project team collaboration were needed in addition to the centralization
of data, as it would enable the management and all employees involved to gain
access to the required information.
Another study about the digital revolution published in 2020 stated that since the
1980s, the digital revolution has been both a negative and positive force. According
to the authors of this article, the lockdown during COVID-19 accelerated the
adoption of digital solutions at an unprecedented pace, creating unforeseen
opportunities for scaling up alternative approaches to social and economic life, but
it also resulted in digital risks and threats (Hantrais et al., 2021). The authors found
that the pandemic supported changes in data collection techniques and dissemination
practices for official statistics. They demonstrated how the ethics of artificial
intelligence became a primary concern for government legislation at national and
international levels and how the features enabling smart cities to act as drivers of
productivity did not necessarily give them an advantage during the pandemic.
It was also illustrated that the pandemic accelerated the adoption of digital tech-
nologies in some areas where uptake had been stalled or was only slowly progress-
ing, such as data collection techniques, online working, learning, and social
interconnectedness. New challenges were created, requiring the scaling up of
production, fast-tracking of digital supplies, and construction of online platforms
and video-conferencing products. These transformations did not come without a
cost: The pandemic exacerbated existing challenges, demanding government
interventions to prevent harm and social exclusion associated with teleworking and
social networking on an unprecedented scale.
In conclusion, many authors have established that COVID-19 has had a large
effect on project management, and it is the main reason for the digital revolution.

2.2 Digital Project Management

Prior to the COVID-19 pandemic, project management had been undergoing a grad-
ual shift from traditional ways of working toward embracing digitalization. The
pandemic accelerated the transformation to the digitalization of project management,
including the adoption of digital tools and technologies, embracing an agile
approach to implementing projects, working collaboratively in remote teams, and
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 215

breaking traditional barriers of geography, time zones, and, fundamentally, how

project teams collaborate.
Research was conducted in Romania in 2018 about project management in the
digital era. The results stated that project management in the digital age is affected
by a series of influences. Among these, digitalization is one of the most important
ones identified in the research (Simion et al., 2018). The author mentioned that it is
likely that in the foreseeable future, nearly all project managers will be digital
project managers, giving rise to the importance of understanding the challenges and
benefits and building digital skills for both individuals and organizations.
Another study was conducted in Germany in 2019 about digitalization in small
and medium enterprises (SMEs). The authors stated that there are several manual
processes that need to be digitized. Any SME setting out to digitalize must identify
which processes among the entire value chain of the company will give them the
highest benefits according to their key performance indicators (e.g., improving
overall equipment effectiveness, process transparency, and efficiency, customer
satisfaction, and cash flow improvement). The main objective of digitalization is to
improve the entire value chain and enterprise resource planning as a higher-level
system for the planning and management of all of the company’s organizational
and technical resources, and the entire chain is only as strong as its weakest link.
Thus, automation and logistic technologies are usually implemented to improve the
productivity of the company (Kilimis et al., 2019).
In sum, many studies have established that digitalization affects project
management.

2.3 Digital Communication During the COVID-19

Global Pandemic

Governments and public health institutions across the world set social distancing
and work-from-home guidelines to battle the COVID-19 pandemic. With reduced
opportunities to spend time together in person came new challenges to remain
socially connected. The pandemic changed people’s use of digital communication
methods, and inequalities in the use of these methods may have arisen. Digital
inequalities may have been further reinforced by a lack of access to digital support.
As the world began to heavily rely on digital technology for communication, the
less tech-savvy may have needed more support. People mostly depend on family
and peer networks for digital support (Razzaque & Hamdan, 2020; Khalaf et al.,
2023; Kurdy et al., 2023); however, social distancing and stay-at-home guidelines
may have made it more difficult, especially for those who rely mainly on face-to-
face social connections.
Older people and those with lower internet skills were more likely to reduce digi-
tal communication during the pandemic. While the internet may also function as a
digital support source (e.g., search engines, social network sites, and forums), it is
216 S. Ismaeel et al.

mostly used by those with greater internet experience and skills (Kurdy et al., 2023).
During the pandemic, the less tech-savvy may have become increasingly discon-
nected from society with less access to sources of support for establishing new ways
of communicating. At the same time, as in-person interactions were limited to a
minimum, people were connecting through video chat apps and services for com-
munication for the first time (Ayyash, 2022; Shoaib, 2022). In that sense, the pan-
demic with its lockdown measures could be an opportunity for people to
overcome motivational barriers (Albinali & Hamdan, 2021) to try out and adopt
novel ways of communicating.
A study conducted in the United States in 2020 addressed whether people
changed their digital media use and how factors concerning internet access and
internet skills related to changes in social contact during the pandemic. The authors
observed a vast increase in digital communication, which had implications for
digital inequality scholarship. Digital inequality research has suggested that people
vary in their quality of internet access and skills, which may then influence the ben-
efits they can reap from communication technologies (Nguyen et al., 2020). Beyond
access quality, other challenges to engaging with technology include unstable inter-
net connections and difficulties in maintaining the functionality of devices (More,
2023; Mary Josephine & Muninarayanappa, 2023). Furthermore, during the pan-
demic, some people may have lacked the know-how to use digital media effectively
in replacing face-to-face communication (Karthick & Gopalsamy, 2023). People
who rarely used messaging, voice, and video-conferencing apps had to learn how to
download and install these on their devices and then figure out how to use them.
Therefore, it can be concluded that digital communication increased during the
pandemic, but there were some challenges.

2.4 Acceptance of Digitalization

Digitalization has been studied in different ways, and with the large acceptance of
digitalization, it is spreading widely. Several studies have shown that digitalized
systems are preferred and accepted by users (Ary et al., 2020). A study was con-
ducted in Morocco in 2020 with the main objective of identifying factors influenc-
ing IT acceptance by employees of human development public organizations. The
results revealed the significant influence of attitudes and perceived risk on employ-
ees’ intentions to accept technology. This research yielded strong conclusions about
the conditions for successful digitalization in human development public organiza-
tions in Morocco and in developing countries (Oumlil & Aderkaoui, 2020).
Another study was conducted in Romania in 2020 about digitalization and e-pro-
curement systems. It presented a practical overview of the implementation of a new
technological tool for supporting the procurement process within a company, which
impacted organizational change management and process changes as an adapting
strategy to the automation trend within the firm. The study concluded that e-pro-
curement technology contributed to more dynamic processing of orders and
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 217

establishing a network between end customers, strategic buyers, and purchasing

agents. However, it also brought challenges, such as periodic conflicts, especially
between strategic buyers and purchasing agents, due to dynamic changes in
regulations. This was solved in time as the process changes became the new internal
rules of the procurement department.
E-procurement systems are now a trend within large companies, especially as the
globalization and internationalization processes of companies are becoming more
and more dominant. In terms of strategic procurement, this field is also a significant
one, as ensuring cost-efficient contracts with suppliers and favorable conditions for
both the procuring company and the end customers are key elements for success
(Alexandra, 2020).
To summarize, these studies have established the acceptance and preference of
digitalization by employees, buyers, and other parties.

2.5 Safety and Security Influence Factor

Data security protection is an essential element in any system, and the absence of
security can influence the success and acceptance of any technology. Although
digital transformation is geared toward achieving strategic goals, such as efficiency
or competitive advantages, it involves digital threats. Information technology (IT)
security is an overarching task for managers and specialists that currently receives
little attention in digitalization projects. Therefore, the strategic potential of IT
security mostly remains untapped due to a lack of appropriate decision-making and
communication tools that support project managers to address IT security con-
sciously (Guggenmos et al., 2022).
In addition, security is a way to decrease vulnerability and ensure the privacy and
authenticity of information sources (Tounekti et al., 2017). Safety is managed by
security in conducting fund transfers and online payments in addition to data entries
in systems and shared folders. A study was conducted in Russia in 2020 and focused
on identifying the goals and objectives of digitalization and presenting the forms of
implementation of processes. It investigated the methods of ensuring information
security in educational institutions and identified four basic types of risk to build a
threat model. The results of the study showed a significant decline in the number of
successful attacks after implementing the recommendations. The author considered
the effectiveness of approaches to information security of educational processes in
the context of digitalization by conducting a study of the corporate education
system, which included computer facilities, network interactions, and gateways to
the global internet. Automated workplaces were equipped with software for the
education system and had online access services to various network infrastructures,
such as online bibliographic systems. To imitate a real scenario in which an intruder
attacks the network, the researchers conducted a penetration test using the “black
box” method in which the intruder did not have any advanced information about the
system (Almaz et al., 2020).
218 S. Ismaeel et al.

It has become increasingly evident that the COVID-19 pandemic not only funda-
mentally altered the modus operandi of many organizations but also precipitated the
failure of many businesses around the globe. The range of measures, including local
and national lockdowns, social distancing, government-led border closures, and
quarantines, forced many firms to adapt their business models at short notice.
Broadly speaking, this arose in two domains: externally (how firms interface with
customers, suppliers, and other stakeholders) and internally (how firms manage
employees and employer–employee relationships). One consequence of COVID-19
may have been the accelerated trend toward the digitalization of business models
coupled with the shift of commercial activities from predominantly offline and
brick-and-mortar outlets to online outlets.
Research from 2021 illustrated that shifting to remote working and remote oper-
ations was a driver for digitalization. Although many of the technologies for enabling
remote working have existed for at least a decade, most firms chose not to adopt
them; nevertheless, the pandemic forced large numbers of firms to embrace emer-
gent technologies to shift to remote working and remote skills formation activities.
The results of the study indicated that the adoption of emerging technologies could
be hindered by vested external interests, nostalgia, and employer opportunism as
well as negative effects on employee well-being that undermine productivity, work–
life balance, and the future of work. While digitalization may bring new opportuni-
ties, the process imparts risks that may be hard to mitigate or prepare for (Amoah
et al., 2021).
In conclusion, researchers have found that safety and security are the main digi-
tal communication factors. In this research, we study whether safety and security
factors influence project management in the Kingdom of Bahrain.

2.6 Ease-of-Use Influence Factor

The ease of use of a system is achieved when a user can expect to use the system
without effort. Many end-user customers have a reasonable understanding and can
use new technologies. New technologies can be personalized to provide maximum
ease of use for employees and customers, but an enormously complicated system
will push them away. Ease of use can be a key factor for suppliers to accept a
tendering system or apply for tenders or not. E-payments involve multiple aspects,
which are ease of payment, ease of registration, and ease of access. The procedure
to conduct a payment must be short and easy (Tounekti et al., 2017). Ease of use can
affect a user’s aim toward using a new technology and the ongoing use of it. Several
studies have used the technology acceptance model (TAM) to study the ease-of-use
influence factor (Barkhordari et al., 2017). Referring to TAM, ease of use is known
“as the degree to which the prospective adopter expects the new technology adopted
to be a free effort regarding its transfer and utilization” (Davis, 1989).
The ease-of-use factor in e-systems relates to the result of self-efficiency that a
user seeks, which is the capacity to produce the mandatory results with less effort,
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 219

and the technology is used without complications (Chipato, 2017). Research was
conducted in Zambia in 2017 regarding the factors influencing the adoption of
e-banking, a type of digitalized system provided to users, in addition to an
e-tendering system facilitating e-payments. It stated that a system’s ease of use is
the level of effort required for using the system, and this level must be moderately
low. The research found that ease of use was instrumental in forming the user’s
attitude toward using the system, but it was not a factor that directly determined
whether the user would use the e-payment system or not. Hence, if an e-payment
system has a high level of ease, it produces a positive effect on the user and creates
a positive attitude toward using the system. This research highlighted that users
perceive that learning to use a system is easy, that an e-payment service does not
require much mental effort, and that an e-payment system can be used to achieve
banking requirements (Mwiya, et al., 2017).
Another study in 2019 was about the transformation of the innovation process
and how digital tools are changing work, collaboration, and organizations in new
product development. This study included some interviews with engineers that
reflected the early use of digital design tools. The results mentioned dissatisfaction
with the complexity of some tools and that ease of use can be both a benefit and a
liability to those involved in the projects (Marion & Fixson, 2021).
Multiple researchers have established that ease of use has a key influence on
project management. In this research paper, a study is conducted to determine
whether the ease-of-use factor affects e-tendering in the Kingdom of Bahrain.

2.7 Accessibility Influence Factor

Accessibility refers to the inclusive practice of removing barriers that prevent inter-
action with or access to websites, digital tools, and technologies by people with
disabilities. The concept is centered around the practice of ensuring that digital
resources can be used by all users with a diverse range of abilities. During the global
COVID-19 pandemic, the availability of internet connectivity helped maintain
business continuity, keep children in education, and ensure that people could access
essential goods and services online (Runde, 2021).
A study was conducted in Tarakli in 2021 on the importance of digitalization and
accessibility. It stated that it is necessary to make digital data accessible to everyone
for reliability, interaction density, efficiency, and actuality. The aim of the study was
to determine the opinions of individuals working in institutions in local governments
about the importance of digitalization and accessibility. Results showed that much-
lost data could have been recorded if digitalization had started earlier. “Priority can
be given to practices that will promote the district in digital media.” According to
the study, the participants had positive thoughts about the use of ICH practices in the
tourism industry by ensuring accessibility during the transition to digital media.
Accessibility could ensure the recognition and popularity of the district in the
national and international markets (Ismael, 2021).
220 S. Ismaeel et al.

Another study about accessibility to digital technology in 2021 stated that while
the history of digital technology exhibits periodic cycles of gain and loss of
accessibility, the pattern can also be observed at the much smaller level of specific
projects and services (Borg et al., 2021). The most common pattern when it comes
to accessibility is that corrections are made, but the production process itself is not
improved. Consequently, as soon as external accessibility consultants or an
especially knowledgeable developer leaves and an update is required, old and new
accessibility problems are recreated (Cooper et al., 2012). In other words, fixing the
result is a largely wasted effort if the software production process itself is not
improved to include accessibility in the same way that it includes usability, security,
and other key criteria. To the extent that accessibility is used to qualitatively rethink
every aspect of the design and production process, it can improve the overall user
experience for everyone (Microsoft, 2010).
To sum up, several researchers have established that accessibility has a key influ-
ence on project management. This research paper aims to determine whether the
accessibility factor affects e-tendering in the Kingdom of Bahrain.

2.8 Cost Influence Factor

Nowadays, huge budgets are being invested to embody digital strategies in public
organizations worldwide. One main reason behind this investment refers to its
important role in empowering and ensuring the success of public policies for
sustainable human development. Moreover, digitalization enables public
organizations to reduce costs, ensure transparency, and optimize budget efficiency.
However, these goals are not always reached (Oumlil & Aderkaoui, 2020).
As companies go international, there is an increased need for e-procurement sys-
tems to control operations, maintain relationships between buyers and suppliers,
and reduce costs. Some studies have shown that e-procurement technology makes it
possible for firms to lower total purchase costs on average by 8–12%. As mentioned
earlier, a study conducted in Romania in 2020 about digitalization and e-procure-
ment systems presented an overview of a new technological tool to support the
procurement process of a company. There were advantages in terms of decreasing
time and costs for purchase order management. The study partly confirmed that
costs could be reduced by introducing part-timers or decreasing payments due to
more catalogs and catalog products as well as through the responsibility of users to
edit their purchase requisitions (PRs). This was because the number of part-timers
increased by only one person for the whole team, but the decrease in extra hours to
process PRs and payments was confirmed.
Another study was conducted in 2022 to examine the perceived value of service
digitalization in France. The findings underlined the perceived benefits and costs of
service digitalization for both managers and customers (Vo-Thanh et al., 2022).
A third study conducted in Bahrain in 2020 showed that for the employer, remote
working can boost productivity and lower organizational costs, while employees
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 221

can enjoy perks like flexibility and reduced commuting. However, employees must
ensure that they have the technology required, a separate workspace, and an internet
service that meets their needs. All these may entail additional costs to ensure access
to an online system (Moovala, 2020).
In conclusion, cost has been found to have an influence on project management.
One of the goals of this research paper is to determine whether the cost factor affects
e-tendering in Bahrain.

2.9 Review Outcomes

Digital communication has been implemented in many sectors before COVID-19,

but this significantly increased after the pandemic (Alexandra, 2020). In this chap-
ter, we stated that digitalized systems are being implemented and used at an increas-
ing rate by governments and organizations. With the improvement of technology,
digital communication has become more widely applied, earning employees’ and
users’ acceptance and preference with time (Ary et al., 2020). With regard to using
digital communication, various influencing factors affect users, starting from proj-
ect managers to employees and customers. Through the studies on numerous factors
reviewed in this research, we found that the results of each factor are distinct from
the others. In this research, we focus on four factors – safety and security,
accessibility, ease of use, and cost – which have been established to impact project
management. Such factors play a key role in digitalization acceptance and
implementation in project management processes; thus, the government of the
Kingdom of Bahrain needs to motivate organizations to turn to digitalization.

3 Research Methodology

The focus of this section is the methodologies applied to interpret the data acquired
from questionnaires. A survey was conducted to collect information and opinions
from several points of view. This research targeted a sample of users who dealt
mainly with the e-tendering system in Bahrain to analyze the effect and impact level
of digitalization on e-tendering. Thus, the survey was distributed to users such as
purchasing authorities, contractors, and Tender Board employees. We identified
cause-and-effect relationships between two or more variables: dependent and
independent variables. We then manipulated the levels of the dependent variables to
gauge their effect on the dependent variable. Therefore, an investigational research
design was the most suitable approach to observe the factors influencing e-tender
values in the Kingdom of Bahrain and answer the main research question recognized
in chapter “Sustainable Competitive Advantage Through Technological Innovation:
An Introduction” of this research. Furthermore, we implemented a quantitative
research approach to explore the effects by utilizing statistical data collected through
222 S. Ismaeel et al.

the designed survey distributed electronically to the users of the e-tendering system.
Statistical testing methods were added to examine the type of relations between the
dependent and independent variables of this research.

3.1 Theoretical Framework

The system theory and user theory are related to this work. Below is the theoretical
framework (Fig. 1).

3.2 Research Hypotheses

A hypothesis is used to investigate the relationship between dependent and indepen-

dent variables. Concerning the research structure devised, the problem of the
research established, and the research aim and objectives set for this study review,
research assumptions were formulated to test the impact of digitalized communica-
tion factors on tender values. The analysis was used to test the following hypotheses:
H1: Safety and security affected tender values in Bahrain during the COVID-19
pandemic.
H2: Cost affected tender values in Bahrain during the COVID-19 pandemic.
H3: Ease of use affected tender values in Bahrain during the COVID-19 pandemic.
H4: Accessibility affected tender values in Bahrain during the COVID-19 pandemic.
Safety and security were important reasons for shifting to digital communication
during the pandemic. To ensure social distancing while keeping data secure, the
e-tendering system was implemented by Bahrain Tender Board to maintain
purchasing processes around the kingdom. People were afraid of getting infected
with the COVID-19 virus, and the e-system aimed to solve this issue. Unfortunately,
some challenges and negative effects of this change arose.
The cost of acquiring technology was another factor that may have influenced
tender values, as the technology required some extra costs, such as a PC or laptop

Fig. 1 Theoretical framework

Analyzing the Effects of Digital Communication on Project Management in Bahrain… 223

and an internet connection to enter the e-tendering system and upload or review
documents. Suppliers also needed to acquire the required technology, devices, and
internet service to apply for tenders. The Tender Board and purchasing authorities
had to provide these services and items. All these may have entailed additional costs
to ensure access to the online system.
Ease of use may also have had an influence on tender values. An easier process
could result in more benefits, but some users were not used to the technology and
online work, especially older users. The knowledge to use the system to upload and
download tender documents and the complexity of the process may have influenced
the purchasing process and the values of the tenders.
The last factor, accessibility, may have affected tender values in several ways.
Ease of access and the ability to access from anywhere at any time were factors that
may have influenced the purchasing process and the tenders’ values.

3.3 Research Population and Research Sample

The research population is often viewed as a large group of individuals or objects

that is the core focus of a research study. It is a subcategory of the population that
has the same characteristics as the rest of the population. The population is
represented by observations and inferences drawn from the sample data. The
population for this research was e-tendering system users in the Kingdom of Bahrain
with access to an online questionnaire. This delivered the required results, and the
targeted sample was suitable for gathering all the obligatory data and information.
The expected connections and relations of the dependent variables and the
independent variables were studied by analyzing the collected data. This study was
limited to a selected sample as follows: Bahrain Tender Board employees who
evaluate and control the tendering processes, purchasing authorities who add tenders
to the system, and contractors who are registered and active in the e-tendering
system within the last 12 months.

3.4 Questionnaire Design

The focal research question was articulated in an appropriate survey questionnaire

with the assistance of the identified research variables, which suited a quantitative
research approach. The questionnaire was taken from previous research, but some
factors were added like “safety” and “cost.” The questionnaire was divided into five
parts. The first collected demographic or general information, such as age, gender,
and education, from the respondents. The second part contained five questions
aimed at gathering data to measure the e-tendering system’s security and users’
safety. The third part comprised four questions aimed at measuring the e-tendering
system’s cost. The fourth part had seven questions to measure the e-tendering
224 S. Ismaeel et al.

system’s ease of use. The final part of the questionnaire contained six questions
aimed at gathering data to determine the e-tendering system’s accessibility. A copy
of the questionnaire is attached in Appendix A.

4 Data Analysis and Results

The survey was distributed to 350 users who dealt with the e-tendering system. A
total of 127 complete and reliable responses were received from the distributed
survey, resulting in a response rate of 36.2%.

4.1 Analyzing the Demographic Data

Demographic data are important, as they provide an overview of a targeted popula-

tion in research. An examination of the demographic data collected from the survey
conducted in this research is shown below. Table 1 illustrates the respondents’ gen-
ders, ages, educational levels, and types (categories). The details of each point are
discussed next.

Table 1 Responses to demographic questions

# Categories Options Frequency %
1 Gender Male 72 56.7
Female 53 41.7
Prefer not to say 2 1.6
Total 127 100
2 Age 18–34 years 46 36.3
35–54 years 64 50.3
55 years and greater 17 13.4
Total 127 100
3 Educational level High school diploma 9 7.1
Bachelor’s degree 80 63
Master’s degree 33 26
PhD 2 1.6
Others 3 2.3
Total 127 100
4 Type Tender Board employee 24 18.8
Purchasing authority 29 22.7
Supplier 56 43.8
Other 18 14.7
Total 127 100
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 225

Gender Analysis The first question of the demographic data defined the genders of
the respondents. The male gender represented 56.7% of the respondents, and the
second option, female, represented 41.7%. The remaining 1.6% preferred not to say.
Age Analysis The second question defined the ages of the respondents. The data
were divided into three groups. The first group was aged between 18 and 34 years
and represented 36.3%. The second group was 35–54 years old, which represented
50.3% or most of the participants. The third group was in the age range of 55 years
and more and represented 13.4%.
Educational Level Analysis The third question described the participants’ educa-
tional levels classified into four groups. The first group represented high school
diploma education with 7.1% of the participants. The second category represented
participants with bachelor’s degrees (63%), the third educational category was
labeled as master’s degrees and represented 26% of the participants, and the last
group comprised PhD holders (1.6%). Some participants chose “Other,” and the
percentage was 2.3%. From the above data, it is clear that most participants were
bachelor’s degree holders, which may explain why the majority age of the partici-
pants was between 35 and 54 years old.
Position Analysis The fourth question described the type of respondent. They
were classified into three groups: Bahrain Tender Board employees (18.8%),
purchasing authorities (22.7%), and suppliers (43.8%). The suppliers represented
(43.8%) of the respondents, which represents most of the participants. Some
respondents answered the question with their job titles, with a percentage of 14.7%.

4.2 Descriptive Analysis

Descriptive statistics can be used to describe single or multiple variables. This type
of analysis can help summarize correlations between variables. In this case, one
dependent variable was discussed, which was the value of the tenders during
COVID-19, and four dependent variables were mentioned earlier. Each of these
variables is descriptively analyzed in the following paragraphs.
We identified the factors representing the independent variables in the literature
review. The impact of these factors is shown in the tables below with the related
questions and perspectives of the participants for each one.

4.2.1 Safety and Security Factor Analysis

The results of the first question for this factor indicated that most of the respondents
agreed that safety has an effect on the quality of project management. The responses
were as follows: 69 participants agreed (54.3%), 34 strongly agreed (11.8%), and 9
226 S. Ismaeel et al.

disagreed (7.1%). However, no participant strongly disagreed with the first

statement. The results showed a standard deviation of 0.821, which was lower than
1, and a mean of 4.008 (Table 2).
For the second question, most of the survey participants agreed that digital com-
munication is generally secure and safe. Seventy-five participants agreed (59.1%),
24 were neutral (18.9%), 16 strongly agreed (12.6%), 10 disagreed (7.9%), and 2
strongly disagreed (1.6%). The standard deviation was 0.84, lower than 1, and the
mean was 3.732.
The third question responses indicated that the majority of the survey partici-
pants agreed that privacy is maintained within digitalized project management. Of
the total participants, 75 agreed (59.1%), 25 were neutral (19.7%), 15 strongly
agreed (11.8%), 10 disagreed (7.9%), and 2 strongly disagreed (1.6%). The result-
ing standard deviation was 0.835, and the mean equaled 3.717.
The replies to the fourth question showed that most respondents agreed that
security has affected the values of the tenders. The responses were as follows: 53
agreed (41.7%), 34 were neutral (26.8%), 21 disagreed (16.5%), 17 strongly agreed
(13.4%), and 2 strongly disagreed (1.6%). The results revealed a standard deviation
of 0.975, which was lower than 1, and a mean of 3.488.
The fifth question’s results exhibited that most of the respondents agreed that the
risk of digital project management is minimum if not zero. Fifty-three participants
agreed (41.7), 34 were neutral (26.8%), 26 disagreed (20.5%), 9 strongly agreed
(7.1%), and 5 strongly disagreed (3.9%). As shown in Table 2, the standard deviation
was 0.997, lower than 1, and the mean was 3.276.

Table 2 Perspectives on digital communication safety and security

Frequency %
Strongly Strongly
Statement agree Agree Neutral Disagree disagree SD Mean
Safety has an effect on the 26.8 54.3 11.8 7.1 0 0.821 4.008
quality of project management.
Digital communication is 12.6 59.1 18.9 7.9 1.6 0.84 3.732
generally secure and safe
within the project management
process.
Privacy is maintained within 11.8 59.1 19.7 7.9 1.6 0.835 3.717
digitalized project
management.
Security has affected the values 13.4 41.7 26.8 16.5 1.6 0.975 3.488
of the tenders.
The risk of digital project 7.1 41.7 26.8 20.5 3.9 0.997 3.276
management is minimum if not
zero.
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 227

4.2.2 Cost Factor Analysis

The results of the first question about the cost factor showed that the majority of the
survey respondents agreed that electronic devices are affordable and can be provided
by the company. The responses of the participants indicated that 79 agreed (62.2%),
22 were neutral (17.3%), 17 strongly agreed (13.4%), 8 disagreed (6.3%), and 1
strongly disagreed (0.8%), with a standard deviation of 0.774, which was lower than
1. The mean equaled 3.811.
The majority of the respondents agreed that cost has an effect on the quality of
project management, as shown by the results of the second question. Sixty-one
participants agreed (48%), 35 were neutral (27.6%), 20 strongly agreed (15.7%), 11
disagreed (8.7%), and there were no responses for strongly disagree. The results had
a standard deviation of 0.837, lower than 1, and a mean of 3.709.
For the third question, the majority of the survey respondents agreed that cost
has affected the values of the tenders. The responses were as follows: agree, 52
(40.9%); neutral, 40 (31.5%); disagree, 17 (13.4%); strongly agree, 14 (11%); and
strongly disagree, 4 (3.1%). The results revealed a standard deviation lower than 1
at 0.964 and a mean that equaled 3.433.
The results of the last question showed that most respondents were neutral about
the statement digital communication tools are expensive. There were 43 neutral
responses (33.9%), 34 disagreed (26.8%), 33 agreed (26%), 11 strongly agreed
(8.7%), and 6 strongly disagreed (4.7%). The standard deviation was 1.033, which
was higher than 1, and the mean was 3.071.
The details for the cost factor are shown in Table 3.

4.2.3 Ease-of-Use Factor Analysis

The results of the first question for the ease-of-use factor indicated that the majority
of the participants strongly agreed and agreed that digitalized processes and services
are easy to use. The responses were as follows: 71 participants agreed (55.9%), 36

Table 3 Perspectives on digital communication cost

Frequency %
Strongly Strongly
Statement agree Agree Neutral Disagree disagree SD Mean
Electronic devices are 13.4 62.2 17.3 6.3 0.8 0.774 3.811
affordable and can be
provided by the company.
Cost has an effect on the 15.7 48 27.6 8.7 0.837 3.709
quality of project
management.
Cost has affected the values of 11 40.9 31.5 13.4 3.1 0.777 3.433
the tenders.
Digital communication tools 8.7 26 33.9 26.8 4.7 1.033 3.071
are expensive.
228 S. Ismaeel et al.

strongly agreed (28.3%), 16 were neutral (12.6%), 3 strongly disagreed, and 1

disagreed (0.8%). The standard deviation was lower than 1 and equaled 0.808, while
the mean equaled 4.071.
The second question’s responses showed that most agreed that ease of use has an
effect on the quality of project management. Sixty-nine participants agreed (54.3%),
31 were neutral (24.4%), 24 strongly agreed (18.9%), 2 strongly disagreed (2.6%),
and 1 disagreed (0.8%), with a standard deviation lower than 1 (0.773) and a mean
of 3.882.
The results of the third question indicated that most of the respondents agreed
that digital services are user-friendly. Among the participants, 65 agreed (51.2%),
29 were neutral (22.8%), 23 strongly agreed (18.1%), 6 disagreed (4.7%), and 4
strongly disagreed (3.1%). The mean equaled 3.764, and the standard deviation was
0.912, which was lower than 1.
The respondent details of the fourth question were as follows: 65 participants
agreed (the majority at 51.2%), 26 were neutral (20.5%), 23 strongly agreed
(18.1%), 11 disagreed (8.7%), and 2 strongly disagreed (1.6%). The mean was
3.756, and the standard deviation was lower than 1 at 0.906.
The fifth question asked whether digitalized processes and services allowed the
participants to recover from mistakes quickly and easily. The results revealed that
58 participants agreed (47.7%), 31 were neutral (24.4%), 25 strongly agreed
(19.7%), and 13 disagreed (10.2%). There are no responses for strongly disagree.
The mean equaled 3.748, and the standard deviation was lower than 1 at 0.891.
The results of the sixth question showed that the majority agreed that digitaliza-
tion requires the fewest steps possible to accomplish it. The results were as follows:
64 agreed (50.4%), 26 were neutral (20.5%), 20 strongly agreed (15.7%), 16 dis-
agreed (12.6%), and 1 strongly disagreed (0.8%), with a standard deviation lower
than 1 (0.916) and a mean of 3.677.
For the last question (ease of use has affected the values of the tenders.), the
majority of the responses were agree and neutral. The results were as follows: 48
participants agreed (37.8%), 46 were neutral (36.2%), 19 disagreed (15%), 13
strongly agreed (10.2%), and 1 strongly disagreed (0.8%). The standard deviation
was lower than 1 and equaled 0.895, and the mean equaled 3.417. Table 4 shows the
details of ease of use.

4.2.4 Accessibility Factor Analysis

The results of the first question of the accessibility factor showed that the majority
of the participants agreed and strongly agreed that digitalization allows them to get
or provide services quickly. The results were as follows: 78 agreed (61.4%), 33
strongly agreed (26%), 11 were neutral (11, 8.7%), and 5 disagreed (3.9%). No
participants strongly disagreed with the statement. The standard deviation equaled
0.706 (lower than 1), and the mean equaled 4.094.
The results of the second question indicated that most of the survey respondents
agreed and strongly agreed that the system can be accessed from anywhere. The
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 229

Table 4 Perspectives on digital communication ease of use

Frequency %
Strongly Strongly
Statement agree Agree Neutral Disagree disagree SD Mean
Overall, digitalized processes 28.3 55.9 12.6 0.8 2.4 0.808 4.071
and services are easy to use.
Ease of use has an effect on 18.9 54 24.4 0.8 0.016 0.773 3.882
the quality of project
management.
Digital services are 18 51.2 22.8 4.7 3.1 0.912 3.764
user-friendly.
I can use the system and 18.1 51 20.5 8.7 1.6 0.906 3.756
provide or get services
successfully every time.
Digitalized processes and 0.197 0.457 0.244 0.102 0.891 3.748
services allow me to recover
from mistakes quickly and
easily.
Digitalization requires the 0.157 0.504 0.205 0.126 0.008 0.916 3.677
fewest steps possible to
accomplish it.
Ease of use has affected the 0.102 0.378 0.362 0.15 0.008 0.895 3.417
values of the tenders.

responses showed that 75 participants agreed (59.1%), 33 strongly agreed (26%), 9

disagreed (7.1%), 7 were neutral (5.5%), and 3 strongly disagreed (2.4%). The
standard deviation was 0.904 (lower than 1), and the mean was 3.992.
For the third question (overall, online systems and websites are easy to access.),
the majority agreed and strongly agreed. Sixty-two participants agreed with the
statement (48.8%), 37 strongly agreed (29.1%), 15 were neutral (11.8%), 10
disagreed (7.9%), and 3 strongly disagreed (2.4%). The results revealed a standard
deviation of 0.970 (lower than 1) and a mean of 3.945.
The fourth question’s results exhibited that the majority of the survey respon-
dents agreed that accessibility has an effect on the quality of project management.
The results comprised 68 participants who agreed (53.5%), 28 who strongly agreed
(22%), 21 who were neutral (16.5%), 9 who disagreed (7.1%), and 1 who strongly
disagreed (0.8%). The standard deviation equaled 0.857 (lower than 1), and the
mean equaled 3.890.
The results of the fifth question showed that the majority agreed that services are
always online and available. The results were as follows: 74 participants agreed
(58.3%), 24 strongly agreed (18.9%), 19 were neutral (15%), 9 disagreed (7.1%),
and 1 strongly disagreed (0.8%). For this question, the mean was 3.874, and the
standard deviation was 0.826 (lower than 1).
Most of the survey participants agreed and were neutral about the last question
(accessibility has affected the values of the tenders). The results were as follows: 19
strongly agreed (15%), 44 agreed (34.6%), 43 were neutral (33.9%), 19 disagreed
230 S. Ismaeel et al.

Table 5 Perspectives of the participants on accessibility

Frequency %
Strongly Strongly
Statement agree Agree Neutral Disagree disagree SD Mean
Digitalization allows 26 61.4 8.7 3.9 0.706 0.499 4.094
me to get or provide
services quickly.
The system can be 26 59 5.5 7.1 0.024 0.904 0.817 3.992
accessed from
anywhere.
Overall, online systems 29 48.8 11.8 7.9 2.4 0.97 0.941 3.945
and websites are easy to
access.
Accessibility has an 22 54 16.5 7.1 0.8 0.857 0.734 3.89
effect on the quality of
project management.
Services are always 0.189 0.583 0.15 0.071 0.008 0.826 0.682 3.874
online and available.
Accessibility has 0.15 0.346 0.339 0.15 0.016 0.974 0.949 3.465
affected the values of
the tenders.
Ease of use has affected 0.102 0.378 0.362 0.15 0.008 0.895 3.417
the values of the
tenders.

(15%), and 2 strongly disagreed (1.6%). The standard deviation was lower than 1
(0.974), and the mean was 3.465. Table 5 shows the details for accessibility.

4.3 Hypothesis Testing

To answer the research question, tests were conducted to check the validity of the
research hypotheses. We used the T-test for the analysis. This type of test was
chosen, as it was used by other researchers in similar studies (Table 6).

4.3.1 Testing the First Hypothesis

H1: Safety and security affected tender values in Bahrain during the
COVID-19 pandemic
This hypothesis illustrates the relationship between safety and security and the
changes in the tenders’ values. The mean equaled 3.633, which was between agree
and neutral. The standard deviation was less than 1, so all of the respondents had
similar responses. The significance was less than 0.05, so the null hypothesis is
rejected, and the alternative hypothesis is accepted. Therefore, security and safety
impacted tender values.
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 231

Table 6 T-test results

Dependent
variable Hypothesis Mean SD T-test Sig.
Safety and The safety and security factor affected tender 3.633 0.570 12.560 0.001
security values in Bahrain during the COVID-19
pandemic.
Cost The cost factor affected tender values in Bahrain 3.744 0.587 14.344 0.001
during the COVID-19 pandemic.
Ease of use The ease-of-use factor affected tender values in 3.859 0.577 16.846 0.001
Bahrain during the COVID-19 pandemic.
Accessibility The accessibility factor affected tender values in 3.500 0.513 11.035 0.001
Bahrain during the COVID-19 pandemic.

Based on the findings from the literature review, safety and security was one of
the reasons for transitioning to online communication during the pandemic. As
many studies have stated, COVID-19 accelerated the process of virtual
communication by forcing a large fraction of the global workforce to switch to
working from home, and its effects on productivity and which factors played a role
in making work from home more or less productive than working in the office were
investigated. Furthermore, per the study conducted in Bahrain, safety was a factor
that affected employees, and it was a driver of their attitudes. The studied organiza-
tion shifted to online services to promote the mental health of their employees.

4.3.2 Testing the Second Hypothesis

H2: Cost affected tender values in Bahrain during the COVID-19 pandemic
This hypothesis concerns the relationship between cost and the changes in the ten-
ders’ values. The mean equaled 3.744, which was between agree and neutral. The
standard deviation was less than 1, indicating that all respondents agreed with the
statements. The significance was less than 0.05, so the null hypothesis is rejected,
and the alternative hypothesis is accepted. Thus, cost had an impact on the
tenders’ values.
The respondents regarded cost as the second most important factor affecting the
value of the tenders. It is important to note that the literature review highlighted the
particular significance of the cost factor; for instance, Gibbs et al. (2021) mentioned
that an important source of changes in virtual workforce productivity is higher
communication and coordination costs. The cost factor can be seen from two
different perspectives. On the employer side, a study conducted in Bahrain stated
that digital communication could boost productivity, reduce turnover, and lower
organizational costs. On the system user side, a good network connection and a
computer are required, which are considered extra costs (Moovala, 2020).
232 S. Ismaeel et al.

4.3.3 Testing the Third Hypothesis

H3: Ease of use affected tender values in Bahrain during the COVID-19
pandemic
This hypothesis examines the relationship between ease of use and the changes in
the tenders’ values. The mean was 3.859, which was closer to the “agree” response.
The standard deviation was less than 1, indicating that all of the respondents had
similar responses. The significance was less than 0.05, so the null hypothesis is
rejected, and the alternative hypothesis is accepted. It can be concluded that ease of
use affected the tenders’ values.
The quantitative research results showed that ease of use was the most significant
influence factor in relation to the change in tender value in the Kingdom of Bahrain,
as it had the highest mean. This highlights the importance of the ease of use of the
system. Interestingly, the findings of the study strongly aligned with the literature
review. In these contexts, the ease of use of systems could be considered both a
benefit and a liability to some projects (Marion & Fixson, 2021). The Kingdom of
Bahrain promoted digitalization through the Cabinet’s directives for all ministries
and authorities, such as the Bahrain Institute of Public Administration, to make
quick digital shifts for their services, as they concluded that it would be easier and
more practical to provide their services online.

4.3.4 Testing the Fourth Hypothesis

H4: Accessibility affected tender values in Bahrain during the COVID-19

pandemic
This hypothesis examines the relationship between accessibility and the changes in
the tenders’ values. The mean was 3.500, which fell between agree and neutral. The
standard deviation was less than 1, so all of the responses were similar. The
significance was less than 0.05, so the null hypothesis is rejected, and the alternative
hypothesis is accepted. Thus, accessibility impacted the tenders’ values.
As with the previous variables, the respondents reported a positive association
between this factor and tender values. Ismael (2021) acknowledged that it is neces-
sary to make digital data accessible to everyone for reliability, interaction density,
efficiency, and actuality. In Bahrain, studies have found that digital communication
faces some challenges, and Moovala (2020) revealed that not having access to the
tools or information needed for work and not having a workspace are the major
challenges that face online jobs. In addition, communication between colleagues
can be difficult.
From the above, we can confirm the relationships between the variables “safety
and security,” “cost,” “ease of use,” and “accessibility” and the dependent variable,
“tender values in Bahrain during the COVID-19 pandemic.” Our hypotheses can be
accepted, which agrees with the study of Oumlil and Aderkaoui (2020).
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 233

5 Conclusion and Recommendations

5.1 Conclusion

This research studied the main digital communication factors that affected project
management in the Kingdom of Bahrain during the COVID-19 pandemic and
caused an increase in tender values. A quantitative approach was applied by
distributing an online survey. The selected sample included 127 respondents
representing e-tendering system users in Bahrain. Quantitative analysis and
descriptive analysis were performed, and hypothesis testing demonstrated the
significant influence of the digital communication factors identified. The findings of
the study confirmed that all the factors – safety and security, cost, ease of use, and
accessibility – impacted tenders in the Kingdom of Bahrain and increased
their values.

5.2 Recommendations

This study aimed to investigate the digitalized communication factors that had a
significant effect on tender values in the Kingdom of Bahrain. Great steps were
taken by the kingdom to adopt digitalized services and provide adoption capabilities
to different parties, such as government employees, citizens, customers, and
suppliers, to ensure social distancing during the pandemic. In addition to the findings
and conclusion of the study, we recommend the following to help clarify the
importance of the factors and the steps to be taken in the field of digitalized
communication:
The high adoption of digitalized communication in the coming years is the first ele-
ment to focus on. Digitalization by the government and private sectors should be
encouraged to cope with technology that is improving day by day and innova-
tions and ideas. More than traditional methods, digitalization will create move-
ment in the country’s economy and lead to additional economic growth in
the future.
Second, safety and security factors should be handled with utmost care when adopt-
ing or managing a project, as the study shows that these factors are highly effec-
tive for successful project management.
The third element to consider when adopting a new project and managing it is the
cost. The study shows that e-system costs can affect the value of tenders. Hence,
low costs to achieve digitalized systems and services will increase communication.
The fourth consideration in adopting a new project and managing it is the ease of
use. It is one of the main points to focus on in the first stages of project
management. The study shows that the ease of use of the e-tendering system is
very important to users. Moreover, many users are likely to shift from one com-
munication method to another simply because of ease of use.
234 S. Ismaeel et al.

The fifth element, which is accessibility, can increase the dependability and level of
communication. The more accessible a digitalized communication channel (the
e-tendering system in our research) is, the more likely it is that users will depend
on the service and boost their level of communication.
To summarize, for successful digitalized communication and strong project man-
agement, the safety and security, cost, ease-of-use, and accessibility factors
should be focused on.
This research may be of great value to the Bahrain Tender Board, and the findings
can be used to evaluate the e-tendering system to control and enhance the process.
As ease of use is the most influential factor, we recommend that the system
should be improved to be easier for users by providing training, user manuals,
and instructions.
Finally, we recommend that the Bahrain Tender Board replace the hard documents
of the initial bonds with digitalized bonds (bank transfers) for more security, to
prevent the loss of documents and to save time and effort.

References

Albinali, E. A., & Hamdan, A. (2021). The implementation of artificial intelligence in social
media marketing and its impact on consumer behavior: Evidence from Bahrain. In B. Alareeni,
A. Hamdan, & I. Elgedawy (Eds.), The importance of new technologies and entrepreneurship
in business development: In the context of economic diversity in developing countries. ICBT
2020. Lecture Notes in Networks and Systems, vol. 194. Springer, Cham. [Link]
0.1007/978-3-030-69221-6_58
Alexandra, M. (2020). Challenges of digitalization and e-procurement systems in the procurement
field in the case of Genpact. Retrieved October 24, 2022, from [Link]
Almaz, M., Elvir, A., Rifat, S., Vladimir, V., & Tatyana, B. (2020). Approaches to information
security in educational processes in the context of digitalization. Retrieved October 23, 2022,
from [Link]
Amoah, J., Khan, Z., Wood, G., & Knight, G. (2021). COVID19 and digitalization: The great
acceleration. Retrieved October 23, 2022, from [Link]
pii/S0148296321005725
Ary, B., Eliyana, A., Syabarrudin, A., Arief, Z., & Emur, A. P. (2020). Digitalization in banking
sector: The role of intrinsic motivation. Retrieved October 22, 2022, from [Link]
[Link]/science/article/pii/S240584402032644X
Ayyash, I. N. (2022). The impact of social media on employee productivity at the work-
place. International Journal of Business Ethics and Governance, 5(1), 59–69. [Link]
org/10.51325/ijbeg.v5i1.96
Bahrain Tender Board annual report. (2020). Reviewed July 15, 2022, from the Website: https://
[Link]/MediaHandler/ImageHandler/Pdf/annualreport/Tender%20
Board%20Annual%20Report%202020%[Link]
Barkhordari, M., Nourollah, Z., Mashayekhi, H., Mashayekhi, Y., & Ahangar, M. S. (2017).
Factors influencing adoption of e-payment systems: An empirical study on Iranian customers.
Information Systems and e-business Management, 15, 89–116.
Bohrer, L. (2021). Can a company save money with remote work? Retrieved March, 2022, from
[Link]
Borg, J., Zhang, W., Smith, E., & Holloway, C. (2021). Introduction to the companion papers to the
global report on assistive technology. Assistive Technology, 33(1), 1–2.
Analyzing the Effects of Digital Communication on Project Management in Bahrain… 235

Chipato, P. (2017). An investigation on the impact of electronic payment system on financial

performance of commercial banks. A case study of Standard Chartered Bank (2013–2015)
[Business Studies (Honours) Degree in Banking and Finance].
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of informa-
tion technology. MIS Quarterly, 13(3), 319–340.
Gibbs, M., Mengel, F., & Siemroth, C. (2021). Work from Home & Productivity. [Link]
[Link]/wp-content/uploads/2021/05/BFI_WP_2021-[Link]
Guggenmos, F., Häckel, B., Ollig, P., & Stahl, B. (2022). Security first, security by design, or secu-
rity pragmatism – strategic roles of IT security in digitalization projects. Retrieved October 22,
2022, from [Link]
Hantrais, L., Allin, P., Kritikos, M., Sogomonjan, M., Anand, P., Livingstone, S., Williams, M., &
Innes, M. (2021). COVID19 and the digital revolution. Retrieved May 3, 2022, from https://
[Link]/doi/full/10.1080/21582041.2020.1833234
Ismael, B. (2021). Digitalization and evaluation of accessibility in the tourism use of handicrafts:
Tarakli example. Journal of Gastronomy, Hospitality and Travel, 4(2), 569–585.
Karthick, A. V., & Gopalsamy, S. (2023). Role of IoT in business sustainability. In J. Aloysius Edward,
K. P. Jaheer Mukthar, E. R. Asis, & K. Sivasubramanian (Eds.), Current trends in economics,
business and sustainability. ICEBS 2023. Contributions to Environmental Sciences & Innovative
Business Technology. Springer, Singapore. [Link]
Khalaf, A., Radhi, A., Al Mascati, M., Moosa, M., Hamdan, A., & Syed-Ahmad, S. (2023). The
impact of social media on e-commerce and marketing. In B. Alareeni, A. Hamdan, R. Khamis,
& R. E. Khoury (Eds.), Digitalisation: Opportunities and challenges for business. ICBT 2022.
Lecture Notes in Networks and Systems, vol. 621. Springer, Cham. [Link]
3-031-26956-1_15
Khalifa, Z., Hammad, W., AlMadhoob, H., & Bayoumi, M. (2021). Communication limitations
during COVID19 pandemic: Challenges and solutions for public sector in the Kingdom
of Bahrain. Retrieved May 3, 2022, from [Link]
authors#authors
Kilimis, P., Zou, W., Lehmann, M., & Berger, U. (2019). A survey on digitalization for SMEs
in Brandenburg, Germany. Retrieved October 24, 2022, from [Link]
science/article/pii/S240589631931506X
Kurdy, D. M., Al-Malkawi, H.-A. N., & Rizwan, S. (2023). The impact of remote working on
employee productivity during COVID-19 in the UAE: The moderating role of job level. Journal
of Business and Socio-economic Development. [Link]
Marion, T. J., & Fixson, S. K. (2021). The transformation of the innovation process: How digital
tools are changing work, collaboration, and organizations in new product development. Journal
of Product Innovation Management, 38, 192–215. [Link]
Mary Josephine, M., & Muninarayanappa, M. (2023). Industry 4.0 - It’s impact and scope towards
sustainable business operations. In J. Aloysius Edward, K. P. Jaheer Mukthar, E. R. Asis, &
K. Sivasubramanian (Eds.), Current trends in economics, business and sustainability. ICEBS
2023. Contributions to Environmental Sciences & Innovative Business Technology. Springer,
Singapore. [Link]
Moovala, V. (2020). Challenges and Benefits of ‘Work from Home’ for Employees in the Kingdom
of Bahrain. Retrieved February 15, 2022, from [Link]
Challenges-and-Benefits-of-Work-from-Home-for-employees-in-the-Kingdom-of-
[Link]
More, A. B. (2023). Implementing digital age experience marketing to make customer relations
more sustainable. In A. Nayyar, M. Naved, & R. Rameshwar (Eds.), New horizons for indus-
try 4.0 in modern business. Contributions to Environmental Sciences & Innovative Business
Technology. Springer, Cham. [Link]
Mwiya, B., Chikumbi, F., Shikaputo, C., Kabala, E., Kaulung’ombe, B., & Siachinji, B. (2017).
Examining factors influencing e-banking adoption: Evidence from bank customers in Zambia.
American Journal of Industrial and Business Management, 7, 741–759.
236 S. Ismaeel et al.

Nguyen, M. H., Gruber, J., Fuchs, J., Marler, W., Hunsaker, A., & Hargittai, E. (2020). Changes in
digital communication during the COVID19 global pandemic: Implications for digital inequal-
ity and future research. Retrieved October 22, 2022, from [Link]
full/10.1177/2056305120948255
Oumlil, R., & Aderkaoui, A. (2020). Technology acceptance, a relevant step to digitalize Moroccan
human development public organizations. Revue Management & Innovation, 1, 119–136.
[Link]
Razzaque, A., & Hamdan, A. (2020). Social networking with internet of things aid Bahraini medi-
cal professionals’ decisions through their knowledge sharing. In A. Hassanien, R. Bhatnagar,
N. Khalifa, & M. Taha (Eds.), Toward Social Internet of Things (SIoT): Enabling technolo-
gies, architectures and applications. Studies in Computational Intelligence, vol. 846. Springer,
Cham. [Link]
Robbins, S. P., & Judge, T. (2007). Organizational behavior. Upper Saddle River, NJ: Pearson/
Prentice Hall.
Runde, C. (2021). Digital accessibility: A pandemic look back—and forward. Retrieved
October 24, 2022, from [Link]
back-and-forward/
Shamim, M. (2022). The effects of COVID19 on project management processes and practices.
Retrieved October 22, 2022, from [Link]
CAJOTAS/article/view/861/848
Shoaib, H. M. (2022). Digital transformation as a mediating variable in the relationship between
organizational culture and job satisfaction. International Journal of Business Ethics and
Governance, 5(1), 70–104. [Link]
Sidek, N. (2015). Determinants of electronic payment adoption in Malaysia: The stakeholders’
perspectives [Doctoral thesis].
Simion, C., Popa., S., & Albu, C. (2018). Project Management 4.0 - Project Management in the dig-
ital era. Retrieved October 24, 2022, from [Link]
pdf/1_11.pdf
Tounekti, O., Ruiz-Martínez, A., & Skarmeta-Gómez, A. (2017). An evolution analysis of elec-
tronic payment systems and mobile payment systems characteristics. Journal of Current Issues
in Media and Telecommunications, 9(2/3), 1–12.
Vo-Thanh, T., Zaman, M., Hasan, R., Akter, S., & Dang-Van, T. (2022). The service digitalization
in fine-dining restaurants: A cost-benefit perspective. International Journal of Contemporary
Hospitality Management, 34(9), 3502–3524. [Link]
The Factors Affecting the Adoption
of Artificial Intelligence Technologies
in Organizations

Khawla Khalifa, Mukhtar AL-Hashimi, and Allam Hamdan

1 Introduction

Nowadays artificial intelligence is considered as a vital commercial opportunity in

the fast-changing economy worldwide, where the global GDP growth is estimated to
be increased by 15.7 trillion USD by 2030 (Saidl, 2019). In addition, AI has shaped
a new strong market named after it “Artificial Intelligence Market”. In particular, AI
plays a substantial role in a country’s economic growth, for instance, in the United
States, China, India, and Australia (Chris Messom et al., 2019). The increasing use of
AI offers the Australian business a substantial opportunity to develop, where the PwC
report indicates that the Australian economy has the potential to reach a GDP 2.2
trillion USD in 2030. Several industrial reports have shown the significant benefits in
adopting AI in the organization by creating a competitive advantage, improving the
organization performance, reducing the cost, increasing the revenue, and improving
the efficiency of business (Chris Messom et al., 2019). Kingdom of Bahrain realized
the value of adopting AI on simplifying the business processes. Therefore, Bahrain
has announced an Artificial Intelligence Academy at Bahrain Polytechnic, in coop-
eration with Microsoft Corporation and Tamkeen, where their objective is to provide
a platform for youth to boost their creativity, capabilities, and innovation in artificial
intelligence field, which will be in line with the Economic Vision 2030 of the
Kingdom of Bahrain (eGoverment, 2020a). Bahrain is providing a strong digital

K. Khalifa (*)
Ministry of Labor, Manama, Bahrain
M. AL-Hashimi
Ahlia University, Manama, Bahrain
A. Hamdan
College of Business & Finance, Ahlia University, Manama, Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 237
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
238 K. Khalifa et al.

infrastructure that allows it to be able to gradually enter the artificial intelligence sec-
tor. Moreover, it keens to increase cognition in entrepreneurs about AI by holding
several programs aiming to provide students in the “technology majors” with train-
ing, AI knowledge, and relationships to establish their potential business based on the
emerging sector (AI) (Alwatan, 2019). AI will affect most industries in the near
future. However, waiting for expertise to step in for artificial intelligence adoption
will not help the organization strategy. Based on that, the organizations have to be
proactive in this adoption to be capable of entering the AI technologies to prevent any
difficulties in catching up with outperforming competitors (Chris Messom et al.,
2019). Therefore, the question that should be addressed is how can the firms start
with this initiative? Furthermore, the research will investigate about the barriers and
complications that cause the organization to avoid adopting AI by addressing the
overview of potential issues that can help the organization recognize them and plan
to overcome. The term of barrier is defined as “any condition that makes it difficult
to make progress or to achieve an objective” (Based, 2003). In particular, barrier in
this research is considered as a negative contextual factor with adoption of artificial
intelligence, which can be discouraging the adoption action (Saidl, 2019).
This research suggests that there is a gap between large organizations who are
spending more in information technology budgets compared to smaller organizations
due to the financial capability, which makes them quickly and easily jump on the
latest trends of technology (Saidl, 2019). As per Neha Soni’s study, the top 5
companies out of 119 that have already adopted AI are Google, Apple, IBM,
Amazon, and Microsoft, and then they performed their financial analysis to evaluate
the impact of AI on global market. It was noticed that there is a significant increase
in their earning per share (EPS), share prices, the investment in artificial intelligence,
and the net sales for the last decade (Soni et al., 2019). Also there is an issue that
argued about stemming from a lack of knowledge in high technology to understand
artificial intelligence and lack of competence and support (Saidl, 2019). In Bahrain
a lot of the organizations did not take the initiative to adopt. Therefore, the research
will examine the gap that prevents the companies to adopt artificial intelligence.
The main intention of this research is to investigate AI from manufacturing orga-
nization’s perspective in the Kingdom of Bahrain to fill the gap in their knowledge
and also to investigate the factors that would impact the adoption of artificial intel-
ligence in Kingdom within manufacturing sector. This research will also attempt to
overcome the gaps from the literature review and explore solutions that would con-
tribute to fulfill the objectives of the research.

2 Literature Review

2.1 Artificial Intelligence in Bahrain in Several Sectors

After the Kingdom of Bahrain is recognized, the extent of artificial intelligence (AI)
important. Bahrain is emerging as a regional leader in artificial intelligence, until it
reaches to the potential to become the center development of AI in the region.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 239

Bahrain is keen to improve the standards of business in the country and make sure
that entrepreneurs adopt the best strategies to streamline their business process by
machines (eGoverment, March 2020b). Accordingly, in cooperation with Tamkeen,
Bahrain Polytechnic, and Microsoft Corporation, has announced the first artificial
intelligence AI academy in Bahrain, which is considered as a platform for youth
entrepreneur to emerge their innovation capability in their business (eGoverment,
March 2020b). In 2014, artificial intelligence was first introduced by the central
bank by creating licenses for payment and card processing services and encouraged
non-banking entrepreneur companies to provide banking services. In 2015, the
central bank of Bahrain (CBB) introduced electronic funds services with the help of
entrepreneur company Benefit Company and the impact of this on Bahrain’s
economy was that the non-oil sector by 3.6% in 2015, 3.7% in 2016 while 5% in
2017. Bahrain was the first country that integrated legal laws for security reason
such as “Trusts Law, Investment Limited Partnership, and Protected Cells
Companies.” In 2017, a Fintech unit was established as regulatory body for
approving and supervision of the companies for the development in the Fintech
sector. Over the years strategic partnerships were seen among entrepreneurial
companies and banks such partnership between Bahrain Development Bank and
Rowad and Bahrain FinTech Bay (BFB). In 2017, the Kingdom of Bahrain reported
a record high foreign direct investment FDI of US $733 million with 71 new
companies in the region, of which the ICT sector was the most influenced sector that
was led by Amazon Web Services (AWS) with a contribution of 54% of the total
FDI. In 2018, the CBB established a real-time inter-bank payment settlement
(RTGS) to support inter-bank communication and payments. The FDI inflows grew
by 114% in 2018 and saw 76 new companies being established that accounted an
investment of $ 810 million. QR code technology was standardized during 2018 in
accordance with the EMV® QR Code Specifications for Payment Systems (“EMV
QRCPS”). Within the same year, Tarabut Gateway became the first company to
successfully graduate its regulatory sandbox by receiving an in-principle
confirmation under the open banking regulatory framework that with partnership.
The National Bank of Bahrain became the first to provide open banking services
within the MENA region in 2019. A regulatory framework was established for
crypto-asset services, 92 new companies were seen in the Fintech sector with an
investment of US $830 million in 2019, and within the same year, Bahrain became
the first country to ordain the Model Law on Electronic Transferable Records
globally. Within these years, entrepreneurial startups like Sigma Ratings, OffrBox,
Travelex, Careem, Murabaha Club, and many others (Milken, 2019). An AI-powered
digital employee named Fatima was created in 2019 by Soul Machines™ to be part
of ABC bank’s employee, to customize the ability of Fatima to meet their customer’s
needs, and to provide a stimulating interface in communication in the rapidly
evolving digital field (Bank, 2019).
Artificial intelligence has a significant impact on economic and social life, as this
technology can greatly contribute to the economy of Bahrain and on organizations
itself by improving the existing industries, and it is estimated that the global impact
of this technology is projected to contribute about $16 trillion to the economy of the
world (Al-Ammal & Aljawder, 2019). However, in order to fully make out the
240 K. Khalifa et al.

artificial intelligence technology wide in Bahrain, there is a need to encourage the

largest segment of companies that have barriers to adopt AI.

2.2 Application of Artificial Intelligence

in the Manufacturing Sector

In the current time, most of the manufacturing industries focus on digitizing and
automation of their services. With the digitization process, now the invention and
introduction of human chatbots are taking place. These chatbots are the computer
programs that work by interacting with the humans in their natural language. The
chatbots work by stimulating a human conversation in response to a natural language
input that occurs through a text or voice. These chatbots provide a quick answer
with less effort so the main reason that humans choose this is for the high productivity.
These provide emotional and social support and provide information by linking
human to another computer. Customer services is one of the domains in which
chatbots have been growing rapidly. The interest in chatbots has also been increased
due to the e-commerce and E-service developments that include the natural language
interfaces. The human-like conversation that these chatbots provide help the
customers to write the questions and get the answers to those questions in a
meaningful [Link] these chatbots are used in the routine queries of the people and
the workers that make up the most service requests (Priya, 2017).
Artificial neural network works as a predicting tool too. It plays a role in the
prediction of the future prices of the materials accurately. It is widely used since it
is a nonlinear model and easy to understand especially when it is compared with the
statistical methods. Changes in the construction prices have a great impact on the
budget. It is difficult to manage the price due to fluctuations. There are different
tools that help in the prediction and some of them widely used are artificial neural
network and trend analysis. In the trend analysis, the historical records of the data
and the results are used to predict the future outcome (Singh et al., 2023). The pre-
dicted outcome is traced by focusing on the variance in the cost and schedule per-
formance. A trend analysis is basically an aspect of technical analysis that helps in
the prediction of the movement of the stock based on the past data. The trend analy-
sis works by giving the traders data about what has happened in the past and so what
is likely to happen in the future based on the previous occurrences (Adamopoulou,
2020; Reyad et al., 2019).
The use of artificial intelligence has been increasing with time. The usage has
drastically increased in speech recognition (Mathew et al., 2023). In speech recog-
nition, an appropriate tool is used to solve problems that are related to different
styles and are classified as per their type. Artificial intelligence helps in pattern
recognition. Automatic recognition, classification, and grouping are widely used in
several fields. In this process, templates are used that are usually the fingerprint
images, handwritten word cursives, and human faces or voice signals. In speech
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 241

recognition, neural networks play an important part. Neural networks consist of a

set of nodes. These nodes collectively form a special account and each node plays a
part in a special standard unit of that account. These nodes work in parallel and
interact. In the speech recognition process, first, there is the processing of an acous-
tic signal that is passed through a phase where patterns are matched and classified.
Then after its alignment as per the time, patterns and sequence of the word are some
and the selected word is produced. In this process, the size of the neural networks
influences the detection of phonemes in the word (Karsting, 2018).
Artificial intelligence and machine learning are also becoming very popular.
They have become the main techniques to solve the problems in many areas like
research and industry. The data in the world is increasing and the size of the data
that is collected with respect to any problem is usually huge. This data is needed to
be converted into useful and meaningful. Also the meaning of the data needs to be
understood in terms of the context that the data is collected. So the problem is
usually in first collecting a huge amount of data and then secondly converting it into
knowledge, conclusion, and actions. Large data sets can be used to retrieve
information. The data on climate change can be used to understand global warming,
large amount of sensor readings of plants can be used to detect droughts, the data
from games can be used and turn their pixels into actions with in the video games,
and the observational data helps the robots in understanding the complex information
and the environment in order to learn the skills. Machine learning is used here and
also in blogs and media to deal with the information. In 2016 when South Korean
master Lee Sedol was defeated by the alpha go in the broad game, the term machine
learning as used to describe how alpha go won. Also in Gartner’s list of top 10
strategic trends for 2018, AI was placed at the top for having machine learning that
is highly scoped and helps in targeting specific tasks (Smadi, 2015).
Machine learning also helps in the fraud detection. Due to e-commerce and
online payments, fraud has been increasing and creating problem for the dealers.
Financial fraud means the use of mobile transactions that is unauthorized. It is done
through credit card stealing and identity theft. This fraud usually results in a lot of
financial loss. In order to detect fraud and reduce it, machine learning and artificial
intelligence are being used. The unsupervised learning method is used in the
machine learning to detect the fraud. The supervised method is used to accurately
classify the data. In the supervised learning, the value of input data is classified and
given a label (Al Kurdi, 2021), while in the unsupervised learning, the data is not
labeled and it is usually called as clustering sample. In order to make fraud detec-
tive, there is data pre-processing, sampling, feature selection, and the clustering
algorithm in the machine learning. In the data pre-processing process, the data is
cleaned and correlated. Then the data is passed through sampling process where
data is evaluated and its various ratios are verified. Further the clustering process is
done where the algorithms are performed and the results are used as trainings set in
the process of classification. These help in the fraud detection by using the neural
networks value that gave a value of 95:1 and 99:1 ratios, which is similar to the
actual ratio in the real world (Choi, 2018; Hasan & Hassan, 2021).
242 K. Khalifa et al.

2.3 Barriers in Adopting AI in Organizations

“Haider (2020b) conducted studies to investigate the barriers to the adaption of AI

in organizations in India where findings suggest that factors contributing toward the
implementation includes cost, investment, and infrastructure, data integrity, interop-
erability, trust issues, regulatory implications, employment and skill set, and
inequality concerns” (Haider 2020a, b).
“Chris Messom et al.’s (2019) studies show the barriers to AI adaptions in
Australian organizations such as unclear business case for AI implementation, lack
of leadership support, unclear which aspects of AI, limited technology capabilities,
security concerns relating to AI adoption, consumer trust and regulatory acceptance,
organizations lack the skills to evaluate, build and deploy AI solutions, employee
fear of change, and lack of funding” (Chris Messom et al., 2019).
“Assadullah (2019) Studied the barriers of AI implementation in healthcare orga-
nizations which are algorithm opacity, trust, regulatory standards, preserve privacy
and integration with legacy system are most commonly faced challenges in adaption
of AI” (Assadullah, 2019).
“Duke (2019) retail industry barriers of implementing AI are change manage-
ment, limited business case, data quality, cost of solution, lack of skilled workers,
operationalization of AI framework, access to computing resources and GDPR com-
pliance issues are significant barriers to AI adaption in retail chains” (Duke, 2019).
“Cubric (2020) conducted study to investigate the social considerations and bar-
riers for artificial intelligence adoption in business sector of the UK, which included
healthcare, supply chain, logistics, project management, energy, information tech-
nology, agriculture, engineering, apparel industry, smart cities, transport, and tour-
ism. Findings of the study suggest that barriers faced by AI adaption include lack of
knowledge, trust stakeholder’s perspective and safety, reusability of models, and
availability of data” (Cubric, 2020).
“Medaglia and Sun (2018) investigated the challenges faced by AI implementa-
tion in healthcare settings, which are ethical challenges, political legal and policy
challenges data challenges, social challenges, economic challenges, managerial and
organizational challenges, and technological challenges” (Medaglia & Sun, 2018).
“Dremel (2017) investigated the barriers in big data adaption in automotive sec-
tor where primary data was gathered from car manufacturers. The barriers are the
lack of skilled resources, lack of collaboration between departments, lack of appro-
priate organizational structure and data-driven culture, and lack of relevant data pool
which cars commitment and relevancy within the organization” (Dremel, 2017).

3 Research Methodology

This section presents the research method by indicating the theoretical model that
was used for the purpose to answer the constructed research questions and aid with
the final findings. Also the hypothesis that was built and created will be presented.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 243

Moreover, it will explain the research design that will be used for the study and
comprises the type of study that will be conducted. This chapter also discusses the
instruments used as per the research approach and research design. It will provide
the guidelines for the selection of population, moral and ethical issues, validity and
reliability, and sampling technique by mentioning the sample size of the research.

3.1 Research Approach and Design

Top management and the technical in the manufacturing sector in Bahrain will be
the setting for the current study in order to explore the factors affecting the adoption
of artificial intelligence technologies in organization among manufacturing sector in
the Kingdom of Bahrain. The research approach usually consists of quantitative and
qualitative approaches. The research approach usually consists of quantitative and
qualitative approaches. The quantitative approach refers to the approach in which
the research outcomes are quantified. The quantification is done by using different
statistical methods and techniques. The other is the qualitative research approach,
which is more interpretative and naturalistic in nature; however a small-scale
qualitative method was used, in order to investigate opinions from top management’s
perspective in finding solutions to overcome the barriers to adopt the artificial
intelligence in their organization. In this, the data is collected by conducting
interviews, observation, and content analysis (Langkos, 2014).
In this study a quantitative cross-sectional study will be used using convenience
sampling method, and the sample size of the study will be n = 234 that will include
participants from manufacturing sector in Bahrain who’s consider as a top
management and the technical in the organization. Finally, the responses will be
analyzed in order to determine the barriers that are affecting the organization to
adopt the artificial intelligence.
The collected numeric data will measure the different factors that impact AI
adoption in an organization.
Secondly, the responses of the groups based on the demographics will be ana-
lyzed. The current study satisfies the three criteria so it will be considered quantita-
tive in nature. In addition to this, a cross-sectional design is used in the current study
to determine the factors affecting the adopting artificial intelligence technologies in
organizations among the manufacturing sector in the Kingdom of Bahrain.

3.2 Study Hypotheses

The study hypothesized the following three hypotheses:

H01: There is no significant impact of the technological factor and the adoption of
AI among manufacturing organizations in the Kingdom of Bahrain.
244 K. Khalifa et al.

H1: There is a significant impact of the technological factor and the adoption of AI
among manufacturing organizations in the Kingdom of Bahrain.
H02: There is no significant impact of the organizational factor and the adoption of
AI among manufacturing organizations in the Kingdom of Bahrain.
H2: There is a significant impact of the organizational factor and the adoption of AI
among manufacturing organizations in the Kingdom of Bahrain.
H03: There is no significant impact of the environment factor and the adoption of AI
among manufacturing organizations in the Kingdom of Bahrain.
H3: There is a significant impact of the environment factor and the adoption of AI
among manufacturing organizations in the Kingdom of Bahrain.

3.3 Data Types and Sources

In the current research, the main primary data will be collected from the participants
in manufacturing sector in Bahrain. A questionnaire will be used to collect the data.
The questionnaire consists of two parts. The first part is related to demographic
information related to the descriptive statistics. The questions are related to the type
of ownership, nationality of the organization, establishment time period of the
organizations, location of the organization, manufacturing activity of the
organization, and the number of employees of the organization.
The second part consists of ten questions related to factors affecting the artificial
intelligence in the organizational, technological, and environmental context. There
are three steps to conducting quantitative research. These include collecting and
analyzing the numerical data, measuring the different attributes of the subject
matter, and comparing the groups to relating factors. Lastly in the third section, it is
consisting of general questions about artificial intelligence and COVID-19. The
current research data will be collected by using an instrument in numeric form. The
questionnaire items have been derived from the previous studies including as shown
in the table below, with a Likert scale of 1–5, where 1 is strongly agree and 5 is
strongly disagree.

4 Empirical Analysis

4.1 Descriptive Analysis

4.1.1 Descriptive Analysis for Demographic Questions

This section will examine the data collected from the survey. Table 4 presents the
collected demographic information, such as ownership type, organization’s origin,
organization age, organization’s location, organization’s activity, no. of employees
the organization has, and the participant position.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 245

Table 1 Participants’ responses to demographic questions (ownership type of organization

analysis)

No. of Q. Question Answer choices Frequency Percent

1.0 What type of ownership Bahraini joint stock 12 5.0
your origination has? companies (public)
Bahraini joint stock 27 11.2
companies (closed)
Limited liability companies 141 58.3
Partnership companies 19 7.9
Companies limited by shares 9 3.7
Foreign company branches 3 1.2
Sole proprietorship 31 12.8
Total 242 100

[Link] Ownership Type of Organization Analysis (Table 1)

The outcome of the first question in the survey is relative to the ownership type of
the organization. The ownership type is divided into seven different types according
to the Ministry of Industry, Commerce and Tourism classification. The first type was
“Bahraini joint stock companies (public)” (5.0%), second type is “Bahraini joint
stock companies (closed)” (11.2%), third type is “limited liability companies”
(58.3%), fourth type is “partnership companies” (7.9%), fifth type is “companies
limited by shares” (3.7%), sixth type is “foreign company branches” (1.2%), and
lastly the “sole proprietorship” type (12.8%).

[Link] Origin of Organization Analysis (Table 2)

The origin of the organization was divided into three groups. The majority of responses
was from the first group “National (Bahraini organization)” (78.5%), followed by
“multinational organization” (14.0%) and the “international organization” (7.4%).

[Link] Age of Organization Analysis (Table 3)

The outcome of the third question in the survey revealed the age of the organization,
which was divided into five groups. Table 4 shows that the majority of the respon-
dents their organization’s age is more than 20 years, and they represent 56.6%. The
second highest organization’s age group of respondents is 11–15 years, and they
represent 14.5%. Moreover, respondents classifying to the group of 0–5 years are
representing 11.2%, and 26 of the respondents with an organization age are between
16 and 20 years, and they represent 10.7%. Lastly, the least number of respondents
are the organization 6–10 years representing by 7.0%.
246 K. Khalifa et al.

Table 2 Participants’ responses to demographic questions (origin of organization analysis)

No. of Q. Question Answer choices Frequency Percent
2.0 What is the nationality National (Bahraini 190 78.5
of your organization? organization)
Multinational organization 34 14.0
International organization 18 7.4
Total 242 100

Table 3 Participants’ responses to demographic questions (origin of organization analysis)

No. of Q. Question Answer choices Frequency Percent
3.0 Since when your organization 0–5 years 27 11.2
has been established? 6–10 years 17 7.0
11–15 years 35 14.5
16–20 years 26 10.7
More than 20 years 137 56.6
Total 242 100

[Link] Location of Organization Analysis (Table 4)

The locations were categorized based on the most common industrial areas in
Bahrain. The majority of the participants were from South Alba/Asker/Almazra
Industrial Park (27.3%), and second highest respondent percentage is from Hidd
Industrial City (17.4%), and the third ranked are from Sitra Industrial Park, which
represent 14.9%, followed by Ma’meer Industrial Park (9.1%), Bahrain International
Investment Park (BIIP) (8.7%), Mina Salman Industrial Park (5.8%), Sitra
Roundabout/Al-Lehsy Industrial Park (5.0%), and Hafeera Industrial Park (1.7%),
and 10.3% of the respondents were from other areas.

[Link] Activity of Organization Analysis (Table 5)

The outcome of the fifth question in the survey revealed the main activity that the
organization is practicing, and it was noticed a variety in participant selection where
there are 14 listed activities. The majority of participants (11.6%) are in field of
furniture and fixtures, the second majority (9.9%) are in steel field, followed by a
9.5% from the field of food processing, and 9.5% were in the aluminum field as
well. The lowest majority are in the field of electronics (1.2%).
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 247

Table 4 Participants’ responses to demographic questions (location of organization analysis)

No. of Q. Question Answer choices Frequency Percent
4.0 Where is your Hidd Industrial City 42 17.4
organization’s location? Bahrain International Investment 21 8.7
Park (BIIP)
Mina Salman Industrial Park 14 5.8
Sitra Roundabout/Al-Lehsy 12 5.0
Industrial Park
South Alba/Asker/Almazra 66 27.3
Industrial Park
Hafeera Industrial Park 4 1.7
Ma’meer Industrial Park 22 9.1
Sitra Industrial Park 36 14.9
Other 25 10.3
Total 242 100

Table 5 Participants’ responses to demographic questions (activity of organization analysis)

No. of Q. Question Answer choices Frequency Percent
5.0 Select the manufacturing activity your Aluminum 23 9.5
organization in Fiberglass 9 3.7
Paper industry 9 3.7
Industrial equipment 11 4.5
Furniture and fixtures 28 11.6
Steel 24 9.9
Petrochemicals 9 3.7
Plastic 22 9.1
Electronics 3 1.2
Chemical industry 8 3.3
Pharmaceutical 4 1.7
industry
Printing and 8 3.3
publishing
Building materials 18 7.4
Food processing 23 9.5
Other 43 17.8
Total 242 100

[Link] Number of Employees in the Organization Analysis (Table 6)

The outcome of the sixth question in the survey revealed the number of the employ-
ees in the organization. The number of employees was divided into five different
groups. The first group was between 1 and 9 employees (31.8%), the second group
was 10–49 employees (37.0%), the third group belongs to between 50 and 249
employees (38.0%), the fourth group was 250–499 employees (8.3%), and the last
group was 500 or more employees (14.0%).
248 K. Khalifa et al.

Table 6 Participants’ responses to demographic questions (number of employees in the

organization analysis)
No. of Q. Question Answer choices Frequency Percent
6.0 How many employees does your 1–9 19 7.9
organization have? 10–49 77 31.8
50–249 92 38.0
250–499 20 8.3
500 or more 34 14.0
Total 242 100

[Link] Position of Participant in the Organization Analysis

No. of Q. Question Answer choices Frequency Percent

7.0 What is your position CEO/Top management level 128 52.9
in the firm? Middle Level Manager/technical 63 26.0
manager
Supervisor/front Line Manager/ 31 12.8
Engineer
Other 20 8.3
Total 242 100

The majority of participant (52.9%) are “CEO/Top management level,” and the sec-
ond highest group are “Middle Level Manager/technical manager representing”
(26.0%). While (12.8%) of participants are “Supervisor/front Line Manager/
Engineer”, and (8.3%) from the participant percentage are from other positions.

4.1.2 Descriptive Analysis of Dependent Variables Questions

This will be the second section to examine data collected from survey. Table 5 presents
the information collected from the general questions; the status of the organizations in
adopting AI, the applications they used it for or whether they have a future plan to use
them, in addition to the role of artificial intelligent during the COVID-19 pandemic.

[Link] Artificial Intelligent Adoption Analysis (Table 7)

Most of the participant organization (68.2%) stated that they are currently not using
AI, while 31.8% of the organizations stated that they are using it in their
manufacturing activities and other areas such as in admin, inventory, etc.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 249

Table 7 Participants’ responses to dependent questions (artificial intelligence adoption analysis)

Answer Chi-
No. of Q. Question choices Frequency Percent square Sig.
9.0 Does your organization currently Yes 77 31.8 28.32 0.00
adopt artificial intelligence? No 165 68.2
Total 242 100

[Link] Considered Areas to Invest AI in Analysis (Table 8)

Question no. 10 examined the most areas within each organization that may con-
sider in adopting the artificial intelligence in, and it was divided into Designing,
Production, Maintenance, and Inventory. The majority of participants (59.9%)
stated that they consider Production as a most important area to invest artificial
intelligent in, 11.2% of the participants stated that Inventory is considered as the
most important to invest AI in. In addition 3.7% of participants choose Designing
area as the most important area, 3.7% of participants as well choose Maintenance,
and 15.7% of the participants did not believe in investing in artificial intelligence in
the organization.

[Link] Current State of AI Applications Adoption Analysis (Table 9)

In this particular section, it will be identifying the current AI applications adoption

level of artificial intelligence within the manufacturing sector in Bahrain.
• Speech recognition: Most of the manager level/technical levels (68.6%) stated
that they do not use it or have no plans to use it, while 16.1% of them stated that
they currently use it, and 15.3% of them stated that they have plans to start using
it in the future.
• Automated communications machine translation or chatbots: Most of the partici-
pant (58.7%) stated that they do not use it or have no plans to use it, and 24.4%
of them stated that they have plans to start using it in the future, while 16.9% are
currently using it already.
• Visual diagnostics face or image recognition, (computer vision): Most of the
participants (58.7%) stated that they do not use it or have no plans to use it, and
24.4% of them stated that they have plans to start using it in the future, while
16.9% are currently using it already.
• Autonomous machines, such as smart and autonomous robots or vehicles: 47.9%
of the participants stated that they do not use such that AI technology, while
18.2% of the participant stated that they are currently using this technology in
their organization, and 33.9% do not have plans to start using it in the future.
• Digital twins, e.g., product development/design customization/shop floor perfor-
mance improvement/logistics optimization: Most of the participant (51.7%)
stated that they do not use it or have no plans to use it, and 28.9% of them stated
250 K. Khalifa et al.

Table 8 Participants’ responses to dependent questions (considered areas to invest AI in analysis)

No. of Q. Question Answer choices Frequency Percent Chi-square Sig.
10.0 Which area your Designing 9 3.7 198.73 0.00
organization considers Production 145 59.9
investing AI in? Maintenance 9 3.7
Inventory 27 11.2
None 38 15.7
Other 14 5.8
Total 242 100

Table 9 Participants’ responses to dependent questions (current state of AI applications adoption)

No. of Q. Question Answer choices Frequency Percent Chi-Square Sig.
11.0 Based on your knowledge, what is the current state of AI adoption in your
organization for each of the following AI applications?
11.1 Current state of AI We do not use 166 68.6 66.09 0.00
applications adoption it or have no
“speech recognition” plans to use it
We currently 39 16.1
use it
We have plans 37 15.3
to start using it
in the future
Total 242 100
11.2 Current state of AI We do not use 142 58.7 34.02 0.00
applications adoption it or have no
“automated plans to use it
communications machine We currently 41 16.9
translation or chatbots” use it
We have plans 59 24.4
to start using it
in the future
Total 242 100
11.3 Current state of AI We do not use 126 52.1 18.01 0.00
applications adoption it or have no
“visual diagnostics face or plans to use it
image recognition We currently 67 27.7
(computer vision)” use it
We have plans 49 20.2
to start using it
in the future
Total 242 100
(continued)
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 251

Table 9 (continued)
No. of Q. Question Answer choices Frequency Percent Chi-Square Sig.
11.4 Current state of AI We do not use 116 47.9 21.81 0.00
applications adoption it or have no
“autonomous machines, plans to use it
such as smart and We currently 44 18.2
autonomous robots or use it
vehicles” We have plans 82 33.9
to start using it
in the future
Total 242 100
11.5 Current state of AI We do not use 125 51.7 17.81 0.00
applications adoption it or have no
“digital twins, e.g., product plans to use it
development/design We currently 47 19.4
customization/shop floor use it
performance improvement/ We have plans 70 28.9
logistics optimization” to start using it
in the future
Total 242 100
11.6 Current state of AI We do not use 103 42.6 3.47 0.17
applications adoption it or have no
“predictive maintenance, plans to use it
e.g., quality assurance” We currently 64 26.4
use it
We have plans 75 31.0
to start using it
in the future
Total 242 100
11.7 Current state of AI We do not use 118 48.8 16.07 0.00
applications adoption it or have no
“machine learning, e.g., plans to use it
fraud detection or risk We currently 46 19.0
analysis (anomaly use it
detection)/forecasting, We have plans 78 32.2
price optimization and to start using it
decision-making using in the future
machine learning
Total 242 100
algorithms/generative
design/inventory
management”
11.8 Current state of AI We do not use 103 42.6 3.39 0.18
applications adoption it or have no
“automated data analyst, plans to use it
e.g., price forecasting of We currently 60 24.8
raw material/process use it
optimization/automated We have plans 79 32.6
operational/efficiency to start using it
analyst/predictive in the future
analytics/edge analytics”
Total 242 100
252 K. Khalifa et al.

that they have plans to start using it in the future, while 19.4% are currently using
it already.
• Predictive maintenance: The majority of the participants (42.6%) stated that they
do not use it or have no plans to use it, and 31.0% of them stated that they have
plans to start using it in the future, while 26.4% are currently using it already.
• Machine learning: The majority of the participants (48.8%) stated that they do
not use it or have no plans to use it, and 32.2% of them stated that they have plans
to start using it in the future, while 32.2% are currently using it already.
• Automated data analyst: 42.6% of the participants stated that they do not use it
or have no plans to use it, 24.8% of the participants are currently using it, and
32.6% of the participants stated that they have plans to start using it in the future.

4.1.3 Descriptive Analysis for Independent Variables Questions

[Link] Frequency Testing

Three variables “independent variables” contain 13 sub-variables that affect the

adoption of artificial intelligence in manufacturing organization in Bahrain were
identified from literature review. Tables below identify the impact about each factor:
Technological Factor Analysis (Table 10)
In the technological factor for the “Incompatibility of an AI solution with an orga-
nization’s legacy IT system or process,” participants have strongly agreed (10.7%),
and those who agreed were 34%, which is considered the highest, followed by neu-
tral (32.6%), 20.2% of the participants disagreed, and finally 1.7% only for partici-
pants that strongly disagreed. The overall mean was 3.33 and the standard deviation
is 0.971, which is below 1.0.
The “lack of IT competence or knowledge” is the second sub-variable, and
12.0% of the participants strongly agreed, while the majority of them agreed
(34.7%), followed by 32.6% who were neutral, while 14.0% disagreed, and finally
6.6% only strongly disagreed. The mean here is 3.31 and the standard deviation
is 1.067.
Organizational Factor Analysis (Table 11)
The organizational factor has nine sub-variables. The “lack of AI understanding”
comes first in this analysis as 38.8% of the participants strongly agreed, while
45.5% of them agreed, followed by participants who were neutral (15.3%). None of
the participant disagreed (0%) and only 0.4% strongly disagreed. The overall mean
for this sub-variable is 4.22 and the standard deviation is 0.729.
The second sub-variable is “no or little prior AI experience” have indicated that
16.5% of the participants strongly agreed, and the majority agreed (34.7%). Neutral
resulted 30.2%, which is slightly near to those who agreed (16.5%) disagreed and
they are equivalent to the number of participant that strongly agreed, and 2.1% was
the result for those whom strongly disagreed. The overall mean is 3.47 and the stan-
dard deviation is 1.019.
Table 10 Perspectives on factors of adopting artificial intelligence (independent variables – technological factors)
Frequency %
No. Strongly Strongly
of agree Agree Neutral Disagree disagree Std. Chi-
Variable Q. Mediating variable Statement (5) (4) (3) (2) (1) Total Mean deviation square Sig.
Technological 13.2 Incompatibility of an AI technology is 26 84 79 49 4 242 3.33 0.971 56.45 0.00
factors AI solution with an compatible to the 10.7% 34.7% 32.6% 20.2% 1.7% 100%
organization’s legacy existing operations
IT systems or of the organization
processes
13.4 Lack of IT The employees in 29 84 79 34 16 242 3.31 1.067 31.87 0.00
competence or the organization are 12.0% 34.7% 32.6% 14.0% 6.6% 100%
knowledge competent (i.e.,
having the skills
and the know-how)
to use AI.
The Factors Affecting the Adoption of Artificial Intelligence Technologies…
253
Table 11 Perspectives on factors of adopting artificial intelligent (independent variables – organization factors)
Frequency %
Strongly Agree Neutral Disagree Strongly
No. Mediating agree (4) (3) (2) disagree Std. Chi-
Variable of Q. variable Statement (5) (1) Total Mean deviation square Sig.
Orginizational 8.0 “Lack of AI According on the given 94 110 37 0 1 242 4.22 0.729 28.32 0.00
factors Understanding” definition above? I know what 38.8% 45.5% 15.3% 0% 0.4% 100%
artificial intelligence is
13.3 “No or little The organization has an 40 84 73 40 5 242 3.47 1.019 39.19 0.00
prior AI experience in implementing AI 16.5% 34.7% 30.2% 16.5% 2.1% 100%
experience”
13.1 “No or little I think adopting AI solution will 88 112 40 2 0 242 4.18 0.729 25.53 0.00
prior AI add value and benefit the 36.4% 46.3% 16.5% 0.8% 0% 100%
experience” organization
15.2 “Change I believe that there is a 31 80 76 44 11 242 3.31 1.055 40.32 0.00
resistance” resistance to change in the 12.8% 33.1% 31.4% 18.2% 4.5% 100%
organization in regards of
adopting AI applications
15.3 “Competing Adopting AI technology is not a 34 66 78 51 13 242 3.24 1.100 24.69 0.00
priorities” priority in the organization 14.0% 27.3% 32.2% 21.1% 5.4% 100%
15.4 Lack of clear The organization has a clear 26 82 89 37 8 242 3.33 0.972 47.29 0.00
business case business case and strategy in 10.7% 33.9% 36.8% 15.3% 3.3% 100%
and strategy terms of adopting AI technology
15.5 “Top I believe that the “Top 26 47 70 81 18 242 2.93 1.121 35.25 0.00
management Management support” is a 10.7% 19.4% 28.9% 33.5% 7.4% 100%
support” barrier to adopt AI application
15.1 “Financial I believe that cost of AI 65 106 61 10 0 242 3.93 0.827 39.23 0.00
constraints” application is a barrier to adopt 26.9% 43.8% 25.2% 4.1% 0% 100%
AI
Mediating
Variable No. of Q. Variable Question Answer choices Frequency Percent Chi-Square Sig.
Orginizational 14.1 Resources What is the Machine learning or modeling skills 171 70.7 128.71 0.00
factors constraints infrastructure needed Cloud computing skills 29 12.0
to implement AI in Big data management skills 24 9.9
your organization?
Programming skills 5 2.1
Please select a
maximum of three. Robotics skills 11 4.5
Other 2 0.8
Total 242 100
14.2 What is the Machine learning or modelling skills 0 0 1.87 0.39
infrastructure needed Cloud computing skills 52 21.5
to implement AI in Big data management skills 60 24.8
your organization?
Programming skills 46 19.0
Please select
Robotics skills 11 4.5
Other 0 0
Total 169 69.8
14.3 What is the Machine learning or modeling skills 0 0 7.155 0.028
infrastructure needed Cloud computing skills 0 0
to implement AI in Big data management skills 35 14.5
your organization?
Programming skills 48 19.8
Please select
Robotics skills 60 24.8
Other 0 0
Total 143 59.1
256 K. Khalifa et al.

The following sub-variable for this factor is “no or little prior AI experience”
where participants responded (36.4%) strongly agreed, and the highest results are
for those who agreed (46.3%). Neutral has 16.5%, and 0.8% of them disagreed and
none strongly agreed (0%). The overall mean shows as 4.18 and the standard devia-
tion is 0.729, which is equal to the “lack of AI understanding” sub-variable.
“Change in resistance” sub-variable resulted in 12.8% of the participants strongly
agreed, 33.1% agreed, and slightly lower were neutral (31.4%). 18.2% disagreed
and 4.5% only strongly disagreed. The overall mean is 3.31 and the standard devia-
tion is 1.055.
“Competing priorities” sub-variable showed 14.0% of those who strongly agreed
and agreed by 27.3%. Those who were neutral are the highest in this sub-variable
(32.2%). Disagreeing participants were 21.1% and strongly disagreeing were 5.4%.
The overall mean is 3.24 and the standard deviation is 1.100.
The sixth sub-variable is “lack of clear business case and strategy” that showed
the result of 10.7% for those who strongly agreed and 33.9% agreed, neutral is
slightly higher (36.8%). For those who disagreed resulted in 15.3% and strongly
disagreed in 3.3%. The overall mean is 3.33 and the standard deviation is 0.972.
“Top management support” is the seventh sub-variable where participants
strongly agreed (10.7%) and agreed (19.4%). Neutral resulted in 28.9%. The high-
est result was for those who disagreed (33.5%), while the lowest for those who
strongly disagreed (7.4%). The overall mean is 2.93 and the standard deviation
is 1.121.
With regard to “financial constraint” that showed that 26.9% of the participants
that strongly agreed and the majority agreed (43.8%). The result for the neutral is
(25.2%) and only (4.1%) disagreed, while none strongly agreed (0%). The overall
mean is 3.93 and the standard deviation is 0.827, which is below 1.
The last sub-variable for this factor is “resources constraints” as it was measured
on how frequent the participants chose the listed answers. Starting with participant
who chose “machine learning or modeling skills” were 171 of 242 participants. “Big
data management skills” was the second with 119 of 242 participants answer choice,
followed by “programing skills” with 99 of 242 participants. After that, “robotic
skills” had 82 of 242 participants and slightly behind with 82 of 242 participants was
for “cloud computing skills” and only 2 answers of 242 participants for “Others.”
Environmental Factors Analysis (Table 12)
The first sub-variable “Dependency on external help” showed (19.0%) of the par-
ticipants strongly agreed followed by (33.1%) agreed, and the majority for those
who were neutral (38.0%). (6.6%) disagreed and (3.3%) strongly disagreed. The
overall mean is 3.58 and the standard deviation is 0.979.
The second and final sub-variable is “Legislation, regulation and compliance
constraints” resulted in (12.0%) strongly agreed and the majority agreed (34.7%)
and slightly lower was the participants who were neutral (32.6%). Participants who
disagreed were 14.0% and strongly disagreed were 6.6%. The overall mean is 3.12
and the standard deviation is 1.013.
Table 12 Perspectives on factors of adopting artificial intelligence (independent variables – environmental factors)
Frequency %
No. Strongly
of Mediating agree Agree Neutral Disagree Chi- Total Std. Chi-
Variable Q. variable Statement (5) (4) (3) (2) Square Sig. Mean deviation square Sig.
Enviromental 15.6 “Dependency There is a 46 80 92 16 8 242 3.58 0.979 79.26 0.00
factors on external sufficient 19.0% 33.1% 38.0% 6.6% 3.3% 100%
help” support from
external
entities (such
as: Tamkeen
government
support
programs,
others) to
support our
organization in
adopting AI
15.7 “Legislation, “Legislation, 29 84 79 34 16 242 3.12 1.013 91.16 0.00
regulation and regulation and 12.0% 34.7% 32.6% 14.0% 6.6% 100%
compliance compliance
constraints” constraints”
within the
The Factors Affecting the Adoption of Artificial Intelligence Technologies…

government
are a barrier to
adopt AI in
your
organization
257
258 K. Khalifa et al.

Table 13 Participants’ responses to general questions (role of AI in the COVID-19 pandemic)

Frequency %
No. Strongly Strongly
of agree Agree Neutral Disagree disagree
Q. Question Statement (5) (4) (3) (2) (1) Total
17 Role of AI I see that 37 92 50 35 28 242
during the COVID-19 has 15.3% 38.0% 20.7% 14.5% 11.6% 100%
COVID-19 a role to impact
pandemic AI adoption?
18 I think that 30 111 62 21 18 242
adopting AI in 12.4% 45.9% 25.6% 8.7% 7.4% 100%
your
organization
will improve the
operation
during
COVID-19

4.1.4 Descriptive Analysis for Questions of COVID-19 (Table 13)

In questions 17 and 18, it is examining the role of COVID-19 in adopting AI, as well
as the role of the artificial intelligence during the pandemic COVID-19, and how
can artificial intelligent can facilitate the work in the organization in current situa-
tion. Therefore, 15.3% of the participants strongly agreed on that COVID-19 has a
role in adopting artificial intelligence, while the majority of them agreed (38.0%),
followed by 20.7% who were neutral, while 14.5% disagreed, and finally, 11.6%
only strongly disagreed.
Moreover, 12.4% of the participants stated that they strongly agree that artificial
intelligence will improve and facilitate the operation during the pandemic, while the
majority of them agreed (45.9%), followed by 25.6% who were neutral, while 8.7%
disagreed, and finally, 7.4% only strongly disagreed.

4.2 Empirical Study and Testing of Hypothesis

Regression analyses used to explain the relationship between “Adoption of Artificial

Intelligence in Manufacturing Organization in Kingdom of Bahrain” and the inde-
pendent variable factors, which are technological factor, organizational factors, and
environmental factor to test hypotheses. Furthermore, Chi-square test was used to
confirm the result of the variables.
The follow model used for the testing:

IMOB 1 TF 2 OF 3 EF i
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 259

where:
AAIMOB = Adoption of artificial intelligence in manufacturing organization in the
Kingdom of Bahrain
α = Constant
β (1–4) = $/OP
εi = random error
The regression results are shown in Table 14:
As shown above, empirical testing model was used, and the results of F-statics
test and constant have proven that the model is valid in Bahrain since the (sig.
0.000 < 0.05).
R is 94.8% reflects a positive correlation between the dependent variable between
“Adoption of Artificial Intelligence in Manufacturing Organization in Kingdom Of
Bahrain” and the independent variables factors, which are technological factor,
organizational factor, and environmental factor.
R Square (R2) is 89.9% measure the aggregate intensity of the relationship and
the variance ratio in the dependent variable “Adoption of Artificial Intelligence in
Manufacturing Organization in Kingdom Of Bahrain,” which can be clarified by the
independent variables: technological factor, organizational factor, and environmen-
tal factor in the regression model.
Moreover, to confirm the result of each it was used Chi square, and it noticed that
the result all frequency is less than 5%, that mean there is a high correlation between
the dependent variables and independent variable (Table 15).

Table 14 Results of multiple regression analysis

Variable β T-Test Sig.
(Constant) 0.274 3.296 0.001
Technological factors (H1) 0.001 0.044 0.965
Organizational factors (H2) 0.082 2.980 0.003
Environmental factors (H3) 0.754 45.568 0.003
F 702
Sig. 0.000
R 94.8%
R2 89.9%

Table 15 Results of testing hypothesis

Main hypotheses Sig. Result
H1: Technological factor serves as a significant barrier for AI adaption 0.965 > 0.05 Reject
among manufacturing organizations on the Kingdom of Bahrain.
H2: Organizational factor serves as a significant barrier for AI 0.003 < 0.05 Accept
adaption among manufacturing organizations on the Kingdom of
Bahrain.
H3: Environmental factor serves as a significant barrier for AI 0.003 > 0.05 Accept
adaption among manufacturing organizations on the Kingdom of
Bahrain.
260 K. Khalifa et al.

4.2.1 Testing First Hypothesis

It is worth noting that the results of the literature review have demonstrated the
crucial position of the “technological factor” according to Haider (2020a, b), Chris
Messom et al. (2019), Duke (2019), Medagliaand Sun (2018), and Dremel (2017).
The authors have discussed that the companies have to improve the limited technol-
ogy capabilities they have, provide a sufficient data and development of a big data
analytics competence, and provide accessible data sources and unified IT landscape.
Given the findings of the literature review, “technological factor” was a key ele-
ment where respondents that the need for the technology infrastructure for adopting
the artificial intelligence is so essential. The majority of the respondents to the sur-
vey agreed for the need for adopting such AI applications to compatibility of an
artificial intelligent solution with the system and process of the organization. Also
require for an IT competence in staff has a strong knowledge in the IT. This hypoth-
esis for the factor of “technological factor” was rejected due to a high significance
value (H1 > 0.5), and according to Beta’s statistical finding that had the lowest Beta
results (0.001) among the other two variables, this adverse view can be justified by
the fact that this factor is not a big dilemma for adopting AI, because the organiza-
tion can come up with an easy solution if they have the intention for the adoption,
such as providing a good IT structure and hiring employees with good experience in
IT. So, this factor does not affect the adoption of artificial intelligence in manufac-
turing organizations in the Kingdom of Bahrain.

4.2.2 Testing Second Hypothesis

As for “organizational factor,” respondents have reported a positive correlation

between this aspect and adoption of artificial intelligence on manufacturing
organization in the Kingdom of Bahrain.
More precisely, the statistical findings (Beta) have put the organizational factor
component at the second level in terms of its positive effects in adoption of artificial
intelligence in manufacturing organization in Bahrain with a rate of 0.082.
Author (Haider, 2020a, b) have addressed the barriers that faced the organiza-
tions to adopt artificial intelligence, and it found that the major barriers are cost,
investment, trust issues, employment, and skills set. Chris Messom et al., (2019)
found that the lack of leadership support, security concerns relating to AI adoption,
and employee fear of change are the main challenges facing the organizations to
adopt artificial intelligence. Moreover, Cubric (2020) has added that he found the
lack of knowledge and trust and stakeholder’s perspective and safety are major
barriers faced to adopt the artificial intelligence. Moreover, Dremel (2017) agreed to
the other authors’ finding and added that barriers to adopt artificial intelligent are
the lack of skilled resources, lack of collaboration between departments, and lack of
appropriate organizational structure.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 261

4.2.3 Testing Third Hypothesis

Respondents classified “environmental factor” as the first most important factor

affecting the adoption of artificial intelligence in manufacturing organization in
Bahrain with beta (0.754). This optimistic impression may have arisen from the
strong need of the external need from the government to support the manufacturing
organization to ease the adoption of AI, such as funds, free training courses for their
employees, etc.
Despite the finding from the literature review, most of the authors have not
addressed the “environmental factor” as a barrier to adopt the artificial intelligence.
One of the minorities stated that political legal and policy, and economic, are chal-
lenges to consider to adopt artificial intelligence (Medaglia & Sun, 2018).

4.2.4 Multiple Regression Result Summary

Multiple regression analyses tested the validity of each of the three hypotheses. The
three hypotheses are based on the variables that affect the adoption of artificial
intelligence in manufacturing organization in the survey measuring the participants’
opinion about if the factors are considered as a barrier to them in adopting artificial
intelligence within their organization.
A definite conclusion on the research hypothesis can be drawn based on the
results of the multiple regression analysis, and on the basis of the parameters for the
dependent variables, the significance was greater than 0.05 in relation to
“technological factor” and that this variable does not have a statistically significant
relationship to adopt artificial intelligence. The results, however, showed less than
0.05 for “organizational factor” and “environmental factor.” These variable
hypotheses were accepted, implying that there is a statistically significant correlation
between each of these factors and the adoption of artificial intelligence in Bahrain’s
manufacturing organizations.

5 Conclusion, Recommendations, and Future Research

5.1 Conclusion

The research has begun with the explanation of the concept of AI and its ability to
interface a new situation and adopt a strategy to create something new in intelligence
way based on the behavior of humans to solve complex and simple problems.
Furthermore, several case studies have been discussed and scenarios of adopting
of artificial intelligence technology in organizations in several sectors have been
discovered, then in the manufacturing sector in particular. It was found that artificial
intelligence used in manufacturing organizations are for the purpose of solving
262 K. Khalifa et al.

problems, analyzing the data, product design, predictive maintenance, and

controlling inventories. Which can assist the organizations to have better optimize,
monitor, and control their system and physical operations. In addition, AI helps the
top management and concerned leaders to have better decision making; hence it will
increase the efficiency and the productivity of the organization.
It was noticed through the research that the percentage of artificial intelligence
adopter in manufacturing organizations in Bahrain is low (31.8%). Moreover, the
most AI application used are visual diagnostics face or image recognition applica-
tion (27.7%), predictive maintenance. (26.4%), and automated data analyst (24.8).
Lastly, as mentioned in chapter “Internet of Things for Healthcare: Evaluate
User’s Acceptance and Sustainability During Pandemics”, the theoretical model is
consist of three main barriers that can affect the adoption of artificial intelligence
in manufacturing organizations, and after analyzing the survey results, it was
noticed that the “technological factor” is not a barrier to adopt artificial intelli-
gence, and it can overcome it easily. On the other hand, the “environmental factor”
has the most influence on decision-makers to adopt the artificial intelligence as the
beta is 0.754.

5.2 Recommendations

5.2.1 In Organizational Context

It is worth saying that adopting artificial intelligence in any sector will definitely
return with a significant benefit in the long-term future, and the production cost will
be cheaper, so the final products will cost less.
• Investing in artificial intelligence to be considered by allocating a percentage
from the organization’s capital or from the net profit to use it in artificial
intelligence.
• To employ the right AI application, the top management has to identify their
need and their problems that need for AI solutions and explore how these
applications will occur the crucial change and benefit the organization in general.
All this is achieved by building a clear strategy by the top management.
• The organization has to invest in building a good IT infrastructure eligible for AI
usage in the future.
• Hiring an expert or employees with high qualifications in IT is required in each
organization.

5.2.2 In Environmental Context

• It is recommended contribute private companies support the organizations to

adopt AI. By offering a consultation guiding them for an ideal way to adopt AI
based on their status of the organization.
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 263

• For those who require extra support, it is suggested that the private companies
offer a customized program for each organization taking their hand from the zero
levels, by understanding their process and examining the current status, and
accordingly build a proposed plan in the know-how of implementing AI.
On the other hand, based on the finding of the research, government support has
a prime role in encouraging the organizations in Bahrain to adopt artificial
intelligence. Accordingly, the following are recommended:
• Bahraini government has to invest in the education of artificial technology in
schools and universities to raise a new qualified generation in artificial intelli-
gence (Badawi et al., 2019).
• Arrange awareness campaigns or seminars for top management of the
organizations.
• Offer a free training courses and education to the technical workers that will
assist in proper integration of artificial intelligence adoption within the organiza-
tion (Hamdan et al., 2020).
• Offer funding packages support with subsidies for the AI machineries from
Tamkeen for all organizations that have a full plan for adopting artificial
intelligence.

5.3 Future Research Suggestion

The current study aimed to investigate the artificial intelligence adoption in manu-
facturing organizations in the Kingdom of Bahrain and identify the factors that con-
sidered a barrier to adopt artificial intelligence. Based on the study’s findings and
conclusions, the researcher might conclude that further research is required to
address some of the gaps in this field of study, as below:
• To undertake future studies by investigating the barriers that were faced by the
organization in other sectors in Bahrain
• Study of the impact of each artificial intelligence application on the organiza-
tions such as robotics, machine learning, etc.
• Figure out an efficient clear strategy can that organizations adopt to assist them
in adopting artificial intelligence in a clear way without any doubt.

References

Adamopoulou, E. (2020). Machine learning with applications (Vol. 2). Elsevier.

Al-Ammal, H. & Aljawder, M. (2019). Strategy for artificial intelligence in Bahrain: Challenges
and opportunities. Conference: 2019 Gulf Research Meeting A (Vol. 1(1), p. 1).
Al Kurdi, O. F. (2021). A critical comparative review of emergency and disaster management in the
Arab world. Journal of Business and Socio-economic Development, 1(1), 24–46. [Link]
org/10.1108/JBSED-02-2021-0021
264 K. Khalifa et al.

Alwatan. (2019). Alwatan news [Online]. Available at: [Link]

cle/830092/Business/%D8%A7%D9%84%D8%B0%D9%83%D8%A7%D8%A1-
%D8%A7%D9%84%D8%A7%D8%B5%D8%B7%D9%86%D8%A7%D8%B
9 % D 9 % 8 A -% D 8 % A A % D 9 % 8 6 % D 8 % B 6 % D 9 % 8 5 -% D 9 % 8 4 % D 8 % B 4 % D 8 % -
B1%D9%83%D8%A7%D8%A1-% D8%A8%D8%B1%D9%86%D8%A7%D9%85%D
8%AC-%D8%B1%D8%A7%D8%. Accessed 31 Oct 2020.
Assadullah, M. (2019). Barriers to artificial intelligence adoption in healthcare management: A
systematic review. Jones and Bartlett.
Badawi, S., Reyad, S., Khamis, R., Hamdan, A., & Alsartawi, A. (2019). Business education and
entrepreneurial skills: Evidence from Arab universities. Journal of Education for Business,
94(5), 314–323. [Link]
Bank, A. (2019). ABC bank [Online]. Available at: [Link]
Media/Press/Pages/Digital-[Link]. Accessed 18 Dec 2020.
Based, W. (2003). The free dictionary by Farlex [Online]. Available at: [Link]
[Link]/barrier. Accessed 16 Dec 2020.
Choi, D. (2018). An artificial intelligence approach to financial fraud detection under IoT environ-
ment: A survey and implementation. Security and Communication Networks, 4, 1–15.
Chris Messom, S. A., Alsheibani, S. A., & Cheung, D. Y. (2019). Factors inhibiting the adop-
tion of artificial intelligence at organizational-level: A preliminary investigation. Twenty-fifth
Americas Conference on Information Systems (Vol. 1(1), pp. 1–10).
Cubric, M. (2020). Drivers, barriers and social considerations for AI adoption in business and
management: A tertiary study. Technology in Society, 62(1), 1–20.
Dremel, C. (2017). Barriers to the adoption of big data analytics in the automotive sector. Twenty-
third Americas Conference on Information Systems (Vol. 1(1), pp. 1–10), Boston.
Duke, J. (2019). Barriers and challenges to AI adoption in retail. IDC PERSPECTIVE, 2–8.
eGoverment. (2020a). eGoverment [Online]. Available at: [Link]
portal/!ut/p/a1/jZFBU8IwEIX_ipdem22jpXiLHUQZOzBopeTChBrTOGlS0kj139vCR
WZAu7fd-d 68eW8RRTmimu2lYE4azVS_02jzMIcoCONwFuMMA5lHyXI8gWAKN
x2w_g0AxpMeGC1Gr-M wimGYHsI0CR6vO32aApD4bvn0cp8ATPFA_YUh__o_
M4tmA0zkx25HCaKF0Y5_OZRzYfa1sY6pDbMeKKbf. Accessed 30 Oct 2020.
eGoverment. (2020b, March). Emerging technologies [Online]. Available at: [Link]
[Link]/wps/portal/!ut/p/a1/nZJNU8IwEIb_ihx6LNk2bWm9VQZRhg8HRGkuTFuW-
tE6blDaC_nsDjDM6I4LmlE2ed_PubggjC8JEvM15rHIp4mIfM295NwHPsn174NM5hX
DidadBD6w-u BqIvgJAaW8PdB46T4Ht-X CZHuxR17p3tH40Agj9m-n w8bYL0Kfn9M-
EEZYKVamMRMjltpK1ioslCgOKWKxywa-qmGNjAJZY. Accessed 1 Oct 2019.
Haider, H. (2020a). Barriers to the adoption of artificial intelligence in healthcare in India,
UK. K4D research helpdesk.
Haider, N. (2020b). The global health security index and joint external evaluation score for health
preparedness are not correlated with countries’ COVID-19 detection response time and mortal-
ity outcome. Epidemiology & Infection, 148, e210.
Hamdan, A., Sarea, A., Khamis, R., & Anasweh, M. (2020). A causality analysis of the link between
higher education and economic development: Empirical evidence. Heliyon, 6(6), 40–46.
Hasan, M., & Hassan, A. (2021). The Impact of Team Management on the Organizational
Performance in Bahrain Government Sector. International Journal of Business Ethics and
Governance, 4(3), 54–69. [Link]
Karsting, K. (2018). Machine learning and artificial intelligence: Two fellow travelers on the quest
for intellugent behavior in machines. Frontiers in Big Data, 1, 6.
Langkos, S. (2014). CHAPTER 3 - RESEARCH METHODOLOGY: Data collection method and
research tools. Research, 1(1), 1–10.
Mathew, D., Brintha, N. C., & Jappes, J. T. W. (2023). Artificial Intelligence Powered Automation
for Industry 4.0. In A. Nayyar, M. Naved, & R. Rameshwar (Eds.), New Horizons for Industry
4.0 in Modern Business. Contributions to Environmental Sciences & Innovative Business
Technology. Springer, Cham. [Link]
The Factors Affecting the Adoption of Artificial Intelligence Technologies… 265

Medaglia, R., & Sun, T. Q. (2018). Mapping the challenges of artificial intelligence in the public
sector: Evidence from public healthcare. Government Information Quarterly, 36(2), 368–383.
Milken, I. (2019). Developing Bahrain and the UAE into FinTech Hubs. Milken Institute.
Priya, S. (2017). Prediction of material price. International Journal of Scientific & Engineering
Research, 8(5).
Reyad, S. M. R., Musleh Al-Sartawi, A., Badawi, S., & Hamdan, A. (2019). Do entrepreneurial
skills affect entrepreneurship attitudes in accounting education? Higher Education, Skills and
Work-Based Learning, 9(4), 739–757. [Link]
Saidl, A. A. (2019). A multiple-case study on perceived barriers discouraging nordic small and
medium-sized enterprises to adopt artificial intelligence-based solutions. CBS, 1(1), 1–146.
Singh, S., Sharma, S., Bhadula, S., & Mohan, S. (2023). Industry 4.0 Internet of Medical Things
Enabled Cost Effective Secure Smart Patient Care Medicine Pouch. In A. Nayyar, M. Naved,
& R. Rameshwar (Eds.), New Horizons for Industry 4.0 in Modern Business. Contributions to
Environmental Sciences & Innovative Business Technology. Springer, Cham. [Link]
0.1007/978-3-031-20443-2_7
Smadi, S. (2015). Artificial intelligence for speech recognition based on neural networks. Journal
of Signal and Information Processing, 6(2), 66–72.
Soni, N., Sharma, E. K., Singh, N., & Kapoor, A. (2019). Impact of artificial intelligence on busi-
nesses: From research, innovation, market deployment to future shifts in business models.
Journal of Business Research, 1(1), 1–32.
The Impact of Teaching Artificial
Intelligence Concepts and Tools
in Improving Creative Thinking Skills
Among Talented Students

Mohammed F. Abu Owda , Assma H. Abu Mousa, Mahmoud D. Shakfa,

and Dawood A. Al-Hidabi

1 Introduction

The world today is moving toward preparing students with twenty-first-century

skills that revolve around four important skills: creative, critical thinking skills,
cooperation, and communication (4C skills). These skills are the concentration of
keeping pace with the technical acceleration and the explosion of knowledge.
Creative thinking comes among these four main skills and receives wide attention
by educators. According to Crumpler (2021), creative thinking involves some
actions like transforming a concept into fresh information to discover novel and
improved items. The International Encyclopedia of the Social and Behavioral
Sciences (2015) states that creative thinking is more likely when there is the right
quantity of information available – more knowledge isn’t necessarily better – and
when the person is aware of how to use the information. It is also defined as the col-
lection of abilities that allow a person to generate original ideas and evaluate them
in a distinctive way. These abilities need continual practice to stay sharp and focused,
as well as the use of different thinking strategies to improve the mentality necessary
for the generation of novel and creative ideas (Tabieh et al., 2021).
Addressing the problem is the first step in the scientific activities that make up
the creative thinking process, followed by gathering information about it. Then, the
next steps are identifying different alternatives to the solution, testing alternatives to
produce new knowledge by combining concepts and finally evaluating ideas and
making decisions.

M. F. Abu Owda (*) · A. H. Abu Mousa

Islamic University of Gaza, Gaza, Palestine
e-mail: modaa@[Link]
M. D. Shakfa · D. A. Al-Hidabi
International Islamic University Malaysia, Kuala Lumpur, Malaysia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 267
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
268 M. F. Abu Owda et al.

One of the most important components and indicators of creative thinking is a

person’s skills of fluency, flexibility and originality. In light of this, creative thinking
can be defined as a complex cognitive process aimed to improving ideas or produc-
ing new ideas. This study defines creative thinking as the ability to produce new
solutions to problems, namely, how to think about the issue from different angles,
using the right tools to evaluate them and make decisions, measured by the creative
thinking skills test.
Since creative thinking has been considered the driving force behind all human
progress (Saggar et al., 2017), the relationship between creativity and innovation is
important. This means that curriculum developers must work to develop creativity
by promoting curricula with fourth industrial revolution innovations such as the big
data and artificial intelligence. This study focused on artificial intelligence, concepts
and tools, to examine the impact of its teaching on the development of creative
thinking skills, especially fluency, flexibility and originality.
John McCarthy coined the phrase “artificial intelligence” in 1956, and since then
many theoretical concepts of artificial intelligence have emerged. Baker and Smith
(2019) defined artificial intelligence as follows: Cognitive computing refers to
machines that do tasks that are typically associated with human minds but that do
not notably learn or solve problems. In order to emulate human intelligence, AI
research and development have initially concentrated on the concepts of encoding
human thought, and subsequently on “expert systems,” which simulate expert pro-
cedural decision-making based on specific knowledge rules (Williamson &
Eynon, 2020).
After 2010, artificial intelligence gradually returned to a new model that emerged,
not as human intelligence, simulation software or expert systems, but as data pro-
cessing systems that could learn and predict a particular classification. In addition,
they can link huge amounts of big data and calculations including data analytics,
machine learning, neural networks, and deep learning, and enhanced learning
focuses not on creating (super-intelligence) but on developing machines that can
learn from their own experience, adapting to improve its performance and creating
a new decision-making algorithm (Williamson & Eynon, 2020).
According to this study, artificial intelligence (AI) refers to computerized sys-
tems that are capable of thinking like humans do, including learning, adapting, clas-
sifying, self-correcting, and using data for complex processing tasks that typically
call for human intelligence, like visual perception. Zawacki-Richter et al. (2019)
suggests that some important foundations have been laid to classify the field of
artificial intelligence into three key types: basic artificial intelligence, with the aim
of exploring computational techniques to simulate intelligent behavior, and applied
artificial intelligence. This is interested in using current AI techniques to build prod-
ucts for use in the real world, and cognitive science, focusing on studying human or
animal intelligence through different means.
The importance of the study lies in the fact that it provides a general framework
for teaching basic artificial intelligence its concepts and tools at the core stage,
which may benefit technology teachers, curriculum designers and developers.
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 269

The study links creative thinking skills to artificial intelligence in the fourth era
of industry and education, fostering talented and programmatically superior
programs.

2 Literature Review

2.1 Artificial Intelligence

The concept of artificial intelligence can be customized to systems that automati-

cally perform tasks that are pre-trained and originally programmed to accomplish
them. Also, these systems implement different algorithms in achieving their goals.
We can define artificial intelligence (AI) as computing systems capable of engaging
in human-like processes such as learning, adaptation, synthesis, self-correction and
data use for complex processing tasks (Popenici & Kerr, 2017). Machine learning
and deep learning have made it possible for artificial intelligence to learn on its own
from large data sets (Aggarwal, 2018). Algorithms, machine learning and artificial
neural networks are thus the three most crucial terms in artificial intelligence. The
idea of algorithms initially came to an end in 1996, while the Google founders were
still Stanford University students (Holmes et al., 2019). Recently, several trends
have emerged in the search for artificial intelligence technologies and their applica-
tions on the one hand and AI concepts and related concepts on the other, such as
studying the impact of artificial intelligence AI on teaching and learning. It is worth
mentioning that higher education reveals the progress of AI capabilities to replace
teachers with machines (Chassignol et al., 2018).
A study by Panigrahi and Joshi (2020) aimed to understand the extent to which
AI is used in education and its expected benefits. He also provided examples of the
use of artificial intelligence in education. This explores India as one of the develop-
ing countries, where education for all is seen as one of the sustainable development
goals. Qian and Feng (2020) study stated that the great development of deep learn-
ing makes machine performance brain-like. The integration of artificial intelligence
and education has become an inevitable trend for development. Hence the idea of
the current study to study the impact of teaching AI concepts and tools in develop-
ing skills creative thinking for ninth graders as the first daughter in integrating AI
into education. Seren and Ozcan (2021) aim to uncover methods that can contribute
to increasing the efficiency of distance education and whether human education can
be left to machines. Several studies discussed the type of attitudes that would be
faced if such a system was used, and the results indicated that the use of AI-based
education must be thoroughly considered by all parties involved and must be done
so for the benefit of people.
Additionally, Bonami et al. (2020) aimed to provide definitions and discussions
on artificial intelligence, big data from an academic point of view, or through what
international organizations have published. The examination of education through
270 M. F. Abu Owda et al.

the development of twenty-first-century skills and the influence of AI in the plat-

form age is proposed in this study, subject to three systematic considerations:
research, application, and assessment. As the same point, Popenici and Kerr (2017)
explore the use of artificial intelligence in teaching and learning in higher education
and also examine the educational implications of new technologies on the way stu-
dents learn. In addition, we investigate how institutions teach and develop in their
employment and how modern technological developments are explored. Apparently,
the growing rate at which new technologies are incorporated into higher education
in order to forecast how higher education would develop in a setting where artificial
intelligence is ingrained in universities. The study identified some of the challenges
facing higher education institutions and educated students in adopting these tech-
niques to teach, learn, and support students and management.
In the same regard, Azid and Md-Ali (2020) conducted an experimental investi-
gation utilizing mixed analysis to investigate the efficacy of the successful AI unit
(SIIM) that employs thinking abilities. Additionally, University Utara Malaysia stu-
dents’ analytical, practical, and creative thinking skills were to be improved through
the development of this interactive unit. The qualitative research methodology was
utilized to attain this aim by posing an open question to a sample of professors in
order to discuss the prospective effects of AI on higher education at Prince Sattam
Bin Abdul Aziz University (Aldosari, 2020). The findings indicated a decline in
knowledge of the methods used to use AI and the need to further spread knowledge
about the potential applications of AI in education in Saudi Arabia.
In light of the results of previous studies, the current study relies on a training
program designed by the researchers that aimed at spreading the culture of AI and
integrating it into education. The program provides training in AI concepts such as
machine learning, deep learning, features, patterns, data sets, and decision-making
and on tools to apply these concepts: machine learning for kids, coinmates, and
Google’s teachable machine.

2.2 Creative Thinking Skills

With global variables, the world is moving toward preparing twenty-first-century

students with the necessary knowledge and skills. Creative thinking and criticism
are the most important features of a student’s personality for the twenty-first cen-
tury. These lead us as teachers to think about how to enhance teaching practices
with thinking skills. In addition, when we understand that young learners are
already active in the learning process before entering school, the use of creative and
critical thinking skills as part of learning instructions becomes necessary (Netto-
Shek, 2017). These thinking skills are at the heart of the education field, with many
studies on how to develop these skills and how to improve students’ attitude accord-
ing to thinking skills. In the same regard, Wijayati et al. (2019) aim to improve the
ability to think creatively, make thermodynamics devices, and make fuel oil from
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 271

plastic waste. This study is a hands-on, classroom study that was carried out in
three cycles, each of which had four stages: observation, process, re-observation,
and reflection. Moreover, Netto-Shek (2017) argued for teaching thinking to young
learners, especially in English lessons, to be educated in the twenty-first century.
This paper explained how thinking skills should be contextual in authentic chil-
dren’s literature as a means of modeling thinking frameworks and good thinking.
Furthermore, Putri et al. (2019) aimed to study improving the creative thinking
skills of elementary school students in science through project-based learning
(PBL). Use this quasi-experimental research with the design of an unequal control
group. The study included (45) fifth graders at a public elementary school in
Karawang, West Java.
In the light of these studies, this study seeks to combine the novelty of the field
of artificial intelligence in its teaching among students of general education schools
with the authenticity of thinking skills in terms of refinement and development. It
aims to examine the impact of teaching the program on the concepts and tools of
artificial intelligence on the development of creative thinking skills in line with
studies that have studied several programs and strategies to develop these skills.

3 Study Objectives

• Detecting the impact of teaching artificial intelligence concepts and tools on cre-
ative thinking skills among talented students
• Identifying the significant differences between the talented students in the test of
creative thinking skills

4 Study Importance

• It offers a broad framework for instruction. Artificial intelligence concepts and

tools at the basic stage that benefit technology teachers, curriculum designers,
and developers.
• The study presents a test to measure creative thinking skills that benefits inter-
ested and researchers in graduate studies.

5 Study Limitations

The research was carried out during the academic year (2020–2021), on a group of
(25) ninth-grade talented students from three education directorates: West Gaza,
East Gaza, and East Khan Younis.
272 M. F. Abu Owda et al.

6 Study Terms

• Artificial intelligence concepts: AI is related to concepts of intelligence agents,

machine learning, deep learning, machine training, information, decision-
making, and programming principles, which used to design the unit.
• Creative thinking skills: In this study, fluency, flexibility, and originality skills
are intended for the student to be able to produce the largest number of ideas,
adapting them to reality and the uniqueness of these ideas measured by creative
thinking skills test.

7 Research Methodology

7.1 Research Aim

With the requirements of the twenty-first-century students with critical and creative
thinking skills, it becomes a challenge in the field of education to prepare students
with the knowledge and skills necessary to actively engage in their communities to
keep pace with the new development in the fourth technical revolution and develop
its concepts and tools in the hands of students to enable them to employ them effec-
tively in solving their problems and those of their communities; in this context
comes to link creative thinking skills as the most prominent skills of the twenty-first
century with the most important innovations of the fourth technical revolution,
namely, artificial intelligence. By examining the impact of teaching AI concepts and
tools on the development of creative thinking skills among talented students, the
problem was presented in the following major question:
What is the impact of teaching artificial intelligence concepts and tools on
improving creative thinking skills among talented students?
It has the following sub-questions:
• Are there statistically significant variations at the level of (α ≤ 0.05) between
the mean score of the creative thinking skills of the experimental group stu-
dents in the pre- and post-applications of the creative thinking test?
• Are there statistically significant variations at the level of (α ≤ 0.05) between
the mean scores of the creative thinking skills of the male and female students
in the post-applications of the creative thinking test?

7.2 Study Hypotheses

• There were no statistically significant variations at the level of (α ≤ 0.05) between

the mean scores of the scientific of the experimental group students in the pre-
and post-applications of the creative thinking test.
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 273

• There were no statistically significant variations at the level of (α ≤ 0.05) between

the mean scores of the creative thinking of the male and female students in appli-
cations of the creative thinking test.

7.3 Study Design

The research employed a descriptive and quasi-experimental methodology (the

design of one group pre-post). The study’s training program for teaching artificial
intelligence concepts and tools was built using a descriptive approach, while the
research experiment was designed according to the quasi-experimental approach for
one experimental group of 25 ninth-grade talented students distributed among three
education areas (West Gaza, East Gaza, and East Khan Younis). Students were
selected intentionally based on their GPA and programming skills examined by the
Programming Skills Test.

7.4 Data Collection

Reviewing literature and studies to assess creative thinking skills. The tested skills
were determined by fluency, flexibility, and originality, the test was made of seven
questions, and after the test was processed in its final form, it was adjusted and
applied to the experimental group before the application of the program designed
according to task-based learning (TBL) and applied remotely via Zoom and Google
classroom and after the implementation of the program. The results were compared
(pretest with post-test) to determine the impact of teaching the AI concepts and tools
program on the development of creative thinking skills among students of the exper-
imental group.

7.5 Validity and Reliability

To verify the validity of the test, the test was presented to a group of curriculum
professors and methods of teaching science and technology to adjust the test and
make the necessary adjustments. To confirm the internal consistency of the test, the
researchers calculated the correlation factor between the paragraph grades and the
overall degree of the test, and the results came as follows (0.851, 0.741, 601, 0.700,
0.829, 0.770, 0.455); all correlation transactions were statistically significant at the
semantic levels (0.01, 0.05) and to verify reliability, the researchers calculated
Cronbach’s alpha coefficient, which was worth (0.786) as a result of the research-
ers’ finding that the test was valid and reliable.
274 M. F. Abu Owda et al.

7.6 Analysis of Data

The data collected through the study tools was analyzed using the SPSS Statistical
Package for the Social Sciences Version (23):
• The Kolmogorov-Smirnov test was examined to verify the natural distribution of
the data, and the test showed that the population sampled was usually
distributed.
• To evaluate whether the difference between the pre- and post-test was significant,
a paired sample t-test was performed, and the value of ƞ2 was computed to deter-
mine the effect volume of teaching artificial intelligence concepts and tools. The
independent sample t-test was conducted to determine if the difference between
the female students’ results and male students’ results was significant.

8 Results and Discussion

8.1 Results

8.1.1 Results of Question 1

Are there statistically significant variations at the level of (α ≤ 0.05) between the
mean scores of the creative thinking skills of the experimental group students in the
pre- and post-application of the creative thinking test? The hypothesis is as follows:
There were no statistically significant variations at the level of (α ≤ 0.05) between
the mean scores of the scientific of the experimental group students in the pre- and
post-applications of the creative thinking test.
In the creative thinking skills test, students pre- and post-test results varied sig-
nificantly at level (α = 0.01) as shown in Table 1. Pre experiment, the average stu-
dent score was (30.04) after teaching the artificial intelligence unit using the (TBL)
technique, average students score it increased to (57.40), to determine the effect size
the value of ƞ2 was computed as shown in Table 2. The values of ƞ2 for all the

Table 1 Paired sample t-test between the pre- and post-test results
Scientific practices df Test Means S. D t-test sig
Fluency 24 Pre 14.04 4.523 12.001 0.001
Post 27.92 4.636
Flexibility 24 Pre 9.76 2.204 10.067 0.001
Post 16.52 2.874
Authenticity 24 Pre 6.24 2.666 11.440 0.001
Post 12.96 1.904
Total degree 24 Pre 30.04 8.956 12.144 0.001
Post 57.40 8.958
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 275

Table 2 Effect size ƞ2 of teaching AI concepts and tools in improving creative thinking skills
Scientific practices t-test value t2 df ƞ2
Fluency 12.001 144.024 24 0.85716
Flexibility 10.067 101.3445 24 0.80852
Authenticity 11.440 130.8736 24 0.84503
Total degree 12.144 147.4767 24 0.86003

Table 3 Independent sample t-test between males’ and females’ pretest results
Scientific practices df Test Means SD t-test sig
Fluency 14 M 13.07 2.702 -1.220 0.235
10 F 15.27 6.051
Flexibility 14 M 9.57 1.604 -0.475 0.639
10 F 10.00 2.864
Authenticity 14 M 5.36 1.985 -1.978 0.060
10 F 7.36 3.075
Total degree 14 M 28.00 5.588 -1.303 0.205
10 F 32.64 11.775

creative thinking skills measured were all more than (0.14) with total effect size
(0.85). This implies that teaching artificial intelligence concepts and tools has a
significant impact among talented ninth-grade students’ ability to think creatively.

8.1.2 Results of Question 2

Are there statistically significant variations at the level of (α ≤ 0.05) between the
mean scores of the creative thinking of the male and female students in the post-
applications of the creative thinking test? The hypothesis is as follows: There were
no statistically significant variations at the level of (α ≤ 0.05) between the mean
scores of the creative thinking of the male and female students in the post-
applications of the creative thinking test.
To examine this hypothesis, the experimental group is divided into males and
females, and the pretest results were compared. This is to verify the equality of the
two groups, as indicated in Table 3. There were no significant variations between
the average scores of the male and female students in the pre-application of the
creative thinking test. Also, there were no significant variations in the average scores
of each skill between male and female students, to examine the impact of the pro-
gram interaction with gender. The results of post-test were compared, as shown in
Table 4 that there were no significant variations between the average grades of the
two groups, which means that the program has an effective impact in improving
creative thinking skills among male and female students with the same effect.
276 M. F. Abu Owda et al.

Table 4 Independent sample t-test between males’ and females’ post-test results
Scientific Practices df Test Means S. D t-test sig
Fluency 14 M 27.64 5.372 −0.331 0.744
10 F 28.27 3.717
Flexibility 14 M 16.21 3.191 −0.592 0.560
10 F 16.91 2.508
Authenticity 14 M 12.71 2.431 −0.721 0.478
10 F 13.27 0.905
Total degree 14 M 56.57 10.545 −0.514 0.612
10 F 58.45 6.773

8.2 Discussion

This study discussed the impacts of educating artificial intelligence concepts and
tools among talented ninth graders’ ability to think creatively. The study findings
indicated that teaching an artificial intelligence concepts and tools unit has a favor-
able effect on boosting the average score of gifted students’ capacity for creative
thought. The findings of the study that creative thinking abilities can be enhanced
are consistent with research. Wijayati et al. (2019) demonstrated that students’ typi-
cal modes of thought are increasing significantly in terms of both fluency and elabo-
ration, and Putri et al. (2019) study findings that demonstrated that students in the
experimental group had better creative thinking abilities than those in the control
group. It may be concluded that project-based learning (PBL) can successfully
boost creative thinking skill of primary school pupils in science class. The
Connecting, Organizing, Reflecting and Extending (CORE) learning paradigm is
helpful in fostering students’ capacity for creative thought. In addition to Saregar
et al. (2021) study which showed that the (Connecting, Organizing, Reflecting, and
Extending) CORE learning model, is effective in enhancing students’ creative
thinking skills with Effect Size (0.48), which is in the medium category. Meanwhile,
a study by Aytaç and Kula (2020) found that (SCA) is a significant variable that has
a good impact on pupils’ capacity for creative thought (CTS). The project brief has
a positive impact on creative thinking abilities, according to Habibi et al.’s (2020)
study. When compared to the lecture strategy, the fluency indicator has the largest
average effect, which is (15.7), as well as the average of (9.89) and the lowest on the
originality indicator. According to Tabieh et al. (2021), the experimental group stu-
dents’ learning of fluency, one of the three creative thinking skills was impacted by
the narrative technique. While the research of Rumahlatu et al. (2021) demonstrated
that the resource-based learning design thinking (RBLDT) learning model has an
impact on creative thinking abilities, idea acquiring, and digital literacy of students
in the class (XI) senior high school on the topic of animal tissue (p < 0.05). The
(RBLDT) learning model syntax can enhance students’ conceptual learning, critical
thinking, and digital literacy more effectively than RBL or DT used alone.
According to this study, the improvement of creative thinking skills may be
attributed to the nature of content in the first place, which is considered attractive
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 277

content belonging to the world of digital students and falls within the areas of their
curiosity and interest. Additionally, the design of instruction with learning based on
tasks puts students in a constant state of thought and frees up space for them to
express and share their ideas with their peers. Researchers found no significant dif-
ferences in students’ learning abilities or curiosity towards acquiring and employing
new knowledge in the digital world. While their abilities vary in technology, the
passion for artificial intelligence in both teams is in similar proportions.

9 Conclusion

Artificial intelligence is one of the most important sciences that resulted from the
Fourth Industrial Revolution. This study aimed to verify the impacts of teaching
artificial intelligence its concepts and tools on their thinking skills and creativity in
particular. Results showed the positive impact of teaching artificial intelligence con-
cepts and tools on the creative thinking skills of the targeted students. Study tool’s
pre- and post-applications favor post-applications. Results also showed that there
are no gender-based disparities in how the program affects pupils’ ability to think
creatively. Considering the findings, the study is considered an important study in
introducing the concepts of artificial intelligence and its tools among students and
examining their impact in improving some variables due to the novelty of artificial
intelligence on the one hand and the specificity of the target group on the other hand.

10 Recommendations

1. Integration of artificial intelligence concepts and tools in school curricula for

all stages
2. Training teachers on teaching artificial intelligence concepts and tools
3. Designing content with spiral width for the concepts of artificial intelligence and
teaching it using active methods

References

Aggarwal, C. C. (2018). Neural networks and deep learning: A textbook. Springer.

Aldosari, S. (2020). The future of higher education in the light of artificial intelligence transforma-
tions. International Journal of Higher Education, 9(3), 145–151. [Link]
v9n3p145
Aytaç, T., & Kula, S. S. (2020). The effect of student-centered approaches on students’ creative
thinking skills: A meta-analysis study. International Journal of Contemporary Educational
Research, 7(2), 62–80. [Link]
278 M. F. Abu Owda et al.

Azid, N., & Md-Ali, R. (2020). The effect of the successful intelligence interactive module on
University Utara Malaysia students’ analytical, creative and practical thinking skills. South
African Journal of Education, 40, 1–11. [Link]
Baker, T., & Smith, L. (2019). Educ-AI-tion rebooted? Exploring the future of Artificial intelli-
gence in schools and colleges. Retrieved from Nesta Foundation website: [Link]
[Link]/documents/Future_of_AI_and_education_v5_WEB.pdf
Bonami, B., Dala-Possa, A., & Piazentini, L. (2020). Education, big data and artificial intelli-
gence: Mixed methods in digital platforms Educación, Big Data e Inteligencia Artificial:
Metodologías mixtas en plataformas digitales Luiz Piazentini. Comunicar, 4(65), 156–167.
[Link]
Chassignol, M., Khoroshavin, A., Klimova, A., & Bilyatdinova, A. (2018). Artificial intelligence
trends in education: A narrative overview. Procedia Computer Science, 136, 16–24. [Link]
org/10.1016/[Link].2018.08.233
Crumpler, W. (2021). Higher-order skills in critical and creative thinking [online]. Available at:
[Link] Accessed 30
May 2021.
Habibi, M., Jumadi, J., Gummah, S., Ahzan, S., & Prasetya, D. (2020). Project brief effects on
creative thinking skills among low-ability pre-service physics teachers. International Journal
of Evaluation and Research in Education (IJERE), 9, 415–420. [Link]
v9i2.20531
Holmes, W., Bialik, M., & Fadel, C. (2019). Artificial intelligence in education – Promises and
implications for teaching and learning. Independently published.
Netto-Shek, J. A. (2017). Developing creative & critical thinking in young learners. The 2nd
International Conference 2017 on Teaching English for Young Learners (TEYLIN) (pp. 1–15).
[Link]
Panigrahi, A., & Joshi, V. (2020). Use of artificial intelligence in education. SSRN Electronic
Journal, 55, 64–67. [Link]
Popenici, S. A. D., & Kerr, S. (2017). Exploring the impact of artificial intelligence on teaching
and learning in higher education. In Research and practice in technology enhanced learning
(Vol. 12). [Link]
Putri, S., Sumiati, T., & Larasati, I. (2019). Improving creative thinking skill through project-
based-learning in science for primary school. Journal of Physics: Conference Series, 1157(2).
[Link]
Qian, S., & Feng, Q. (2020). Research on the integration of artificial intelligence and education.
Journal of Physics: Conference Series, 1570. [Link]
Rumahlatu, D., Sangur, K., Berhitu, M. M., Kainama, S. Y., Kakisina, V. V., & Latupeirissa,
C. (2021). Resource based learning design thinking (RBLDT): A learning model to improve
students’ creative thinking skills, concept gaining, and digital literacy. Cypriot Journal of
Educational Science, 16(1), 288–302. [Link]
Saggar, M., Quintin, E. M., Bott, N. T., Kienitz, E., Chien, Y. H., Hong, D. W., Liu, N., Royalty, A.,
Hawthorne, G., & Reiss, A. L. (2017). Changes in brain activation associated with spontaneous
improvisation and figural creativity after design-thinking-based training: A longitudinal fMRI
study. Cerebral Cortex, 27(7), 3542–3552. [Link]
Saregar, A., Cahyanti, U., Misbah, M., Susilowati, N., Anugrah, A., & Muhammad, N. (2021).
CORE learning model: Its effectiveness towards students’ creative thinking. International
Journal of Evaluation and Research in Education (IJERE). [Link]
v10i1.20813
Seren, M., & Ozcan, Z. (2021). Post pandemic education: Distance education to artificial intel-
ligence based education. International Journal of Curriculum and Instruction, 13(1), 212–225.
Tabieh, A. A. S., Al-Hileh, M. M., Abu Afifa, H. M. J., & Abuzagha, H. Y. (2021). The effect of
using digital storytelling on developing active listening and creative thinking skills. European
Journal of Educational Research, 10(1), 13–21. [Link]
The Impact of Teaching Artificial Intelligence Concepts and Tools in Improving… 279

Wijayati, N., Sumarni, W., & Supanti, S. (2019). Improving student creative thinking skills through
project based learning. KnE Social Sciences. [Link]
Williamson, B., & Eynon, R. (2020). Historical threads, missing links, and future directions in
AI in education. Learning, Media and Technology, 45(3), 223–235. [Link]
0/17439884.2020.1798995
Zawacki-Richter, O., Marín, V., Bond, M., & Gouverneur, F. (2019). Systematic review of
research on artificial intelligence applications in higher education – where are the educators.
International Journal of Educational Technology in Higher Education, 16(39), 1–27. https://
[Link]/10.1186/s41239-019-0171-0
Part II
Digitalization Towards Improved
Sustainable Business, and Society
Digital Risk in International Business
Management and Allied Areas in India,
the UAE, and Austria

Udo Christian Braendle , Nasser Almuraqab , M. V. Manoj Kumar ,

and Ananth Rao

1 Introduction

The emergence of a new digital research frontier has occurred at the same time that
international business (IB) has undergone significant transformation (Hennart,
2019). Companies operating on a global scale that are connected digitally have
access to a wide variety of new opportunities, including the ability to obtain global
resources, reach customers located in other countries, and improve global opera-
tions. However, top executives in companies must remember not to minimize the
dangers that come along with these opportunities. Multinational corporations priori-
tize risk management. The IB disregarded the dangers that could be posed by digi-
tization and instead concentrated on the dangers that could arise from politics,
finances, and transactions (Rugman, 2009). IB researchers have to ask themselves a
lot of questions because there is a need for additional research into digital threats.

U. C. Braendle (*)
IMC Krems University of Applied Sciences, Krems, Austria
e-mail: [Link]@[Link]
N. Almuraqab · A. Rao
Dubai Business School, University of Dubai, Dubai, United Arab Emirates
e-mail: nasser@[Link]; arao@[Link]
M. V. Manoj Kumar
Department of Information Science and Engineering, Nitte Meenakshi Institute
of Technology, Bangalore, India

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 283
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
284 U. C. Braendle et al.

1.1 Research Objectives

The digitalization of industry is the fourth major industrial revolution. Connectivity

to the digital realm may differ between nations, sectors, and companies as a result
of international geopolitics, public health crises, and sluggish economic growth
around the world. Multinational corporations (MNCs) both enable and benefit from
increased connectivity, which transforms international business. Because digital
connections can be used across national boundaries at a lower cost than traditional
internet protocol (IB) connections, they are only available in certain countries. The
new era of international business is dominated by digital global connectivity, which
also serves to address growing levels of uncertainty. The process of digitization is
fraught with numerous dangers, and despite its importance to business on a global
scale, it has received little attention, either theoretical or empirical.
Risk management assumes that physical goods, services, investments, and capi-
tal flowed through tangible barriers. Intangible barriers to instant flow of ideas, data,
and knowledge are decreasing. Figure 1 shows the actions MNCs must take
individually and collectively to avoid digital risks. These actions include developing,
deploying, and harnessing digital intelligence for local adaptation, transnational
resilience, and global orchestration of digitally enabled cross-border activities. This
paper discusses international business and related digital risks.

Fig. 1 A framework for the processing of information regarding IB digital risks. A comprehensive
outline of the dangers posed by digitization (Information obtained from Yadong Luo in 2022)
Digital Risk in International Business Management and Allied Areas in India, the UAE… 285

1. Identify the key determinants to predict digital risks based on their feature
importance.
2. Design artificial intelligence quantitative and qualitative models to address the
risk features.
3. Suggest strategies for MNCs to effectively handle the business risks as a value-
added proposition.
This study has five sections, including the introduction. Section 2 reviews the
literature on digital risks, including types, sources, interdependencies, and informa-
tion-processing needs and capabilities. Section 3 describes the framework, method-
ology, and data. Section 4 analyzes digital risk factors. Section 5 discusses limitations
and future research (along with acknowledgment, contributions by authors, and
conflict of interest, with source of funding for the research).

2 Literature Review

In this research, we apply Luo’s framework to business firms in economic blocks

like BRCS (Brazil, Russia, China, and South Africa), GCC (Gulf Cooperation
Council), EU (European Union), and QUAD (Australia, Japan, and the United
States) in general and India, the UAE, and Austria in particular to predict business
risks that have been scantly researched by researchers.1 Figure 1 presents Luo’s
model for the management of digital risks in multinational corporations
(multinational companies). The theory of information processing, which states that
information-processing systems deal with work-related uncertainty, serves as the
theoretical foundation for the framework.
The framework emphasizes the most important points. First, the complexity of
operational tasks and the requirements for information processing are both increased
by digital threats. Second, the level of digital risk that is posed by multinational
corporations varies according to the nature of their businesses and the requirements
of their information systems. Those who have access to a significant amount of
information and data, a geographically diverse user base, and participate on global
platforms are at risk. Third, multinational corporations (MNCs) have the ability to
manage these requirements by enhancing their information-processing capabilities.
Some examples of these capabilities include risk analytics, digital intelligence, risk
control, and collective actions. The management of digital risk necessitates an
alignment between the requirements and capabilities of information processing and
the nature of digital risk. This fit has an effect on efficiency and cost because
multinational corporations are sensitive to the disruptions that digital technology
causes. The field of information-processing theory places a greater emphasis on the

1
For an excellent explanation of various digital risks, its sources, and how to manage them, please
see Luo (2022).
286 U. C. Braendle et al.

information-processing mechanisms and capabilities of organizational design than

does the field of transaction cost economics.

2.1 Digital Interdependence Risk

This results in unanticipated communication breakdowns, contagions, and interrup-

tions between a focal multinational corporation (MNC) and its worldwide business
partners, vendors, suppliers, distributors, customers, and corporate members. The
global financial crisis of 2008 demonstrated how rapidly contagion can spread via
links between capital markets. Businesses become more dependent on digital con-
nections and platforms as a result of digitization, which also enables multinational
corporations to better respond to unforeseen disruptions and difficulties (e.g.,
COVID-19 pandemic). The new era of IB is characterized by digital global connec-
tivity, which is both a defining trait of this era and an essential catalyst for address-
ing new challenges and unknowns. How companies handle digital risk avoidance
for their global operations varies greatly from one another.

2.2 Global Information and Cybersecurity Risk

Financial loss or other harm from a multinational corporation’s fragile information

and communications systems can lead to cyberattacks or data breaches. Customers
worldwide are hesitant to use digital outlets that do not protect their personal
information. They want the highest level of security, availability, reliability, and
performance (Nambisan et al., 2017; UNCTAD, 2015). As corporate data crosses
borders, security concerns grow (EIU, 2014). Internal and external security breaches
are a new category of IB risk that manifest economically and socially (World Bank,
2016). Indirect damage from security breaches includes data loss, customer trust,
and company reputation. Companies must guard against tangible and intangible
threats. Cyberterrorism and cyberespionage threaten national security, and
cyberattacks pose a new international business risk for multinational
corporations (MNCs).
Theft of intellectual property, data breaches, and market manipulation are just
some of the types of cybercrime that add up to a yearly cost of $400 billion to the
world economy. In the future, more businesses will be impacted by cyberattacks,
and those businesses that lack the necessary technology and security measures will
be especially susceptible to these attacks. Firewalls are the industry standard for
securing devices and zones, but risk management in the digital age calls for an
approach that utilizes managed services and can protect IT ecosystems over time.
The focus of cybersecurity moves from individual devices to services.
Digital Risk in International Business Management and Allied Areas in India, the UAE… 287

2.3 Digital Regulatory Complexity Risk

More emphasis is being placed on customers, digital taxes, the protection of sensi-
tive information, and national security. The scope of these regulations necessitates
the preparation of digital risk mitigation strategies. Adopting strategies for customer
master data management is one of the ways that banks and other financial institu-
tions can enhance their digital capabilities in preparation for Europe’s General Data
Protection Regulation. Many different national governments are currently debating
whether or not they should place restrictions on the transmission and storage of data
across international borders. There are those who advocate for governments to man-
date that businesses process and store data on locally hosted servers. This law is
interpreted differently in a variety of nations including Indonesia, Nigeria, Russia,
Vietnam, and others as a result of differences in the digitalization-related regula-
tions, rules, and standards that are in place in those nations. Disruptions at the inter-
national level are caused by the multiplicity, variance, and incompatibility of these
factors. Laws in many countries are comparable to one another (Manyika et al., 2016).

2.4 Within-Country (Target Country) Sources

These include restrictions on digital connectivity and commerce as well as discrimi-

nation against foreign companies. These laws protect consumers from being
defrauded digitally and online. Inadequate protection of digital intellectual property
rights (such as AI) and a lack of transparency in economic and regulatory policies
pertaining to digital connectivity are also contributing factors. The health of a target
country’s key sectors (e.g., electronics, the internet, and information and communi-
cation technology) will have an effect on the global connectivity of a foreign com-
pany. There is a correlation between physical conditions and digital risks. Broadband
(fiber optics, 4G or 5G), international Internet bandwidth, internet data routes,
mobile telecommunications, communications satellite, network infrastructure, data
centers, cloud, big data, and the internet of things are examples of investments that
have been made by both the public and private sectors (UNCTAD, 2015; World
Bank, 2016).

2.5 Cross-Country Sources

The sources that span multiple countries become geopolitical. The United States is
currently engaged in a trade dispute with a number of other countries, most notably
China. As a result of this dispute, many governments have increased their scrutiny
of foreign company takeovers, with a particular emphasis on the implications of
information and communications technology (ICT) and other digital developments
288 U. C. Braendle et al.

for national security and technological advantage. Digitization and information and
communication technology standards are beginning to diverge among economies.
Worsening ties between the home country and the host country make the situation
more complicated. The deterioration of MNCs’ relationships with their home
countries can be detrimental to their businesses (or regions). The advent of the
digital age has made multinational corporations (MNCs) more susceptible to
international threats such as cyberattacks and acts of terrorism. Businesses are put
in jeopardy as a result of the ease with which cybercriminals can carry out attacks
overseas in secret or through proxies brought about by digital technologies
(Kshetri, 2005).
According to the information-processing theory, cross-unit operations or respon-
sibilities are difficult and fraught with uncertainty due to the complexity of the task,
the interdependence of the subunits, and the dynamic nature of the task environ-
ment. These three factors all contribute to the overall complexity and unpredictabil-
ity of the company. More processing power is required when dealing with complexity
and ambiguity. The amount of MNC information and data intensity both contribute
to an increase in the complexity of a digital task. There is a possibility that task
interdependence will increase when a multinational corporation (MNC) participates
more actively in global platforms or adopts a more globalized strategy. Environmental
dynamism can be increased by a company’s expansion of their global supply chain
or their presence in foreign markets (Kano et al., 2020). Key determinants of infor-
mation-processing demands for digitally connected activities, as well as firm-spe-
cific exposure and digital risk vulnerabilities, include the intensity of information
and data, geographic diversity, the type of international strategy, and participation in
global platform activities.

2.6 Information and Data Intensity

Some multinational corporations are more dependent than others on the flow of
information both within and outside the company. Global executives develop a
digital architecture to facilitate internal communication and data sharing,
collaboration with global suppliers and customers, virtualization of global teams,
and connection to global suppliers and customers. An ERP system, an HCM system,
a CRM system, a data management platform, cloud computing, and a social
marketing platform are all included in this architecture. Increased digital connectivity
may alleviate some of the challenges associated with distance, space, and time in
governance, but it may also drive up the costs of organizing and monitoring
(Monaghan et al., 2020).
According to the theory of information processing, organizations that are suscep-
tible to risk require additional information processing (Egelhoff, 1991). Companies
with a lot of information have to worry about both cybersecurity and regulatory
risks. Technology and politics have become the new battlefield. Several countries,
particularly those that are already considered to be technological leaders, compete
Digital Risk in International Business Management and Allied Areas in India, the UAE… 289

for information and communication technology standards and technologies in order

to increase their economic and market power (Sacks, 2020). Because of regulatory
and ICT tensions, many multinational corporations are unable to participate in
activities associated with global value chains. ICT is rapidly transitioning into a
foundational infrastructure for the digital age (UNCTAD, 2015). The global supply
chain and production network of a company rely heavily on digital infrastructure,
which includes things like automated processes, algorithms supported by artificial
intelligence, and cloud computing, among other things.

2.7 Geographic Diversity

An MNC’s internationalization (from supply chain expansion to market expansion)

and global diversification across regions and countries are both aspects of what is
meant by the term “geographic diversity.” Diversification is a hallmark of global
corporations. Multinational companies that diversify their operations put themselves
at risk of being attacked digitally for several reasons. Diverse multinational
companies need to cover more geographic ground, which will expose them to digital
threats (both physical and institutional) in a greater number of countries. Second,
the interdependence of a multinational corporation (MNC) with foreign resources,
regulators, competitors, partners, vendors, platforms, and other ecosystem players
is increased by diversity (Dellestrand & Kappen, 2012). This results in increased
interdependence, information security, and regulatory risks in various countries.
More diversity results in an increase in the number of information-processing nodes
both within and between countries, as well as an increase in the number of digital
risks resulting from interactions between organizations (Stallkamp & Schotter, 2021).
The increasing complexity of the global operations of multinational corporations
is directly correlated to the diversification of their workforces. In order to better
manage digital risks, many executives are increasing the amount of money they
invest in their company’s digital architecture (e.g., ERP, HCM, CRM, global talent
bank, data management platform, cloud computing, and data analytics). This could
result in failures of the internet and intranets, the leaking of sensitive information,
and inadequate digital infrastructure in multiple countries. For the purpose of risk
assessment, the MNC needs to process data from both the domestic and international
levels. When it comes to the management of digital risks, multinational corporations
(MNCs) will have to comply with more stringent information-processing
requirements as their geographic diversity increases.
290 U. C. Braendle et al.

2.8 International Strategy

Leaders of multinational corporations (MNCs) often employ multi-domestic,

global, hybrid, or transnational strategies when competing on a global scale (Bartlett
& Ghoshal, 1989). A multi-domestic strategy, also known as a local adaptation
orientation, is characterized by high levels of local adaptation and responsiveness in
the respective countries in which MNC subunits compete. This strategy places an
emphasis on competition within each country and segments foreign markets based
on national boundaries. Decisions on both a strategic and operational level are made
by foreign subunits in order to adapt products and services to specific local markets.
Because of this strategy, the multinational corporation will be put in jeopardy in the
country on multiple fronts, including the economic, social, and regulatory fronts.
Additionally, the requirement for intra-MNC digitization interdependence and
interconnection is lessened when a multi-domestic strategy is implemented (Bartlett
& Ghoshal, 1989).
The globalization of markets presupposes the standardization of products across
all of those markets. The command center operates under the presumption that
overseas subunits are dependent upon one another and prioritizes integrating them
(Prahalad & Doz, 1987). This approach takes advantage of both global scale and
innovations developed locally. This strategy is put into action by the integrated ERP
solution known as “SAP Business One,” which is designed for use by multinational
corporations, their overseas subsidiaries, and their suppliers. A core solution for the
application that is both flexible and scalable is beneficial to growth and innovation.
This architecture satisfies the global legal and linguistic requirements through the
utilization of a single code base. Because each function related to the company is
combined into a single package, it is very simple to install, configure, and operate.
The use of open application programming interfaces (APIs) or certified standard
integration packages makes system integration simple. This architecture is helpful
under a global strategy, or higher global integration orientation, because multinational
corporations (MNCs) face more cross-country risk forces, such as trade ties between
their home country and the host country and geopolitics that affect digital
globalization.
Positioned between multi-domestic and global strategies is that of transnational
hybrid strategy (Prahalad & Doz, 1987). This hybrid strategy requires a shared
vision, individual commitment, and an integrated organizational network that is still
flexible in order to achieve global efficiency and local responsiveness (Baaij &
Slangen, 2013). Leaders of MNCs who adopt this strategy intend to stimulate
communication within the company, with the goals of preventing conflicts over
integration and localization and increasing the flexibility and discretion of foreign
subunits. In order to keep their local responsiveness while also transferring their
specialized skills to other members of the network, hybrid businesses must
collaborate. Because of these two mandates, information-processing requirements
are becoming more and more stringent, and the design of the digitization system
must be flexible enough to account for variations and unforeseen circumstances.
Digital Risk in International Business Management and Allied Areas in India, the UAE… 291

Foreign subunits need to be sufficiently differentiated so that they can respond

appropriately to the various demands, markets, and policy environments they will
encounter (Sturgeon, 2020).

2.9 Global Ecosystem

Because of digitization, businesses in many countries and industries are being

forced to consider the products and services they offer as components of a larger
whole. It is simple to transfer digital assets across organizational boundaries and
national borders, as well as to modify and recombine them for use in a different
market (Nambisan et al., 2017). The digital platform and ecosystem strategy of a
multinational corporation is driven by data. When a platform is used on a global
scale, data may travel across national boundaries. This presumption is being called
into question as governments in almost every region of the world impose restrictions
on how, when, or how much data can be transferred between countries in business
transactions (World Bank, 2016). This evidence demonstrates both the benefits and
the risks of global platforms.

3 Conceptual Framework, Methodology, and Data

3.1 Conceptual Framework

The psychological stance that companies take toward domestic and international
markets for digital goods and services is one component of what is known as digital
business risks (DBR). During times of widespread macroeconomic unpredictability,
like financial crises and pandemics like COVID-19, businesses have a propensity to
speculate, be optimistic, or be pessimistic about a particular digital trade. DBR
explains why this happens.

Y1ijt Y2 ijt f Xijt ,Z ijt ijt (1)

The conceptual framework of the research is shown in Eq. 1 and Fig. 2. It is

anticipated that the DBR output (Yitj) will fall for India, Austria, and the UAE in
particular, as well as for QUAD, BRCS, GCC, and EU in general. This output
measure for the DBR is included in the framework. Inputs (Xijt) are indicators of
firms’ trade diversity, trading partner reputation in terms of logistics and
infrastructure to support trade in India, Austria, the UAE, QUAD, BRCS, GCC, and
the EU. In addition, inputs (Xijt) are indicators of infrastructure to support trade in
India, Austria, and the UAE. The political and financial crises, pandemic events, and
macroeconomic variables depicted in Fig. 2 are all behavioral factors that are related
292 U. C. Braendle et al.

DBR (Yijt = Output)

DBR Determinants Macroeconomic factors

= Inputs (Xijt) (Control inputs = Z ijt)

Fig. 2 Conceptual framework input-output relation of digital business risk (DBR) with DBR
determinants and macroeconomic factors (Source: Authors’ own creation)

to Sustainable Development Goal 8 (growth and economic development) and

Sustainable Development Goal 9 (information and communication technologies).
The research makes use of artificial intelligence (AI) to model DBR and capture
behavioral factors rather than hypotheses.

3.2 Rationale for Focusing on Regional Economic Blocks Like

BRICS, GCC, EU, and QUAD (AJUS)

3.2.1 BRICS

Brazil, Russia, India, China, and South Africa account for 41% of the world’s popu-
lation, 24% of global GDP, and 16% of global trade. BRICS drive economic growth.
BRICS countries have different pharmaceutical trades, international participation,
and other interests. The BRICS’ rise as a unique organization with increasing trans-
national health and trade cooperation strains global governance systems and proce-
dures. Academics, legislators, and consultants seek leadership and inspiration from
national governments and regional blocks. BRICS nations may fill the leadership
void left by retreating countries. More research is needed to determine if the BRICS
can fill this gap. A constitutional definition of authority has contributed to Brazil’s
federal-state cooperation. Uncoordinated efforts to pool resources in Russia have
led to inefficiency. BRICS countries provide diplomatic and technical support for
global health programs

3.2.2 Gulf Cooperation Council (GCC)2

Dynamic, active, and diverse are the GCC and BRICS economies. The GCC and
BRICS countries are attracting foreign investment as they enter the global economy
and grow faster than the industrialized world (Bhuyan et al., 2016). According to the
World Federation of Exchanges, the GCC and BRICS have a $12,809 trillion market

2
Gulf Cooperation Council (GCC) comprises of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia,
and the United Arab Emirates (UAE).
Digital Risk in International Business Management and Allied Areas in India, the UAE… 293

cap. It is 1200 trillion dollars more than Europe, the Middle East, and Africa
combined. The GCC and BRICS are important sources of demand and supply. In
2018, the UAE was 11.5% citizens and 88.5% expats. Fifty-nine percent of non-
UAE citizens are South Asian. BRICS and GCC markets are affected by macroeco-
nomic conditions (Mensi et al., 2014).
GCC and BRICS economies are internal. Many GCC and BRICS economies and
financial systems are externally driven. The GCC and BRICS, which share gold and
oil, benefit when the QUAD (the United States, Australia, and Japan) and other
developed countries do well. Both China and India consume a lot of oil. Russia, a
leading producer of crude oil and natural gas with ties to industrialized economies,
is an energy powerhouse. Worsening economic conditions in developed economies
would reduce capital flows from advanced to GCC and BRICS economies and
exports to developed markets rich in oil, the GCC. The BRICS nations are able to
make some modifications to the rich GCC block’s model and then use it as their
own. Collaboration in information technology may be led by BRICS. The
information technology (IT) exports of India are projected to skyrocket in 2022.
This year, it is anticipated that Indian exports will grow by 4.7%. Predictions
pertaining only to India:
• It is possible that outbound shipments will exceed $400 billion.
• According to projections made by the WTO, India’s exports will increase by
4.7% in 2022.
• The value of software exported could reach 148 billion dollars. This is more than
the oil sales of GCC.
• In the coming weeks and months, India’s software companies will experience
significant growth.
Because the BRICS have the largest engineering population in the world, it is
possible that software exports will skyrocket in 2022–2023 and beyond. Exports of
software are a part of growth driven by exports, but their momentum is picking up

3.2.3 Australia, Japan, and the United States (AJUS-QUAD Partners)3

AJUS-QUAD is a trilateral technology accelerator between Australia, Japan, and

the United States. It speeds up the development and use of key technologies. It is a
deal between governments, research organizations, and private companies, including
non-defense tech companies. The AJUS alliance is a foundational contribution to a

3
A growing momentum toward monolateral cooperation in the Indo-Pacific to “meet the chal-
lenges of the twenty-first century” was fueled by the formation of AJUS in September 2021, which
was an “enhanced trilateral security partnership” between Australia, Japan, and the United States.
The agreement promotes the exchange of information and technologies; integrates security
and defense research, technology, industrial bases, and supply chains; and enhances the combined
capabilities and interoperability of the three countries. The grouping could improve security
in the Indo-Pacific region despite the fact that it is limited to the three Anglo partners
(Jagannath, 2022).
294 U. C. Braendle et al.

free, open, and inclusive Indo-Pacific. QUAD discusses COVID-19, vaccines,

technological innovation, supply chain resilience, and climate change.

3.2.4 European Union

Within its borders, the European Union (EU) seeks to promote peace, its values, and
the well-being of its citizens; offer freedom, security, and justice without internal
borders; regulate asylum and immigration; prevent and combat crime; establish an
internal market; and accomplish sustainable development based on balanced
economic growth, price stability, and a highly competitive market economy that
supports emoji. The global objectives of the European Union are to uphold and
promote its values and interests, contribute to peace and security and sustainable
development, and promote solidarity and mutual respect among peoples, free and
fair trade, poverty eradication, and human rights, as stated on the website of the
European Union ([Link]
eu-priorities-en).

3.3 Methodology

3.3.1 Traditional OLS and Ridge Regression

Because of multicollinearity, the design matrix is almost entirely singular, which

means that X and X’X do not have full rank. It is not possible to obtain the OLS
estimate. As a result, one must pay attention to the multicollinearity of the data. The
traditional approaches involve either gathering more data or reducing the number of
variables. Increasing the amount of data collected can be prohibitively expensive or
impractical. When trying to reduce multicollinearity in a model, dropping variables
from the model could cause specification bias, which would make the solution
worse than the original problem. Our objective is to derive the maximum amount of
information from the data at our disposal, and this objective is what has inspired
researchers to devise novel statistical methods, such as ridge regression (Vinod,
1978), in order to address the issue of multicollinearity. Ridge regression with Y1
and Y2 joint distributions was the method that we used in this study.

3.3.2 Artificial Neural Network (ANN)

Artificial neural networks (ANN) were developed by researchers in the fields of

psychology, neuroscience, and engineering to approximate the way information is
processed. ANN assists multinational corporations in responding to news, learning,
processing information, and making decisions. ANN operates under the assumption
of bounded rationality, which holds that market participants adjust their prior
Digital Risk in International Business Management and Allied Areas in India, the UAE… 295

subjective beliefs based on their previous errors. The ANN makes the assumption
that economic decision-makers react to external shocks in an asymmetrical and
nonlinear fashion. The ANN provides an intuitive approximation of the decision-
making process in economics and business. For two reasons that are interrelated, the
emerging market logistics, information and communication technology, and other
sectors are fertile ground for ANN. One reason is that the data are frequently noisy
because of the shallowness of the market or the rapidity with which news spreads,
which means that asymmetries and nonlinearities cannot be assumed to be
eliminated. Second, participants in the market frequently learn about recent policy
news, changes in the law, and other changes in the market through trial and error. An
artificial neural network (ANN) uses a combination of learning and searching to
arrive at its estimates of synaptic weights, also known as parameter coefficients
(McNellis, 2005): (a) the perceptron, (b) the feed-forward neural network, (c) the
multilayer perceptron, (d) the convolutional neural network, (e) the radial basis
functional neural network, (f) the recurrent neural network, and (g) the LSTM –
long short-term memory. In our research, we derived synaptic weights by using a
multilayer perceptron artificial neural network (ANN). A comparison of (d) and (h)
is not within the purview of the present investigation.

3.3.3 Random Forest Tree (RFT) Model

The ensemble machine learning (ML) technique known as random forest is trained
using a large number of decision trees. Because decision trees are relatively
straightforward, it is possible that a single tree won’t be enough to construct a
machine learning model. In order to make decisions, random forest combines the
characteristics of many different decision trees. Therefore, it is a “forest” of trees;
consequently, it is called “random forest.” This method makes use of “randomly
created decision trees,” as the name of the method suggests. RFT utilizes bootstrap
trees in order to make predictions and classifications (sometimes referred to as
bagging). Multiple decision trees are aggregated into one larger tree in place of
using just one. One of the drawbacks of using a decision tree is overfitting. It is
possible to alleviate some of this difficulty by employing RFT regression rather than
decision tree regression. In comparison to more conventional regression models,
RFT is both quicker and more reliable.
RFT creates sample data sets for each model by selecting rows and features at
random from the entire data set. Bootstrap. The random forest regression method is
comparable to any other machine learning approach.

3.4 Empirical Model

The output, input, and control factors are detailed in Table 1. The framework is
empirically analyzed using Eq. 2 covering OLS, ridge regression, RFT, and ANN
specifications.
296 U. C. Braendle et al.

Table 1 Details of output (Yijt) and inputs (Xijt and Zijt)

Fig. 1
World Bank WDI factor description Relation Factor implication
Y1 The index of the net barter terms of trade 2.1 The higher the ICT coverage, the
(2000 = 100) higher the barter index
Y2 Individuals using the internet (% of 2.1 Imply higher penetration facilitating
population) trade
X1 Business extent of disclosure index 2.1 Higher ICT coverage facilitates
(0 = less disclosure to 10 = more greater disclosure
disclosure)
X2 (Expressed as a percentage of the net 2.8 Positive metrics imply competitive
difference Between exports and imports advantage in exporting country and
of commercial services) computer, negative metrics imply competitive
communications, and other services disadvantage in importing country
X3 Broadband subscriptions that are fixed 2.2 Imply higher ICT penetration
(per 100 people)
X4 GDP per capita growth (annual %) 2.4 Higher per capital income implies
capacity to access ICT tools
X5 ICT goods net of exports-imports (% net 2.8 Positive ICT good metrics imply
goods total exports-total imports) competitive adv. In exporting country
and negative metrics imply
competitive disadvantage in
importing country
X6 ICT service exports as a percentage of 2.8 Imply ICT services competitive
total service exports (base year) advantage in exporting country
X7 ICT investment with private sector 2.9 The higher the PP in ICT, the higher
participation (in current US dollars) the competitive advantage in both the
exporting and importing countries
X8 The overall logistics performance index 2.6 Imply supply chain higher
ranges from 1 (low) to 5 (high) performance due to ICT coverage
X9 Index of the performance of logistics: 2.6 Imply supply chain higher
infrastructure quality relating to performance due to ICT coverage
commerce and transportation on a scale
of 1 (low) to 5 (high)
X10 Manufacturing sector net of 2.8 Positive manufacturing sector metrics
exports-imports imply competitive adv. in exporting
country and negative metrics imply
competitive disadvantage in
importing country
X11 Merchandise by the reporting economy 2.7 Positive metrics imply external trade
that is net of exports and imports, diversity in these economies reducing
expressed as a percentage net of total business risks due to ICT coverage
exports and imports of merchandise
X12 Merchandise after deducting exports and 2.7 Positive metrics imply external trade
imports to economies in the Arab World diversity in Arab World reducing
(expressed as a percentage after business risks due to ICT coverage
deducting total exports and imports of
merchandise)
(continued)
Digital Risk in International Business Management and Allied Areas in India, the UAE… 297

Table 1 (continued)
Fig. 1
World Bank WDI factor description Relation Factor implication
X13 Merchandise after deducting exports and 2.7 Positive metrics imply external trade
imports to economies with high incomes diversity in HIC reducing business
(percentage after deducting total exports risks due to ICT coverage
and imports of merchandise)
X14 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
LMIC (% net of total merchandise diversity in LMIC reducing business
exports-imports) risks due to ICT coverage
X15 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
LMIC in EU and Central Asia (% net of diversity in LMIC in EU and Central
total merchandise exports-imports) Asia reducing business risks due to
ICT coverage
X16 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
LMIC in Latin America and the diversity in LMIC in Latin America
Caribbean (% net of total merchandise and Caribbean reducing business
exports-imports) risks due to ICT coverage
X17 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
MENA (% net of total merchandise diversity in LMIC in MENA
exports-imports) reducing business risks due to ICT
coverage
X18 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
South Asia (% net of total merchandise diversity in LMIC in South Asia
exports-imports) reducing business risks due to ICT
coverage
X19 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
sub-Saharan Africa (% net of total diversity in LMIC in sub-Saharan
merchandise exports-imports) Africa reducing business risks due to
ICT coverage
X20 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
LMIC outside region (% net of total diversity in LMIC outside region
merchandise exports-imports) reducing business risks due to ICT
coverage
X21 Merchandise net of exports-imports to 2.7 Positive metrics imply external trade
LMIC within region (% net of total diversity in LMIC within region
merchandise exports-imports) reducing business risks due to ICT
coverage
Z1 Natural logarithm of GDP (constant 2.1 Imply size of the country (control
2015 US$) variable)
Z2 Pandemic events (PE) 2.1 Like swine flu, malaria, smallpox,
SARs, and recently the COVID
Z3 Economic and financial crises (EC) 2.1 2008–2009 economic and financial
crises
298 U. C. Braendle et al.

3.4.1 Empirical Model

Y jjt ijt ijt Xijt ijt Z ijt ijt

(2)

where:
Yijt = Two outputs of DBR (Y1 and Y2) for three individual countries (India, the UAE,
and Austria) and the four blocks j (QUAD, GCC, BRCS, EU) and t = 2000–2020.
Xijt = Set of DBR indicator inputs (drawn from world development indicators (WDI)
database of the World Bank) for countries in the blocks j and t = 2000–2020.
Zijt = Set of macro-factors such as GDP (2015 constant US$) representing the size
of the country, pandemic, and economic crises events in the four blocks j and
t = 2000–2020. The control inputs have a greater impact on DBR in the economies
under study.
J = 14 economies grouped into seven groups comprising of three specific countries
where one represents India, two represent Austria, three represent the UAE, and
four regional blocks represented by QUAD (three developed countries excluding
India), BRCS (four countries excluding India, i.e., Brazil, Russia, China, and
South Africa), GCC block (excluding the UAE – five developing oil-rich
economies: Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia), and the European
Union (excluding Austria) and t = time from 2020–2020.
εijt is the error term for the ith country, jth block for time t = 2000–2020.
Third column in Table 1 aligns the output, input, and control factors to risk
dimensions depicted in Fig. 1, which are explained in Sect. 2 under 2.1, 2.2, 2.3, 2.4,
2.5, 2.6, 2.7, 2.8, and 2.9. The significance and influence of sector-specific studies
in enhancing both domestic and international trade performance of business corpo-
rations cannot be overstated. This is the uniqueness of this research.

4 Model Results

Figure 3 shows that the root mean square error (RMSE) is highest in OLS model
compared to ridge regression, RFT, and ANN models for predicting BDR.
So we focus our discussion of results on the RFT and ANN models for predicting
accuracy of BDR. Figure 4 displays the feature importance of RFT in decreasing
order in our data set.
Digital Risk in International Business Management and Allied Areas in India, the UAE… 299

Fig. 3 Comparison of OLS, ridge regression, RFT, and ANN models

Fig. 4 Feature importance on BDR

300 U. C. Braendle et al.

SHapley Additive exPlanations (SHAP)

4.1

SHAP is most likely in the lead for ML explainability. This method involves the
reversed engineering of the outcome of a prediction algorithm. Researchers make
use of SHAP values in order to comprehend the choices made by a complex model
(gradient boosting, neural network, etc.). SHAP is a concept in game theory. Take
into consideration a predictive model, a “game,” and “players” in the game. SHAP
determines the degree to which each feature contributes to prediction. One observa-
tion is equal to one “game.” The SHAP focuses on the possibility of local interpreta-
tion. The SHAP value plot depicts predictor-target relationships that are both
positive and negative (in our case, ICT governance framework Y1 and Y2). These
train data dots are used in this graph. Displays: Importance of feature: Variables are
ordered descending.
• Horizontal placement shows whether a value affects a higher or lower forecast.
• Color indicates whether a variable is high (red) or low (blue) (in blue).

4.2 Discussion of RFT and ANN Model Results

Figure 4 displays the summary results of all models factor-wise. The following fac-
tors have positive impact on BDR in decreasing order of importance:
The X17 factor represents the disparity between MENA’s exports and imports (as
a percentage of the total amount of merchandise exported and imported). The trade
surplus in low- and middle-income countries in the Middle East and North Africa
(MENA), which increased ICT coverage, increased business risks. This corroborates
the findings presented in Sect. 2.1, which state that the diversity of MNCs contributes
to an increase in digital risks for a variety of reasons. The finding lends credence to
this assertion. Diverse multinational companies need to cover more geographic
ground, which will expose them to digital threats (both physical and institutional) in
a greater number of countries. More geographic ground must be covered in order to
cover more ground. Second, increased diversity heightens a multinational
corporation’s reliance on external ecosystem players such as foreign resources,
regulators, competitors, partners, vendors, and platforms (Dellestrand & Kappen,
2012). This results in an increase in the risks associated with global interdependence,
information security, and regulatory oversight. More diversity results in more
information-processing nodes both within countries and between them, as well as
an increase in the number of digital risks resulting from exchanges between organi-
zations (Stallkamp & Schotter, 2021).
X18 factor, merchandise net of exports-imports to South Asia (% net of total mer-
chandise exports-imports). The implication is the same as for the factor X17 factor
for MENA trade surplus resulting in trade diversity.
X2, along with the factors of computer, communication, and service (net com-
mercial exports-imports). Because of the same factors as X17 and X18, DBR increased
Digital Risk in International Business Management and Allied Areas in India, the UAE… 301

as a result of a competitive advantage in India, the UAE, and Austria. This finding
is in line with Luo’s observation, which states that the volume of information and
data, geographic diversity, the type of international strategy, and participation in
global platforms all contribute to the specific exposure and digital risk vulnerabilities
of a company.
X15 factor, merchandise net of exports-imports to LMIC in EU and Central Asia
(% net of total merchandise exports-imports) was next important feature in
predicting DBR. Surplus trade diversity in LMIC in EU and Central Asia increased
DBR risks due for the same reasons as adduced for X17 and X18.
UAE dummy had positive impact on DBR. This implies that ICT competitive
advantage in the UAE increased DBR. The reasons are similar to those discussed
under factor X17 above.
Austria dummy had positive impact on DBR. This implies that ICT competitive
advantage in Austria increased DBR. The reasons are similar to those discussed
under factor X17 above.
Z1 factor, natural logarithm of GDP (constant 2015 US$) was next important
feature in predicting DBR. This implies that the size of the country (control variable)
was also important in predicting DBR. The higher the size of the country translates
to developed economy and also developed ICT. The reasons are similar to those
discussed under factor X17 above.
India dummy had positive impact on DBR. This implies that ICT competitive
advantage in India increased DBR. The reasons are similar to those discussed under
factor X17 above.
A net merchandise trade surplus was achieved as a result of exporting to MENA,
South Asia, the EU, and Central Asia. This led to an increase in the digital business
risk in India, the UAE, and Austria due to the depth and breadth of their ICT sectors.
These findings imply that, in accordance with Sturgeon (2020), the leaders of MNCs
in these economies adopt a hybrid strategy in order to achieve two goals: stimulating
intra-firm communication in order to avoid integration and localization conflicts and
increasing flexibility and discretion to foreign subunits. In order to maintain a local
presence while also transferring specialized skills within the network, hybrid
companies are required to do so. Because of these two mandates, information-
processing requirements must be met, and the design of the digitization system must
be flexible enough to account for variations and unforeseen circumstances. It is
necessary for foreign subunits to have a sufficient amount of differentiation in order
to meet the varied requirements of various markets and policy environments
The following factors have negative impact on BDR in decreasing order of
importance:
X9 factor, logistics performance index: Quality of trade and transport-related infra-
structure (1 = low to 5 = high) was high in India, the UAE, and Austria. This
implies supply chain higher performance in these three countries due to higher
ICT coverage. These resulted in reduced DBR in these countries.
X8 factor, logistics performance index: Overall (1 = low to 5 = high) was high in
India, the UAE, and Austria. This implies supply chain higher performance in
302 U. C. Braendle et al.

these three countries due to higher ICT coverage. These resulted in reduced DBR
in these countries similar to quality of trade and transport-related infrastructure.
X14 factor, merchandise net of exports-imports to LMIC (% net of total merchandise
exports-imports). Positive metrics in external trade diversity in LMIC thus reduce
business risks due to ICT coverage. This result is contrary to results discussed
under X17 and X18.
X11 factor, merchandise net of exports-imports by the reporting economy, residual
(% net of total merchandise exports-imports) was next important feature in
predicting reduced DBR. Positive metrics imply external trade diversity in these
economies reducing business risks due to ICT coverage.
X13 factor, merchandise net of exports-imports to high-income economies (% net of
total merchandise exports-imports) was next important feature in predicting
DBR. Positive metrics imply external trade diversity in HIC reducing business
risks due to ICT coverage.
X19 factor, merchandise net of exports-imports to MENA (% net of total merchandise
exports-imports) was next important feature in predicting DBR. Positive metrics
imply external trade diversity in LMIC in MENA reducing business risks due to
ICT coverage.
X21 factor, merchandise net of exports-imports to LMIC within region (% net of total
merchandise exports-imports) was next important feature in predicting
DBR. Positive metrics imply external trade diversity in LMIC within region
reducing business risks due to ICT coverage.
X16 factor, merchandise net of exports-imports to LMIC in Latin America and the
Caribbean (% net of total merchandise exports-imports) was next important
feature in predicting DBR. Positive metrics imply external trade diversity in
LMIC in Latin America and Caribbean reducing business risks due to ICT
coverage.
X20 factor, merchandise net of exports-imports to LMIC outside region (% net of
total merchandise exports-imports) was next important feature in predicting
DBR. Positive metrics imply external trade diversity in LMIC outside region
reducing business risks due to ICT coverage.
X5 factor, ICT goods net of exports-imports (% net goods total exports-total imports)
was next important feature in predicting DBR. Positive ICT good metrics imply
competitive advantage that reduces DBR.
EC (2008–2009 economic and financial crisis) factor was next important feature
negatively impacting predicting DBR. One plausible reason is that contagion of
global financial crisis resulted in reduced in ICT infrastructure, reduced trade across
borders, and hence increased DBR as detailed under Sect. 2.9 Global Diversity.
PE (pandemic events) that are control factors was next important feature in pre-
dicting DBR. This implies that pandemic events like swine flu, malaria, smallpox,
SARs, and recently the COVID impacted the DBR negatively for the same reason
as detailed for EC factor above.
Digital Risk in International Business Management and Allied Areas in India, the UAE… 303

BRICS dummy was next important feature negatively impacting in predicting

DBR. One plausible reason is that ICT is well developed in BRICS and hence these
economies have competitive advantage in ICT and thus experience lower DBR.
GCC dummy was next important feature negatively impacting in predicting
DBR. One plausible reason is that ICT is well developed in GCC similar to BRICS
and hence these economies have competitive advantage in ICT and thus experience
lower DBR.
QUAD dummy was the next important feature negatively impacting in predict-
ing DBR. One plausible reason is that ICT is well developed in QUAD similar to
BRICS and GCC and hence these economies have competitive advantage in ICT
and thus experience lower DBR.
In conclusion, a hybrid strategy tends to bring about a reduction in DBR when it
is adopted by trading countries. This is the case because of a higher logistics quality
index, a higher logistics performance index, and the diversity of its external trade
with low- and middle-income countries as well as high-income economies. To be
successful in these countries, the digital platform and ecosystem strategy of an
MNC need to place a significant emphasis on data. When a platform has a global
reach, it is reasonable to assume that data can be transferred between countries;
however, this assumption is coming under increasing scrutiny as governments in
almost every region of the world impose restrictions on how, when, or to what extent
companies can transfer data between countries (World Bank, 2016). Global
platforms and ecosystems bring with them both opportunities and dangers, as was
demonstrated earlier.

5 Conclusion

Digital connections are country-specific because they can be used across national
boundaries for less money than traditional IB connections. Digital global
connectivity dominates the new era of international business and addresses rising
uncertainties. Digitization carries myriad risks, a pivotal issue for global operations
that has received little theoretical or empirical attention. In this background, this
paper specifically addresses the three questions on digital risks in international
business and related areas: (1) Identify the key determinants to predict digital risks
based on their feature importance, (2) design artificial intelligence quantitative and
qualitative models to address the risk features, and (3) suggest strategies for MNCs
to effectively handle the business risks as a value-added proposition.
A comprehensive output-input framework was developed to address the research
questions. The digital business risk (DBR) for India, Austria, and the UAE in
particular and QUAD, BRCS, GCC, and EU economic blocks in general is the DBR
output (Yitj) to be predicted to mitigate. This is a key DBR output measure in the
framework. The inputs (Xijt) are indicators of firms’ trade diversity, trading partner’s
reputation in terms of logistics and infrastructure to support trade, in India, Austria,
and the UAE besides other economic blocks like QUAD, BRCS, GCC, and the
304 U. C. Braendle et al.

EU. The conceptual framework in Fig. 2 encompasses many behavioral factors

related to sustainable development goal SDG-8 (growth and economic development)
and SDG-9 (ICT) captured by political and financial crises besides pandemic events
and macroeconomic variables in general. Thus, instead of focusing on hypotheses,
the study captures the importance of the behavioral factors in DBR modeling by
applying AI tools.
In conclusion, a net merchandise trade surplus caused by exporting to economies
in the Middle East and North Africa (MENA), South Asia, the European Union
(EU), and Central Asia resulted in an increased digital business risk in the exporting
countries of India, the United Arab Emirates (UAE), and Austria. These three
countries had a competitive advantage in terms of the depth and breadth of their
information and communications technology (ICT). There is a tendency for DBR to
be lowered by circumstances such as a higher logistics quality index, a higher
logistics performance index, external trade diversity to LMIC, MENA, and high-
income economies, as well as economic crisis and pandemic events. To lessen the
impact of DBR, multinational corporations (MNCs) might work out some sort of
hybrid strategy with their trading partners. Data serves as the primary motivator for
a multinational corporation’s digital platform and ecosystem strategy when
operating in these countries. It is reasonable to assume that data can be transferred
across national borders when using a platform that has a global reach, such as the
internet. On the other hand, the fact that governments in almost every region of the
world impose restrictions on how, when, or to what extent companies can transfer
data across their border’s casts doubt on the veracity of this assumption. The
evidence presented here demonstrates both the benefits and the dangers that are
associated with utilizing global platforms and ecosystems.
The area under study requires interventions in policy and regulation to bolster
digital intellectual property rights (e.g., AI), as well as transparency in the process
of enforcing economic and regulatory policies regarding digital connectivity. The
economic conditions of a target country, such as the health of key sectors (e.g.,
electronics, the internet, and information and communication technology), will
affect the global connectivity of a foreign company. The nation’s digital risks can be
affected by the physical conditions. Investments in areas such as broadband supply
(fiber optics, 4G or 5G coverage), international internet bandwidth, internet data
routes, mobile telecommunications, communications satellite, network
infrastructure, data centers, cloud, big data, and the internet of things made by both
the public sector and the private sector (IoT).
According to Sturgeon (2020), the leaders of multinational corporations in the
three economies adopt a hybrid strategy in order to stimulate intra-firm
communication and increase the flexibility and discretion of their foreign subunits.
In order to maintain their local responsiveness while also transferring their unique
skills, hybrid companies need to network. Because of these two mandates,
information-processing requirements are being solidified, and the design of the
digitization is being forced to accommodate variations and contingencies. It is
essential for foreign subunits to have a sufficient level of differentiation in order to
successfully navigate the varied demands, markets, and policy environments they
will encounter.
Digital Risk in International Business Management and Allied Areas in India, the UAE… 305

5.1 Directions for Future Research

The study is limited with focus on three individual countries India, Austria, and the
UAE with aggregate secondary WDI data in four regional blocks EU, BRICS, GCC,
and the QUAD. Future studies may expand the database to specific countries in each
block to broaden the research agenda for in-depth research on digital risk in
international business and allied areas.
Authors’ Contribution All four authors have equally contributed in developing this conceptual
paper using their respective domain knowledge.
Ethics Statement The research paper has only used publicly available data from World Bank
and SDG sources.
Financial Support This research paper once accepted for publication will be submitted for
funding through Indian Council of Scientific and Technical Research (ICSTR) in India, National
Research Foundation (NRF) of Ministry of Education in the UAE and European Union (EU)
Horizon.
Data Availability Statement The original contributions made in the study have been incorpo-
rated into the article as well as the Supplementary Material. If you have any further questions,
please contact the author who is listed as the corresponding author.

References

Baaij, M. G., & Slangen, A. H. (2013). The role of headquarters subsidiary geographic distance in
strategic decisions by spatially disaggregated headquarters. Journal of International Business
Studies, 44(9), 941–952.
Bartlett, C. A., & Ghoshal, S. (1989). Managing across borders. Harvard Business School Press.
Bhuyan, R., Robbani, M. G., Talukdar, B., & Jain, A. (2016). Information transmission and dynam-
ics of stock price movements: An empirical analysis of GCC and BRICS and US stock mar-
kets. International Review of Economics & Finance, 46, 180–195. [Link]
iref.2016.09.004
Dellestrand, H., & Kappen, P. (2012). The effects of spatial and contextual factors on headquar-
ters resource allocation to MNC subsidiaries. Journal of International Business Studies, 43(3),
219–243.
Egelhoff, W. G. (1991). Information processing theory and the multinational enterprise. Journal of
International Business Studies, 22(3), 341–368.
EIU (Economist Intelligence Unit). (2014, April). Networked manufacturing: The digital future.
Hennart, J.-F. (2019). Digitalized service multinationals and international business theory. Journal
of International Business Studies, 50, 1388–1400.
Jagannath, P. (2022). Is ‘AUKUS Plus’ a viable option? Available online at: [Link]
com/2022/01/is-aukus-plus-a-viable-option
Kano, L., Tsang, E. W. K., & Yeung, H. W. (2020). Global value chains: A review of the multi-
disciplinary literature. Journal of International Business Studies, 51, 577–622.
Kshetri, N. (2005). Pattern of global cyber war and crime: A conceptual framework. Journal of
International Management, 11(4), 541–562.
Luo, Y. (2022). A general framework of digitization risks in international business. Journal of
International Business Studies, 53, 344–361.
306 U. C. Braendle et al.

Manyika, J., Lund, S., Bughin, J., Woetzel, J., Stamenov, K., & Dhringra, D. (2016). Digital
globalization: The new era of global flows. McKinsey Global Institute.
Mensi, W., Hammoudeh, S., Reboredo, J. C., & Nguyen, D. K. (2014). Do global factors
impact GCC and BRICS stock markets? A quantile regression approach. Emerging Markets
Review, 19, 1–17. [Link]
Monaghan, S., Tippmann, E., & Coviello, N. (2020). Born digitals: Thoughts on their
internationalization and a research agenda. Journal of International Business Studies,
51(1), 11–22.
Nambisan, S., Lyytinen, K., Majchrzak, A., & Song, M. (2017). Digital innovation manage-
ment: Reinventing innovation management research in a digital world. MIS Quarterly,
41(1), 223–238. [Link]
Prahalad, C. K., & Doz, Y. (1987). The multinational mission: Balancing local demands and
global vision. Free Press.
Rugman, A. M. (2009). The oxford handbook of international business (2nd ed.). Oxford
University Press.
Sacks, J. (2020). The ages of globalization: Geography, technology and institutions. Columbia
University Press.
Stallkamp, M., & Schotter, A. P. J. (2021). Platforms without borders? The international strate-
gies of digital platform firms. Global Strategy Journal, 11(1), 58–80.
Sturgeon, T. (2020). Upgrading strategies for the digital economy. Global Strategy Journal,
11(1), 34–57.
UNCTAD. (2015). Information economy report: Unlocking the potential of E-commerce for
developing countries. Geneva, Switzerland: UN.
Vinod, H. D. (1978). A survey of ridge regression and related techniques for improvements
over ordinary least squares. The Review of Economics and Statistics, 60, 121–131.
World Bank. (2016). World Development Report 2016: Digital dividends. World Bank
Publications.
An Online Market in Your Pocket: How
Does an Augmented Reality Application
Influence Consumer Purchase Decision

Haneen Mohammad Shoaib and Muhammad Saleem

1 Introduction

Online and digital channels are widely developing and empowering consumers to
interact with retail stores worldwide (Almunawar & Anshari, 2014; Kotler et al.,
2019). Smartphones are equipped with sophisticated interactive capabilities that
enable consumers to have exciting, new, and unforgettable emotional and rational
purchasing experiences with a brand (Meegahapola & Perera, 2017). In particular,
augmented reality apps are among the most advanced and exciting technologies,
with the dynamic capability to transform consumers’ online shopping experience
(Saleem et al., 2021b; Kamarudin et al., 2022). According to Poushneh and Vasquez-
Parraga (2017), augmented reality apps are integrated with virtual reality, represent-
ing a fundamental innovative media format and allowing consumers to experience
virtual objects, i.e., images or video. Therefore, in 2021 the augmented reality appli-
cation in the consumer market was predicted to grow by 31%, mainly expected to
place a robust future in the retail sector (Wang et al., 2013). For example, Adidas,
Ikea, and Timberland offer augmented reality apps to consumers so they can experi-
ence virtual objects (Kim and Sullivan, 2019; Wadel et al., 2020).
Therefore, prior studies have stressed investigating the crucial role of augmented
reality apps on consumers’ attitudes and purchase intentions in a different context
(Schwartz, 2011; Krishen et al., 2021; Saleem et al., 2021b). Thus, Saleem et al.

H. M. Shoaib (*)
College of Business Administration, University of Business and Technology,
Jeddah, Kingdom of Saudi Arabia
e-mail: haneen@[Link]
M. Saleem
Azman Hashim International Business School, Universiti Teknologi Malaysia,
Kuala Lumpur, Malaysia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 307
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
308 H. M. Shoaib and M. Saleem

(2021b) confirmed that the augmented reality mobile application significantly

impacts consumers’ buying intention. Further, they identified that augmented real-
ity technology influences the online shopping environment and enhances consum-
ers’ involvement with the brands virtually. In this regard, Almunawar and Anshari
(2014) suggested that the utilization of augmented reality in the retail sector is
increasing mainly in developed countries. Thus, due to the lack of technological
innovation and use, the retail sector in developing countries is still not mature
enough to develop augmented reality apps (Saleem et al., 2021b). In addition, Alam
et al. (2021) highlighted that the implication of augmented reality in the retail sector
is still lacking theoretical evidence. Also, little scholarly work investigated the influ-
ence of augmented reality apps on the consumers’ attitudes and purchase decisions
toward a brand (Kim & Sullivan, 2019). According to Watson et al. (2018), “this
model enables researchers to empirically identify causal links between physical,
experiential retail elements, consumers’ affective responses, and purchase inten-
tions and behaviors” (p. 434). However, the aim of the current chapter was primarily
focused on unfolding the use of augmented reality mobile apps in the retail sector
and its impact on consumers’ hedonic, utilitarian, hedonic, satisfaction, and pur-
chase intentions.

2 Hedonic Value

Augmented reality apps enhance and modify user interaction with the physical
objects by providing a virtual exhibition, such as videos and images (3D, 4D, 5D).
The virtual experience of the physical objects encounters the users’ intention to use
and ensures the ultimate involvement with the brand (Alam et al., 2021). Poushneh
and Vasquez-Parraga (2017) pointed out that the use of augmented reality apps in
the retail sector is constantly increasing. Consequently, it also empowers the con-
sumers to gain maximum information about virtual products on their smart devices.
Thus, the use of augmented reality mobile applications is getting more familiar and
motivating users to interact; as a result, it can enhance consumers’ hedonic values
(Qin et al., 2021). More recently, Saleem et al. (2021b) emphasized that augmented
reality apps empower the consumers to get maximum information about virtual
products in a real environment.
Therefore, it is also important for the retailer to design and develop a modern
augmented reality app as it can deliver maximum information about a virtual prod-
uct to the consumers (Krishen et al., 2021; Alam et al., 2021). Empirically, several
studies identified that users who experienced superior levels of augmented reality
apps could enhance their level of enjoyment (Kang et al., 2014). Likewise, users
who experienced a high level of computer-generated 3D or 4D images reveal higher
playfulness levels. Qin et al. (2021) concluded that the interaction of users with
augmented reality apps could gain their hedonic value by offering exact information
and low-risk factor induced by information about a particular product (Baker
et al., 2020).
An Online Market in Your Pocket: How Does an Augmented Reality Application… 309

3 Utilitarian Values

According to Kang (2014), the utilitarian values of a user are determined by their
actual thoughts, knowledge structure, and memories. In the virtual world, utilitarian
values play an essential role by ensuring consumers’ interaction based on their past
experiences with the products they experienced on augmented reality apps (Riar
et al., 2021; Gatter et al., 2022). Impressive virtual reality features of augmented
reality apps attract consumers’ attention to a virtual store of a brand (Krishen et al.,
2021; Saleem et al., 2021b). The dynamic capability of augmented reality apps
evokes users’ responses and thus acknowledges their rational behavior (Whang
et al., 2021). Schwartz (2011) and Lixăndroiu et al. (2021) identified that techno-
logical innovation is changing the online shopping attributes of consumers. Hence
the traditional shopping habits are not affecting their intention to buy. The unique
indicators of the augmented reality applications ensure consumers’ engagement and
intention to buy in a virtual environment. Considering the modern shopping trends,
the retail stores, i.e., Ikea, Timberland, Ray-Ban, Nike, and others, are utilizing
augmented reality apps (Kim & Sullivan, 2019; Wadel et al., 2020). In the present
study, the utilitarian value was adapted to which consumers evaluate the augmented
reality apps to acquire essential information for making purchase decisions (Pantano
et al., 2017). For instance, augmented reality apps support users to visualize a physi-
cal environment with a virtual generated environment, maximizing the consumers’
online shopping experiences by facilitating them to interact with virtual products
(Kang, 2014). In addition, Qin et al. (2021) discussed that augmented reality appli-
cations likely generate positive feelings from consumers by offering complete infor-
mation about a product.

4 Satisfaction Level

Prior studies addressed the effect of augmented reality mobile applications on con-
sumers’ satisfaction (Poushneh & Vasquez-Parraga, 2017; McLean & Wilson,
2019). Thus, Do et al. (2020) identified that the more users feel positive toward
augmented reality apps, the more satisfied they will be. Due to the role of technol-
ogy in online shopping, retailers are learning to adopt a modern and advanced sys-
tem that could make consumers more satisfied when they use it to perform online
shopping (Schwartz, 2011; Lixăndroiu et al., 2021). More likely, due to the novelty
of augmented reality applications, retailers in developing countries are still unaware
of how to develop augmented reality applications and interact with the consumers
through a virtual environment (Poushneh & Vasquez-Parraga, 2017; Boardman
et al., 2020). Therefore, McLean and Wilson (2019) confirmed that the consumers’
satisfaction expands technology usage, buying, revisits, and recommendations of
the brands in their social circle. In the context of augmented reality applications,
310 H. M. Shoaib and M. Saleem

consumers’ satisfaction has been exhibited to have a substantial and positive impact
on purchase intention (Qin et al., 2021; Haile and Kang, 2020).

5 Purchase Intention

Prior studies highlighted that the consumers’ purchase intention is affected by sev-
eral indicators, i.e., hedonic (Li et al., 2017), utilitarian (Kang, 2014), and satisfac-
tion (Poushneh and Vasquez-Parraga, 2017). Therefore, Saleem et al. (2021b) found
that augmented reality applications are constantly used in the retail sector. In this
regard, it is also essential for the retail sector to identify the key indicators of the
augmented reality apps, such as utilitarian and hedonic values, that can ensure the
consumers’ positive attitude and intention toward the virtual products. However, as
discussed earlier in this study, augmented reality apps are assumed to obtain con-
sumers’ hedonic, utilitarian, and satisfaction levels, affecting the consumers’ pur-
chase decisions in retail sectors in Saudi Arabia. Additionally, the findings of Watson
et al. (2018) provided strong empirical support for the influence of augmented real-
ity apps on consumers’ purchase intention.

6 Discussion

The current chapter described the influence of augmented reality apps on consum-
ers’ hedonic values, utilitarian values, satisfaction, and purchase intention during
online shopping. The implementation and regular usage of augmented reality apps
are still in their early stages, mainly in developing countries (Saleem et al., 2021a),
but the retail sectors in most developed countries, i.e., the United States, the United
Kingdom, Germany, and other countries, are featuring progressive developments
with augmented reality apps. According to Poushneh (2018), modern technology in
the retail sector supports them in enhancing their business operations by facilitating
the consumers by providing comprehensive information about the virtual products
on their mobile applications. More likely, the current study contributes to the con-
temporary augmented reality apps literature by describing how consumers assess
immersive user interactive technologies’ allied properties and features. The findings
also enhance empirical affirmation of the rising augmented reality area by investi-
gating how virtuality and interactivity ultimately shape consumers’ rational and
emotional intentions. Although the respondent population was random consumers
who attempted to shop online, most consumers diligently use smartphones and inte-
grate them into their regular shopping practices, so they are familiar with new
smartphone applications and technologies (Schwartz, 2011; Lixăndroiu et al.,
2021). Thus, specific contributions are presented as follows:
First, user control of the augmented reality apps meaningfully contributes to
product success in a wide range. When consumers were able to control the
An Online Market in Your Pocket: How Does an Augmented Reality Application… 311

presentation, computer-generated imagery objects, content, or the environment

offered by the augmented reality app, they tend to perceive it as encompassing both
hedonic and utilitarian values (Watson et al., 2018; Kang, 2014; Sung et al., 2021;
Qin et al., 2021).
Second, consumers’ interactivity with the augmented reality apps meaningfully
influences consumer perceptions of utilitarian, hedonic, and satisfaction. Perceived
experience of consumers enhanced control of the augmented reality app, which can
integrate the apps more intensely into their online shopping experience. Consumers
can experience the virtual products in a physical store visit in a natural setting.
Hence, augmented reality apps change the consumers’ shopping experience by
altering how they sense and interact with products virtually. However, implement-
ing augmented reality apps for several famous brands, i.e., Ikea, Nike, Ray-Ban, and
Timberland, allows consumers to experience their virtual products in a real-time
environment (Rese et al., 2017; Kim & Sullivan, 2019). It also delivers maximum
information about a product to the consumers in which it acknowledges the interac-
tion of consumers with the brands through augmented reality apps. As a result,
brands can obtain their business goals and sustain their competitive advantages in
domestic and international markets. Earlier studies by Pantano et al. (2017) and
Lixăndroiu et al. (2021) highlighted that augmented reality apps during online
shopping ease the consumers’ journey to find and experience their required brands.
Wang et al. (2013) suggested that the augmented reality apps empower the consum-
ers to interact with the retailers while experiencing 3D, 4D, and 5D images of the
virtual products that support them in accomplishing their shopping goals.
Furthermore, consumers’ level of satisfaction would be higher because of the
uniqueness of delivering product information via augmented reality apps.
However, the retailer’s adoption of augmented reality apps can also affect con-
sumers’ utilitarian and hedonic values. Therefore, retailers need to understand con-
sumers’ rational and emotional capabilities and develop the content of products on
augmented reality apps accordingly, as the consumers can feel more satisfied, which
turns into purchase intention. Prior studies found a positive impact of augmented
reality apps on consumers’ hedonic values, utilitarian values (Kang, 2014), satisfac-
tion, and purchase intention (Qin et al., 2021). Consequently, Kowalczuk et al.
(2021) suggested that the retailers should focus more on modern shopping tech-
niques, which significantly affect and develop consumers’ strong intention to
purchase.

7 Conclusion

This study highlighted the consumers’ purchase intention to adopt augmented real-
ity apps for online shopping. Augmented reality apps’ virtual presentation of the
products positively impacts consumers’ utilitarian values, hedonic values, satisfac-
tion, and purchase intention. However, due to the COVID-19 pandemic restrictions,
consumers face a tough time visiting retail stores physically for shopping purposes.
312 H. M. Shoaib and M. Saleem

Nevertheless, online shopping trends are still a cultural challenge for consumers in
developing countries.

References

Alam, S. S., Susmit, S., Lin, C. Y., Masukujjaman, M., & Ho, Y. H. (2021). Factors affecting aug-
mented reality adoption in the retail industry. Journal of Open Innovation: Technology, Market,
and Complexity, 7(2), 142.
Almunawar, M. N., & Anshari, M. (2014). Empowering customers in electronic health (e–
health) through social customer relationship management. International Journal of Electronic
Customer Relationship Management, 8(1–3), 87–100.
Baker, E., Bakar, J. A., & Zulkifli, A. (2020). A conceptual model of mobile augmented reality for
hearing impaired museum visitors’ engagement. International Journal of Interactive Mobile
Technologies (iJIM), 14(17), 79.
Boardman, R., Henninger, C. E., & Zhu, A. (2020). Augmented reality and virtual reality: New driv-
ers for fashion retail? In Technology-driven sustainability (pp. 155–172). Palgrave Macmillan.
Do, H. N., Shih, W., & Ha, Q. A. (2020). Effects of mobile augmented reality apps on impulse
buying behavior: An investigation in the tourism field. Heliyon, 6(8), e04667.
Gatter, S., Hüttl-Maack, V., & Rauschnabel, P. A. (2022). Can augmented reality satisfy consum-
ers’ need for touch? Psychology & Marketing, 39(3), 508–523.
Haile, T. T., & Kang, M. (2020). Mobile augmented reality in electronic commerce: Investigating
user perception and purchase intent amongst educated young adults. Sustainability,
12(21), 9185.
Kamarudin, S., Shoaib, H. M., Jamjoom, Y., Saleem, M., & Mohammadi, P. (2022). Use of aug-
mented reality application in E-learning system during COVID-19 pandemic. In International
conference on business and technology (pp. 241–251). Springer.
Kang, J. Y. M. (2014). Augmented reality and motion capture apparel eshopping values and usage
intention. International Journal of Clothing Science and Technology, 26(6), 486–499.
Kang, X., Azizian, M., Wilson, E., Wu, K., Martin, A. D., Kane, T. D., ... & Shekhar, R. (2014).
Stereoscopic augmented reality for laparoscopic surgery. Surgical Endoscopy, 28, 2227–2235.
Kim, Y. K., & Sullivan, P. (2019). Emotional branding speaks to consumers’ heart: The case of
fashion brands. Fashion and Textiles, 6(1), 1–16.
Kotler, P., Kartajaya, H., & Setiawan, I. (2019). Marketing 3.0: From products to customers to the
human spirit. In Marketing wisdom (pp. 139–156). Springer.
Kowalczuk, P., Siepmann, C., & Adler, J. (2021). Cognitive, affective, and behavioral consumer
responses to augmented reality in e-commerce: A comparative study. Journal of Business
Research, 124, 357–373.
Krishen, A. S., Dwivedi, Y. K., Bindu, N., & Kumar, K. S. (2021). A broad overview of interac-
tive digital marketing: A bibliometric network analysis. Journal of Business Research, 131,
183–195.
Li, P., Qin, T., Hu, B., Zhu, F., & Shen, S. (2017, October). Monocular visual-inertial state esti-
mation for mobile augmented reality. In 2017 IEEE international symposium on mixed and
augmented reality (ISMAR) (pp. 11–21). IEEE.
Lixăndroiu, R., Cazan, A. M., & Maican, C. I. (2021). An analysis of the impact of personality
traits towards augmented reality in online shopping. Symmetry, 13(3), 416.8.
McLean, G., & Wilson, A. (2019). Shopping in the digital world: Examining customer engagement
through augmented reality mobile applications. Computers in Human Behavior, 101, 210–224.
Meegahapola, L., & Perera, I. (2017). Enhanced in-store shopping experience through smart phone
based mixed reality application. In 2017 seventeenth international conference on Advances in
ICT for Emerging Regions (ICTer) (pp. 1–8). IEEE.
An Online Market in Your Pocket: How Does an Augmented Reality Application… 313

Pantano, E., Rese, A., & Baier, D. (2017). Enhancing the online decisionmaking process by using
augmented reality: A two country comparison of youth markets. Journal of Retailing and
Consumer Services, 38, 81–95.
Poushneh, A. (2018). Augmented reality in retail: A trade-off between user’s control of access to
personal information and augmentation quality. Journal of Retailing and Consumer Services,
41, 169–176.
Poushneh, A., & Vasquez-Parraga, A. Z. (2017). Discernible impact of augmented reality on retail
customer’s experience, satisfaction and willingness to buy. Journal of Retailing and Consumer
Services, 34, 229–234.
Qin, H., Peak, D. A., & Prybutok, V. (2021). A virtual market in your pocket: How does mobile
augmented reality (MAR) influence consumer decision making? Journal of Retailing and
Consumer Services, 58, 102337.
Rese, A., Baier, D., Geyer-Schulz, A., & Schreiber, S. (2017). How augmented reality apps are
accepted by consumers: A comparative analysis using scales and opinions. Technological
Forecasting and Social Change, 124, 306–319.
Riar, M., Korbel, J. J., Xi, N., Zarnekow, R., & Hamari, J. (2021). The use of augmented reality
in retail: A review of literature. Proceedings of the 54th Hawaii international conference on
System Sciences (p. 638).
Saleem, M., Kamarudin, S., Shoaib, H. M., & Nasar, A. (2021a). Influence of augmented real-
ity app on intention towards e-learning amidst COVID-19 pandemic. Interactive Learning
Environments, 3, 1–15.
Saleem, M., Kamarudin, S., Shoaib, H. M., & Nasar, A. (2021b). Retail consumers’ behavioral
intention to use augmented reality mobile apps in Pakistan. Journal of Internet Commerce,
21, 1–29.
Schwartz, A. M. (2011). Augmenting purchase intent: An empirical study on the effects of utilizing
augmented reality in online shopping. University of California.
Sung, E. C., Bae, S., Han, D. I. D., & Kwon, O. (2021). Consumer engagement via interactive
artificial intelligence and mixed reality. International Journal of Information Management,
60, 102382.
Wang, X., Love, P. E., Kim, M. J., Park, C. S., Sing, C. P., & Hou, L. (2013). A conceptual frame-
work for integrating building information modeling with augmented reality. Automation in
Construction, 34, 37–44.
Watson, A., Alexander, B., & Salavati, L. (2018). The impact of experiential augmented reality
applications on fashion purchase intention. International Journal of Retail & Distribution
Management, 48(4). [Link]
Wedel, M., Bigné, E., & Zhang, J. (2020). Virtual and augmented reality: Advancing research in
consumer marketing. International Journal of Research in Marketing, 37(3), 443–465.
Whang, J. B., Song, J. H., Choi, B., & Lee, J. H. (2021). The effect of augmented reality on
purchase intention of beauty products: The roles of consumers’ control. Journal of Business
Research, 133, 275–284.
Healthcare Technology and Innovation
Management Methods: Theoretical
Interpretation

Michael Fascia, Ellie Koseda, and Bryan McIntosh

1 Introduction

Discussions are within a predicate interpretive framework (Di Bella, 2016; Kon
et al., 2016; Stones, 2017); this indicates value, from the perspective of the patient
(client). As a result, technology and innovation can be valued. Locate systemic man-
agement and probability; assume elemental obligations; these actions become the
appropriate actions of the client instead of just being a mandatory response from a
manager. Adopting this perspective grants a business context to the core interpreta-
tion of a healthcare management setting and decision-making (ElMelegy et al.,
2016; Pegram et al., 2014; Seran & Izvercian, 2014).
Moreover, to allow definitive axiomatization (Kurucz, 2008), we recognize the
logic of epistemic actions (Kurucz, 2010) as a core aspect of interpretation (Kurucz
& Marcelino, 2012). From a healthcare manager’s point of view, it allows recogni-
tion and understanding of elements of technology and innovation. This becomes key
in the region of cooperative problem-solving (Kajzer Mitchell & Walinga, 2017)
and latterly (Wright-St Clair & Newcombe, 2014) linked to decision-making.

M. Fascia
Edinburgh Napier, Edinburgh, UK
e-mail: m.fascia2@[Link]
E. Koseda
Nottingham Trent University, Nottingham, UK
e-mail: m.fascia2@[Link]
B. McIntosh (*)
Brunel University, London, UK
e-mail: [Link]@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 315
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
316 M. Fascia et al.

2 Positioning

Technology and innovation management share a symbiotic relationship (Trong

Tuan, 2017; Wanberg et al., 2017), the relationship between the source and the
recipient and the broader environment in which technology and innovation manage-
ment occurs (Fascia, 2019; Zhao et al., 2017), whereby all contributing factors in
assessing success of a decision.
This interpretation satisfies the necessary axioms, both by contradiction and revi-
sion, to define success or failure.
As a result, this formalized position allows us to highlight principles that are
apparent in current theoretical or conditional interpretations of technology or inno-
vation management around or surrounding mechanisms. This facilitates the associa-
tion of these ideas to practical and recognizable business environments. For instance,
healthcare leadership is discussed in greater detail by Hargett et al. (2017).
Healthcare leadership in this context is concerned with the leadership of healthcare
organizations and their members. This includes establishing goals and strategies,
developing and implementing policies and supervising the staff’s work.
As such, effective leadership in healthcare is crucial to ensuring organizations
can provide high-quality care and meet the needs of their communities (Haddad,
2012). As a result, healthcare leaders have a responsibility to manage a variety of
activities including financial and operational management, personnel, quality
improvement and outreach in the community. They may also have a role in promot-
ing the organization to stakeholders like patients, staff and policymakers.
Constructive truth is frequently employed to resolve issues, understand situa-
tions or improve them. It can involve presenting information in a straightforward
and concise manner and providing context or perspective that helps others compre-
hend a reality. Conversely, truths that are neither constructive nor destructive may
be ineffective or even harmful because they lack context or perspective, they are too
severe or critical, or they are presented without consideration. Non-verbal truths
that are ineffective can lead to misunderstandings or conflicts and may not be ben-
eficial in resolving issues or improving situations.

3 Analysis

This interpretation is straightforward: The central location of the foundational real-

ist concept is significant and perhaps crucial to the identification or interpretation of
knowledge usage in an organization. Additionally, this concept is important if predi-
cated by the desire to achieve or measure competitive advantage. Clearly, the doc-
trine of foundational realism affirms that there is a singular reality that is separate
from language, thought and perceptions. This foundation or basis of all of our expe-
rience and knowledge may not perfectly represent this reality, but they are still con-
nected to it and rooted in it. Investigation of technology and innovation demonstrates
Healthcare Technology and Innovation Management Methods: Theoretical Interpretation 317

that, similar to fundamental realism, emergent themes are opposed to various forms
of scepticism, which believe that our experiences and knowledge are not necessarily
connected to an independent reality, and various forms of relativism, which believe
that the nature of reality is dependent on our perceptions, thoughts or language.
Despite the apparent simplicity of this position, its generalizability is limited on the
surface. Contemporary theory is vastly different and has significant flaws.
This is evident in the management literature, which has little in common that can
be attributed to a subsequent theoretical position. It is still difficult, therefore, with-
out the use of a logical structure, to determine which interpretations of knowledge
are supportive of or interruptive of emerging ideas, or simply a by-product of the
interaction of all of the participants in the technology transfer process.
Given the preceding text, it is perhaps understandable why many of the leading
authors have focused on understanding and ultimately improving this approach to
explaining technology and innovation management in a business context, as this
appears to be a key factor in explaining useful properties (Miller & French, 2016;
Carroll & Richardson, 2016). In doing so, however, this perspective will ultimately
attempt to examine various arguments from one point of view, primarily a Western
focus. A logical context does not exist when deriving reality. Thus, the explanatory
practice of specific knowledge schemes can be discussed in detail, as there does not
appear to be any single explanation that can be interpreted as normal knowledge,
even in the contemporary field of thought surrounding critical realism (Holmes
et al., 2017; Naylor & Foulkes, 2018; Yanchar, 2018).
As such, when considering a useful component of technology and innovation
management in an organization, it would seem logical to consider how a recognized
position of knowledge is identifiable within an organization’s general interpretation
of formalized knowledge in business management theory and how this knowledge
is interpreted as “useful” in this context. That is, the knowledge must have value if
we consider the observer’s actual perception of the reality and motivation associated
with the knowledge transfer scenario. This would lead to a formal structure for the
agent’s beliefs and the ordering of epistemic propositions becoming a beneficial or
significant position.

4 Technological Implementation and Ethical Interpretations

Technological implementation in healthcare settings (particularly health and social

care services) could potentially help to reduce increasing gaps between supply and
demand for resources (Dastbaz et al., 2018). New technologies provide many poten-
tial advantages for organizations, including improved efficiency, quality of care,
health outcomes and provisions of new services (Dastbaz et al., 2018; Franziska
Kaiser et al., 2021). However, despite reported benefits, technology implementation
remains challenging with a lack of acceptance and uptake. Barriers to enhancing
transformative practices counter any benefits derived from new innovations or stall
progression over the long term. Health and social care systems worldwide are facing
318 M. Fascia et al.

increasing pressures, driven by limited resources, an aging population and the prev-
alence of long-term conditions (Dastbaz et al., 2018; Azimi et al., 2017; Ng
et al., 2021).
Current practice suggests a need for technology to overcome key problem areas
with service efficiency linked to extended waiting times, accident and emergency
admissions, general practitioner appointments and referral to treat/discharge patients
(Franziska Kaiser et al., 2021; Ng et al., 2021). The nexus of sustainability and the
information communications of technologies are changing the way people live,
learn and conduct business (Franziska Kaiser et al., 2021). Therefore, one cannot
ignore emerging and ubiquitous technologies embedded in the daily lives of people,
which may rightfully be considered as enabling solutions for future sustainable
development in healthcare (Kabaniha et al., 2020; Dastbaz et al., 2018; Kaliraj &
Thirupathi, 2022).
Management within a business context considers pre-conceived and evolving
ideas to accommodate the application of evolving technologies (Dastbaz et al.,
2018). Conversely, managers in healthcare settings interpret various ethical per-
spectives in the form of risk aversion, thus prioritizing outdated approaches over
competitive advantage (Fenn & Egan, 2012). Moreover, adopting certain measures
continues to remain problematic for the purpose of strategy and enhancing opera-
tions. Revisiting foundational and doxastic positions enables healthcare managers
to view technological enhancement, management and knowledge as a singular con-
struct, thus reinforcing the notion of multitude definition, although not defined by a
(singular epistemic principle). Significance is applied to tripartite theory of
“Knowledge, Belief, Truth and Jurisdiction” (epistemic principle) being inferred as
the norm within transfer mechanisms.
As previously outlined, it fundamentally allows for the identification of alterna-
tive perspectives to technology and innovation management. Barriers to technology
implementation are not confined to the realm of operations; such definitions pertain-
ing to ethical considerations and universal acceptance could be considered contrib-
uting factors (Saarni, 2008).
There is evidently a need to better understand the factors that contribute to the
translation of development of sound technology to successful implementation and
ongoing use outside a business context (Kabaniha et al., 2020; Franziska Kaiser
et al., 2021). Singular thought processing applies episodes of thinking in addition to
epistemic possibilities, or relevant constraints continue to influence managerial
decision-making with respect to ethical decision-making.
The epistemic principle is a norm for within transfer mechanisms that allows for
the identification of alternative perspectives in technology and innovation manage-
ment (Fascia, 2019a, b; Nathan, 2015). It is a way of understanding how knowledge
is acquired, structured and used in different contexts and how this can inform
decision-making and problem-solving. This principle is important for understand-
ing how different perspectives can influence the development and implementation
of technology by helping organizations become more adaptable and responsive to
changing conditions (Kaliraj & Thirupathi, 2022).
Healthcare Technology and Innovation Management Methods: Theoretical Interpretation 319

Singular thought processing is the tendency to rely on only one perspective or

approach when making decisions, instead of considering multiple options or alter-
native approaches (Crane, 2011). This can be problematic when considering ethical
considerations, as it may lead to decisions that are not in accordance with estab-
lished ethical principles or that do not take into account the potential effects on
different parties.
Counter arguments to singular thought processing reside within ethical decision-
making, as it may lead to decisions that are not in line with established ethical
principles (Tannahill & Douglas, 2014). Healthcare managers have the tendency to
scrutinize the epistemic possibilities and relevant constraints for a more informed
and ethical decision-making (Grote & Berens, 2020). These further challenge ideas
to incorporate decision-making processes made by machine learning with respect to
paternalism, moral responsibility and fairness, in essence further limiting the
deployment of technologies (Grote & Berens, 2020; Tsamados et al., 2022).
Epistemic possibilities and relevant constraints are factors that can influence
decision-making and can help managers to identify and consider multiple perspec-
tives and potential outcomes. By considering these possibilities and constraints,
managers can make more informed and ethical decisions that are better aligned with
organizational goals and values.

5 Conclusion

A predicate for adaptive interpretation was employed that valued technology and
innovation from the perspective of the patient, this definition the success or failure
by contradiction and revision. This emphasizes the significance of technology and
innovation management in healthcare, specifically the difficulties in accurately
assessing it. This discussion has described perspectives around current and histori-
cal practices of technology and innovation linked to contemporary management
philosophy. Focused aspects of theory and positioning were incorporated into the
realm of a business context to investigate the concept of technology and innovation
management in healthcare, specifically its challenges in establishing and measuring
formalized valuable contribution. In the analysis, a dedicated and collective effort
was devoted to a doxastic stance and epistemic principle that concerns the utiliza-
tion of knowledge in a business setting.
Key findings from the literature suggest that the use of technology and innova-
tion management is crucial for business success and competitive advantage, but it
remains problematic to evaluate it in a healthcare setting. Moreover, the analysis
reflects on the significance of technology and innovation management in a business
context and suggests a different perspective that does not conform to prevailing
knowledge theory. Propositions are put forward around “technology and innovation
management” that can help healthcare organizations stay economical by improving
efficiency, productivity and patient satisfaction.
320 M. Fascia et al.

Through the reconciliation of the fundamental and doxastic positions, the signifi-
cance of technology, management and knowledge can be viewed as a singular con-
cept. Suppositions necessitate this combined approach when assessing the value of
knowledge in this context. However, this is characterized by the multitude of defini-
tions surrounding the use of “value” as opposed to a singular epistemological prin-
ciple of something that is valuable. Additionally, it must be assumed that any
significance or relevance to the sender or receiver is derived from the tripartite the-
ory of knowledge: belief, truth and justification (the epistemic principle). This prin-
ciple also serves as a norm in the mechanism that transfers knowledge, and it
provides justification for the premise of the interaction between an epistemic knowl-
edge principle, derived from the knowledge transfer practitioner’s perspective sup-
ported by a doxastic assumption.
While technology and innovation management are important to business success
and a competitive advantage, it is difficult to quantify in healthcare organizations.
Importantly, from the perspective of mainstream business management and the
foundations of practice (success and strategy), this flexibility in interpretation
becomes beneficial to business and organization.

Bibliography

Azimi, I., et al. (2017). Internet of things for remote elderly monitoring: A study from user-centered
perspective. Journal of Ambient Intelligence and Humanized Computing, 8(2), 273–289.
Carroll, N., & Richardson, I. (2016). Aligning healthcare innovation and software require-
ments through design thinking. Paper presented at the International Workshop on Software
Engineering in Healthcare Systems, SEHS 2016.
Crane, T. (2011). The singularity of singular thought. Proceedings of the Aristotelian Society,
Supplementary Volumes, 85, 21–43. [Link]
Dastbaz, M., Arabnia, H., & Akhgar, B. (Eds.). (2018). Technology for smart futures. Springer
International Publishing.
Di Bella, S. (2016). Leibniz on error: Between Descartes and Spinoza. Will, judgement and the
concept of reality. Rivista Di Storia Della Filosofia, 71(4), 713–725. Retrieved from https://
[Link]/inward/[Link]?eid=2-s2.0-85009832246&partnerID=40&md5=c25188
15d6427dcefc8ed296efb3423f
ElMelegy, A. R., Mohiuddin, Q., Boronico, J., & Maasher, A. A. (2016). Fostering creativity
in creative environments: An empirical study of Saudi architectural firms. Contemporary
Management Research, 12(1), 89–119. [Link]
Fascia, M. (2019a). Attributes of knowledge a transfer scenario. Journal of Strategy, Operations &
Economics, 4(5), 11. [Link]
Fascia, M. (2019b). Innovation as a singular enabler. SSRN Electronic Journal [Preprint]. https://
[Link]/10.2139/ssrn.3337757
Fenn, P., & Egan, T. (2012). Risk management in the NHS: Governance, finance and clinical risk.
Clinical Medicine, 12(1), 25–28.
Franziska Kaiser, L., Wehking, C., & vom Brocke, J. (2021). How to organize digital innovation?
The role of involvement, structure, and technology. International Journal of Innovation and
Technology Management, 18(03), 2150010.
Grote, T., & Berens, P. (2020). On the ethics of algorithmic decision-making in healthcare. Journal
of Medical Ethics, 46, 205–211.
Healthcare Technology and Innovation Management Methods: Theoretical Interpretation 321

Haddad, M. J. (2012). On leadership and leaders. Healthcare Papers, 12(3), 57–59. Retrieved
from [Link]
d5=fb80d5b2a80ea7023a6cac53ee32124a
Hargett, C. W., Doty, J. P., Hauck, J. N., Webb, A. M. B., Cook, S. H., Tsipis, N. E., et al. (2017).
Developing a model for effective leadership in healthcare: A concept mapping approach.
Journal of Healthcare Leadership, 9, 69–78. [Link]
Holmes, J., Marra, M., & Lazzaro-Salazar, M. (2017). Negotiating the tall poppy syndrome in New
Zealand workplaces: Women leaders managing the challenge. Gender and Language, 11(1),
1–29. [Link]
Kajzer Mitchell, I., & Walinga, J. (2017). The creative imperative: The role of creativity, creative
problem solving and insight as key drivers for sustainability. Journal of Cleaner Production,
140, 1872–1884. [Link]
Kabaniha, G. A., Ataguba, J. E.-O., & Kutzin, J. (2020). Global healthcare financing: Economics,
methods, and strategies for sustainable healthcare. In R. Haring et al. (Eds.), Handbook of
global health (pp. 1–42). Springer International Publishing.
Kaliraj, P., & Thirupathi, D. (Eds.). (2022). Industry 4.0 technologies for education: Transformative
technologies and applications (1st ed.). CRC Press.
Kon, A. A., Shepard, E. K., Sederstrom, N. O., Swoboda, S. M., Marshall, M. F., Birriel, B., &
Rincon, F. (2016). Defining Futile and potentially inappropriate interventions: A policy state-
ment from the society of critical care medicine ethics committee. Critical Care Medicine,
44(9), 1769–1774. [Link]
Kurucz, A. (2008). On axiomatising products of Kripke frames, part II.
Kurucz, A. (2010). On the complexity of modal axiomatisations over many-dimensional structures.
Kurucz, A., & Marcelino, S. (2012). Non-finitely axiomatisable two-dimensional modal logics,
Journal of Symbolic Logic, 77, 970–986.
Miller, F. A., & French, M. (2016). Organizing the entrepreneurial hospital: Hybridizing the log-
ics of healthcare and innovation. Research Policy, 45(8), 1534–1544. [Link]
respol.2016.01.009
Nathan, G. (2015). Innovation process and ethics in technology: An approach to ethical (respon-
sible) innovation governance. Journal on Chain and Network Science, 15(2), 119–134.
Naylor, S., & Foulkes, D. (2018). Diagnostic radiographers working in the operating theatre: An
action research project. Radiography, 24(1), 9–14. [Link]
Ng, W. Y., et al. (2021). Blockchain applications in health care for COVID-19 and beyond: A sys-
tematic review. The Lancet Digital Health, 3(12), e819–e829.
Pegram, A. M., Grainger, M., Sigsworth, J., & While, A. E. (2014). Strengthening the role of the
ward manager: A review of the literature. Journal of Nursing Management, 22(6), 685–696.
[Link]
Saarni, C. (2008). The interface of emotional development with social context. In M. Lewis,
J. M. Haviland-Jones, & L. F. Barrett (Eds.), Handbook of emotions (pp. 332–347). The
Guilford Press.
Seran, S., & Izvercian, M. (2014). Prosumer engagement in innovation strategies. Management
Decision, 52(10), 1968. Retrieved from [Link]
countid=13042. [Link]
val_fmt=info:ofi/fmt:kev:mtx:journal&genre=article&sid=ProQ:ProQ%3Aabiglobal&atitl
e=Prosumer+engagement+in+innovation+strategies%3A+The+Prosumer+Creativity+and
+Focus+Model&title=Management+Decision&issn=00251747&date=2014-11-30&volume=
52&issue=10&spage=1968&au=Seran+%28Potra%29%2C+Sabina%3BIzvercian%2C+Mon
ica&isbn=&jtitle=Management+Decision&btitle=&rft_id=info:eric/&rft_id=info:doi/
Stones, R. (2017). Sociology’s unspoken weakness: Bringing epistemology back in. Journal of
Sociology, 53(4), 730–752. [Link]
Tannahill, A., & Douglas, M. J. (2014). Ethics-based decision-making and health impact assess-
ment. Health Promotion International, 29(1), 98–108.
322 M. Fascia et al.

Trong Tuan, L. (2017). Knowledge sharing in public organizations: The roles of servant leadership
and organizational citizenship behavior. International Journal of Public Administration, 40(4),
361–373. [Link]
Tsamados, A., et al. (2022). The ethics of algorithms: Key problems and solutions. AI & SOCIETY,
37(1), 215–230.
Wanberg, J., Javernick-Will, A., & Taylor, J. E. (2017). Mechanisms to initiate knowledge-
sharing connections in communities of practice. Journal of Construction Engineering and
Management, 143(11). [Link]
Wright-St Clair, V. A., & Newcombe, D. B. (2014). Values and ethics in practice-based deci-
sion making. Canadian Journal of Occupational Therapy, 81(3), 154–162. [Link]
org/10.1177/0008417414535083
Yanchar, S. C. (2018). Agency, world, and the ontological ground of possibility. Journal of
Theoretical and Philosophical Psychology, 38(1), 1–14. [Link]
Zhao, L., Pan, S. J., & Yang, Q. (2017). A unified framework of active transfer learning for
cross-system recommendation. Artificial Intelligence, 245, 38–55. [Link]
artint.2016.12.004
The Relationship Between Food
E-Advertising and Children’s Obesity
in Bahrain: Role of Rules

Aalaa Ameer Affooni and Allam Hamdan

1 Introduction

Obesity rates in the Kingdom of Bahrain have skyrocketed in recent years, making
it one of the country’s most significant threats to public health. National estimates
for overweight and obesity in Bahrain have reported that among Bahraini children,
one out of every three boys is overweight (36%) and about the same percentage for
girls (34%). Figures from the 2019 school screening program show that obesity and
overweight may be as high as 45.5% in girls and 40.4% in boys aged 10–12 years.
Obesity’s increasing prevalence is especially concerning as the major risk factor for
chronic illnesses, and various types of cancer can eventually lead to mortality.
On top of that, a statement by the Centers for Disease Control and Prevention
(CDC) asserted that obesity affects children’s behavior, making them lean toward
more sedentary activities and affecting their sleep routine and medication use (CDC,
2021). Overweight or obese adults appear to be more likely to become overweight
or obese, increasing their risk of at least 12 distinct forms of cancer (Government,
2020). Based on the high percentage of obesity in Bahraini children, it is crucial to
investigate further the impact of food E-advertisement on children in Bahrain and
the existing rules and regulations that help monitor these advertising activities,
along with suggesting new rules and limitations that must be implemented to dimin-
ish, and hopefully eliminate, the link between E-advertising and obesity.
It is important to identify the relationship between food E-advertising and chil-
dren’s obesity as the number of children struggling with obesity in the Kingdom of

A. A. Affooni (*)
College of Business and Finance, Ahlia University, Manama, Bahrain
e-mail: 202010104@[Link]
A. Hamdan
College of Business & Finance, Ahlia University, Manama, Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 323
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
324 A. A. Affooni and A. Hamdan

Bahrain is increasing. After further research, it was clear that even though the num-
ber of children suffering from obesity has increased in the past few years in Bahrain,
there is not much research on the reasons behind this increase. Also, with children’s
screen time increasing and advertisements targeting children popping up all over
social media platforms and gaming apps, it is important to assess how relevant this
is to children’s obesity.

2 Literature Review

People’s increasing desire to communicate and technological advancement has led

to social media’s evolution. Cambridge dictionary defines social media as websites
and programs on the internet accessed by people using computers or mobile phones
to communicate and share information. Some forms of social media are blogs, pod-
casts, and applications like Instagram, Snapchat, and Facebook (Cambridge, n.d.).
Social media platforms created an interaction opportunity with the target audience
and increased sales and brand familiarity. Advertising is a method used for raising
awareness among customers regarding a product’s applications and benefits, mak-
ing products accessible for users seeking them; this fulfills the advertiser’s goal and
boosts their profits. In brief, advertising serves three goals: improving businesses
and increasing company sales, providing quality service to consumers, and ensuring
the economic and social well-being of society (Mwakasege, 2015).
Obesity is a complicated condition caused by genetics, emotional and intellec-
tual qualities, and the environment. A variety of personal, behavioral, and lifestyle
habits influence weight. Obesity, which builds gradually with time, is usually the
result of unhealthy dietary and lifestyle decisions, many of which are acquired in
childhood (Harvard, 2009).
Obesity has reached epidemic proportions in GCC countries. The region’s and,
more specifically, Bahrain’s increased numbers of overweight and obesity are
among the most extreme reported globally. Regarding the Eastern Mediterranean
region, the World Health Organization has classified Bahrain, Egypt, Jordan, Saudi
Arabia, Kuwait, and the UAE as the countries with the highest obesity rate (WHO,
Obesity, 2020). The 2018 Bahrain National Health Survey found that one among
three Bahraini adults over the age of 18 is overweight and 42.8% are obese. These
two categories were pooled, and for all people surveyed, it was found that one-third
of which were non-Bahraini nationalities, and Bahraini nationals had greater levels
of overweight and obesity, rating 76% versus non-Bahraini citizens rating 65.5%.
Over the last 40 years, obesity rates have increased in Bahrain among girls and boys
aged 5–19 years. According to statistics, one in three boys (36%) is overweight,
which in comparison with the rates in 1975 it is almost double, and approximately
the same percentage of girls are overweight (Sabt et al., 2019).
The Relationship Between Food E-Advertising and Children’s Obesity in Bahrain: Role… 325

2.1 Food E-Advertisement and Its Relation to Obesity

According to American Psychological Association (APA), children nowadays use

various forms of media and spend up to 44.5 h per week in front of computers, TV,
and gaming panels instead of doing any other activity in their daily lives besides
sleeping. Arguably, as mentioned earlier, the rise of advertising of non-nutritious
food has been associated with higher rates of childhood obesity (APA, 2010).
Usually, children under the age of 6 cannot differentiate between programs and
advertisements, and notably, they do not grasp the manipulative intent of the adver-
tisements. Therefore advertising targeting children under 8 years old is considered
exploitation. Product preference influences children’s purchase demands, influenc-
ing parents’ buying decisions (APA, 2010). Only a limited number of advertisers
provide reminders to differentiate content from pure advertising (APA, 2010).

2.2 Rules and Regulations

As part of integrated marketing communications (IMC), food and beverage produc-

ers, supermarket merchants, and quick-service restaurants employ a variety of tac-
tics and channels to advertise their products and brands (Kraak et al., 2019).
Marketing on social media has risen in recent years to become among the most
popular marketing platforms in various industrial sectors, including the food sector
(Kraak et al., 2019). Increased usage of social media advertising has made reaching
a larger audience, including children and teenagers, much easier (WHO, 2018;
Kemp, 2020). Researchers who study food brand websites revealed that child-tar-
geting websites frequently use entertaining, dynamic, and compelling methods to
advertise unhealthy products. The British Heart Foundation (BHF) investigated
more than 100 websites for food and drink goods commonly purchased or sought by
children, such as treats and cereals, which makes 80% of goods that have not been
permitted to be marketed to children on television based on UK broadcast con-
straints that were advertised online using animations, cartoons, competitions, brand
characters, games, links, and available for download materials (e.g., mobile phone
ringtones).

2.3 Advertising Regulations of Major Social Media Platforms

A large proportion of social media platforms’ revenue is typically generated from

advertising (Zenith, 2020). Social media advertising is mainly self-regulatory, with
businesses marketing themselves on social media platforms held responsible for
material validity and compliance with city codes and regulations (ACCC, 2020).
Despite the strong international recommendations for action to limit children’s
326 A. A. Affooni and A. Hamdan

exposure to unhealthy food advertising, almost none of the major and most com-
monly used social media platforms have implemented a full prohibition on unhealthy
food advertising. Even though YouTube Kids, a platform that is designed specifi-
cally for children under the age of 13, has an advertising rule in which it prohibits
marketing food products on its platform, there is proof that children using this plat-
form may be subjected to unhealthy food products through sponsored content and
promotional material on the platform (Greenberg, 2015). Sacks and Looi (2020)
conducted a study and identified that almost all platforms restricted and, in some
cases, banned the advertising of tobacco goods and alcohol. Still, regarding safe-
guarding children, social media platforms lack comprehensive policies to limit the
marketing of unhealthy foods on their platforms.

3 Research Methodology

A quantitative method was used to conduct and assess the research to obtain the
objectives of the present study. The primary data for this study was obtained from
the Bahraini community to assess the impact of food E-advertising on children’s
obesity and the effect of rules and regulations in mitigating this impact. A distrib-
uted online survey was used to collect data (questionnaire). The sampling number is
calculated by considering several factors, such as the volume of the questioned
population, the error margin, and the confidence level. As a result, the sample size
calculated for this study is 398 samples. Furthermore, the frequency and percentage
that determine the questionnaire’s key demographics are provided in Table 1.

4 Data Analysis

The survey included statements to test the two factors influencing children’s obesity.
This section will explore the independent variables of food E-advertising and rules
and regulations, as well as the dependent variable represented by children’s obesity.

5 Children’s Obesity

According to Table 2, most participants believe that children’s obesity is primarily

caused by a lack of physical activity and poor eating habits, with 67.3% strongly
agreeing and 27.9% agreeing with statement S1, accounting for 95.2% of all respon-
dents. This could imply that most participants are unaware of the impact of adver-
tisements and other factors on children’s obesity or that they simply consider it a
part of the unhealthy eating habits and lack of activity caused by long hours
spent online.
The Relationship Between Food E-Advertising and Children’s Obesity in Bahrain: Role… 327

Table 1 Participants’ responses to demographic questions

Question Answer choices Freq. %
Gender Male 58 14.6
Female 340 85.4
Total 398 100
Age Less than 25 years 26 6.5
25–35 years 163 41
36–45 years 123 30.9
Above 45 years 86 21.6
Total 398 100
Marital status Single 71 17.8
Married 310 77.9
Divorced 10 2.5
Widow 7 1.8
Total 398 100
Level of education Secondary or below 34 8.5
Diploma 46 11.6
BSc 248 62.3
Masters 63 15.8
PhD 7 1.8
Total 398 100
Number of children under 14 years 1-Dec 149 37.4
2-Jan 157 39.4
5-Mar 82 20.6
More than 5 10 2.5
Total 398 100

Table 2 Children’s obesity

% Degree of agreement General
Statements SD D N A SA Mean SD %
Children’s obesity is caused by a lack of 0.3 0.8 3.8 27.9 67.3 4.613 0.624 92.30
activity and unhealthy eating habits.
Genetics is the only driver of obesity or 10.6 42.7 27.4 16.8 2.5 2.58 0.972 51.60
thinness in children as they are born this
way.
Childhood obesity affects the risk of 0.5 1 14.3 48.2 35.9 4.181 0.746 83.60
developing some diseases such as cancer
and heart disease in the future.
Most obese children lack self-control. 1 11.1 22.4 48.2 17.3 3.698 0.917 74
I don’t have a constant control on what 4.5 28.1 31.7 28.6 7 3.055 1.015 61.10
my child eats during the day.
Obese children will not lose weight as 0 0.5 0.8 27.1 71.6 4.698 0.506 94
part of their natural growth alone without
diet and exercise.
Children’s obesity is a public health issue 1.3 12.3 17.3 48.7 20.4 3.746 0.959 74.90
that society needs to help solve.
Children’s right to health must be 0.3 1.3 2 32.4 64.1 4.588 0.624 91.80
protected at all costs.
328 A. A. Affooni and A. Hamdan

The respondents also showed that they disagree with the statement that genetics is
the only factor behind obesity in children with 53.3% strongly disagreeing and dis-
agreeing collectively 27.4 neutral answers, and 19.3 strongly agreeing and agreeing
collectively, with a mean of 2.580 and a standard deviation of 0.972, which is barely
<1 in statement S2, indicates that there are conflicts in the participants’ answers. S4
was about children’s lack of self-control, in which 65.5% strongly agreed and agreed
with the statement, 12.1% strongly disagreed and disagreed, and 22.9% were neutral;
this led to a μ = 3.698 and a standard deviation of 0.917. On the other hand, S5, which
stated that parents do not have a constant control on what their child eats during the
day, resulted in a 35.6% collective strong agreement and agreement, 31.7% neutral
answers, and 32.6% collectively disagreeing and strongly disagreeing. Moving to S6,
majority of participants agreed (27.1%) and strongly agreed (71.6%) that obese chil-
dren will not lose weight as part of their natural growth alone without diet and exercise
where the mean was 4.698 and standard deviation was 0.506. When asked about chil-
dren’s obesity being a public health issue that society needs to help solve in S7, 69.1%
of participants strongly agreed and agreed with the statement, 13.6% strongly dis-
agreed and disagreed with the statement, and 17.3% were neutral resulting in a mean
of 3.746 and standard deviation of 0.959. The vast majority of participants showed
their agreement and strong agreement with the statement S8 with a percentage of
96.5%; this led to a mean of 4.588 and standard deviation of 0.624.

5.1 Food E-Advertising

The results of Table 3 will be used to describe the E-advertising aspect.

Looking at the result in statement S1 that measures participants’ concern about the
E-advertising of unhealthy food products at times when children are on the
internet/social media platforms, it was clear that most participants agreed and strongly
agreed with the statement with a collective 82.2% agreement, while only 0.8%
strongly disagreed and 4.8% disagreed and 12.3% were neutral. As shown in Table 3,
in statement S2 the responses resulted in μ = 4.407 and standard deviation = 0.745;
results showed that 53.5% of the participants strongly agreed that use of popular per-
sonalities or characters in food E-advertisements targeting children increases the
influence of unhealthy food promotions and 36.2% agreed with the statement to, only
2.3% collectively disagreed and strongly disagreed which is a very small percentage.
Moreover, the results were similar for statement S3 where 52.5% strongly agreed that
food E-advertising that promotes free toys or gifts with products attracts children to
unhealthy food, 38.7 agreed, and only 3% strongly disagreed and disagreed collec-
tively resulting in a mean of 4.397 and standard deviation of 0.773. Another statement
that majority of participants agreed on was that food E-advertising does not provide
accurate information about nutritional quality of the product being advertised, 53.8%
strongly agreed with the statement, 37.7% agreed, 6.5% were neutral, 1.5% disagreed,
and 0.5% strongly disagreed. The mean and standard deviation values were 4.427 and
0.726 confirming the agreement of the participants. The statement S5 regarding
The Relationship Between Food E-Advertising and Children’s Obesity in Bahrain: Role… 329

Table 3 Food E-advertising

% Degree of agreement General
Statements SD D N A SA Mean SD %
I am concerned about the E-advertising of 0.8 4.8 12.3 37.2 45 4.209 0.889 84.20
unhealthy food products at times when
children are on the internet/social media
platforms.
The use of popular personalities or 0.3 2 8 36.2 53.5 4.407 0.745 88.10
characters in food E-advertisements
targeting children increases the influence of
unhealthy food promotions.
Food E-advertising that promotes free toys 1 2 5.8 38.7 52.5 4.397 0.773 87.90
or gifts with products attracts children to
unhealthy food.
Food E-advertising does not provide 0.5 1.5 6.5 37.7 53.8 4.427 0.726 88.50
accurate information about nutritional
quality of the product being advertised.
I monitor what my child watches on the 0.8 4.5 30.4 39.9 24.4 3.827 0.877 76.50
internet and social media platforms.
I observe the effect of E-advertising of 0.5 9.3 25.4 41.2 23.6 3.781 0.928 75.60
unhealthy foods on my child’s choice of
foods.
Food E-advertising affects children’s 0.5 3.8 11.8 48 35.9 4.151 0.808 83
obesity.

monitoring what children watches on the internet and social media platforms resulted
in a mean of 3.827 and a standard deviation of 0.877, and participants collectively
agreed and strongly agreed with the statement with a percentage of 64.3; on the other
hand 30.4% were neutral, 4.5% disagreed, and 0.8% strongly disagreed. The findings
of S6 resulted in 64.8% of the participants collectively agreeing and strongly agree-
ing, 25.4% were neutral, 9.3% disagreeing and 0.5% strongly disagreeing, and the
results of the mean and standard deviation were 3.781 and 0.928, respectively.
Meanwhile, statement S7 also resulted in the majority of participants agreeing and
strongly agreeing with the statement where 35.9% strongly agreed and 48% agreed.
The disagreement percentage of S7 was very low, where 3.8% disagreed and 0.5%
strongly disagreed, and the mean value was 4.151 and the standard deviation was
0.808. The results of the last two statements clearly indicate that there is an issue with
food E-advertisements that targets children and that many parents have noticed the
impact that these advertisements have on their children’s food choices.

5.2 Rules and Regulation

Table 4 will measure the role of rules and regulations in protecting children from
unhealthy food E-advertisements to reduce and hopefully eliminate children’s
obesity.
330 A. A. Affooni and A. Hamdan

Table 4 Rules and regulations

% Degree of agreement General
Statements SD D N A SA Mean SD %
There are laws in the Kingdom of Bahrain 7.8 20.1 57.5 11.3 3.3 2.822 0.852 56.40
regulating food E-advertisements directed
at children.
If any, the current regulations of food 0.5 2.8 36.7 42.2 17.8 3.741 0.797 74.80
E-advertising in the Kingdom of Bahrain
are not effective in protecting children
from targeted advertisements.
If any, rules that are implemented by 0.5 1.8 9.8 41.7 46.2 4.314 0.761 86.30
social media platforms are not enough to
protect children from E-advertisements of
unhealthy food products.
The government should introduce stronger 2.3 8.5 19.3 30.9 38.9 3.957 1.063 79.10
restrictions on food E-advertising.
Unhealthy food E-advertisements should 0.3 1 24.4 47.7 26.6 3.995 0.758 79.90
be totally banned.
Major social media platforms should 0.5 2.3 10.3 43 44 4.276 0.777 85.50
voluntarily restrict the exposure of
children to E-advertisements of unhealthy
foods.

As shown in Table 4, participants responded to the statement S1 that indicates

that there are laws in the Kingdom of Bahrain regulating food E-advertisements
directed at children with 7.8% strongly disagreeing, 20.1% disagreeing, 11.3%
agreeing, and 3.3% strongly agreeing, and there were also 57.5% neutral responses
that resulted in a mean of 2.822 and standard deviation of 0.852. S2 was related to
how effective are Kingdom of Bahrain’s regulations where the results indicated a
cumulative agreement and strong agreement equaling 60%, a cumulative disagree-
ment and strong disagreement equaling 3.3%, and a neutral value of 36.7%; as
mentioned before the percentage of neutral responses indicates that participants are
unaware of the existence of rules and regulations implemented by the Kingdom of
Bahrain let alone their effectiveness. The mean and standard deviation values were
respectively, 3.741 and 0.797. On the other hand, S3 stated that rules that imple-
mented by social media platforms are not enough to protect children from
E-advertisements of unhealthy food products, the responses were mostly in agree-
ment with the statement where 41.7% of participants agreed and 46.2% of partici-
pants strongly agreed, and there were some disagreement (1.8%) and strong
disagreement (0.5%), but they were minimal in comparison to the agreement, and
the responses resulted in a μ = 4.314 and standard deviation = 0.761. The findings
of S4 resulted in 69.8% of the participants collectively agreeing and strongly agree-
ing, 19.3% participants were neutral, 8.5% disagreeing and 02.3% strongly dis-
agreeing, and the results of the mean and standard deviation were 3.957 and 1.063,
respectively. Unhealthy food E-advertisements should be totally banned; this state-
ment was to measure the participants’ view of the negative effect that unhealthy
The Relationship Between Food E-Advertising and Children’s Obesity in Bahrain: Role… 331

food E-advertisements have on children; a total of 74.3% agreed and strongly agreed
with the statement, while 24.4% were neutral and 1.3% disagreed and strongly dis-
agreed. The responses resulted in a μ = 3.995 and standard deviation = 0.758. The
findings of S6 resulted in 87% of the participants collectively agreeing and strongly
agreeing, 10.3% of participants were neutral, 2.3% disagreeing and 0.5% strongly
disagreeing, and the results of the mean and standard deviation were 4.276 and
0.777, respectively.

5.3 Path Analysis

Table 5 represents the T-test results of participants’ perspectives on the factors influ-
encing children’s obesity in terms of whether the participants are males or females;
all the variables revealed no significant difference because the T-test results were
higher than (0.05 sig.).
Table 6 represents the ANOVA test results of participant’s perspective about the
variables affecting children’s obesity based on the participant’s age.

Table 5 Participants’ perspectives based on their gender

Variable Factor of gender Mean T-test p-value
Children’s obesity Male 3.808 -1.959 0.051
Female 3.910
Food E-advertising Male 4.168 -0.580 0.954
Female 4.172
Rules and regulations Male 3.756 -1.542 0.124
Female 3.867

Table 6 Participants’ perspectives based on their age

Variable Factor of age F-test p-value
Children’s obesity Less than 25 years 2.633 0.05
25–35 years
36–45 years
Above 45 years
Food E-advertising Less than 25 years 5.359 0.001
25–35 years
36–45 years
Above 45 years
Rules and regulations Less than 25 years 4.552 0.004
25–35 years
36–45 years
Above 45 years
332 A. A. Affooni and A. Hamdan

When comparing the significance level to alpha = 5%, it is apparent that there
was a significant difference between the groups in participants’ responses regarding
food E-advertising variable statements (sig. = 0.001) and rules and regulations state-
ments (sig. = 0.004) where both significant values were under 5%. The variance in
responses was mostly between participants who were less than 25 years and the
other groups.

5.4 Testing the First Hypothesis

The first hypothesis stated that food E-advertising is a contributing factor to obesity
in children. The results of the regression were shown in Table 7.
The data outcome reveals that the hypothesis is accepted as the sig. (0.000) < 0.05.
The data also shows that R is 32%, which means that food E-advertising is a con-
tributing factor to children’s obesity, and the effect percentage of food E-advertising
is shown to be 10.3%. Remarkably, the findings of the study accurately reflect the
arguments mentioned in the literature review where it was stated that food
E-advertising influences children’s eating habits and therefore influences children’s
obesity.

5.5 Testing the Second Hypothesis

The second hypothesis stated that rules and regulations related to monitoring food
E-advertisement in Bahrain can help mitigate children’s obesity. The results of the
regression were shown in Table 7. The data outcome reveals that the hypothesis is
accepted as the sig. (0.000) < 0.0; the data also shows that R is 38.5%, which means
that rules and regulations have a positive impact (14.8%) in mitigating the effect of
food E-advertising on children’s obesity. The reasons why rules and regulations are
important in preventing the effect of food E-advertising on children’s obesity were
also emphasized in the literature review.

Table 7 Regression results

Sig. (F.
Hypothesis R R2 F-test test) T-test Sig.
Food E-advertising is a contributing factor to 0.320 0.103 45.309 0.000 6.731 0.000
obesity in children.
Rules and regulations related to monitoring food 0.385 0.148 68.825 0.000 8.296 0.000
E-advertisement in Bahrain can help mitigate
children’s obesity.
The Relationship Between Food E-Advertising and Children’s Obesity in Bahrain: Role… 333

6 Conclusion, Recommendations, and Future Research

The study’s main goal was to investigate the relationship between food E-advertising
and children’s obesity in Bahrain, as well as the impact of rules and regulations on
this relationship. The study adopted a quantitative technique, which included dis-
tributing a survey to Bahraini citizens as the study’s target population, which
resulted in 398 responses. The testing of hypotheses acknowledged the significant
impact of food E-advertising on childhood obesity, as well as the significant role
that rules and regulations can play in preventing it. To summarize, this study found
that food E-advertising has an impact on children’s obesity in the Kingdom of
Bahrain and that implementing rules and regulations to control food E-advertising
will mitigate this impact. Children’s obesity rates in the Kingdom of Bahrain are
rising. Thus, the lack of published data and evaluation on the relationship between
food E-advertising and childhood obesity in the Kingdom of Bahrain was the study’s
main limitation. It was also difficult to find any rules or regulations particularly
related to food E-advertising targeting children, as most regulatory actions were
related to children-targeted advertisements on television or in printed ads.
Children should be encouraged to participate in the digital world so that they can
exercise their rights to information and participation. However, the participation of
children in the digital world should not be conditional to exposing them to adver-
tisements for unhealthy foods. Furthermore, given the tragic increase in childhood
obesity in Bahrain, we have an obligation to protect children’s rights to a healthy
life and, as a result, establish statutory regulations for the digital marketing of
unhealthy foods to children. Concerned governmental entities, in my opinion,
should work together to improve existing rules and regulations controlling advertis-
ing in general, as well as construct new rules and regulations and establish a new
law governing children’s food advertising.

References

ACCC. (2020). Social media. Retrieved from Australian Competition & Consumer Commission:
[Link]
APA. (2010). The impact of food advertising on childhood obesity. Retrieved from American
Psychological Association.
Cambridge. (n.d.). Definition of social media. Retrieved from Cambridge Dictionary: [Link]
[Link]/dictionary/english/social-media
CDC. (2021). Childhood obesity causes & consequences. Retrieved from CDC: [Link]
gov/obesity/childhood/[Link]
Government, O. A. (2020). Protecting children from harmful food marketing.
Retrieved from Open Access Government: [Link]
unhealthy-food-marketing/82498/
Greenberg, J. (2015). YouTube’s kids app is coming under fire for junk food ads. Retrieved from Wired:
[Link]
Harvard. (2009). Why people become overweight. Harvard Health Publications.
334 A. A. Affooni and A. Hamdan

Kemp, S. (2020). Digital 2020: Global digital overview. Retrieved from Datareportal: https://
[Link]/reports/digital-2020-global-digital-overview
Kraak, V., Patino, S., & Sacks, G. (2019). An accountability evaluation for the International Food
& Beverage Alliance’s Global Policy on Marketing Communications to Children to reduce
obesity: A narrative review to inform policy. Obesity Reviews, 20, 90–106.
Mwakasege, G. (2015). Influence of advertising on consumer buying behaviour: Case study of
forever living cosmetics products. Master of Science in Marketing Management (Msc-MKT)
dissertation, Mzumbe University
Sabt, A., Haji, E., Sharbati, W., Nassar, L., Al-Hajeri, M., & Ajlan, B. (2019). School screening
program in Kingdom of Bahrain: Obesity and overweight outcome. Journal of the Bahrain
Medical Society, 31, 24–30.
Sacks, G., & Looi, E. (2020). The advertising policies of major social media platforms over-
look the imperative to restrict the exposure of children and adolescents to the promotion of
unhealthy foods and beverages. International Journal of Environmental Research and Public
Health, 17, 4172.
WHO. (2018). Monitoring and restricting digital marketing of unhealthy products to children
and adolescents. Report based on the expert meeting on monitoring of digital marketing of
unhealthy products to children and adolescents. Moscow, Russian Federation.
WHO. (2020). Obesity. Eastern Mediterranean Health Journal, 1–38.
Zenith. (2020). Social media overtakes print to become the third-largest adver-
tising channel. Retrieved from Zenith: [Link]
social-media-overtakes-print-to-become-the-third-largest-advertising-channel/
The Obvious Foreseen Effects of Machines
Replacing Humans in Society

George Sammour and Laila Malas

1 Introduction

Creativity, imagination, and innovation are key methods humans use to make their
lives easier and achieve success. To increase productivity and profits, companies
have sought to involve employees in manual craftsmanship like sewing and have
encouraged the use of counsel and scientific knowledge to strengthen their
capabilities. Additionally, gaining the ability to persuade others of one’s viewpoint
has been seen as integral to success.
So, the Ideas about human existence were explored until the industrial revolution
of 1790 to 1840, when automation began to enter the scene. This caused great
concern to workers whose jobs were now in jeopardy. In 1837, Charles Babbage
developed the analytical engine, the first device considered to be a computer. Soon
after, robots started to emerge, with the term coined by Karl Kapek in 1939. The
first physical robot was created a year later, named ELEKTRO. It was showcased in
an international exhibition, marking a milestone for the history of automation.
Figure 1 shows the advancement of artificial intelligence (AI).
With this ever-increasing focus on automation, this notion is the ultimate innova-
tion of humanity, which we will discuss in this paper, the artificial intelligence (AI)
that was transformed during the Second World War. In 1950, Alan Turing devised a
technique to quantify the intelligence of the device that was based on the device’s
capacity to think and comprehend, thus the artificial intelligence that involves com-
posing a learning program and algorithms that allow the machine to function, and
this is called machine learning, so that if it applies to any device like cars, it becomes

G. Sammour (*) · L. Malas

Princess Sumaya University for Technology, Amman, Jordan
e-mail: [Link]@[Link]; lay20198087@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 335
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
336 G. Sammour and L. Malas

1784 1870 1969 Now

1st Industrial Revolution: 2nd Industrial Revolution: 3rd Industrial Revolution: 4th Industrial Revolution:

• Mechanization,steam • Electricity, assembly line, • Electronics, computers • Cyber-physical systems

power, weaving looms mass production • Automation • Internet of Things
• Large -scale • Internal combustion • Information technology • Sensor Networks
transportation with steam- engines, automobiles • Advanced Robotics
powered vessels and • Radio and television • Big Data
railroads • Machine Learning
• Replacing human and • Cloud Computing
• Driverless cars
animal power with • 3D/4D printing-based
machines manufacturing
• Blockchain transaction
architecture

Fig. 1 The temporal development of the automation process from the first industrial revolution
until now

intelligent in its functioning without a driver (A history of automation: The rise of

robots and AI, 2019).
Nowadays, it is essential that people pay attention to potential issues that may
arise and affect humanity and that we must take the time to seriously consider how
to best prepare for any potential difficulties that could arise, as these could have a
profound impact on our lives and our ability to generate an income.
The emergence of modern machines and technologies such as AI and robots has
caused a disruption in the workplace. They have been successful in generating
profits and increasing productivity in a short time; however, these machines lack the
capability to understand and work with the intelligence of emotions and feelings, as
in the case of a patient who needs 50% affection for treatment. To keep the human
element alive in the work environment, people have come up with solutions that
guarantee the human right to strive for development and creativity.
The importance of this investigation is to accomplish a harmony between man
and machine without disregarding the human factor. Rather, we make utilization of
machines advantageous for organizations and decision-makers as an approach
through which it helps decision-makers to help their work in a specialized manner
utilizing artificial intelligence and without dispensing with the human factor so that
organizations and businesses can accomplish what profits them, arrive at a reasonable
conclusion, and acquire benefits all this in this paper.
The research paper will be structured as follows mentioning all the related works
that talk about machines replacing humans and what they did not mention in order
to discover the gap; next the solution will be explained by evaluating real-life
methodology that shows how machines and humans are used in business wise; after
that the solution will be proposed to ensure in previous section that the methodology
must be balanced between machines and humans using hybrid intelligence to finally
reach to the conclusion and recommendation.
The Obvious Foreseen Effects of Machines Replacing Humans in Society 337

2 Literature Review

In this section, the paper will explore various published works related to machine
substitution of human labor, analyzing the perspectives, beliefs, and opinions of the
authors. Also, we will identify any gaps in the existing literature and present our
own ideas to provide a holistic understanding of the topic and its potential solutions.
Bruuna and Duka (2018) in their research “Artificial Intelligence, Jobs and the
Future of Work: Racing with Machines” focused on the reality that artificial
intelligence is advancing in our everyday lives and how, if left unchecked, it will
eventually replace human labor and lead to a disaster. Therefore, they set out to
lessen the potential of technological unemployment in their research. To help those
who become unemployed, the government should implement taxes on corporations
that use robots in place of human labor. These taxes should be distributed among the
affected employees. Initially, they utilized the situation analysis method to categorize
scenarios whether they are repetitive or non-repetitive or cognitive or manual, based
on cognitive level and repetition level. Additionally, they utilized the unconditional
universal basic income method to impose taxes on companies that use robots in
place of human workers, in certain proportions. This change eventually resulted in
a standardized shift in the current economic model and diminished some of the most
adverse effects linked with technological unemployment (Bruuna & Duka, 2018).
Dahlin (2019) in his research “Are robots stealing our jobs?” emphasizes that
automation, including robots and artificial intelligence, is spread unevenly across
the labor market, particularly in middle-skill jobs. As such, his goal in his research
was to examine the degree of the effect of robotics and automation on employment
through the perspective of displacement and enhancing in the United States between
2010 and 2015 using the linear regression method between industrial robots and the
loss of jobs and gains. Therefore, results showed that the rise in robot industrialism
is connected with the rise in high skill and some occupations in medium skills.
These results suggest that we are entering a new era in which robots are more
technologically advanced and able to collaborate more effectively with human
employees (Dahlin, 2019).
Fossen and Sorgner (2019) in their research “Mapping the Future of Occupations:
Transformative and Destructive Effects of New Digital Technologies on Jobs” this
article explore the effects of modern technological digitization on professions that
can be destructive or transformative. To begin, the researchers categorized
professions into four groups: rising stars, collapsing, machine terrain, and human
terrain, each of which differed according to the effect of digitization. Two measures
were used to analyze these professions: a destruction measurement and a
transformation measurement. The destruction measurement is based on expert
judgment and O*Net Database data gathered by the US Department of State. The
transformation measurement is based on data provided by the Electronic Frontier
Foundation and O*Net occupation data, which measures the progress of artificial
intelligence for each profession. This data will help to determine which occupations
will have a demand and what the rate of employment is (Fossen & Sorgner, 2019).
338 G. Sammour and L. Malas

One could conclude the outcome of the four mentioned thoughts by the authors
notice that we are entering into an age full of dilemmas facing humanity. The very
clear fact that man invented machines control by computers for those machines to
replace their inventors.
If one look at the core of the problem, he would notice that his thoughts and
conclusions mixed with his inventions are all in vicious circle as man will start
inventing computers and machines to replace him reaching to a point for those
machines to think by themselves to replace the inventor. When one look into such a
problem it will lead him to a machine controlling the new invention of new superior
machines that will reach a point to be clever enough to surpass the inventor. But
what would be very clearly noticeable during this journey of inventions that no
matter where machine could reach, they will lack the sense of humanitarian
characteristics and emotions. This issue by itself will put the major constraint on the
dream of any inventor to have the perfect machine resampling humans as
created by God.
It is believed that a considerable percentage of the evolving workforce will be
replaced by machines and robots controlled by computers (StringField & Stone III,
2017). Those kinds of replaceable tasks and jobs are the kind of high-speed
production units that are purely repetitive and that do not need high levels of
intelligence. Contrary of this kind of labor sector there is tow bands of lower
production and less of intelligence needs that will be always available for human
labors to occupy at a much lower cost than inventing machines to replace this kind
of lower band of the workforce.
This will leave us with the upper band of the labor force that represents the
human productive mind and intelligence of high-caliper personnel such as doctors,
lawyers, and scientists characterized by the human touch of emotions and affections
that could never be accommodated to machines and computers. So whatever people
talk about machines and computers replacing humans, it should have constraints not
to bypass certain limits.

3 Methodology

After studying the relationships between these publications and knowing the gap
that they did not touch upon. In this section, the paper will tackle the problem of
replacing humans with machines using an experimental real-life example that shows
that humans have their own capabilities and that machines have specific capabilities
in order to complement each other that cannot be replaced. Since human beings
have the ability to intuit, make decisions and arbitration, and understand the parties,
machines cannot perform these operations because they are only able to extract
information and carry out some tasks according to certain algorithms and rules that
would help humans to make the decision, and therefore we have to balance between
humans and machines to cancel the idea of substitution, and this example works to
The Obvious Foreseen Effects of Machines Replacing Humans in Society 339

reinforce the concept of balancing between humans and machines using

brainstorming method.
Suppose that ACME Company seeks to solve the marketing strategy problem
that confronts them. Therefore, managers resort to a brainstorming session to solve
this problem and reach a result that humans extracted, but before the session is held,
each person must obtain, analyze data as a proof of concept, and guide to take the
appropriate decision toward this problem so that here comes the role of machines
that work to explore and extract data in a way that makes it easier for humans to
make decisions without errors or repetitions, so the research will explain here the
role of the machine by extracting and analyzing dataset extracted from Kaggel
website using the knowledge discovery method (KDD), which goes through several
stages (Guerra-Hernández et al., 2008); see Fig. 2.
1. Determine the aim of the application and the previous knowledge by establishing
the goal of the KDD process; here in this example the goal is to analyze Fitbit
Fitness Tracker Data to get insights on how consumers use the app and figure out
the patterns so as to give a top level of recommendation for marketing strategy.
2. Data selection: this aims to create a target dataset from the original data and
choose a subset of the variable data samples that must be discovered.
3. Preprocessing is an important step in data cleaning and preparation for analysis.
It involves detecting and eliminating inconsistencies and outliers, filling in
missing values, and applying statistical techniques to determine mean, median,
variance, and standard deviation. Machine learning is also used to handle
missing values.
4. Transformation is an integral part of the knowledge discovery process that works
to reduce and drop data by selecting examples and important features. It can also
be used to decrease the number of variables being studied or to change the
data format.
5. Data mining: by extracting interesting patterns by choosing:

Fig. 2 The knowledge discovery process for data analysis

340 G. Sammour and L. Malas

(a) Specific task or method to extract data such as summarization, classification,

aggregation, clustering, regression, etc.
(b) Algorithms and techniques for researching patterns in reduced data such as
K-means, CART data mining algorithm, k-nearest neighbors, statistical
analysis, etc.
(c) Relevant representation of output outcomes
6. Interpret and evaluate mined patterns and review some steps.

3.1 Data Description

The First Step will target dataset from Kaggle website: Fitbit Fitness Tracker Data
that consist of 18 CSV files this data all combined and collected from surveys
generated from March 12, 2016, to May 12, 2016 (FitBit Fitness Tracker Data, 2016).
In terms of personal data, 30 Fitbit users consented to submit their personal data;
all these datasets consist of five main aspects: physical activity recorded in minutes,
heart rate, sleep monitoring, daily activity, and steps.
Of course, each dataset has several limitations. One of them is that these datasets
collected from 2016 about daily activity, fitness, sleep, and stress, etc. All these
patterns may be changed after certain period of time based on the user behavior so
it must be on real-time manner and relevant, also the personal data of the 30 Fitbit
users is not representative of the entire female population, in addition to that since
this data collected from survey unable to ascertain the integrity or the accuracy of
the data.
In order to select the best dataset to work with, we have to measure the quality of
data using evaluation criteria that show the effectiveness of this dataset by ROCCC
metric that stands for reliable, original, comprehensive, current, and cited the
following table describe this data source using this matric that is shown in Table 1.
Here in this example the paper target one dataset called daily activity merged,
this dataset consist of 940 samples and 15 attributes, all these attributes are numerical
attributes and they are ID which is id for each user that must be unique as primary
key, activity date, total steps, total distance, tracker distance, logged activity
distance, very active distance, moderate active distance, light active distance,
sedentary active distance, very active minutes, fairly active minutes, fairly active
minutes, lightly active minutes, sedentary minutes, and calories.

Table 1 The evaluation criteria that this methodology relies on

Reliable Original Comprehensive Current Cited
Low Low Medium Low Low
Only has 30 There is a Since these parameters Because these These data
respondents third-party match Bellabeat product dataset from collected from
provider for this parameters 2016 and is not third party
data source relevant
The Obvious Foreseen Effects of Machines Replacing Humans in Society 341

3.2 Data Preprocessing

In order to preprocess the data, this paper uses Python programming language in
google Colab as a tool to process, analyze, and visualize the data so the following
steps are taken into consideration for this data:
Step 1 Import the basic libraries that we need to use for this dataset NumPy for
numerical operations, pandas for data structure and data analysis, matplotlib for
data visualization, and date time for date data types. Figure 3 shows the code to
import libraries.
Step 2 Show the first ten rows from the data in order to make sure that the data are
now currently available and we can modify it as shown in Fig. 4.
Step 3 Check the missing values for each attribute as shown in Fig. 5.

Fig. 3 The basic libraries to import the data that can be used for analysis

Fig. 4 Sample from the data first ten rows

342 G. Sammour and L. Malas

Fig. 5 How to check if there is missing value or not

Fig. 6 Data type for each attribute

Step 4 Discover the data types for each attribute as displayed in Fig. 6
Step 5 Determine the distinct values of IDs as presented in Fig. 7
From here, the results noticed that there are no null or missing values, this dataset
consists of 15 attributes and 940 samples but the activity date misclassified must be
date data type, and also there is 33 unique IDs instead of 30 that are consented for
sharing their personal data as a fitness tracker user. All these will be solved in the
transformation step.
The Obvious Foreseen Effects of Machines Replacing Humans in Society 343

Fig. 7 The uniqueness IDs

3.3 Data Transformation

Here changing data type and structure of features will be applied; the below steps
solve the above limitations:
Step 1 Transform the activity date data type into the following format yyy-mm-dd
as exposed in Fig. 8.
Step 2 Create list of rearranged columns as displayed in Fig. 9.
Step 3 Create new column called day of week in order to represent each date with
their day as shown in Fig. 10.
Step 4 Rename columns as presented in Fig. 11.
Step 5 Create new column called total min that calculate the minutes of very active,
fairly, lightly, and sedentary minutes as presented in Fig. 12.
Steps 6 Create total hours columns that convert the total min into hours by round-
ing them as exposed in Fig. 13.

3.4 Data Modeling

Here in this example the paper tends to analyze the data by interpreting some
descriptive analytics using some statistics in order to explain exactly the results
clearly (mean, median STD, quartiles, min, max) as displayed in Fig. 14.
The results indicate the following:
1. Generally, people logged 7637 steps or 5.4 km, which is not enough. As sug-
gested by the CDC, a grown-up female needs to target a minimum of 10,000
steps or 8 km every day to gain from overall health, fat reduction, and fitness
enhancement. Source: Medical News Today article.
2. The majority of users are sedentary, logging an average of 991 min or 20 h,
which accounts for 81% of the total average minutes.
344 G. Sammour and L. Malas

Fig. 8 Change the format of date data type attribute

Fig. 9 Apply feature selection and arrangement

Fig. 10 Create new feature in this dataset

The Obvious Foreseen Effects of Machines Replacing Humans in Society 345

Fig. 11 Change attribute names

Fig. 12 Create calculated field to find the total minutes

Fig. 13 Apply another feature creation that calculates total hours

346 G. Sammour and L. Malas

Fig. 14 Statistical analysis for the data

3. Taking into account that the average calories burned is 2303 calories, which is
equivalent to 0.6 pound, it is difficult to explain in more detail, as the number of
calories burned depends on various aspects such as age, weight, daily activities,
exercise, hormones, and daily calorie intake. Source: Health Line article.

3.5 Result and Discussion

After all operations are completed, the results are visualized by dashboard as a
guide or tool that helps members make decisions, such as the example shown below
in Fig. 15.
Each graph indicates as a key performance indicator that reflects the whole
dashboard.
The First Graph Indicates that user tracks their activity using app during mid-
week from Tuesday until Friday and the rest of the days the frequency dropped
down; see Fig. 16.
The Second Graph Here the graph noticed that there is a positive correlation
between steps taken and calories burned and when users >0 to 15,000 steps taken
with calories burn rate cooling down from 15,000 steps onward as displayed in
Fig. 17.
The Obvious Foreseen Effects of Machines Replacing Humans in Society 347

Fig. 15 The dashboard result for the data analysis

Fig. 16 Number of users logged by day of week

The Third Graph This graph shows weak correlation where increase in hours
logged does not translate more calories being burned; also there is fewer outliers as
exposed in Fig. 18.
348 G. Sammour and L. Malas

Fig. 17 Correlation between steps taken and calories burned

Fig. 18 Correlation between hours logged and calories burned

The Fourth Graph Sedentary minutes takes the biggest slice at 81.3% (Fig. 19).
After that, the brainstorming session begins to discuss the data appearing from each
person and to develop appropriate solutions to reach appropriate marketing strate-
gies; see Fig. 20. For example, some people may develop a proposal to improve
customer loyalty through targeted advertising campaigns or define promotional
strategies to enhance their profitability, and here the strengths and weaknesses of
each option are discussed by using mind map, which help them to put the main ideas
for the problem.
The Obvious Foreseen Effects of Machines Replacing Humans in Society 349

Percentage of Activity in Minutes

Very Active Minutes
Lightly Active Minutes

Measure Names
Sedentary Minutes Fairly Active Minutes
Lightly Active Minutes
Sedentary Minutes
Very Active Minutes

Fig. 19 Percentage of activity in minutes

Fig. 20 Mind map for marketing strategy

After the brainstorming process is over, a collective agreement is reached by

consensus on an appropriate solution based on the extracted data and based on the
recommendations of the members. This example is not only limited to the field of
business in marketing, sales, production, and human resource, but also, we can set
this example for engineers, doctors, and lawyers who face a problem and want to
address it through brainstorming.
This methodology concludes high level of recommendation of marketing strat-
egy that is being discussed in a brainstorming session and concludes that the major-
ity of users (81.3%) are utilizing the Fitbit app to record sedentary activities and not
for monitoring their health habits.
350 G. Sammour and L. Malas

Also, people tend to monitor their activities more on weekdays than on week-
ends – likely due to the fact that they spend more time outdoors during the week-
days. Both companies manufacture products that concentrate on providing women
with data regarding their health, habits, and physical fitness and motivate them to be
cognizant of their current lifestyle and make healthy choices. These frequent ten-
dencies related to health and fitness could be applied to Bellabeat customers with
great effect. In addition to that, on weekends, Bellabeat app can also prompt notifi-
cation to encourage users to exercise.
From here the following question is asked, “Who made the decision?”; the
answer is humans who have decision-making, arbitration, and persuasion skills that
machines helped them solve by extracting data free of errors and repetitions, and
this led to a balance between humans and machines and this balance is called
“hybrid intelligence,” which will be highlighted in the next section.

4 Hybrid Intelligence as a Best Solution

In the past, the overall goal of artificial intelligence was to demonstrate the capabili-
ties that naturally come to a person like logical progress, and artificial intelligence
systems are far from ideal. When machines operate without human assistance, mis-
takes can be committed or fail completely. For example, when artificial intelligence
works on driving a car, the percentage of errors and failures at this stage may
increase and may adversely affect the user and can lead to bad results such as loss
of lives, so the idea of hybrid intelligence emerged. Which works to establish and
emphasis the idea of partnership between humans and systems of artificial intelli-
gence and balance between them without becoming the only controlling machine
that has been replaced by humans so that hybrid intelligence can produce mathe-
matical tasks in front of humans to overcome the disadvantages of artificial intelli-
gence systems alone (Kamar, 2016).
Hybrid intelligence is essential to maximizing the potential of both human and
artificial intelligence. Machine learning algorithms can uncover complex and
accurate patterns in large datasets that surpass the capabilities of the human brain.
On the other hand, the brain can effectively handle noisy, uncertain information and
changing circumstances. To take advantage of the strengths of both, humans and
machines must come together to form a hybrid intelligence. Research has found that
67% of people believe that artificial intelligence will help humans and machines
work together to increase their overall strength (Deric, 2019).
One of the prime examples of this technique is a crowdsourcing application, in
which human intelligence is readily accessible to both developers and users.
Meanwhile, artificial intelligence systems can provide assistance when the user is
unavailable or unable to do so (Fig. 21).
With the advancement of artificial intelligence and machine learning, humans
can use their creativity and decision-making skills to take on the tasks that machines
are unable to accomplish. Humans are the ones who created and developed the
The Obvious Foreseen Effects of Machines Replacing Humans in Society 351

Fig. 21 The hybrid intelligence architecture

machines, so it is impossible to eliminate human jobs. This means that job security
is maintained and the idea of automation being a substitute for humans is cancelled.

5 Conclusion and Recommendation

To conclude what covered in this paper that shed light on the development of auto-
mation since the first industrial revolution until now and how artificial intelligence
has become part of our lives that still constitute a major obstacle in all aspects of life
even in the field of jobs that worked to replace humans with machines where more
than one researcher focused on this problem, but from a different angle, which was
mostly focused on previous and limited data in the field of economics.
Nonetheless, in this research paper, the primary focus became on abolishing the
concept of substitution and stressing the idea of equilibrium between humans and
machines. We learned from the instance that engaged the problem of marketing
strategy that humans were the ones who made the decision based on data that was
mined and derived from a machine to aid the human being to make the suitable
decision that accomplished equilibrium through hybrid intelligence, which
concentrated on combining human and artificial intelligence with its varied
algorithms, which made the future of jobs a beginning point by making human
beings have a role in this hybrid intelligence by transforming the nature of work,
unifying the assets of human intelligence and addressing new predicaments.
Therefore, the paper recommends at the end to keep humans in the loop with
artificial intelligence because only humans have the ability to invent, create, and
solve problems and communicate with individuals in an understandable way.
352 G. Sammour and L. Malas

Fig. 22 Show hybrid intelligence with human loop

Without human beings, we would not have reached artificial intelligence, which has
made it easier for us to do things in all areas of Interest. Figure 22 shows how to
keep the human within the loop.

References

A history of automation: The rise of robots and AI. (2019, September 9). A history of auto-
mation: The rise of robots and AI. Retrieved from [Link]
bots-and-ai/a-history-of-automation-the-rise-of-robots-and-ai/
Bruuna, E. P., & Duka, A. (2018). Artificial intelligence, jobs and the future of work: Racing with
machines. Basic Income Studies, 13(2).
Dahlin, E. (2019). Are robots stealing our jobs. Socius, 5, 2378023119846249.
Deric, A. (2019, October 21). The future of work is Hybrid Intelligence: How artificial intelligence
and human intelligence support each other. Retrieved from [Link]
future-work-hybrid-intelligence-how-artificial-intelligence-and-human-intelligence-support-
each-other/59482
FitBit Fitness Tracker Data. (2016). Retrieved from Kaggle Dataset: [Link]
datasets/arashnic/fitbit
Fossen, F., & Sorgner, A. (2019). Mapping the future of occupations: Transformative and destruc-
tive effects of new digital technologies on jobs. Foresight and STI Governance, 13(2), 10–18.
Guerra-Hernández, A., Mondragón-Becerra, R., & Cruz-Ramırez, N. (2008). Explorations of the
BDI multi-agent support for the knowledge discovery in databases process. Retrieved from
[Link]
Kamar, E. (2016, July). Directions in hybrid intelligence: Complementing AI systems with Human
Intelligence. IJCAI (pp. 4070–4073).
StringField, S., & Stone, J., III. (2017). The labor market imperative for CTE: Changes and chal-
lenges for 21st century. Peabody Journal of Education, 92(2), 166–179.
Digitizing Business Education and Quality
of Education: A Survey

Ali Ateya Ali Alromaihi, Allam Hamdan, and Amir Dhia

1 Introduction

Via a digital learning setting, specific channels are provided to the users to facilitate
the interaction between students and their instructors independently and
collaboratively. In a collaborative learning setting, technological tools are integrated
to facilitate the process. Learning Management System (LMS), Google Classroom,
and Google Hangouts are examples of those tools (Janahi et al., 2023). HEIs shifted
toward other learning methods such as video conferencing courses. In this type of
learning, instructors can upload their learning sessions, quizzes, and activities
(Klašnja et al., 2011). The use of video conferencing allows for valuable guidelines
on varying levels of knowledge and cognitive skills among learners and connections
with various learning styles (Hsu, 2017). The course instructors evaluate their stu-
dent’s work either by individual work assigned to them or through group tasks in the
form of a project or a case study (Janahi et al., 2023).
Therefore, business education plays a significant role in supplying the demand of
the local labor market with skilled employees who will become future leaders (Sun
& Lee, 2020). In return, this will bolster the national economy due to the reliance on
national labor instead of expatriates. According to Bahrain Vision 2030, the
Kingdom seeks to improve the skills of Bahrainis so that they become the first

A. A. A. Alromaihi (*)
Ahlia University, Manama, Bahrain
A. Hamdan
College of Business & Finance, Ahlia University, Manama, Bahrain
A. Dhia
University of Business and Technology (UBT), Jeddah, KSA
e-mail: amirdhia@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 353
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
354 A. A. A. Alromaihi et al.

choice for the labor market. Therefore, in order for Bahrain’s Vision 2030 to become
a reality, the country has taken a number of initiatives to improve its educational
system. This includes providing high-quality standards in education to satisfy future
needs. Over the past few years, many lives have been disrupted due to the outbreak
of COVID-19. At the initial phase of the virus, the World Health Organization
(WHO) office in China declared the newly spread COVID-19 virus as an epidemic
on December 31, 2019. However, the situation continued to evolve until WHO
declared on March 11, 2020 the novel COVID-19 virus as a pandemic as it spread
on a global scale (Alhalwachi et al., 2022).
For so long, the quality of education indicators has been a focus for several
researchers (Al Dhaen, 2021; Agrawal & Mittal, 2018). During the pandemic, large
numbers of students joined business tertiary education programs. As a result, many
of them graduated or are expected to do so soon. Subsequently, those students will
be returning to their workplaces and are expected to reflect on the skills they
acquired throughout their studies. This can only be assured if the delivery in educa-
tion is of quality. Therefore, a question arises whether the quality and learning out-
comes of the courses were at the same levels as at pre-pandemic levels. The reason
behind this is that the COVID-19 pandemic forced HEIs to change their learning
mode from traditional to digital learning via technology integration. Consequently,
the role of international accreditation bodies is to monitor the quality of education
after the shift to digital education, maintain quality pre-pandemic standards, and
provide full support to HEIs to overcome challenges while ensuring quality in digi-
tal learning (Janahi et al., 2023).
This research paper aims to study the impact of digitizing business education on
the quality of business education. Further, the study analyzes the moderating effect
of international accreditation bodies in ensuring the delivery of quality in digital
business education. Firstly, the study contributes toward covering the scarcity of
studies that deal with the quality of digitizing business education, especially in
times of global pandemic. Secondly, the study provides faculty in HEIs with
important information that can be employed to develop future business education in
a digital setting. At the same time, the results of this study are essential for HEIs in
Bahrain, both public and private, to update their business programs to keep pace
with changes in the labor market in general and with developments that may occur
at any time. It is considered one of the trending topics in the global arena as it affects
a vast number of students around the globe. Finally, the researchers believe that
distance learning will continue after COVID-19; therefore, considerable research
needs to be done in this area.

2 Literature Review

According to Lim et al. (2022), HEIs faced many challenges to achieve sustainable
development, especially during the COVID-19 pandemic. Their research explores
different levels of attitudes toward the digitalization of education in HEIs. The
authors divided the attitude experienced into three correlated attitude levels. In the
Digitizing Business Education and Quality of Education: A Survey 355

first level, teaching attitudes and educational attitudes exist. The second level
comprises digital platform attitudes, technology attitudes, use of technology
attitude, and resource attitude. Finally, the third level incorporates network, service,
and development attitudes. Their study suggests that HEI should continuously
improve their digital education by innovation, development of their technology,
resource allocation, and designing better digital platforms or creating better
environments.
Further, sustainable technical support plays a significant role in enhancing the
quality of digital learning. That is because there is a need to have in place the proper
infrastructure of gadgets, networks, and technical teams consisting of experts to
provide technical support at any time required (Nawaz & Kundi, 2010). In addition
to the aforementioned variables that have an impact on the quality of digital
education, the gender of students plays an important role in the quality, satisfaction,
and motivation with respect to digital learning (Cuadrado-García et al., 2010).
Finally, the study revealed that the level of quality of digital learning varied between
the levels of courses. This is also supported by the study of Peixoto et al. (2012),
which stresses that, based on the level of the course, there is a difference between
study habits, satisfaction, and learning strategies (Alromaihi & Hamdan, 2022).
According to Gómez et al. (2016) and Kurucay and Inan (2017), faculty and
student satisfaction, as well as learning effectiveness, access, and institutional cost-
efficiency, all contribute to learning quality. In a previous study conducted by
Rienties and Toetenel in 2016, it was concluded that there is no significant difference
between traditional learning and digital learning if the digital class was well
designed. However, other studies found that students and instructors were more
satisfied with traditional learning (Fishman et al., 2013). Measurement of student
satisfaction in digital learning, according to other studies, is an important part of
successfully fostering educational processes for institutions, instructors, and
students (Latip et al., 2020; Cheon et al., 2020). The faculty, interactions, and the
technology are the three main factors that influence student and instructor’s
satisfaction with digital learning (Bolliger, 2004; Kurucay & Inan, 2017) as well as
the students, their instructors, and the institution (Bolliger & Wasilik, 2009). There
is a relationship between student and faculty satisfaction. Since student satisfaction
is influenced by interaction and technology, this requires extra effort from the
instructors to engage the attendees of the digital class. The course instructors, even
more, must possess proper techno-pedagogical abilities (Hamdan & Hamdan, 2020).
The concept of quality in higher educational institutions seems to be vague as
researchers have defined it based on different points of view. Based on Mishra and
Jha (2019), the term quality is defined as “a focus on meeting a predefined set of
standards, specification, and requirements, or focusing on exceeding the highest
standards in pursuit of excellence and exclusivity.” Several other researchers defined
it as “focusing on accountability to the public or providing a transformative learning
experience to benefit students and employers” (Blitz, 2020; Thomas et al., 2017).
Quality is viewed as a tool for achieving success in all sectors, specifically in
education. In higher education, academic excellence has long been a core value.
Accreditation is used to improve and develop educational quality in the academic
environment (Hamdan et al., 2020). Currently there are numerous accreditation
356 A. A. A. Alromaihi et al.

bodies all around the world. The Association of Advance Collegiate Schools in
Business (AACSB), the European Foundation for Management Development
(EFMD), and the Association for MBAs (AMBA) are business school accreditation
bodies, to name a few. The purpose of assessing any business school or management
program is to promote ongoing quality improvement in education by assuming gen-
eral presumptions about the standards and quality of those institutions (Cura &
Alani, 2018).
Accreditation agencies such as AACSB, AMBA, and the EQUIS grant HEIs
accreditations based on their quality of education and research conducted. The
intention of accreditation is to ensure and maintain high standards of education
(Sen, 2021). The authors express that the current accreditation and quality metrics
are not suited for digital classes, but rather suited for traditional classes. Following
the digitization of HEI classes, the authors suggest that the existing quality metrics
should be redesigned. Accreditation bodies need to take into consideration new
factors related to physical resources, infrastructure, and administration support.
That would also include robust network connectivity, digital infrastructure, online
databases and resources, and resource portability between different systems
(Alshurafat et al., 2021). Parameters for quality may take into account faculty who
are adequately trained to handle support systems and conduct digital classes.
Since COVID-19, faculty around the globe have witnessed unethical behavior
and moral issues from students. For instance, it has become challenging to administer
digital exams and quizzes without the student engaging in unfair practices. To limit
students from cheating, the authors suggest using customized proctoring software,
design exams that include a certain percentage of multiple-choice questions, and
create question banks. Furthermore, to ensure utmost fairness in exams, questions
assessing conceptual clarity and creativity may be made mandatory.

3 The Method and Survey

The quantitative method employed targeted academic staff in the colleges of busi-
ness in both public and private HEIs in Bahrain. The number of business academic
staff identified by liaising with HEC according to their statistics was 441. The total
responses received from the faculty of the colleges of business in public and private
HEIs in the country were 232 samples as presented in Table 1.

4 Descriptive Analysis

In respect of quality of education, three factors that are independent variables (IVs)
having an impact on the dependent variables (DVs) were identified from existing
literature. Also identified was the moderating variable (MV) based on the role of
international accreditation bodies. Table 2 identifies the impact on each factor. In
Digitizing Business Education and Quality of Education: A Survey 357

Table 1 Participant’s responses to demographic questions

Question Answer choices Frequency Percent
Gender Male 141 60.80
Female 91 39.20
Total 232 100
Age 26–35 years 61 26.30
36–45 years 68 29.30
46–55 years 56 24.10
More than 55 years 47 20.30
Total 232 100
Nationality Bahraini 122 52.60
Non-Bahraini 110 47.40
Total 232 100
Educational background Bachelor’s degree 7 3.00
Master’s degree 57 24.60
Doctorate degree 168 72.40
Total 232 100
Academic rank Professor 31 13.40
Associate Professor 42 18.10
Assistant Professor 94 40.50
Lecturer 52 22.40
Teaching and Research Assistant 13 5.60
Total 232 100
Experience Less than 1 year 4 1.70
1–5 years 34 14.70
6–10 years 50 21.60
11–15 years 48 20.70
More than 15 years 96 41.40
Total 232 100
Type of institution Public 78 33.60
Private 154 66.40
Total 232 100

this part, three sub-factors are examined, namely, LMS, assessment of students, and
interaction with students. Subsequently, both the MV and DV will be examined.

5 Learning Management Systems Analysis

According to the results of the first indicator (Table 2), Learning Management
Systems, participants tended to agree and strongly agree that “the quality of
digitizing business education depends on the IT infrastructure of the institute”
(mean μ = 4.582 and std. deviation ˂ 1). The participants who strongly agreed were
358 A. A. A. Alromaihi et al.

Table 2 The impact LMS on the quality of education

Frequency
Strongly Strongly
agree Agree Neutral Disagree disagree
Statement (%) (%) (%) (%) (%) Mean SD %
The quality of digitizing 65.5 28.0 6.0 0.0 4.0 4.58 0.65 91.6
business education
depends on the IT
infrastructure of the
institute
Your institute changed 34.9 25.9 19.1 10.9 8.7 3.68 1.29 73.7
the curricula (course
content) due to the
consequences of the
pandemic
Your institution provides 61.2 29.3 7.3 1.3 0.9 4.49 0.76 89.7
supports to students to
address any difficulty
faced (technical,
academic, etc.) in a
timely manner
Course instructors at your 36.2 26.7 21.6 13.4 2.2 3.82 1.13 63.7
institute had experience
with digital learning prior
to COVID-19 pandemic
Digital learning tools are 33.2 51.3 12.1 2.2 1.3 4.13 0.80 82.6
fast, reliable, and easy to
use
Learning Management 50.4 36.6 10.8 1.3 0.9 4.35 0.79 86.9
Systems provide a unique
experience to students
Learning Management 45.3 33.2 16.8 3.9 0.9 4.18 0.91 83.6
Systems maintain the
confidentiality of
personal information

65.5%, those who agreed 28%, those neutral 6%, those disagreed 0%, and those
who strongly disagreed 4%. The overall mean was 4.582 and the standard deviation
showed a lower percentage than 1 (precisely at 0.6461). The overall percentage of
this indicator is 91.6%; therefore, it is a positive result since it is more than 60%
(Balogh et al., 2001).
The second question relates to whether “your institute changed the curricula
(course content) due to the consequences of the pandemic” (mean μ = 3.683 and std.
deviation > 1). The majority either strongly agreed (34.9%) or agreed (25.9%).
Slightly behind were participants who were neutral (19.1%), followed by those who
disagreed (10.9%) and strongly disagreed (8.7%). The mean μ = 3.683 and standard
deviation = 1.2913 > 1. The overall percentage of this indicator is 73.7% and there-
fore represents a positive result since it is more than 60% (Balogh et al., 2001).
Digitizing Business Education and Quality of Education: A Survey 359

The third question asked if “your institution provides support to students to

address any difficulty faced (technical, academic, etc.) in a timely manner” (mean
μ = 4.487 and std. deviation < 1). The majority either strongly agreed (61.2%) or
agreed (29.3%). Participants who were neutral were 7.3%, while those who
disagreed were 1.3%, and those who strongly disagreed were 0.9%. The mean
μ = 4.487 and standard deviation = 0.7615 < 1. The overall percentage of this
indicator is 89.7% and therefore constitutes a positive result since it is more than
60% (Balogh et al., 2001).
The fourth question examined if the “course instructors at your institute had
experience with digital learning prior to COVID-19 pandemic” (mean μ = 3.815 and
std. deviation > 1). The results of this item indicated that the majority either strongly
agreed (36.2%) or agreed (26.7%). Participants who chose to be neutral were 21.6%,
those who disagreed 13.4%, and strongly disagreed 2.2%. The mean μ = 3.815 and
standard deviation = 1.1301 > 1. The overall percentage of this indicator is 63.7%;
therefore once again it is a positive result since it is more than 60% (Balogh
et al., 2001).
The results of the fifth question, namely, “digital learning tools are fast, reliable
and easy to use” (mean μ = 4.129 and std. deviation < 1), indicated that the majority
either strongly agreed (33.2%) or agreed (51.3%). Some 12.1% of the participants
chose to be neutral, 13.4% disagreed, and 2.2% strongly disagreed. The mean
μ = 4.129 and standard deviation = 0.8008 < 1. The overall percentage of this
indicator is 82.6%; therefore, it is a positive result since it is more than 60% (Balogh
et al., 2001).
The sixth question reflected on if the “Learning Management Systems provide a
unique experience to students” (mean μ = 4.345 and std. deviation < 1). The results
indicated that the majority either strongly agreed (50.4%) or agreed (36.6%).
Participants who were neutral represented 10.8%, those who disagreed were 1.3%,
and those who strongly disagreed were 0.9%. The mean μ = 4.435 and standard
deviation = 0.7907 < 1. The overall percentage of this indicator is 86.9%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
Finally, the seventh question addressed the extent to which “Learning
Management Systems maintain the confidentiality of personal information” (mean
μ = 4.181 and std. deviation < 1). Most participants either strongly agreed (45.3%)
or agreed (33.2%). Participants who were neutral represented 16.8%, while those
who disagreed were 3.9% and those who strongly disagreed were 0.9%. The mean
μ = 4.181 and standard deviation = 0.9079 < 1. The overall percentage of this
indicator is 83.6%; therefore, it leads to a positive result since it is more than 60%
(Balogh et al., 2001).
360 A. A. A. Alromaihi et al.

Table 3 The impact of the assessment of students on the quality of education

Frequency
Strongly
Strongly Agree Neutral Disagree disagree
Statement agree (%) (%) (%) (%) (%) Mean SD %
Your institution 58.2 32.8 5.6 1.7 1.7 4.44 0.82 88.8
developed new
assessment measures,
especially for exams
COVID-19 has disrupted 16.4 37.5 23.7 11.6 10.8 3.37 1.20 67.4
the trust in quality
assurance and learning
outcomes of the degree
Instructors experience 30.2 44.8 14.2 9.9 0.9 3.94 0.96 78.7
difficulty in assessing
student’s degree of
attention
Malpractices such as 47.0 27.6 13.8 7.8 3.9 4.06 1.13 81.2
plagiarism and cheating
has increased in digital
learning
The academic 40.9 24.6 16.4 9.5 8.6 3.80 1.30 75.9
performance of students
during the pandemic is
higher than their
performance before

6 Assessment of Students Factor Analysis

Assessment of students was the second factor examined (Table 3). The results
showed that the majority of participants agreed with the statement “your institution
developed new assessment measures, especially for exams” (mean μ = 4.440 and
std. deviation < 1). The majority either strongly agreed (58.2%) or agreed (32.8%).
Participants who were neutral represented 5.6%, those who disagreed were 1.7%,
and those who strongly disagreed were 1.7%. The overall mean was 4.440 and the
standard deviation showed a lower percentage than 1 (precisely 0.8196). The overall
percentage of this indicator is 88.8%, therefore, it is a positive result since it is more
than 60% (Balogh et al., 2001).
The second question inquired on whether “COVID-19 has disrupted the trust in
quality assurance and learning outcomes of the degree” (mean μ = 3.371 and std.
deviation > 1). Some 16.4% strongly agreed, 37.5% agreed, 23.7% were neutral,
11.6% disagreed, and 10.8% strongly disagreed. The mean μ = 3.371 and standard
deviation = 1.2027 > 1. The overall percentage of this indicator is 67.4%, therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The third question asked if the “instructors experience difficulty in assessing
student’s degree of attention” (mean μ = 3.935 and std. deviation < 1). The majority
either strongly agreed (30.2%) or agreed (44.8%). Participants who were neutral
Digitizing Business Education and Quality of Education: A Survey 361

represented 14.2%, those who disagreed were 9.9%, and those who strongly
disagreed were 0.9%. The mean μ = 3.935 and standard deviation = 0.9581 < 1. The
overall percentage of this indicator is 78.7%, therefore, it is a positive result since it
is more than 60% (Balogh et al., 2001).
The fourth question questions whether “malpractices such as plagiarism and
cheating has increased in digital learning” (mean μ = 4.066 and std. deviation > 1).
The majority either strongly agreed (47%) or agreed (27.6%). Participants who
chose to be neutral were 13.8%, those who disagreed 7.8%, and strongly disagreed
3.9%. The mean μ = 4.066 and standard deviation = 1.1265 > 1. The overall
percentage of this indicator is 81.2%, therefore, it is a positive result since it is more
than 60% (Balogh et al., 2001).
Last, the fifth question questioned if “the academic performance of students dur-
ing the pandemic is higher than their performance before” (mean μ = 3.797 and std.
deviation > 1). The majority either strongly agreed (40.9%) or agreed (24.6%).
Participants who were neutral represented 16.4%, those who disagreed were 9.5%,
and those who strongly disagreed were 8.6%. The mean μ = 3.797 and standard
deviation = 1.3018 > 1. The overall percentage of this indicator is 75.9%, therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The statistical findings of the assessment of students’ variables indicate that the
quality of business education is impacted by the method of assessment. The
participants’ responses indicated that most of their HEIs developed new assessment
measures, particularly for exams. Although many HEIs had LMS in place prior to
the pandemic, there was no assessment mechanism to evaluate students digitally.
Participants also indicated that they agree with the fact that the pandemic has
disrupted the trust in quality assurance and learning outcomes of the degree achieved
via digital learning. This may be due to the fact that course instructors experienced
difficulties in assessing the student’s degree of attention along with the increase of
malpractice actions during digital learning. To conclude, most participants in the
questionnaire emphasized that digital learning has enhanced the academic
performance of students when compared to their performance before the pandemic.

7 Interaction with Students Factor Analysis

According to the results of the last indicator of this section (Table 4), “Interaction
with students,” participants tended to agree and strongly agree that “digital learning
provides greater involvement and attention of students during the lesson based on
the questions addressed in the chat” (mean μ = 3.625 and std. deviation > 1). Those
who strongly agreed were 22.4%, and those who agreed were 38.8%. Participants
who were neutral were 22%, those who disagreed were 12.5%, and those who
strongly disagreed were 4.3%. The overall mean was 3.625 and the standard
deviation showed a greater percentage than 1 (precisely at 1.0938). The overall
percentage of this indicator is 72.5%; therefore, it is a positive result since it is more
than 60% (Balogh et al., 2001).
362 A. A. A. Alromaihi et al.

Table 4 The impact of the interaction with students on the quality of education
Frequency
Strongly Strongly
agree Agree Neutral Disagree disagree
Statement (%) (%) (%) (%) (%) Mean SD %
Digital learning provides 22.4 38.8 22.0 12.5 4.3 3.63 1.09 72.5
greater involvement and
attention of students
during the lesson based on
the questions addressed in
the chat
Digital learning provides 52.6 32.3 11.2 3.4 0.4 4.33 0.84 86.6
more availability of
contacts outside class
hours for clarification via
email and WhatsApp
Digital learning provides a 21.6 43.5 18.1 12.9 3.9 3.66 1.07 73.2
greater “sense of team”
and collaboration between
students and their
instructors, aimed at better
preparations for exams
Absence of direct 50.0 28.0 13.8 5.6 2.6 4.17 1.03 83.4
face-to-face interaction has
a negative impact on the
learning experience
Despite heightened 23.7 46.1 19.0 9.5 1.7 3.81 0.96 76.1
disengagement level due
to the loss of social
interaction, students
learned new skills such as
time management and
responsibility through
digital learning
The course instructor 48.7 38.4 9.5 2.6 0.9 4.32 0.82 86.3
applies different tools and
strategies to promote
active participation in the
virtual classroom
Interaction in the digital 47.8 37.1 9.9 3.4 1.7 4.26 0.90 85.2
classrooms depends on the
personality of the course
instructor and his students
The digital learning 55.2 31.9 10.8 0.9 1.3 4.39 0.81 87.8
environment offers the
possibility to interact with
students and with
specialists from different
parts of the world
Digitizing Business Education and Quality of Education: A Survey 363

The second question wondered if “digital learning provides more availability of

contacts outside class hours for clarification via email and WhatsApp” (mean
μ = 4.332 and std. deviation < 1). The majority either strongly agreed (52.6%) or
agreed (32.2%). Participants who were neutral were 11.2%, those who disagreed
were 3.4%, while those who strongly disagreed were the minority (0.4%). The mean
μ = 4.332 and standard deviation = 0.8412 < 1. The overall percentage of this
indicator is 86.6%; therefore, it is a positive result since it is more than 60% (Balogh
et al., 2001).
The third question inquired whether “digital learning provides a greater ‘sense of
team’ and collaboration between students and their instructors, aimed at better
preparations for exams” (mean μ = 3.659 and std. deviation > 1). The majority either
strongly agreed (21.6%) or agreed (43.5%). Participants who chose to be neutral
were 18.1%, followed by those who disagreed (12.9%) and those who strongly
disagreed (3.9%). The mean μ = 3.659 and standard deviation = 1.0733 > 1. The
overall percentage of this indicator is 73.2%; therefore, it is a positive result since it
is more than 60% (Balogh et al., 2001).
The fourth question intended to see if “absence of direct face-to-face interaction
has a negative impact on the learning experience” (mean μ = 4.172 and std.
deviation > 1). The majority either strongly agreed (50%) or agreed (28%).
Participants who chose to be neutral were 13.8%, followed by those who disagreed
(5.6%) and those who strongly disagreed (2.6%). The mean μ = 4.172 and standard
deviation = 1.0343 > 1. The overall percentage of this indicator is 83.4%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The fifth question intended to examine if “despite heightened disengagement
level due to the loss of social interaction, students learned new skills such as time
management and responsibility through digital learning” (mean μ = 3.806 and std.
deviation < 1). The majority either strongly agreed (23.7%) or agreed (46.1%),
while 19% of the participants chose to be neutral. On the other hand, the participants
who disagreed were 9.5%, and those who strongly disagreed were 1.7%. The mean
μ = 3.806 and standard deviation = 0.9631 < 1. The overall percentage of this
indicator is 76.1%; therefore, it is a positive result since it is more than 60% (Balogh
et al., 2001).
The sixth question assesses if “the course instructor applies different tools and
strategies to promote active participation in the virtual classroom” (mean μ = 4.315
and std. deviation < 1). The majority either strongly agreed (48.7%) or agreed
(38.4%). Participants who were neutral were 9.5%, those who disagreed were 2.6%,
and those who strongly disagreed were 0.9%. The mean μ = 4.315 and standard
deviation = 0.8166 < 1. The overall percentage of this indicator is 86.3%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The seventh question relates to if the “interaction in the digital classrooms
depends on the personality of the course instructor and his students” (mean μ = 4.259
and std. deviation < 1). The majority either strongly agreed (47.8%) or agreed
(37.1%). Participants who were neutral were 9.9%, those who disagreed were 3.4%,
and those who strongly disagreed were 1.7%. The mean μ = 4.259 and standard
364 A. A. A. Alromaihi et al.

deviation = 0.8985 < 1. The overall percentage of this indicator is 65.2%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
Finally, the eighth question reflects on if “the digital learning environment offers
the possibility to interact with students and with specialists from different parts of
the world” (mean μ = 4.388 and std. deviation < 1). The majority either strongly
agreed (55.2%) or agreed (31.9%). Participants who were neutral were 10.8%,
whereby those who disagreed were 0.9%, and those who strongly disagreed were
1.3%. The mean μ = 4.388 and standard deviation = 0.8141 < 1. The overall
percentage of this indicator is 87.8%; therefore, it is a positive result since it is more
than 60% (Balogh et al., 2001).
The statistical findings of the last variable in this section indicate that quality of
business education relies on the interaction between the course instructor and
students. Most of the responses indicated that digital learning had a positive impact
on the quality of education and that it facilitated the interaction between instructors
and their students. It was noted that based on the questions addressed in the chat,
there was greater involvement of students and attention. The availability of more
contact hours rendered course instructors more accessible and approachable so that
they can accordingly assist students resolve any issues or provide further
clarifications. Most respondents also agreed that digital learning better prepared
students for exams as it provided a greater sense of teamwork and collaboration.
Although almost half of the participants indicated that they strongly agree with
the statement that the lack of face-to-face interaction has a negative impact on the
learning experience, most of them indicated that digital learning helped students to
learn new skills such as time management and a greater sense of responsibility.
Additionally, the respondents agreed to the statement that digital learning allows for
interaction with students and experts globally to share knowledge. To remedy any
shortcomings of digital learning and especially those related to the personality of
the course instructor or students, the course instructor agreed that different tools and
strategies must be applied to promote active participation in the digital classroom.

8 International Accreditation Bodies Factor Analysis

As in Table 5, with respect to the moderating variable “The role of international

accreditation bodies,” the participants tend to agree and strongly agree that “gaining
an international accreditation has a positive impact on the institution and the society”
(mean μ = 4.578 and std. deviation ˂ 1). Those who strongly agreed were 68.5%, and
those who agreed were 23.7%. Participants who were neutral represented 6%, those
who disagreed were 0.4%, and those who strongly disagreed were 1.3%. The overall
mean was 4.578 and the standard deviation showed a lower percentage than 1
(precisely at 0.7403). The overall percentage of this indicator is 91.6%; therefore, it
is a positive result since it is more than 60% (Balogh et al., 2001).
The second question relates to if “applying international accreditation standards
improves faculty professional development” (mean μ = 4.491 and std. deviation < 1).
Digitizing Business Education and Quality of Education: A Survey 365

Table 5 The role of international accreditation bodies

Frequency
Strongly Strongly
agree Agree Neutral Disagree disagree
Statement (%) (%) (%) (%) (%) Mean SD %
Gaining an international 68.5 23.7 6.0 0.4 130.0 4.58 0.74 91.6
accreditation has a
positive impact on the
institution and the society
Applying international 61.2 30.2 6.0 1.7 0.9 4.49 0.76 89.8
accreditation standards
improves faculty
professional development
The management of my 63.8 28.4 4.3 2.6 0.9 4.52 0.77 90.3
institution has an active
role to achieve
international accreditation
of business programs
International accreditation 53.9 34.5 8.2 2.6 0.9 4.38 0.81 87.6
assists in formulating a
strategy to harmonize
digital business education
and the quality of
education
International accreditation 58.6 33.6 5.6 0.9 1.3 4.47 0.76 89.5
standards help in the
implementation of quality
in business education
International accreditation 54.7 32.8 9.9 0.9 1.7 4.38 0.83 87.6
helps in embedding
technology in business
education

The majority either strongly agreed (61.2%) or agreed (30.2%). Participants who
were neutral were 6%, those who disagreed were 1.7%, and those who strongly
disagreed were 0.9%. The mean μ = 4.491 and standard deviation = 0.7616 < 1. The
overall percentage of this indicator is 89.8%; therefore, it is a positive result since it
is more than 60% (Balogh et al., 2001).
The third question inquired if “the management of my institution has an active
role to achieve international accreditation of business programs” (mean μ = 4.517
and std. deviation < 1). The majority either strongly agreed (63.8%) or agreed
(28.4%). Participants who were neutral were only 4.3%, followed by those who
disagreed 2.6% and those who strongly disagreed 0.9%. The mean μ = 4.517 and
standard deviation = 0.7727 < 1. The overall percentage of this indicator is 90.3%;
therefore, it is a positive result since it is more than 60% (Balogh et al., 2001).
The fourth question assessed if “course instructors at your institute had experi-
ence with digital learning prior to COVID-19 pandemic” (mean μ = 4.379 and std.
deviation < 1). The majority either strongly agreed (53.9%) or agreed (34.5%).
366 A. A. A. Alromaihi et al.

Participants who chose to be neutral were 8.2%, those who disagreed were 2.6%,
and those strongly disagreed were 0.9%. The mean μ = 4.379 and standard
deviation = 0.8128 < 1. The overall percentage of this indicator is 87.6%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The fifth question intended to draw an understanding if “international accredita-
tion standards help in the implementation of quality in business education” (mean
μ = 4.4474 and std. deviation < 1). The majority either strongly agreed (58.6%) or
agreed (33.6%), while 5.6% of the participants chose to be neutral. Participants who
disagreed were 0.9%, and those who strongly disagreed were 1.3%. The mean
μ = 4.474 and standard deviation = 0.7555 < 1. The overall percentage of this indi-
cator is 89.5%; therefore, it is a positive result since it is more than 60% (Balogh
et al., 2001).
The sixth question examined to what point “international accreditation helps in
embedding technology in business education” (mean μ = 4.379 and std.
deviation < 1). The majority either strongly agreed (54.7%) or agreed (32.8%).
Participants who were neutral represented 9.9%, those who disagreed were 0.9%,
and those who strongly disagreed were 1.7%. The mean μ = 4.379 and standard
deviation = 0.8339 < 1. The overall percentage of this indicator is 87.6%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
Overall, it could be concluded that the respondents acknowledged the impor-
tance of international accreditation bodies and appreciated their role in maintaining
the quality of education. Participants also acknowledged the pivotal role of the
international accreditation bodies in improving the faculty professional development,
harmonizing digital business education and the quality of education, and embedding
technology in business education. The responses indicate that the faculties of the
college of business in Bahrain possess great knowledge of the international
accreditation process and its impact on the relationship between digitizing business
education and the quality of education. However, around half of the participants
previously indicated in their responses that they have not either gained international
accreditation or that their HEIs are in the process of gaining it.

9 Quality of Education Factor Analysis

With respect to the dependent variable “Quality of education” (Table 6), the partici-
pants tend to agree and strongly agree that “the institution faculty maintains consis-
tent discipline which is conductive to learning” (mean μ = 4.328 and std.
deviation ˂ 1). Those who strongly agreed were 48.7%, and those who agreed were
38.4%. On the other hand, those who were neutral were 10.3%, those who disagreed
were 2.2%, and those who strongly disagreed were 0.4%. The overall mean was
4.328 and the standard deviation showed a lower percentage than 1 (precisely at
0.7816). The overall percentage of this indicator is 86.6%; therefore, it is a positive
result since it is more than 60% (Balogh et al., 2001).
Digitizing Business Education and Quality of Education: A Survey 367

Table 6 Participants’ Perspectives on the quality of education

Frequency
Strongly Strongly
agree Agree Neutral Disagree disagree
Statement (%) (%) (%) (%) (%) Mean SD %
The institution faculty 48.7 38.4 10.3 2.2 0.4 4.33 0.78 86.6
maintains consistent
discipline that is
conductive to learning
The course instructor 51.3 40.1 6.9 1.3 0.4 4.41 0.71 88.1
provides sufficient and
appropriate information
regarding the students’
academic progress
The institution faculty 53.9 36.6 8.2 0.9 0.4 4.43 0.72 88.5
employs various
instructional methods and
strategies to meet the
students’ needs
Educational support is a 65.1 30.6 3.9 0.4 0.0 4.60 0.59 92.1
key factor in the student’s
educational success and
to ensure quality of
education
The institute provides 46.6 34.9 15.5 1.3 1.7 4.23 0.88 84.7
support of professional
development for
pedagogy (pedagogical
tools, instructors
behaviors and attitudes)
My institute offers 47.8 33.2 11.6 3.4 3.9 4.18 1.03 83.5
adequate access to
up-to-date computers and
technologies
My institute ensures 49.1 37.1 10.8 0.4 2.6 4.30 0.87 85.9
quality in structuring its
programs designs (by
benchmarking and
providing up-to-date
programs)
Maintaining quality of 56.5 35.3 6.9 0.9 0.4 4.47 0.70 89.3
business education
ensures the achievement
of knowledge, skills, and
experience required for
the labor market

The second question examined if “the course instructor provides sufficient and
appropriate information regarding the students’ academic progress” (mean μ = 4.405
and std. deviation < 1). The majority either strongly agreed (51.3%) or agreed
368 A. A. A. Alromaihi et al.

(40.1%). Participants who were neutral represented 6.9%, those who disagreed
were 1.3%, and those who strongly disagreed were 0.4%. The mean μ = 4.405 and
standard deviation = 0.7145 < 1. The overall percentage of this indicator is 88.1%;
therefore, it is a positive result since it is more than 60% (Balogh et al., 2001).
The third question raised the point if “the Institution faculty employs various
instructional methods and strategies to meet the students’ needs” (mean μ = 4.427
and std. deviation < 1). The majority either strongly agreed (53.9%) or agreed
(36.6%). Participants who were neutral formed 8.2%, followed by those who
disagreed 0.9% and those who strongly disagreed 0.4%. The mean μ = 4.427 and
standard deviation = 0.7170 < 1. The overall percentage of this indicator is 88.5%;
therefore, it is a positive result since it is more than 60% (Balogh et al., 2001).
The fourth question pertains to whether “educational support is a key factor in
the student’s educational success and to ensure quality of education” (mean
μ = 4.603 and std. deviation < 1). The majority either strongly agreed (65.1%) or
agreed (30.6%). Participants who chose to be neutral were 3.9%, those who
disagreed were 0.4%, and those who strongly disagreed were 0%. The mean
μ = 4.603 and standard deviation = 0.5867 < 1. The overall percentage of this
indicator is 92.1%; therefore, it is a positive result since it is more than 60% (Balogh
et al., 2001).
The fifth question reviewed if “the institute provides support of professional
development for pedagogy (pedagogical tools, instructors behaviors and attitudes)”
(mean μ = 4.233 and std. deviation < 1). The majority either strongly agreed (46.6%)
or agreed (34.9%), while 15.5% were neutral. Participants who disagreed were
1.3%, and 1.7% strongly disagreed. The mean μ = 4.233 and standard
deviation = 0.0.8813 < 1. The overall percentage of this indicator is 84.7%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The sixth question intended to assess whether “my institute offers adequate
access to up-to-date computers and technologies” (mean μ = 4.177 and std.
deviation > 1). The majority either strongly agreed (47.6%) or agreed (33.2%).
Participants who were neutral were 11.6%, those who disagreed were 3.4%, and
those who strongly disagreed were 3.9%. The mean μ = 4.177 and standard
deviation = 1.0272 > 1. The overall percentage of this indicator is 83.5%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
The seventh question wondered if “my institute ensures quality in structuring its
programs designs (by benchmarking and providing up-to-date programs)” (mean
μ = 4.177 and std. deviation < 1). The majority either strongly agreed (49.1%) or
agreed (37.1%). Participants who were neutral totaled 10.8%, those who disagreed
were 0.4%, and those who strongly disagreed were 2.6%. The mean μ = 4.181 and
standard deviation = 0.8741 < 1. The overall percentage of this indicator is 85.9%;
therefore, it is a positive result since it is more than 60% (Balogh et al., 2001).
Finally, the last question addressed the understanding that “maintaining quality
of business education ensures the achievement of knowledge, skills and experience
required for the labor market” (mean μ = 4.466 and std. deviation < 1). Most
participants either strongly agreed (56.5%) or agreed (35.3%). Participants who
were neutral represented 6.9%, those who disagreed were 0.9%, and those who
Digitizing Business Education and Quality of Education: A Survey 369

strongly disagreed were 0.4%. The mean μ = 4.466 and standard

deviation = 0.7016 < 1. The overall percentage of this indicator is 89.3%; therefore,
it is a positive result since it is more than 60% (Balogh et al., 2001).
It is obvious from most respondents that their HEIs take several measures to
maintain the quality of education. These measures include following a consistent
discipline by course instructors that enhances the educational process, providing
information to students about their academic progress, offering support for
professional development, and the adoption of various strategies to meet the
student’s needs. The results of the respondents are in line with their responses for
the first independent variable “Learning Management Systems,” as respondents
affirmed that their HEIs offer adequate access to up-to-date computers and
technologies that will result in better quality assurance and enhanced learning
outcomes. Most of the responses strongly agreed and agreed to the statement that
their HEIs ensure quality in structuring their programs design. This is accomplished
by providing relevant, up-to-date programs and by benchmarking their programs
with international HEIs. To end, participants assured that quality assurance of
business education ensures the achievement of knowledge, skills and experience
that is required for the labor market.

10 Conclusion

Indicators of the quality of education have been a focus for many researchers for a
long period of time (Al Dhaen, 2021; Agrawal & Mittal, 2018). Due to the novel
pandemic, HEIs were forced to shift from traditional to digital education, rendering
digital education vital for the continuation of the educational process. Many stu-
dents have joined HEI to continue either undergraduate or postgraduate programs.
As a result, a large number of students have graduated or are expected to do so soon.
Subsequently, those students will be returning to their places of employment and are
expected to reflect on the skills they gained during their college years and studies.
The reflection of skills acquired during college cannot be assured unless the
quality of education is assured. Therefore, a question arises whether the quality and
learning outcomes of the courses were at the same levels as pre-pandemic. The
underlying reason for questioning the quality of education was that the pandemic
forced HEIs to adopt digital education via technology integration within a short
period of time making the shift sudden for HEIs. Therefore, the role of international
accreditation bodies is vital as it is being tasked with monitoring the quality of
education after the shift to digital education, maintaining its quality pre-pandemic,
and providing full support to HEIs to overcome challenges accompanied with
ensuring quality in digital learning.
The quantitative finding of this research emphasizes the significance of the fac-
tors that impact the quality of business education. After performing simple regres-
sion analysis to the IVs, the findings indicated that LMS was the most important
factor that influenced the quality of education among the other two IVs followed by
370 A. A. A. Alromaihi et al.

the interaction with students and then assessment of students. To also measure the
impact of the MV, “the role of international accreditation bodies” was incorporated
in the formula. The findings showed that the MV enhances the results of the simple
regression analysis performed. The findings also highlighted the challenges accom-
panied with achieving the accredited status by HEIs from international accreditation
bodies. Furthermore, it demonstrated the perception of the faculty with respect to
digitizing business education and the role of international accreditation bodies.

References

Agrawal, A. K., & Mittal, G. K. (2018). The role of ICT in higher education for the 21st cen-
tury: ICT as a change agent for education. Multidisciplinary Higher Education, Research,
Dynamics & Concepts: Opportunities & Challenges For Sustainable Development (ISBN
978-93-87662-12-4), 1(1), 76–83.
Al Dhaen, E. S. (2021). The use of information management towards strategic decision effec-
tiveness in higher education institutions in the context of Bahrain. The Bottom Line, 34(2),
143–169. [Link]
Alhalwachi, L. F., Karam, A., & Hamdan, A. (2022). The Government support in distance education:
Case of Bahrain. In: Hamdan, A., Hassanien, A. E., Mescon, T., Alareeni, B. (eds) Technologies,
Artificial Intelligence and the Future of Learning Post-COVID-19. Studies in Computational
Intelligence, 1019. Springer, Cham. [Link]
Alromaihi, A. A., & Hamdan, A. (2022). The impact of Digitizing Business Education on the
Quality of Education During COVID-19 Pandemic: The Role of International Accreditation
Bodies. In: Hamdan, A., Harraf, A., Arora, P., Alareeni, B., Khamis Hamdan, R. (eds) Future
of Organizations and Work After the 4th Industrial Revolution. Studies in Computational
Intelligence, 1037. Springer, Cham. [Link]
Alshurafat, H., Al Shbail, M.O., & Mansour, E. (2021). “Strengths and weaknesses of forensic
accounting: an implication on the socio-economic development”. Journal of Business and
Socio-economic Development, 1(2), 135–148. [Link]
Balogh, I., Ørbaek, P., Winkel, J., Nordander, C., Ohlsson, K., Ektor-Andersen, J., & Malmo
Shoulder-Neck Study Group. (2001). Questionnaire-based mechanical exposure indices for
large population studies—reliability, internal consistency and predictive validity. Scandinavian
Journal of Work, Environment & Health, 27, 41–48.
Blitz, A. (2020). Corporate life and death: Who succumbs, who survives during disruption?
Journal of Business Strategy, 41(6), 11–17. [Link]
Bolliger, D. U. (2004). Key factors for determining student satisfaction in online courses.
International Journal on E-learning, 3(1), 61–67.
Bolliger, D. U., & Wasilik, O. (2009). Factors influencing faculty satisfaction with online teaching
and learning in higher education. Distance Education, 30(1), 103–116.
Cheon, S. H., Reeve, J., & Vansteenkiste, M. (2020). When teachers learn how to provide classroom
structure in an autonomy-supportive way: Benefits to teachers and their students. Teaching and
Teacher Education, 90, 103004.
Cuadrado-García, M., Ruiz-Molina, M. E., & Montoro-Pons, J. D. (2010). Are there gender dif-
ferences in e-learning use and assessment? Evidence from an interuniversity online project in
Europe. Procedia-Social and Behavioral Sciences, 2(2), 367–371.
Cura, F., & Ahmed Alani, T. (2018). Accreditation effect on quality of education at business
schools. International Journal of Social Sciences & Educational Studies, 4(5), 71–82.
Digitizing Business Education and Quality of Education: A Survey 371

Fishman, B., Konstantopoulos, S., Kubitskey, B. W., Vath, R., Park, G., Johnson, H., & Edelson,
D. C. (2013). Comparing the impact of online and face-to-face professional development in the
context of curriculum implementation. Journal of Teacher Education, 64(5), 426–438.
Gómez-Rey, P., Barbera, E., & Fernández-Navarro, F. (2016). Measuring teachers and learners’
perceptions of the quality of their online learning experience. Distance Education, 37(2),
146–163.
Hamdan, A., Sarea, A., Khamis, R., & Anasweh M. (2020). A causality analysis of the link between
higher education and economic development: empirical evidence. Heliyon, 6(6), 40–46.
Hamdan, A., & Hamdan, R. (2020). The mediating role of oil returns in relationship between
investment in highereducation and economic growth: Evidence from Saudi Arabia. Economics
and Sociology, 13(1), 116–131. [Link]
Hsu, T. C. (2017). Learning English with augmented reality: Do learning styles matter? Computers
& Education, 106, 137–149.
Janahi, Y. M., AlDhaen, E., Hamdan, A., & Nureldeen, W. A. (2023). Emerging technologies for
digitalized learning in higher education. Development and Learning in Organizations, Vol.
ahead-of-print No. ahead-of-print. [Link]
Klašnja-Milićević, A., Vesin, B., Ivanović, M., & Budimac, Z. (2011). E-Learning personaliza-
tion based on hybrid recommendation strategy and learning style identification. Computers &
Education, 56(3), 885–899.
Kurucay, M., & Inan, F. A. (2017). Examining the effects of learner-learner interactions on satis-
faction and learning in an online undergraduate course. Computers & Education, 115, 20–37.
Latip, M. S. A., Newaz, F. T., & Ramasamy, R. (2020). Students’ perception of lecturers’ compe-
tency and the effect on institution loyalty: The mediating role of students’ satisfaction. Asian
Journal of University Education, 16(2), 183–195.
Lim, C. K., Haufiku, M. S., Tan, K. L., Farid Ahmed, M., Ng, T. F. (2022). Systematic review of
education sustainable development in higher education institutions. Sustainability, 14, 13241.
[Link]
Mishra, A., & Jha, A. (2019). Quality assessment of sarbottam cement of Nepal. International
Journal of Operations Management and Services, 9(1), 1–22.
Nawaz, A., & Kundi, G. M. (2010). Sustained technical support: Issue and prospects for E-Learning
in HEIs. Malaysian Journal of Distance Education, 12(2), 1–18.
Peixoto, H. M., Peixoto, M. M., & Alves, E. D. (2012). Learning strategies used by undergraduate
and postgraduate students in hybrid courses in the area of health. Revista Latino-Americana de
Enfermagem, 20, 551–558.
Rienties, B., & Toetenel, L. (2016). The impact of learning design on student behaviour, satis-
faction andperformance: A cross-institutional comparison across 151 modules. Computers in
Human Behavior, 60, 333–341. [Link]
Sen, S. (2021). Quality and accreditation metrics: Examining the relevance in COVID and post-
COVID scenarios. SSRN Electronic Journal. Available at SSRN 3874427.
Sun, P. H., & Lee, S. Y. (2020). The importance and challenges of outcome-based education–a case
study in a private higher education institution. Malaysian Journal of Learning and Instruction,
17(2), 253–278.
Thomas, A., Antony, J., Haven-Tang, C., Francis, M., & Fisher, R. (2017). Implementing Lean
Six Sigma into curriculum design and delivery–a case study in higher education. International
Journal of Productivity and Performance Management, 66(5), 25–39.
Digital Sustainability for Business
Education: Literature Review

Esra AlDhaen

1 Introduction

During global crisis higher education institutions (HEIs) faced a tremendous chal-
lenge to survive in terms of delivery, recruitment of new students and intellectual
operations. Most HEIs globally reacted to the crisis by using digital tools in order to
continue performing. In some cases, the utilization of digital tools was a learning
curve for the faculty members specifically while delivering online courses and
described as Do it Yourself (DIY) method (Abad-Segura et al., 2020). Several HEIs
did not utilize digitalization prior to the COVID-19 pandemic which is a step prior
to digital transformation, and hence with the COVID-19 pandemic a radical change
took place to all HEIs in terms of academic delivery and administrative operations
(El Hilali et al., 2020). Innovative models towards digital transformation in HEI
context were proposed by researchers, for instance Rof et al. (2020) emphasized
that digital transformation is beyond digitalization of specific aspects such as aca-
demic operations, and digital transformation should be considered at an institution-
alized level covering digitalization of processes in academic and non-academic,
connectivity, data-informed decisions, and digital innovation. There have been sev-
eral assumptions by HEIs towards resisting digital transformation, for instance
Kopp et al. (2019) stated that HEIs assume that digitalization is costly and exceeds
their budget without any return in terms of change. On the other hand various stud-
ies were conducted to investigate the effectiveness of digitalization in terms of vir-
tual learning and assessment (Deev et al., 2021) alongside several academic
standards which were established to support HEI adaptation for virtual delivery and

E. AlDhaen (*)
Management, Marketing and Information Systems Department, College of Business and
Finance, Ahlia University, Manama, Bahrain
e-mail: esaldhaen@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 373
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
374 E. AlDhaen

sustainability (UNESCO, 2021). Although HEIs have taken initiatives towards

digitalization, the initiatives are focused on academic delivery and covering the
overall operations of HEIs. In this context, a research study by Guandalini (2022)
argued sustainability could be achieved through digital transformation by setting a
clear strategy covering different aspects such as policy, procedures, process and
owners to be digitalized and used for reporting and decision making. The definition
of digital transformation is not yet well-defined and consistent in HEIs as there is a
clear overlap between the terminology used “digitalization” and “digital transfor-
mation”. For instance Gartner (2021) defined digitalization as the use of digital
tools and techniques towards activating some processes that could lead to digital
business. In similar context Hanelt et al. (2020) defined digital transformation as an
organizational transformation that covers a clear strategy for implementation which
could lead to innovation. In this context, Guandalini (2022) argued that there is a
clear relationship between sustainability and digitalization. However, Del Río
Castro et al. (2021) argued that the definition of sustainability has lost its identity
with various views, whereas Caputo et al. (2021) stated that sustainability definition
is hard to define as it includes multidisciplinary and other behavioural and influenc-
ing socio-economic organizations. This paper argues that business schools and
HEIs must consider digital sustainability in order to contribute to the United Nations
Sustainable Development Goals (UNSDGs) specifically for business education as it
produces graduates that are serving the economic growth directly.

2 Business Education Overview

According to Charroin et al. (2022) business schools worldwide need to change in

order to sustain and create a positive impact to the world. Business schools must
reconsider its vision and focus on different methods of teaching and delivery, and
emphasis on interdisciplinary academic delivery and research and frugal innovation
was highlighted. In similar context, Bryant et al. (2022) stated that business schools
are facing unprecedented challenges specifically from external stakeholders as the
market demand is dynamically changing; therefore, business schools must consider
a serious transformation in order to produce top-notch graduates to serve the soci-
ety. International accreditation standards are used as a driver towards the change.
Dudley and Cairney (2021) stated that although business schools were able to per-
form during the pandemic, it is time that business educations rethink of its vision
and strategy to address global challenges and societal needs. Business schools were
described as a hub for change and innovation, and therefore, business schools must
consider digitalization for sustainability from multiple aspects related to the three
core functions: teaching, research and societal engagement. Association to Advance
Collegiate Schools of Business (AACSB) revised the Accreditation Standards in
2020 with inclusion of various dimensions including the use of ICT and digitaliza-
tion as part of teaching and learning. With consideration of sustainability as often
considered as part of academic curricular in HEIs, several research papers
Digital Sustainability for Business Education: Literature Review 375

investigated the need of integrating specific competencies as part of academic cur-

ricular to support producing graduates serving the society—competencies related to
research and business ethical standards. For instance, Peterlin et al. (2018) high-
lighted the need to develop a strategic process that is aligned with the business
schools’ vision towards integrating specific competencies to support sustainability.
Research papers investigated integrating sustainably through specific competence
within the academic curricular; however, most of research papers are restricted to
academic delivery and linkage of UNSDGs to curricular and does not cover finan-
cial risk or HEI effectiveness sustainability (Abad-Segura et al., 2020).
The following section will describe the research methodology and data analysis,
followed by a systematic literature review related to the digital use of ICT in busi-
ness education and integrating sustainability in business education, which leads to
the originality of this paper introducing digital sustainability strategies for business
education. This paper aims to provide strategies for implementing digital sustain-
ability for business education which is beyond integrating ICT in curricular, and the
discussion and conclusion will provide an insight on how to set a strategy to imple-
ment digital sustainability through mission-driven approach and holistic engage-
ment. The findings of this paper will also provide future recommendations that
could be practically applied by leaders of business schools and policy makers as
well as scholars.

3 Research Methodology and Data Analysis

This paper is developed based on the systematic literature review analysis to build a
research case to be investigated by other scholars. This research is conducted by
structuring the literature review in the area digital sustainability for business educa-
tion with creating synthesis that could be used as a written case for authors to review
and utilize towards future investigation. According to Patten and Newhart (2017)
that creating research synthesis based on a structural literature review is a core basis
for research investigation. Therefore, this research used specific keywords in line
with Saunders and Lewis (2017) method as part of the systematic review including
digital transformation, digitalization, digital sustainability, sustainability, sustain-
able development, business education, and impact. The keywords enabled to create
an overview on the status in relation to digital transformation in business education
and propose a new framework “digital sustainability” that could be considered by
business schools specifically those seeking international accreditation. The litera-
ture review was carefully analysed to propose an overview of the digital use in busi-
ness education and defines the difference between terminologies including digital
transformation and digitalization, followed by the status of integrating sustainabil-
ity in business education. The proposed framework proposes developing a holistic
framework that is derived by mission-driven strategies and decision-making pro-
cesses. The systematic reviews defined major factors that could be contributing to
digital sustainability framework. This research provided a definition of each factor
that could be utilized while future investigating the framework.
376 E. AlDhaen

4 Digital Use of ICT in Business Education

Business education has attracted several researchers, and several research papers
share the experience of using digitalization in different aspects. According to
Krishnamurthy (2020) the future of the business schools is to create an impact to the
society and hence there is a need to transform the university by using ICT and arti-
ficial intelligence to multiple operational aspects as well as student support issues in
order to lead to the transformation of business schools.
The use of ICT in business education was recommended by multiple researchers
for instance Umoru and Okereke (2016) highlighted that business schools must
invest in the use of digital teaching and learning to ensure that the graduates are
equipped with innovative competencies. Furthermore, the use of e-learning in busi-
ness education was investigated by Sandybayev (2020) and concluded that e-learning
creates a positive impact in terms of education; however, leaders of business schools
must set a clear strategy to apply e-learning and motivate the faculty to ensure that
regular faculty development sessions are planned.
In addition, several research studies have been calling for the rethinking of the
academic curricular of business education. According to Cahapay (2020) there is a
serious need to rethink the academic curricular of business education post-
COVID-19 covering a set of competencies including the use of ICT. The revision
needs to consider innovative teaching methods and tools.
Business education had a rapid change after the COVID-19 pandemic, and sev-
eral research papers called for developing clear quality assurance standards for vir-
tual learning to maintain quality business education (Gidado & Daramola, 2022). In
similar context, Al Dhaen et al. (2022) highlighted the need that leaders of business
schools must utilize the practice of COVID-19 and establish clear policies and pro-
cedures to sustain quality education. Although several successful practices of virtual
learning were investigated, the case of low-income countries such as Nigeria faced
a tremendous challenge in the use of ICT or digital education as it lacks several
built-in infrastructures at the school level as well as lack of financial support for the
students and faculty (Nwabufo & Nuhu, 2022). Therefore, calls for measuring the
effectiveness of digital use in business education were questioned although it is a
requirement.
It is evident that business schools require using ICT and digitalization for busi-
ness education; to support producing graduates with innovative skills, business
schools seeking international accreditation such as AACSB must rethink its mission
in consultation with relevant stakeholders and consider automation of operations
leading to the actual impact (Cortes, 2022). According to Qian (2019) business
schools seeking international accreditation need to develop a mechanism at strategic
level to ensure that the mission is implemented, and the use of digitalization could
support measuring the extent of implementation and impact (Table 1).
Digital Sustainability for Business Education: Literature Review 377

Table 1 Summary of research papers related to digital use in business education

Authors Year Journal Main key findings
Krishnamurthy 2020 Journal of Business There is a need for digital transformation
Research for business schools
Sandybayev 2020 International Journal of Integration of e-learning in business
Research in Tourism and education and digitalization leads to
Hospitality (IJRTH) innovation
Cahapay 2020 Aquademia The use of digital tools as teaching
methods for business education allows
creativity and sustainability
Gidado and 2022 International Journal of The use of ICT and digital tools is
Daramola Education (KIJE) important for business education to build
the competence; however quality assurance
standards are required

5 Integration of Sustainability in Business Education

According to Edwards et al. (2020) business education curricular should be recon-

sidered with an integration of sustainability-related competence and defined ethics,
engagement and creativity. In this regard, Edwards et al. (2020) stated that curricu-
lum should be designed at three stages to achieve sustainable outcome starting with
multidisciplinary, interdisciplinary and multidisciplinary moving towards transdis-
ciplinary. In similar context, Junn and Moon (2021) investigated the integration of
sustainability related to business education in Korea, and the study concluded that
business schools must ensure that sustainability-related courses should be integrated
at different levels across the learning, starting with introductory (theoretical courses)
at the first and second year of learning and more in-depth courses (practical and
outcome based) at the third and fourth year.
Researchers have been calling for sustainability prior to COVID-19; however,
business schools have actively engaged in sustainability after the COVID-19 pan-
demic and various United Nations campaigns. For instance, Barber et al. (2014)
stated that one of the methods to include sustainability as part of business education
curricular is to engage internal and external stakeholders in different projects serv-
ing the society and highlighted that business school leaders should pave the way
with industries and be proactive in establishing multidisciplinary projects to serve
the society and economic growth. AACSB considers internal and external stake-
holders’ engagement as part of the accreditation process; in 2020 AACSB revised
its standards to include a new standard related to engagement and societal impact.
International accreditation such as AACSB could be a driver to integration of sus-
tainability in business education (AlDhaen et al., 2022); however, as identified by
Barber et al. (2014), external stakeholders such as employers must be satisfied with
the future graduates as they must be equipped with different skills beyond business
such as ICT, digital use of specific software and research ethics.
In terms of business disciplines accounting and finance attracted researchers in
terms of integrating sustainability. For instance Mburayi and Wall (2018) stated that
378 E. AlDhaen

accounting and finance differ from management-related academic curricular, and

therefore, there are specific skills and competence required in order to ensure that
the graduates are produced with sustainable outcomes. These include the use of
specific digital software that generate sustainable reporting and auditing such as
Bloomberg. Furthermore, Craig et al. (2021) investigated the co-relation of STEM
(science, technology, engineering and mathematics) learning in order to procedure
graduate with sustainable outcomes. The findings of the study revealed that STEM
competencies have a positive impact on sustainable outcomes as it covers multidis-
ciplinary skills.
Researchers argued that aligning the curricular to sustainability through integra-
tion of specific competencies and skills including ICT and digital software is vital;
however, there is a need to have a clear quality assurance standard in order to ensure
it is appropriately delivered and not superficially aligned (Junn & Moon, 2021). In
this regard, business schools seeking accreditation must ensure that it is aligned to
its mission to accelerate innovation and impact.
In similar context, Painter-Morland et al. (2016) argued that integrating sustain-
ability is beyond curricula integration and proposed a model of ‘Systemic
Institutional Integration” that covers multiple dimensions beyond curricular such as
leadership, institutional capacity and infrastructure and internal and external
engagement. Considering the status of business schools and the challenge to amplify
societal impact, the argument of Painter-Morland et al. (2016) pertaining to institu-
tional capacity and infrastructure is vital; business schools must invest in various
ICT and digital platforms to foster engagement at both internal level between stu-
dents and faculty and external level with relevant stakeholders. Furthermore,
Bosevska and Kriewaldt (2020) stated that sustainable education should be mission-
driven; therefore, it is beyond curricular changes and it requires to be institutional-
ized across the business schools and linked to different operations.

6 Digital Sustainability Strategies for Business Education

According to Bradley (2007) digital sustainability requires an overall life cycle to

manage the technology and create an impact. Similarly, Krishnamurthy (2020)
stated that the future of business schools is to transform digitally to sustain effective
operations. The argument of Abad-Segura et al. (2020) is that higher education sus-
tainable management should be supported by digital transformation. In this context,
Budihardjo et al. (2021) stated higher education including business schools should
have clear strategies for sustainable management; factors contributing to sustainable
management were identified by Budihardjo et al. (2021) covering teaching and
learning, research, outreach, campus operations and administration. A study inves-
tigated strategies to promote sustainability in higher education; the study concluded
that strategies at higher education should be institutionalized and governed by poli-
cies and procedures that quality assures consist of the implementation of the strate-
gies (Berchin et al., 2017). In this context, Benavides et al. (2020) argued leaders of
Digital Sustainability for Business Education: Literature Review 379

higher education including business schools should rethink their strategies and
organizational structure and consider mission-driven approach as part of holistic
transformation.
A study in higher education institutions in Turkey identified that digital sustain-
ability should be derived by a clear strategic plan driven by a set of objectives that
are aligned with the mission statement of the university (Hakan, 2020). The study
also concluded that external engagement with stakeholders is required in order to
revisit the strategy. Business schools aiming to attract international accreditation
such as AACSB are accountable to reflect their operations in line with the mission
statement and reflect clear impact measures. Therefore, leaders of business schools
must reconsider and restructure their strategies towards digital sustainability cover-
ing different factors that could be vital to create an impact to the society.

7 Digital Sustainability in Strategic Decision Making

in Business Education

According to Schiuma et al. (2022) the use of digitalization allows knowledge visu-
alization and supports effectively strategic decision making. It is argued that data
visualization allows presenting meaningful data leading to inspirational and sustain-
able decision making. In similar context, Stone et al. (2020) argued that the use of
artificial intelligence leads to effective strategic decisions in business sector and
supports sustainable decisions during uncertainty. Furthermore; Nauhaus et al.
(2021) stated that there is a need to reconsider strategic decision making in sync
with digital age and highlighted that during COVID-19 organizations had to take
strategic decisions to cope with the uncertainty. It is argued by Elbanna and Child
(2007) that uncertain decisions could be effective due to other contextual factors
that allow performing rational strategic decisions. However, strategic decisions
formed during uncertainty may be effective to cope with the situation for short term
but not sustainable enough as it is not based on enough knowledge and data presen-
tation (Schiuma et al., 2022).
There have been calls to investigate augmentation concept in strategic decision
making leading to sustainable decisions (Raisch & Krakowski, 2021). Argumentation
concept is calling for interaction between human and machines; this could be inte-
grated through major organizational transformation including revisiting the struc-
ture, authorities, defined processes for retrieving and exchange of knowledge
(Nauhaus et al., 2021). There have been calls for developing new models to investi-
gate the use of digitalization in strategic decision making covering various contex-
tual factors (Nauhaus et al., 2021).
Business schools seeking international accreditation such as AACSB are evalu-
ated on mission-driven approach which requires strategic decision making. In line
with the above-mentioned literature, the use of digitalization towards strategic deci-
sion making is expected to lead to sustainable decisions. Business schools must be
380 E. AlDhaen

the pioneer in establishing digital sustainability models considering a number of

factors leading to impact measures. The following section provides a synopsis of
identified factors that could be investigated as part of the digital sustainability model
of business education.

8 Factors for Digital Sustainability for Business Education

Based on systematic literature review, several factors were identified that contribute
to digital sustainability in higher education and hence business schools. This paper
proposes a development model investigating the following factors as drivers for
digital sustainability.

Identified
factors Definitions Supporting authors
Teaching and Integration of digitalization as part of teaching and Budihardjo et al. (2021),
learning learning, virtual learning and integrating of Dybach (2019)
sustainable development topics
Research The use of digitalization for research, Budihardjo et al. (2021),
interdisciplinary topics related to sustainable Abad-Segura et al.
development, global research trends, research (2020), Guandalini
impact and innovation (2022)
Outreach Engaging in different projects with external Budihardjo et al. (2021),
stakeholders, project serving the society, societal Hakan (2020)
impact
Administration Considering campus management, infrastructure Budihardjo et al. (2021)
efficiency, competitive advantage and digital
innovation used for academic and non-academic
operations
Campus Considering organization sustainability in terms of Budihardjo et al. (2021)
operations business operations, green campus, smart
technology, institutionalized digitalization, staff
satisfaction and engagement
Quality Governance of policies and procedures that quality Dybach (2019), Berchin
assurance assures the integration of digitalization for et al. (2017)
sustainable management
Human Faculty, support staff and leaders of higher Benavides et al. (2020),
resources education institutions are the drivers for digital Abad-Segura et al.
transformation and digital sustainability (2020)
Impact The use of digital measures that assess impact at Lejeune et al. (2019),
measures holistic manner covering economy and society Soltanifar et al. (2021)
Digital Sustainability for Business Education: Literature Review 381

9 Challenges of Digital Sustainability in Business Education

Although digitalization and digital transformation have attracted business schools

and higher education sectors during COVID-19, various challenges are still occur-
ring that require attention by leaders of higher education. According to García-
Peñalvo (2021) faculty resistance towards the digital transformation is a key factor
to reduce the maturity of digital transformation and hence digital sustainability. In
similar context, Brunetti et al. (2020) identified cultural issue as a major challenge
that needs to be carefully considered. Business schools must consider a dynamic
organizational culture that enables dynamic transformation. For instance, Kraus
et al. (2022) stated that organization undergoing digital transformation deals with
dynamic changes and therefore one of the major challenges is to maintain the qual-
ity of the delivered services and the brand name. Sustainable quality education is
one of the key aspirations for business schools seeking international accreditation;
therefore, business schools aiming for digital transformation and sustainability must
develop rigorous policies and procedures that assure equivalent quality is main-
tained. In addition, García-Peñalvo (2021) stated that maintaining ethical standards
and policies is one of the major challenges that could be faced by HEIs including
business schools while considering digitalization and hence digital sustainability
may be challenging as it requires very rigorous procedures to maintain ethical stan-
dards at both academic and non-academic operations. A serious issue was raised by
Weiß et al. (2019): digital transformation should ensure engagement and interac-
tion. This matter becomes more acute in business schools as the graduates must be
equipped with an extensive level of engagement and communication skills.
This study argues that digital sustainability framework is required to ensure that
there is a digital transformation and sustainability to support business education.
However, as stated by García-Peñalvo (2021) HEIs are not yet fully matured in
terms of digital sustainability. Therefore, measuring the extent of effectiveness of
such framework is a challenge itself. The following section will provide an insight
on the way forward for business education, including practical recommendations
that could be carried out by scholars and policy makers.

10 Conclusion and Practical Application

Despite various research conducted in relation to digital transformation, digital sus-

tainability and digitalization is business education. In support to García-Peñalvo
(2021) it is visible that there is a need to ensure a maturity in terms of transforma-
tion in the education sector including business education. The need for digital sus-
tainability becomes more acute in business schools as it requires to be implemented
with a consideration of mission-driven approach (Junn & Moon, 2021). Business
schools are considered the drivers for societal impact and hence they are competing
in attaining international accreditation that is considered as a mechanism towards
382 E. AlDhaen

digital transformation and digital sustainability (Dudley & Cairney, 2021). This
paper proposes to develop a digital sustainability framework that could be applied
in business schools to serve business education considering factors that are related
to academic and non-academic activities; the proposed framework includes factors
related to teaching and learning, research, outreach, administration, campus opera-
tions, quality assurance, human resources and impact measures. This paper con-
ducted a systematic literature review analysis to narrow the more relevant factors
that could be investigated to support digital sustainability in higher education and
business schools. However, along with the factors identified there are other contex-
tual factors that may be identified such as regulatory requirements, cultural issues
and leadership.
Leaders of business schools need to establish a clear foundation to implement
digital sustainability framework; from a practical application angle there is a need
to develop a clear mission-driven approach supported by a set of policies, proce-
dures and ownership with defined responsibilities and authorities (Guandalini, 2022).
Policy makers including regulators need to define clear standards to support
higher education sector to implement digital sustainability framework that covers
ethical standards to maintain the security of data including student records (Nabbosa
& Kaar 2020).
Business schools seeking international accreditation could utilize the outcome of
the digital sustainability framework to generate reports leading to decision making
to support business sustainability. For instance, reporting is frequently required to
support risk assessment; therefore, digital sustainability reporting will allow miti-
gating action and strategic level decision making.

11 Limitation and Future Recommendations

This paper is limited to a systematic review analysis and findings; therefore, it pro-
vides a proposed framework with defined factors that are based on literature review
analysis and cannot be confirmed as it is not yet investigated. Due to lack of matu-
rity of digital transformation in the education sector, digital sustainability in busi-
ness schools may require rigorous actions to expedite the integration of digitalization
considering institutionalized operations.
This paper identified factors that could be considered as part of digital sustain-
ability; however, other moderating factors may be considered such as regulatory
standards, accreditation requirements and cultural issues.
Future investigation could be conducted by applying digital sustainability frame-
work in business schools as a full cycle of implementation and investigate the extent
of usefulness in terms of measuring the overall impact.
Digital Sustainability for Business Education: Literature Review 383

References

Abad-Segura, E., González-Zamar, M. D., Infante-Moro, J. C., & Ruipérez García, G. (2020).
Sustainable management of digital transformation in higher education: Global research trends.
Sustainability, 12(5), 2107.
Al Dhaen, E., Stone, M. D., & Mahmood, M. (2022). Higher education institutional strategies
to sustain quality education: COVID-19 practices and lessons. In Assessing university gover-
nance and policies in relation to the COVID-19 pandemic (pp. 37–48). IGI Global.
Barber, N. A., Wilson, F., Venkatachalam, V., Cleaves, S. M., & Garnham, J. (2014). Integrating
sustainability into business curricula: University of New Hampshire case study. International
Journal of Sustainability in Higher Education, 15(4), 473–493.
Benavides, L. M. C., Tamayo Arias, J. A., Arango Serna, M. D., Branch Bedoya, J. W., & Burgos,
D. (2020). Digital transformation in higher education institutions: A systematic literature
review. Sensors, 20(11), 3291.
Berchin, I. I., dos Santos Grando, V., Marcon, G. A., Corseuil, L., & de Andrade, J. B. S. O. (2017).
Strategies to promote sustainability in higher education institutions: A case study of a fed-
eral institute of higher education in Brazil. International Journal of Sustainability in Higher
Education, 18(7). [Link]
Bosevska, J., & Kriewaldt, J. (2020). Fostering a whole-school approach to sustainability:
Learning from one school’s journey towards sustainable education. International Research in
Geographical and Environmental Education, 29(1), 55–73.
Bradley, K. (2007). Defining digital sustainability. Library Trends, 56(1), 148–163.
Brunetti, F., Matt, D. T., Bonfanti, A., De Longhi, A., Pedrini, G., & Orzes, G. (2020). Digital
transformation challenges: Strategies emerging from a multi-stakeholder approach. The TQM
Journal, 32(4), 697–724.
Bryant, S. M., Cullen, P. G., & Iannarelli, J. E. (2022). A vision for management education: The
AACSB perspective. In The future of management education (pp. 225–243). Routledge.
Budihardjo, M. A., Ramadan, B. S., Putri, S. A., Wahyuningrum, I. F. S., & Muhammad,
F. I. (2021). Towards sustainability in higher-education institutions: Analysis of contributing
factors and appropriate strategies. Sustainability, 13(12), 6562.
Cahapay, M. B. (2020). Rethinking education in the new normal post-COVID-19 era: A curricu-
lum studies perspective. Aquademia, 4(2). [Link]
Caputo, A., Pizzi, S., Pellegrini, M. M., & Dabić, M. (2021). Digitalization and business models:
Where are we going? A science map of the field. Journal of Business Research, 123, 489–501.
Castro, G. D. R., Fernandez, M. C. G., & Colsa, A. U. (2021). Unleashing the convergence amid
digitalization and sustainability towards pursuing the Sustainable Development Goals (SDGs):
A holistic review. Journal of Cleaner Production, 280, 122204.
Charroin, L., Fortin, B., & Villeval, M. C. (2022). Peer effects, self-selection and dishonesty.
Journal of Economic Behavior & Organization, 200, 618–637.
Cortes, J. D. (2022). What is the mission of innovation? arXiv preprint arXiv:2201.07170.
Craig, C. A., Petrun Sayers, E. L., Gilbertz, S., Karam, R., & Feng, S. (2021). The role of
STEM-based sustainability in business and management curricula: Exploring cognitive and
affective outcomes in university students. Journal of Management Education. [Link]
org/10.1177/10525629211056316
Deev, M., Gamidullaeva, L., Finogeev, A., Finogeev, A., & Vasin, S. (2021). The convergence
model of education for sustainability in the transition to digital economy. Sustainability,
13(20), 11441.
Dudley, D., & Cairney, J. (2021). Physical literacy: Answering the call for quality education and
sustainable development. Prospects, 50, 5–11.
Dybach, I. (2019). Institutional aspects of educational quality management in higher educational
establishments. Economics of Development, 18, 33–43.
384 E. AlDhaen

Edwards, M., Brown, P., Benn, S., Bajada, C., Perey, R., Cotton, D., et al. (2020). Developing sus-
tainability learning in business school curricula–productive boundary objects and participatory
processes. Environmental Education Research, 26(2), 253–274.
El Hilali, W., El Manouar, A., & Idrissi, M. A. J. (2020). Reaching sustainability during a digi-
tal transformation: A PLS approach. International Journal of Innovation Science. [Link]
org/10.1108/IJIS-08-2019-0083
Elbanna, S., & Child, J. (2007). Influences on strategic decision effectiveness: Development and
test of an integrative model. Strategic Management Journal, 28, 431–453.
García-Peñalvo, F. J. (2021). Avoiding the dark side of digital transformation in teaching. An insti-
tutional reference framework for eLearning in higher education. Sustainability, 13(4), 2023.
Gartner. (2021). Definition of digitalization—Gartner information technology glossary. Gartner.
[Link]
Gidado, S. D., & Daramola, R. (2022). School supervision and inspection: Strategies for qual-
ity assurance in business education in post covid-19 era. KWASU International Journal of
Education (KIJE), 4(1), 126–133.
Guandalini, I. (2022). Sustainability through digital transformation: A systematic literature review
for research guidance. Journal of Business Research, 148, 456–471.
Hakan, K. Ö. (2020). Digital transformation in higher education: A case study on strategic plans.
Высшее образование в России, 3, 9–23.
Hanelt, A., Bohnsack, R., Marz, D., & Marante, C. A. (2020). A systematic review of the literature
on digital transformation: Insights and implications for strategy and organizational change.
Journal of Management Studies. [Link]
Jun, H., & Moon, S. (2021). An analysis of sustainability integration in business school curricula:
Evidence from Korea. Sustainability, 13(5), 2779.
Kopp, M., Gröblinger, O., & Adams, S. (2019). Five common assumptions that prevent digital
transformation at higher education institutions. INTED2019 Proceedings, 1, 1448–1457.
Kraus, S., Durst, S., Ferreira, J. J., Veiga, P., Kailer, N., & Weinmann, A. (2022). Digital trans-
formation in business and management research: An overview of the current status quo.
International Journal of Information Management, 63, 102466.
Krishnamurthy, S. (2020). The future of business education: A commentary in the shadow of the
Covid-19 pandemic. Journal of Business Research, 117, 1–5.
Lejeune, C., Starkey, K., Kalika, M., & Tempest, S. (2019). The impact of business schools:
Increasing the range of strategic choices. Management International/International
Management/Gestión Internacional, 23(2), 88–98.
Mburayi, L., & Wall, T. (2018). Sustainability in the professional accounting and finance cur-
riculum: An exploration. Higher Education, Skills and Work-Based Learning, 8(4). [Link]
org/10.1108/HESWBL-03-2018-0036
Nabbosa, V., & Kaar, C. (2020, May). Societal and ethical issues of digitalization. In Proceedings
of the 2020 international conference on Big Data in Management (pp. 118–124).
Nauhaus, S., Luger, J., & Raisch, S. (2021). Strategic decision making in the digital age: Expert
sentiment and corporate capital allocation. Journal of Management Studies, 58(7), 1933–1961.
Nwabufo, N. B., & Nuhu, H. U. (2022). Virtual teaching and learning of business education in
post covid-19 era in Nigerian Higher Institutions. Kwasu International Journal of Education
(KIJE), 4(1), 39–50.
Painter-Morland, M., Sabet, E., Molthan-Hill, P., Goworek, H., & de Leeuw, S. (2016). Beyond
the curriculum: Integrating sustainability into business schools. Journal of Business Ethics,
139(4), 737–754.
Patten, M. L., & Newhart, M. (2017). Understanding research methods: An overview of the essen-
tials. Routledge.
Peterlin, J., Dimovski, V., Tvaronavičienė, M., Grah, B., & Kaklauskas, A. (2018). The strategic
process of developing social aspects of sustainability through the vision reflection in business
education. Technological and Economic Development of Economy, 24(4), 1718–1736.
Digital Sustainability for Business Education: Literature Review 385

Qian, C. L. (2019). Research on strategic governance mechanism of mission driven business

schools in AACSB accreditation. In DEStech Transactions on Social Science, Education
and Human Science (AEMS). Proceedings of the 3rd International Conference on Advanced
Education and Management Science, Beijing, China (pp. 288–292).
Raisch, S., & Krakowski, S. (2021). Artificial intelligence and management: The automation-
augmentation paradox. Academy of Management Review, 46, 192–210.
Rof, A., Bikfalvi, A., & Marquès, P. (2020). Digital transformation for business model innovation
in higher education: Overcoming the tensions. Sustainability, 12(12), 4980.
Sandybayev, A. (2020). The impact of e-learning technologies on student’s motivation: Student
centered interaction in business education. International Journal of Research in Tourism and
Hospitality (IJRTH), 6(1), 16–24.
Saunders, M., & Lewis, P. (2017). Doing research in business and management. Pearson.
Schiuma, G., Gavrilova, T., & Carlucci, D. (2022). Guest editorial: Knowledge visualisation for
strategic decision-making in the digital age. Management Decision, 60(4), 885–892.
Soltanifar, M., Hughes, M., & Göcke, L. (2021). Digital entrepreneurship: Impact on business and
society (p. 327). Springer Nature.
Stone, M., Aravopoulou, E., Ekinci, Y., Evans, G., Hobbs, M., Labib, A., et al. (2020). Artificial
intelligence (AI) in strategic marketing decision-making: A research agenda. The Bottom Line,
33(2), 183–200.
Umoru, T. A., & Okereke, E. C. (2016). Utilizing new technologies in the preparation of business
education students for self-reliance. Empowering the 21st century learner, 6, 2.
UNESCO. (2021). [Link]
Weiß, P., Warg, M., & Zolnowski, A. (2019). Building systems of engagement to overcome the
challenges of digital transformation. In Naples service forum.
The Feedback System Based
on Computer-Supported Collaborative
Learning (CSCL) on the Case of Covid-19

Samer Shorman , Mohammad H. Allaymoun ,

and Omer Awad Hag Hamid

1 Introduction

CSCL computer e-learning provided technical means and tools that played a major
role in the development of teaching and learning methods and the opportunity to
improve learning methods that would provide a suitable environment for learners. e
Learning seeks to hold the student responsible for the educational process by devel-
oping their ability to learn and explore. However, there is a need to adopt the
student-centered approach by changing the role of the student to be a sender and not
only recipient of the knowledge (Allaymoun, 2020, 2014).
CSCL is an interactive system of collaborative education that provides learners
with information technologies and depends on an integrated digital environment
that displays courses through electronic networks and provides technical tools for
teaching, guidance, and organizing tests. As well, it provides a collaborative learn-
ing environment, creating virtual groups that are very similar to traditional educa-
tional groups and providing these groups with tools to help exchange information
and review educational materials via multimedia (Miyake, 2007). CSCL focuses on
learning to transfer knowledge and manage educational groups, become a supervi-
sory teacher, and intervene when needed (Stahl & Hakkarainen, 2020). CSCL and
its tools seek to develop the conceptual and learning skills of students and

S. Shorman (*)
Department of Computer Science, Applied Science University, Al Eker, Kingdom of Bahrain
e-mail: [Link]@[Link]
M. H. Allaymoun
College of Administrative and Financial Sciences, Gulf University, Sanad, Bahrain
O. A. H. Hamid
College of Administrative and Financial Sciences, Arab Open University, A’ali, Bahrain

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 387
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
388 S. Shorman et al.

encourage them to explore and manage dialogues to achieve greater self-reliance in

the knowledge exchange (Wise & Schwarz, 2017; Allaymoun & Trausan-
Matu, 2016a).
CSCL chat is the most important tool used to exchange knowledge between stu-
dents. The students are the focus of the educational process. Therefore, CSCL chat
allows students to express their opinions and ideas (Allaymoun & Trausan-Matu,
2016b; Stahl et al., 2006). Nevertheless, there are some obstacles to face in their
communication, including the difficulty of conducting self-assessment by students
to recognize their level of understanding and the absence of the serious attraction of
students’ attention to ensure their interaction to the discussions of their colleagues.
Therefore, this paper seeks to find a solution to overcome such obstacles by devel-
oping the model of a feedback system, which enables students to be updated about
their understanding of particular topics. They receive feedback, and based on it,
they enhance their performance to reach successful educational methods. Hence,
each student seeks to be a successful educator, as well as all listeners pay more
attention to educational dialogues. The reason behind is that the listening students
are subjected to random inquiries that keep them alert to answer and interact with
their peers. Moreover, such an approach holds the student to act as a responsible
educator to exchange knowledge with others.
The instant feedback results during the chat help determine the level of under-
standing of the educator and the level of achievement of learners. It seeks to develop
and review performance and then develop plans to improve such performance. The
system creates a reference point at every discussion, links it to the results of the
feedback, and provides it to teachers through which it assesses the performance of
groups and intervenes when necessary to improve educational groups’
performance.
This study is organized as follows: the current section is the introduction. The
second section is the literature review. Section 3 contains the materials and meth-
ods. Section 4 is the results and discussion. Finally the last section is the conclusion.

2 Literature Review

CSCL is one of the most promising innovations to improve teaching and learning
with the help of modern ICT tools. Likewise, it is considered as one of the most
important areas of computer-supported education, which aims to improve the learn-
ing process, as well as employing group work so that learners can discuss their ideas
and express their views, allowing a process of exchange of ideas and information. It
is also interested in multiple and different perspectives on the subject of learning
(Trausan-Matu et al., 2014).
In general, CSCL contributes to activating student-centered learning; student is
the focus of the learning process, by providing them with the opportunity to use
multiple learning methods, training them in communication skills, and working in
educational groups (Allaymoun, 2018).
The Feedback System Based on Computer-Supported Collaborative Learning… 389

In addition to developing methods of participation and exchange of ideas, it

helps students search for information and explore many new and difficult fields with
the help of educational groups (Cress et al., 2015). On the other hand, it improves
and develops student skills in using supportive technical tools effectively, such as
evaluation, communication, and analysis (Ludvigsen et al., 2016).
CSCL environment contains many different technical applications that aim to
facilitate the collaborative and distributive teaching and learning, such as multime-
dia, experimental simulation, and educational application programs, all of which
are involved in supporting cooperation between students (Stahl, 2017).
One of the most important tools of CSCL environment is the chat option, which
works to create virtual synchronous groups that resemble traditional classrooms,
which allow students to exist virtually simultaneously and in different places and
provide a flexible environment that allows for the conduct of educational dialogues
with ease and effectiveness (Allaymoun & Trausan-Matu, 2015). In addition, the
chat effectively helps develop the individual skills of students in exchanging views
and providing a collaborative learning environment, which guarantees indepen-
dence in the discussion of academic subjects (Allaymoun, 2020). On the other hand,
the cooperative in educational dialogues is to involve all students in a concerted
effort to discuss a study topic or solve a problem together.
Most educational institutions use chat as an effective tool among the e-learning
tools they provide to their students (Zoom, MS Teams, and Moodle Chat), for ease
of achieving an educational cooperative for its students. Online peer feedback is one
of the most promising educational strategies for improving student-learning out-
comes. For example, researchers have shown that peer feedback can improve stu-
dents’ educational levels (Jacques et al., 2021; Jacques et al., 2020; Huisman et al.,
2018; Noroozi & Hatami, 2018).
Feedback is considered as one of the most important methods used in the educa-
tion process, as it depends on the speed and ease of student learning. It has a vital
role in motivating students to learn and contributes to modifying behavior, as well
as the development of their positive attributes (Noroozi & Mulder, 2017; Noroozi
et al., 2016).
On the other hand, the student’s knowledge of his performance level motivates
him to achieve the best by correcting the mistakes that he makes; feedback is not an
advice; it is information about what is being done to reach the desired goal of the
educational process, and accordingly, feedback is a basic process to improve learn-
ing for the students (Valero Haro et al., 2018).
Scientific research has focused on studying the impact of peer feedback used in
e-learning, including research, which studies the effect of feedback in raising the
quality of education, in addition to improving educational methods for students’
users EduTech, and this research proved the superiority of students academically
through receiving feedback (Latifi et al., 2019; Kanetaki et al., 2022).
A digital learning module also supported the peer feedback process to engage
students in an intensified learning process and write about a controversial topic. The
use of peer feedback support guided the student’s in appropriate ways to analyze
learning partners’ arguments about the topic, express agreements/disagreements,
390 S. Shorman et al.

and, when possible, integrate various points of view in their reflection report.
Exchanging diverse and multiple conflicting opinions, analyzing one another argu-
ments, and expressing agreements/disagreements supported with scientific facts,
arguments, logical evidence, and examples were then reflected in the attitudinal
change of students towards the controversial topic of the GMOs from pre-test to
post-test (Noroozi et al., 2019).
There is a lot of research that has created feedback tools that support e-learning,
for instance, Synergy. Synergy comprises tools to support learning activities during
dialogic feedback. These tools incorporate scripting and learning analytics support
to guide learners. Using Synergy as an example, we discuss its importance (Er
et al., 2019).
Feedback on student performance in explaining their topics in a chat, not assess-
ing students about the knowledge obtained. In general, the proposed feedback in
this research is based on a scenario that the student discusses specific information
during the CSCL chat, so he would like to know the opinions of his colleagues about
the way he explained and discussed the topic and get their views, and in addition to
that, he would like to know the level of his performance if it is good or not.
Accordingly, the feedback aims to assess the performance of the students them-
selves to obtain results that help in modifying their way of explaining topics and
improving performance and ensuring that students are attentive and attracted to the
explanation during the conversation (Allaymoun & Shorman, 2022).
The feedback system added to the CSCL chat avoids being critical, judging, or
evaluating, but rather seeks to improve, develop, and review students’ educational
performance in order to increase student satisfaction with their performance and to
build confidence in their educational roles effectively, to reach cooperative learn-
ing groups.
On the other hand, the feedback system helps to introduce the student to his posi-
tion in the educational dialogues. Developing the cooperative spirit and attention in
educational groups, through students knowing in advance that they are exposed to
questions during the dialogue, as well as the evaluation mechanism from the stu-
dents themselves, increases the student’s focus in the chat. Each participant seeks to
communicate knowledge to all participants clearly and finally create a reference
point for each feedback—for the teacher to evaluate the performance of the educa-
tional groups later. Feedback is information related to performance and reflects the
extent of cooperation and students’ understanding of the educational content pre-
sented during a chat (Allaymoun & Shorman, 2022; Al-Shoqran & Shorman, 2021).
The following are three questions that this research seeks to discuss:
• What is the effect of students’ feedback on their performance in educational
discussions?
• What are the effects of feedback from students with increased attention and
focus on cooperative education?
• What are the indirect effects of teachers and e-learning?
The Feedback System Based on Computer-Supported Collaborative Learning… 391

3 Materials and Methods

A study was conducted at GUI, and the number of participants was 20 (sampling +
population) students, first-year students in HR, who study human resources (BUSS
131), and the students were divided randomly into 5 groups; each group contains
four students, and the topics that the students will discuss in advance are software,
hardware, network, and computer. In general, the implementation of the study took
about 5 h and was distributed as follows:
• 10 min to distribute students to groups
• 60 min for each student to study and prepare the topic that has been identified
• 10 min of explanations of the feedback system’s mechanism for all groups (ask
a question, analyze results, and determine tasks)
• 30 min of chat time per group
• 10 min to analyze the results by the teacher, evaluate, and give feedback, 10 min
in some groups that need points of disagreement that the teacher re-explains
The study consists of several phases:
The first phase: Randomly distribute students to educational groups, each group
containing four students, and then each student selects a subject to explain it.
The second phase: Clarify the mechanism and elements of the work of the feedback
system in the chat, how to know the results, and what options will be decided,
such as whether to continue if it is a satisfactory result or replay if it is an unsat-
isfactory result, or request for a system point to give a signal to the teacher in
order to re-explain or clarify the point of disagreement.
The third phase: After completing a chat, the teacher gets a report showing the
results, through which the teacher can evaluate the educational groups, in addi-
tion to clarifying and re-explaining the points of disagreement that the student
could not explain.
The chat tool on the Moodle website ([Link] allows
simultaneous text-based conversations in real time and allows saving chat sessions
and allows everyone to view the dialogue records for all groups; the screen shows
the names of the students within the group and the timing of the dialogues. The
feedback system button during the conversation consists of one question (Did you
understand what I explained?). The answers include multiple options (strongly
understood, understood, I do not understand, point system) and be in the form of the
chat screen; in the end, the chat tool shows results in the form of statistical tables, as
well as results for a chat group, for the results of all dialogues.
This Moodle is an educational platform offered by Gulf University for e-learning,
which contains a chat tool, and the chat tool has been modified to suit our research
by adding a feedback system. The new addition is a button that appears in a chat,
through which the student clicks on it if he wants to ask for feedback from his col-
leagues regarding the part that he explained during the chat. A screen appears that
contains a question (Did you understand what I explained?), and a message appears
392 S. Shorman et al.

Fig. 1 Feedback question screen

in front of students, and the answer is in the form of emoji (strongly understood,
understood, I do not understand, point system) (Sun et al., 2019). Emoji is a more
enjoyable feedback (studies indicate that emoji increases students’ awareness of the
emotional state and it is used to distinguish simple cognitive notes attractively and
is more interactive than the option of the check box) (Using and Perceiving Emoji
in Design Peer Feedback) (Noroozi et al., 2019; Er et al., 2019). In addition, the
answer time is limited to 5 s, which is enough time for students to answer a ques-
tion. Then, it shows the feedback results in front of the student to decide whether to
continue the chat or repeat what was explained in a better way (Fig. 1).
As it is noted a simple question reflects the extent to which students understand
the explanation of their colleague and determines whether the educational method
of knowledge delivery is successful. A series of meetings were held with experts in
educational sciences to determine a question and answer in order to fit the objectives
of the research. In conclusion, each student seeks to be active and effective to prove
its ability to deliver knowledge. Moreover, students bear the responsibility for their
understanding of the topics at hand, and the teacher’s role is supervisory and he/she
only intervenes when needed. This is what the CSCL environment seeks in creating
effective educational groups in which the student is the main focus of knowledge
transfer (Allaymoun, 2020; Shorman, 2019).
Reports in the form of statistical tables and graphics make it easy for teachers to
track student dialogues, as well as self-assessment of student performance in educa-
tional groups. On the other hand, the point system is any points that the student
could not explain or be understood by the rest of the students, which need direct
intervention by the teacher to re-explain it. Through these results, the teacher can
infer and evaluate students’ behavior within the chat.
The Feedback System Based on Computer-Supported Collaborative Learning… 393

4 Results and Discussion

1. What are the effects of students’ feedback on their performance in educational

discussions?
Through studying the level of students’ focus and attention in the dialogue
sessions, students are exposed to questions during their dialogue, reflecting on
their performance and providing the best possible way to explain and deliver
knowledge to their colleagues. Hence, the data is analyzed, and the student’s
behavior is monitored within the chat groups that use the feedback system.
Feedback is a reference point for measuring students’ self-performance. It has
become a qualitative addition to learning conversations to stimulate students’
educational behavior within groups so that an increase in cooperative and inter-
active behavior has been observed.
Figure 2 shows the steps of the student’s request to provide feedback on his
performance inside the chat. By obtaining the results that reflect the students’
performance, every student tries to transfer knowledge to his colleagues in an
appropriate manner. The reason for this is that the student is exposed to evaluat-
ing his performance, in addition to knowing the opinions of his colleagues on his
performance. The feedback system allows us to obtain answers with three
options; the first option is that the result is positive, which indicates that all stu-
dents understood the method of explanation and the knowledge delivered. The
second option is for when the result is negative, meaning that most of the stu-
dents did not understand the point that the student requested feedback, so here it
is an option for a student to try to communicate knowledge in another way and
in a better way. The last option is a point system, meaning that the student tries
to convey knowledge more than once, but most students cannot understand it;
hence, the teacher is asked later to intervene and re-explain it.
2. What are the effects of feedback from students with increased attention and
focus on cooperative education?

Fig. 2 The steps of the student’s request to provide feedback

394 S. Shorman et al.

Accordingly, each student becomes responsible for delivering knowledge that

suits his abilities, so he is responsible for his performance. Also, the recipient
students are responsible for understanding the topic being discussed. It has been
observed that students have increased attention in chat groups because they are
more likely to evaluate their performance within the group. As a result, the feed-
back system in the CSCL chat achieved the goal of raising students’ level of
attention within groups.
On the other hand, the feedback results help students feel included in the
dialogues, increase their sense of satisfaction with themselves, and motivate
them to persevere and develop their performance. The main goal of instant feed-
back is to constantly check students’ understanding while maintaining their
attention and participation in the chat.
3. What are the indirect effects of teachers and e-learning?
The feedback system provides results that can be analyzed and knowledgeable of stu-
dents’ behavior within CSCL chat groups and provides these results to the teachers to
evaluate the performance of groups, review students’ behavior during their conversa-
tions, as well as intervene in the event of point system, to re-explain or develop plans to
improve students’ performance. We will try to discuss the results in two cases, firstly by
reviewing the results for students within the group and secondly by reviewing the results
for all groups.

Table 1 and Fig. 3 show the results of group 3, which shows some data on student
dialogues, such as how many feedback requests, their results, how much re-
explanation, and points of the system. The teacher can evaluate the behavior of the
students, provide feedback, and redirect students regarding the improvement of
teaching methods.
The table indicates that the third student was the student with highest results, and
this indicated that his method and method of delivering knowledge were excellent,
unlike Student 1 who showed low results and how much he re-explained. Hence, the

Table 1 The results of group 3

Chat Result
Strongly I do not Point Feedback
Chat Feedback understood Understood understand system no./chat
Group 3 no. no. (4) (3) (2) (1) no. Rating
Hussain 52 12 1 1 3 7 0.23 20
(participant 1)
Bader 66 32 6 19 2 5 0.48 90
(participant 2)
Mohamed 87 48 22 17 8 1 0.55 156
(participant 3)
Suhair 72 37 10 20 6 1 0.51 113
(participant 4)
Total 277 129 39 57 19 14
Result/feedback 0.30 0.44 0.15 0.11
no.
Feedback 0.47
no./chat no.
The Feedback System Based on Computer-Supported Collaborative Learning… 395

Group 3
25
FeedBack No 20
15
10 Strongly understood (4)
5 understood (3)
0
I do not understand (2)
point system (1)

Student

Fig. 3 The results of group 3

Table 2 The results of all groups

Chat Result
Strongly I do not Point Feedback
Chat Feedback understood Understood understand system no./chat
no. no. (4) (3) (2) (1) no.
Group 1 240 137 20 80 25 12 0.57
Group 2 189 32 4 19 2 7 0.17
Group 3 277 129 39 57 19 14 0.47
Group 4 120 71 0 11 20 40 0.59
Group 5 221 118 18 58 23 19 0.53
Total 1047 487 81 225 89 92
Feedback 0.47
no./chat no.
Result/feedback 0.17 0.46 0.18 0.19
no.

teacher can focus on that student, and re-explain what he explained because it shows
his inability to communicate knowledge to his colleagues. There are several possi-
bilities that Student 1 did not understand the topic or did not have an educational
method to present his ideas. As well the table also inferred points of the system and
their location in a chat, which makes it easier for the teacher to follow the students’
conversations and to know the places of lack of understanding and maybe the defect
of the way of delivery of knowledge or lack of absorption of the recipients.
Accordingly, the teacher after obtaining a report re-explains the points of the sys-
tem, for example, there are six points of contention, and the teacher later re-
explains it.
Table 2 and Fig. 4 show all groups’ results after the chat is over, such as how
much feedback, answers, and points of the system. Also, through the table, the
teacher can evaluate the performance of the groups. For example, in group no. 1,
most of the students got high results for feedback and fewer points of the system,
and through this result, it is inferred that this group is more effective and cooperative
396 S. Shorman et al.

100

80
Strongly understood (4)
60
understood (3)
40 I do not understand (2)
20 point system (1)

0
Group 1 Group 2 Group 3 Group 4 Group 5

Fig. 4 The results of all groups

in the delivery of knowledge—unlike group 4, which as observed from the results,

a request for re-explanation and points of the system is more than the rest of the
groups. This indicates that the group is not homogeneous and that there is a weak-
ness the teacher must intervene to improve their performance. As for groups of 4
and 2, their results are close, and that this is the normal rate for educational groups,
and the results are average, and points of the system are acceptable.
On the other hand, the teacher can evaluate all educational groups easily and
effectively, by analyzing the results of the feedback system, which helps to motivate
students to cooperate and express their opinions on the topics for discussion, in
addition to enhancing their confidence in managing the educational dialogues with
high skill and enhancing their self-confidence to manage educational dialogues with
high skill. As well, the teacher re-manages the educational groups to reach effective
and cooperative groups.
It is important to have a clear mechanism for the development of chat to serve
e-learning; the results of the analysis of the chat of educational groups at the end of
the sessions provide feedback to the teacher.

5 Conclusions

This paper reviews a new method to develop and evaluate conversations effectively,
which may change the course of e-learning in the CSCL environment and make the
e-learning more enjoyable and cooperative, as it helps guide learners towards opti-
mal methods of communicating and receiving information. CSCL chat is the most
important and most popular tools used to transfer and exchange knowledge between
students. The student is the main focus of the educational process. Among the fea-
tures of the CSCL is allowing conversation among students to express their opinions
and ideas. However, the problems faced in the chat include the difficulty of students
knowing their performance and the lack of a mechanism capable of ensuring that
students interact and pay attention to their colleagues’ conversations. Therefore, this
paper seeks to solve these problems by creating an immediate feedback mechanism
The Feedback System Based on Computer-Supported Collaborative Learning… 397

that allows students to inquire about their performance in explaining their topics
immediately, and obtaining results through which they infer their performance, and
then try to modify and develop their performance, in order to reach successful edu-
cational groups. Hence, each student seeks to be a successful recruiter for educa-
tional topics, as well as that all recipients increase their attention and focus in the
educational groups. This is because they are exposed to questions during the chat,
which the student seeks to vacate his responsibility for the delivery of information.
The student is responsible for his understanding of the topics presented. The feed-
back system is done by asking the students about their understanding of the topic
that was discussed. Results in instant feedback during chat help determine students’
level of performance and understanding, in addition to seeking to develop and
review performance and then develop plans to improve and develop teaching meth-
ods. The system aims to develop cooperative education in educational groups and to
reach an effective learning environment.

References

Allaymoun, H. M. (2014). Analysis of discourse threading and inter-animation in CSCL chats.

Proceedings of the 10th International Scientific Conference eLearning and Software for
Education, Bucharest, Romania.
Allaymoun, H. M. (2018). CSCL chats analysis and scientific threads discovery. Proceedings of
the 8th International Conference on Computer Science and Information Technology (CSIT
2018), Amman, Jordan.
Allaymoun, M. H. (2020). Analysis of CSCL chats for cognitive assessment and individual par-
ticipations. International Journal of Computing and Digital Systems ISSN (2210-142X), 10(1),
2210–2142, (Scopus and ESCI ISI indexed).
Allaymoun, M. H., & Shorman, S. M. (2022). Individual self-assessment using feedback system to
improve e-Learning in case of corona 19 pandemic. International Journal of Information and
Education Technology, 12(8). [Link]
Allaymoun, H. M, Trausan-Matu, S. (2015). Rhetorical structure analysis for assessing collabora-
tive processes in CSCL. Proceedings of the 19th IEEE International Conference on System
Theory, Control and Computing, ICSTCC2015, Cheile Gradistei, Romania, (pp. 123–127).
Allaymoun, H. M, Trausan-Matu, S. (2016a). Analysis of the altruistic dimension of CSCL chats.
Proceedings of the 12th international scientific conference eLearning and software for educa-
tion, Bucharest, Romania, (pp. 166–173).
Allaymoun, H. M, Trausan-Matu, S. (2016b). Analysis of collaboration in CSCL chat using rhe-
torical schemas. Proceedings of the 19th IEEE International Conference on Information and
Communication Systems, Irbid, Jordan.
Al-Shoqran, M., & Shorman, S. (2021, March). Applications of artificial intelligence in COVID-19
pandemic. In European, Asian, Middle Eastern, North African conference on Management &
Information Systems (pp. 313–321). Springer.
Cress, U., Stahl, G., Ludvigsen, S., & Law, N. (2015). The core features of cscl: Social situa-
tion, collaborative knowledge processes and their design. International Journal of Computer-
Supported Collaborative Learning, 10(2), 109–116.
Er, E., Dimitriadis, Y., & Gasevic, D. (2019). Synergy: An online platform for dialogic peer feed-
back at scale. In K. Lund, G. P. Niccolai, E. Lavoue, C. Hmelo-Silver, G. Gweon, & M. Baker
(Eds.), A wide lens: Combining embodied, enactive, extended, and embedded learning in col-
laborative settings - 13th International Conference on Computer Supported Collaborative
398 S. Shorman et al.

Learning, Conference Proceedings Volume 2 (pp. 1005–1008). International Society of the

Learning Sciences. [Link]
Huisman, B., Saab, N., van Driel, J., & van den Broek, P. (2018). Peer feedback on academic writ-
ing: Undergraduate students’ peer feedback role, peer feedback perceptions and essay perfor-
mance. Assessment & Evaluation in Higher Education, 1–14. [Link]
8.2018.1424318
Jacques, S., Ouahabi, A., & Lequeu, T. (2020). Remote knowledge acquisition and assessment dur-
ing the COVID-19 pandemic. International Journal of Engineering Pedagogy (iJEP), 10(6),
120–138. [Link]
Jacques, S., Ouahabi, A., Lequeu, T. (2021). Synchronous E-learning in higher education during
the COVID-19 pandemic. 2021 IEEE Global Engineering Education Conference (EDUCON),
(pp. 1102–1109). [Link]
Kanetaki, Z., Stergiou, C., Bekas, G., Jacques, S., Troussas, C., Sgouropoulou, C., & Ouahabi,
A. (2022). Grade prediction modeling in hybrid learning environments for sustainable engi-
neering education. Sustainability, 14(9), 5205.
Latifi, S., Noroozi, O., Hatami, J., & Biemans, H. (2019). The impacts of online peer feedback sup-
ported by argumentation instruction and argumentative scripts on students’ learning outcomes.
In K. Lund, G. P. Niccolai, E. Lavoué, C. Hmelo-Silver, G. Gweon, & M. Baker (Eds.), A wide
lens: Combining embodied, enactive, extended, and embedded learning in collaborative set-
tings, 13th International Conference on Computer Supported Collaborative Learning (CSCL)
2019 (Vol. 2, pp. 644–647). International Society of the Learning Sciences.
Ludvigsen, S., Cress, U., Law, N., Rosé, C. P., & Stahl, G. (2016). Future-looking conversations in
CSCL. International Journal of Computer-Supported Collaborative Learning, 11(3), 255–262.
Miyake, N. (2007). Computer supported collaborative learning. In R. Andrews & C. Haythornwaite
(Eds.), Sage handbook of E-learning research (pp. 248–266). Sage.
Noroozi, O., & Hatami, J. (2018). The effects of online peer feedback and epistemic beliefs on
students’ argumentation-based learning. Innovations in Education and Teaching International,
56, 1–10.
Noroozi, O., & Mulder, M. (2017). Design and evaluation of a digital module with guided peer
feedback for student learning biotechnology and molecular life sciences, attitudinal change,
and satisfaction. Biochemistry and Molecular Biology Education, 45(1), 31–39.
Noroozi, O., Biemans, H., & Mulder, M. (2016). Relations between scripted online peer feed-
back processes and quality of written argumentative essay. The Internet and Higher Education,
31, 20–31.
Noroozi, O., Bayat, A., & Hatami, J., (2019). Effects of a digital guided peer feedback system
on student learning and satisfaction (pp. 809–810). International Society of the Learning
Sciences (ISLS) (Computer-Supported Collaborative Learning Conference, CSCL) - ISBN
9781732467248.
Shorman, S. (2019). Internet of things application to development of smart classroom system.
International Review on Computers and Software (IRECOS), 14(1), 22–26.
Stahl, G. (2017). Essays in computer-supported collaborative learning. Illustrated publisher Lulu.
com. ISBN: 1329859561, 9781329859562.
Stahl, G., & Hakkarainen, K. (2020). Theories of CSCL, International handbook of computer-
supported collaborative learning. Springer. [Link]
Stahl, G., Koschmann, T., & Suthers, D. (2006). Computer-supported collaborative learning: An
historical perspective. In R. K. Sawyer (Ed.), Cambridge handbook of the learning sciences
(pp. 409–426). Cambridge University Press. Retrieved July 30, 2010 from: [Link]
[Link]/faculty/gerry/cscl/CSCL_English.pdf
Sun, N., Lavoué, E., Aritajati, C., Tabard, A., Rosson, M. B. (2019). Using and perceiving emoji
in design peer feedback. International Conference on Computer Supported Collaborative
Learning, Lyon, France.
Trausan-Matu, S., Dascalu, M., & Rebedea, T. (2014). PolyCAFe – Automatic support for the
analysis of CSCL chats. International Journal of Computer-Supported Collaborative Learning,
9(2), 127–156.
The Feedback System Based on Computer-Supported Collaborative Learning… 399

Valero Haro, A., Noroozi, O., Biemans, H. J., & Mulder, M. (2018). The effects of an online learn-
ing environment with worked examples and peer feedback on students’ argumentative essay
writing and domain-specific knowledge acquisition in the field of biotechnology. Journal of
Biological Education, 53, 1–9.
Wise, A., & Schwarz, B. (2017). Visions of CSCL: Eight provocations for the future of the field.
International Journal of Computer-Supported Collaborative Learning, 12(4), 423–467.
A Reinforcer to Become a Foodpreneur
Through Cloud Kitchen: Sustainable
Technology-Driven Business Model During
Pandemic

C. Nagadeepa , K. P. Jaheer Mukthar , Edwin Ramirez-Asis ,

Hober Huaranga-Toledo , Marcos Espinoza-Maguiña ,
and Sandra Mory-Guarnizo

1 Introduction

The phrase “foodpreneur” refers to a creative entrepreneur who has made food cre-
ation their passion, despite the fact that it may seem new. “Foodpreneur is the com-
bination of ‘food’ and ‘entrepreneur’ to create an entirely new career title” (Attri &
Bairagi, 2020). Foodpreneurs are hardworking individuals who create their own
business opportunities in the service sector, especially in the food segment. Any
type of business that involves food can fall into this broad, innovative category
(Lukman, 2020).
Cloud kitchen concept is delivery-only café/restaurant and more dining area
people can sit and eat which accepts only order and delivers the food through food
aggregators, various websites or through mobile apps like Zomato, Swiggy and so
on. A commercial kitchen area known as a “ghost kitchen” or “virtual kitchen”
offers food enterprises the amenities and services required to create menu items for
delivery and takeout. Contrary to conventional brick-and-mortar establishments,
cloud kitchens enable the production and delivery of food products with low over-
head. There was nothing special about the infrastructure, waitstaff, tables or furni-
ture (McCrimmon, 1995). Customers can place online orders through restaurant

C. Nagadeepa · K. P. Jaheer Mukthar

Kristu Jayanti College Autonomous, Bengaluru, India
E. Ramirez-Asis (*) · S. Mory-Guarnizo
Universidad Señor de Sipán, Chiclayo, Peru
e-mail: ramirezas@[Link]
H. Huaranga-Toledo
Universidad Nacional Mayor de San Marcos, Lima, Peru
M. Espinoza-Maguiña
Universidad Nacional Santiago Antúnez de Mayolo, Huaraz, Perú

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 401
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
402 C. Nagadeepa et al.

apps or online food aggregator apps, hence the name “cloud kitchen”. These kitch-
ens are sometimes referred to as virtual kitchens, ghost kitchens and gloomy kitch-
ens. Numerous traditional restaurants have converted to cloud kitchens due to
necessity. Meal delivery was already redefining the restaurant experience before
COVID-19, enabling customers/foodies to have restaurant-calibre food in their
homes and enabling eateries to expand their clientele outside their physical loca-
tions. Cloud kitchens were a part of this movement, although they were still some-
what experimental (Coronavirus Careers, 2020). The data survey says that the
number of people who started ordering food online increased by 150 per cent during
2019 and 2020. USP (Unique Selling Point) says that the food delivery market may
increase more than 10 times in the next 10 years, i.e. from 35 billion dollars per year
to 365 billion dollars (“Global Cloud Kitchens Market Report, Share, Size, Analysis
2021–2027”, 2021). The online food delivery market is predicted to generate
US$0.77 trillion in revenue by 2022. By 2027, it is anticipated that revenue will
increase by 13.68% p.a., with a market size of US$1.45 trillion. Cloud kitchen, also
known as “virtual brand,” “cyber kitchen” and “dark kitchen,” was a major trend
both during and after COVID-19 (Oracle, 2020). The following are the reasons for
the new technology-driven cloud kitchen business model, which is a technology-
driven model: fewer human resources in the form of employees, low-cost invest-
ment, easy expansion and so on. These are the reinforces that encourage foodpreneurs
to adopt the cloud kitchen business model, which is a technology-driven model
(Table 1).

Table 1 Types of cloud kitchen

Floor area
requirement
Type Specification (approx.)
Independent It is a traditional and independent model. It is a restaurant 500–600 sq. ft
cloud kitchen without any actual physical space. This model is basically a
single brand model that cooks its meals in a kitchen in
accordance with the online orders that it receives. In terms of
taking orders and delivering prepared meals, the company
concept is self-sufficient
Multi-brand This type of cloud kitchen is based on a careful scrutiny of 1500–2000 sq.
cloud kitchen local food consumption patterns. A communal commercial ft
kitchen is used to cook and package the meals for several
companies. It is an effective and strategic model that makes
money and saves money
Hybrid cloud It is the combination of cloud kitchen and a takeaway 2000+ [Link]
kitchen restaurant. Delivery can either be done independently or
through food delivery apps and websites, etc. In this approach,
a single brand operates out of a single kitchen, but there are
also numerous walk-in locations that provide takeout and
delivery options
Delivery In this business model, a delivery app company leases or buys n.a.
app-owned a convenient kitchen area and assigns it to various up-and-
cloud kitchens coming food brands. These apps are used to place orders, and
they also control the delivery fleet. The food businesses
leverage the app’s audience to attract more consumers, while
the app leverages the talent to provide its users more choices
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 403

2 Theoretical Foundation

As a result of the COVID-19 virus’s and pandemic situations likely long-term prev-
alence, digitally shifted platforms like cloud kitchens and delivery aggregators will
overcome all previous formats. In the ensuing 10 years, these styles would gain
dominance in the Indian food service industry. In India, the COVID-19 pandemic
would significantly change how food is consumed today and in the future due to its
long-term persistence (John, 2021).
The purpose of the study was to see whether cloud kitchens would be preferred
during the pandemic over restaurants (Fernandes, 2021). The tremendous global
rise in food delivery and the quick development of technology have given cloud
kitchens even more momentum. Additionally, the importance of sanitation and
safety as well as evolving sales tactics can reinforce the viability of cloud kitchens
as a whole. Cloud kitchens also provide streamlined menus. The fundamental justi-
fication for the increased demand for cloud kitchens is the availability of simple,
nutritious ingredients devoid of complexity (Warrier & Venkteshwar, 2020). Due to
their minimal operating costs, cloud kitchens are generally more affordable than
restaurants.
The major differences between cloud kitchen and traditional kitchen are cus-
tomer behaviour and response to cloud kitchens, and the during and post COVID-19
has had on consumer contact with food delivery, with a focus on cloud kitchens, are
all discussed here. The analysis of this market is crucial for its future development
because it helps to pinpoint the major problems and consumer behaviours that are
unique to cloud kitchens in terms of expectations and how they prioritise factors
connected to food delivery (Sufi & Ahmed, 2021). The research’s conclusion was
that cloud kitchens offer maximum productivity and satisfy consumer demands for
sanitation, superior food quality, and quick delivery without compromising because
they have less inventory and physical management issues than traditional kitchens
do (Chhabra & Rana, 2021).

2.1 Porter’s Five Forces Analysis of Cloud Kitchen

Any business model’s industry attractiveness is gauged using Porter’s five forces,
which also provide insight into what motivates profitability and skill. Any industry
with a high level of competition will have lower profit potential for businesses oper-
ating there (White, 2017). These forces are known as Porter’s five forces since
Harvard University professor Michael Porter explained them. The main goal of this
analysis is to show that, in addition to your immediate competitors, you also face off
against a wider range of competitors, including those listed below, in the battle for
profitability.
Rivalry Among Existing Competitors (Low) It is how fiercely the existing busi-
nesses in the sector compete with one another. If there are many rivals of compara-
404 C. Nagadeepa et al.

ble size and strength and if industry growth is moderate, which is not the situation
in this industry, then the competition is fierce.
• Limited competition
• Rapid growth
• High flexibility to exit
Threat of New Entrants (High) It measures the threat to the industry’s current
participants from the introduction of new competitors who bring in a product identi-
cal to the current market participant. Entrepreneurs wishing to launch their busi-
nesses in the food and beverage industry are drawn to cloud kitchen because of its
inexpensive start-up and ongoing running costs. Cloud kitchen facilitates simple
customer contact via online food delivery apps (Venkteshwar & Warrier, n.d.).
• Low investment and reduced operating cost
• High ROI
• Limited barriers to entry and expand
• Customer loyalty
• Easy access to distribution channel
Threat of Substitutes (Moderate) It identifies the threat that the availability of
additional goods that meet a comparable need outside the cloud kitchen sector poses
to the current industry players. Service food is important in cloud kitchen because
satisfied customers are more likely to place repeat orders and less likely to switch to
a different brand or replace the flavour.
• Advantage of unique taste
• Promotion and branding through apps
• Customers’ willingness to substitute
• Less switching cost
Bargaining Power of Suppliers (Low) The suppliers in the cloud kitchen sector
are the raw material providers for building up the fundamental kitchen as well as the
supermarkets for daily food supplies (Mehta & Kalara, 2005). Since there are sev-
eral of these suppliers, the current business can change to any new supermarket if it
is more affordable. Due to the abundance of suppliers of food and the low cost of the
raw materials needed for kitchens, business switching costs are minimal. Cloud
kitchens are primarily reliant on these food aggregators for business since they only
fill takeout orders placed through online food platforms.
• Large no. of buyers
• Low price
• Easy availability of information
• Convenient for customers
• Price-insensitive buyers
Bargaining Power of Buyers (Low) Because consumers in the cloud kitchen sec-
tor care about cost, quality and taste, they have significant bargaining power. There
are many customers; however, the average order size is little. Instead of being price
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 405

RIVALRY AMONG
Bargaining Power of Bargaining Power of
EXISTING Threat of new entrants Threat of substitutes
Buyers suppliers
COMPETITORS
• Limited comptetion • Low investment and • Advantage of Unique • Large no of buyers • Large no of grocery
• Rapid growth reduced operating taste • Low price sellers
• Hight flexibility to cost • Promotion and • Easy availability of • Easy substitute
exit • Hight ROI branding through information • Limited technology
• Limited barriers to apps • Convenient for know-how
entry and expand • customers customers • Limited requirement
• Customer loyalty willingness to • Price insensitive of advanced
• Easy access to substitute buyers technology
distribution channel • Less switching cost

Fig. 1 Porter’s five forces analysis of cloud kitchen

sensitive, consumers are attentive to taste and quality. Discounts, however, draw
customers; therefore, cloud kitchens’ collaboration with online food delivery appli-
cations helps with client retention (Fig. 1).
• Large no. of grocery sellers
• Easy substitute
• Limited technology know-how
• Limited requirement of advanced technology

2.2 Cloud Kitchen Technology Solution: Intention to Become

a Foodpreneur

Reduced Capital Investment, Operating Cost and Customer Acquisition Cost

(CAC) The expense of starting a business is the biggest barrier for entrepreneurs
trying to break into the food industry (Beniwal & Mathur, 2021). It is far less with
cloud kitchens because they do not require expensive rent for prime locations, any
front-of-house staff (such as valets, waiters, front desk personnel, etc.) or any seat-
ing area. Highest savings on infrastructure purchases (Mehnaz et al., n.d.). Further,
restaurants incur greater operating costs because they must hire better waitstaff and
improve their decorations to draw customers. On the other hand, a cloud kitchen
doesn’t have to worry about any of this because their sole priority is the quality of
the cuisine. The price associated with acquiring a new customer. Instead of needing
to sell themselves, cloud kitchen businesses get simple and quick exposure through
their delivery partners (The Restaurant Times, n.d.). Despite the fact that they must
pay for their presence on the delivery platforms, altogether, it is less expensive than
what a restaurant would spend on conventional setting.
H1: Reduced cost of the cloud kitchen model impacts the foodpreneur intention.
Pandemic Situations Following the recent COVID-19 pandemic, it was observed
that people reduced their nonessential outdoor activities and preferred deliveries
over dining in for safety reasons. This presented a great opportunity for both new
and existing players in the cloud kitchen industry. People experienced severe finan-
cial hardships throughout these pandemics and were suffering to get employees
406 C. Nagadeepa et al.

during these times (Kulshreshtha & Sharma, 2022); one answer to these issues is the
cloud kitchen.
H2: Pandemic situation has an impact on foodpreneur intention to start their busi-
nesses under cloud kitchen.
Technology The fact that technology and cloud kitchens go hand in hand makes it
simple for them to obtain user data, which allows them to easily adjust their opera-
tions and staffing plans as well as their user interface and profits in accordance with
consumer behaviour (Attri & Bairagi, 2020). Customers are choosing home deliv-
ery choices more frequently due to time constraints. Restaurants are now shifting to
cloud kitchen operations as the quantity of delivery requests rises (Gosai &
Palsapure, n.d.).
H3: Technology-enabled cloud kitchen model impacts the foodpreneur intention.
Self-Efficacy The conviction that one can effectively carry out an activity is known
as self-efficacy, and it has been said that “Efficacy beliefs influence how people feel,
think, motivate themselves, and conduct” (Bandura, 1993, p.118; Zhang & Huang,
2021). Self-efficacy beliefs are a significant predictor of performance because they
have a significant impact on people’s behaviour through their task selection as well
as the motivation and effort they put into completing those tasks (Chen et al., 1998).
It is usual to practise when discussing self-efficacy to distinguish between gener-
alised self-efficacy and other types of the task- or domain-specific self-efficacy
(Asimakopoulos et al., 2019).
H4: Self-efficacy has an impact on foodpreneur intention.
Flexibility The proprietor of a cloud kitchen may be adaptable and easily adjust
the menu in response to a change in consumer demand, although it is more difficult
for traditional restaurants to follow every trend in taste. Since cloud kitchens are not
physically confined, changes to the menu or even the hours of operation can be
made to meet corporate requirements without substantially affecting consumer sat-
isfaction (“Cloud Kitchens and New Technologies in the New Normal,” n.d.).
H5: Flexibility in cloud kitchen model impacts the foodpreneur intention.
Creativity/Innovativeness The ability to think creatively is now necessary for
good business judgment. If you lack creativity, the company could fall into a condi-
tion of stagnation very rapidly. A foodpreneur inventiveness has a big impact on
their ability to be an entrepreneur and leads to it. Food industry is long-lasting, and
customers prefer creativity in the food items too. Foodpreneurs’ ability to think
creatively and innovatively is enhanced (Rout et al., 2022). To be a successful entre-
preneur in the modern world, it is necessary to be innovative and empowered to take
new initiatives.
H6: Flexibility in cloud kitchen model impacts the foodpreneur intention.
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 407

3 Research Model and Methodology

This study was carried out using both qualitative and quantitative methods. The
initial phase of the study was exploratory in nature, and desk work was done to
gather and review the literature with respect to foodpreneur and cloud kitchen. At
the second stage of the study, a survey method is used to conduct a descriptive study.
After moving past a review of the literature, the researcher (Deepak et al., 2022)
concentrates on methodology, developing goals with the statement of the problem
and choosing the best research design for the study. There were 200 respondents
included in the study from various parts of India. The survey was conducted using
social media and Google Forms. Questionnaires were circulated among the respon-
dents to get their responses regarding their intention towards foodpreneur through
technology-driven cloud kitchen. Primary data was gathered through a question-
naire that was sent via social media, Google Forms, e-mails and WhatsApp. The
opinions of few respondents were recorded in the physical interview.

3.1 Research Framework

Based on the literature review, the following framework was developed to find out the
intention towards being a technology-driven cloud kitchen-based foodpreneur (Fig. 2).

4 Analysis and Interpretation of Results

The data were collected via a structured questionnaire which was developed and
circulated via social media across India. The questionnaire has two parts: the first
part is related to the respondent’s demographic information and the second part is

Reduced Cost

Pandemic Situation H
H 1
2
Technology H
3 Intention -
Foodpreneur
H
Self-efficacy 4
H
5 H
Flexibility 6

Innovation/Creativity

Fig. 2 Foodpreneur intention: proposed research frame

408 C. Nagadeepa et al.

having questions to measure the intention to become foodpreneurs based on cloud

kitchen business model. The maximum respondents are male (62%), and 37% fall
under the age group of 25 to 35. Majority of the respondents are degree holders.
Most of the respondents (35%) are not having any family business, while 20% are
doing their own family business.

4.1 Measurement of the Model

To test the reliability of the questions, the items were measured using Cronbach’s
alpha to find out their internal consistency. The results shown in the following table
present the Cronbach’s alpha of each construct. It is inferred that all the items are
above the recommended value 0.7, which shows that the subscales of all the vari-
ables are highly reliable (Table 2).
The KMO (Kaiser-Meyer-Olkin) test was conducted to measure the adequacy of
the sampling for all the factors. The results of the test supplied the adequate factor
loadings which are shown in the above table.

4.2 Hypotheses Test Results

The suggested measurement model was tested using the data collected through
questionnaires from the respondents. Structural equation modelling (SEM) was
used to measure and prove the hypotheses framed using AMOS. The first step in
SEM is to measure the model fit comparing the various model fit indices. The result
shows the fitness of the final structural equation model developed to assess the
impact of chosen independent variables on the dependent variable. The result shows
that all the indicators of model fit attain the threshold limit. Hence, the developed
model is considered fit. The first fit is the minimal fit, i.e. chi-square. For the model,
the chi-square data is 256.21 with 134 degrees of freedom is 1.91 which shows an
adequate fit. The GFI (goodness of fit index) achieved is 0.929, while the AGFI
(adjusted goodness of fit index) is 0.909, above the required 0.90. The CFI and NFI
(normed fit index) values computed are more than 0.90, indicating that the model
fits perfectly with the data. It was discovered that RMSEA is 0.054, which is lower
than 0.08, and that it confirms the model fit. SEM was employed to examine the
proposed model. The following figure and table show the results of the hypotheses
and their relationship clearly (Table 3).
The regression estimates and their significance for the entire path are calculated.
Each estimate represents the amount of change in its dependent variable for each
one-unit change in the variable predicting it. The relative contribution of each pre-
dictor variable to each dependent variable is given by the standardised estimates in
the above table. The results of the model show all the independent variables have an
impact on the dependent variable (Fig. 3).
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 409

Table 2 Survey item and factor loading

Cronbach’s
Constructs Code Measurement items Loading alpha
Reduced cost RCI This model reduces the capital cost 0.81 0.89
ROC It involves less operating cost than the 0.84
restaurant’s setup
RCA Customer acquisition cost is less in this 0.79
model
REC This model requires less employee cost than 0.85
the actual restaurant model
Pandemic PR This model is suitable for pandemic 0.89 0.73
situation restrictions
PER As it required less employees, it is suitable 0.76
for pandemic situations
PSC This model is suitable when there is a curfew 0.87
Technology TTS This model saves time in finding information 0.76 0.81
TUF This model is user-friendly 0.72
TCA Customers prefer this technology-driven 0.82
model to get their food
Self-efficacy SE1 I am self-motivated to start this kind of 0.86 0.84
business
SE2 I am confident that I can shine in this business 0.88
model
Flexibility FAT I can change the model any time 0.74 0.85
FCM It is a very flexible model to change menu 0.89
according to the customer need
FCP This model does not have long process to 0.81
change their menu when compared to
corporate diner
Innovation INN This model is an innovative one 0.77 0.79
CRE I can introduce creativity in the menu 0.81
Foodpreneur FI I intend to become a foodpreneur 0.88 0.82
intention FIC I want to start my career as a cloud kitchen- 0.78
based foodpreneur

Table 3 Regression weights of the estimated model

DV INF INDV Estimate S.E. C.R. P Result
Foodpreneur intention ← Reduced cost 0.87 0.079 4.871 ** Accepted
Foodpreneur intention ← Pandemic situation 0.64 0.058 2.327 * Accepted
Foodpreneur intention ← Technology 0.45 0.087 2.452 ** Accepted
Foodpreneur intention ← Self-efficacy 0.38 0.060 2.721 * Accepted
Foodpreneur intention ← Innovation/creativity 0.51 0.104 3.113 * Accepted
Foodpreneur intention ← Flexibility 0.42 0.072 2.141 * Accepted
*p < 0.05, **p < 0.01
410 C. Nagadeepa et al.

Reduced Cost

Pandemic Situation .
. 87
64
Technology . Intention -
45
Foodpreneur
.
Self-efficacy 38
.
51 .
Flexibility 42

Innovation/Creativity

Fig. 3 Structural equation model of foodpreneur intention

4.2.1 Reduced Cost and Foodpreneur Intention

Reduced investment cost, operating cost and employee cost have a significant and
positive impact on foodpreneur intention (estimator value = 87% – 0.087) as the p
value is less than 0.05 (p = 0.002) with CR of 4.87. Cost-effectiveness is the major
factor which attracts foodpreneur intention towards this technology-driven model.
This result was similar to the research (Deepak et al., 2022) conducted in Hyderabad
and in India (Sarangdhar, 2021).

4.2.2 Pandemic and Foodpreneur Intention

Pandemic situation created a significant impact on foodpreneurs to start their busi-

nesses using cloud kitchen as the p value is less than 0.05 (p = 0.02) with the estima-
tor value of 0.64, SE of 0.58 and CR of 2.327. Cloud kitchen model is apt during
pandemic situations to manage both finance and human resource shortage which is
similar to the study conducted by Choudhary (2019a), Li et al. (2020) and
Fernandes (2021).

4.2.3 Technology and Foodpreneur Intention

The ever-changing technology and its usability have a significant impact on food-
preneurs to start their businesses using cloud kitchen as the p value is less than 0.05
(p = 0.010), with the estimator value of 0.451, SE of 0.087 and CR of 2.452. New
technologies are on the rise because individuals prefer to do business online rather
than in person. Cloud kitchen is the one solution for saving time, and it is proved by
the research conducted by (Assistant Professor, School of Hotel and Catering
Management, Vels Institute of Science Technology and Advanced Studies (VISTAS),
Moyeenudin et al. 2020).
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 411

4.2.4 Self-Efficacy and Foodpreneur Intention

Self-motivation and self-confidence have a significant impact on foodpreneurs to

start their businesses using cloud kitchen as the p value of 0.012 is less than 0.05,
with the estimator value of 0.38 (SE is 0.060) and CR of 2.721. The finding of the
result says that self-efficacy is one of the driving forces for people to intend to
become foodpreneurs, and this result is similar to the research conducted by
Romero-Galisteo et al. (2022).

4.2.5 Innovation and Foodpreneur Intention

Innovation and creativity in the model have significantly influenced the respondents
to intend to become foodpreneurs as the p value is less than 0.05 (p = 0.016) with
the estimator value of 0.51 (SE is 0.104) and CR of 3.113. It is enabling the innova-
tion and creativity among the foodpreneurs which triggers their intention towards
this technology-enabled business model (Chhabra & Rana, 2021; Etty Susilowati
et al., 2021).

4.2.6 Flexibility and Foodpreneur Intention

Flexibility in the model has significantly influenced the respondents to intend to

become foodpreneurs as the p value is less than 0.05 (p = 0.016) with the estimator
value of 0.42 (SE is 0.072) and CR of 2.141.

5 Conclusion

The successful business model must incorporate innovation and creativity, and only
those who do so to stay current with the ever-changing business model will survive
a crisis. The emerging technology-enabled food aggregators and cloud kitchen
worked on business strategies to adapt to changing consumer preferences during the
pandemic curfew and lockdown. The key driving forces behind practical, less
expensive and home-based transportation solutions to deliver food to our doorsteps
are the growing population, shifting dietary habits, longer dwell durations and lon-
ger trip times. In the digital age, Indians must use commonplace food delivery ser-
vices like Swiggy, Zomato, Foodpanda, Uber Eats and Dominos. To take advantage
of the numerous opportunities offered by cloud kitchens, canteens are turning away
from traditional kitchens. The concept of a cloud kitchen encourages more control
over supply and demand, which aids in accelerating production. The growing pref-
erence among consumers for high-quality food over the fatty fare that is typically
provided by low-cost food establishments is another factor that increases the popu-
larity of cloud kitchens. The fundamental change from being a housewife for a
412 C. Nagadeepa et al.

living has helped women stand on their own two feet and gain self-assurance and
self-sufficiency not only by learning about digitalisation and the new trend in the
market but also by creating a new type of business model that allows them to grow
their business in a small space with less capital and more profits while taking care
of both their family and themselves.

References

Asimakopoulos, G., Hernández, V., & Peña Miguel, J. (2019). Entrepreneurial intention of engi-
neering students: The role of social norms and entrepreneurial self-efficacy. Sustainability,
11(16), Article 16. [Link]
Attri, D. R., & Bairagi, M. R. (2020). Chronicle of a Foodpreneur. Psychology and Education
Journal, 57(9), Article 9. [Link]
Beniwal, T., & Mathur, D. (2021). Cloud kitchen: A profitable venture. IARJSET, 8. [Link]
org/10.17148/IARJSET.2021.81010
Bandura, A. (1993). Perceived Self-Efficacy in Cognitive Development and Functioning.
Educational Psychologist, 28, 117–148. [Link]
Chen, Chao C., Greene, Patricia Gene and Crick, Ann, (1998). Does entrepreneurial self-efficacy
distinguish entrepreneurs from managers?, Journal of Business Venturing, 13, issue 4, p.
295–316.
Chhabra, N., & Rana, A. (2021). Rise and the future of cloud kitchens in India: A consumer study.
International Journal of Research in Engineering, Science and Management, 4(7), 158–165.
Choudhary, N. (2019a). Strategic analysis of cloud kitchen – A case study. Management Today, 9,
184–190. [Link]
Choudhary, N. (2019b). Strategic analysis of cloud kitchen–A case study. Strategic Analysis, 93.
Cloud kitchens and new technologies in the new normal. (n.d.). The Times of India. Retrieved
December 26, 2022, from [Link]
kitchen-changing-the-world-of-dining/photostory/[Link]
Coronavirus Careers: Cloud Kitchens Are Now Serving. (2020, June 2). HBS Working Knowledge.
[Link]
Deepak, B., Radhika, P., Baba, M. A., & Chary, S. (2022). A study on financial feasibility of cloud
kitchen firms in Hyderabad Region in Telangana, India. Asian Journal of Agricultural Extension,
Economics & Sociology, 342–350. [Link]
Fernandes, M. (2021). Rise of cloud kitchens amidst the COVID 19 pandemic. 2021.
Global Cloud Kitchens Market Report, Share, Size, Analysis 2021-2027. (2021, September
2). Market Research Reporting & Analysis Agency in India. [Link]
global-cloud-kitchens-market/
Gosai, K., & Palsapure, D. D. (n.d.). A study on cloud kitchens as an emerging food and beverage
industry.
John, K. T. (2021). Digital disruption: The hyperlocal delivery and cloud kitchen driven future of
food services in post-COVID India. International Hospitality Review, ahead-of-print(ahead-of-
print). [Link]
Kulshreshtha, K., & Sharma, G. (2022). From restaurant to cloud kitchen: Survival of the fittest
during COVID-19 An empirical examination. Technological Forecasting and Social Change,
179, 121629. [Link]
Li, C., Mirosa, M., & Bremer, P. (2020). Review of online food delivery platforms and their impacts
on sustainability. Sustainability, 12(14), Article 14. [Link]
Lukman, A. (2020). Covid-19: Current and post effects on F&B industry in Indonesia. Webinar
Kementerian PPN/Bappenas: Food Ingredients Asia.
McCrimmon, M. (1995). Unlash the entrepreneur within, − Pit man.
A Reinforcer to Become a Foodpreneur Through Cloud Kitchen… 413

Mehnaz, S., Baskar, M., & Venkteswar, A. (n.d.). Cloud kitchens in India: A research paper.
Mehta, M., & Kalara, S. (2005, January). Type of behavior in relation to health of Women Research
Paper Presented at Indian Science Congress, Ahmedabad.
Moyeenudin, H. M., Anandan, R., & Bindu, G. (2020). A research on cloud kitchen prerequi-
sites and branding strategies. International Journal of Innovative Technology and Exploring
Engineering, 9(3), 983–987.
Romero-Galisteo, R.-P., González-Sánchez, M., Gálvez-Ruiz, P., Palomo-Carrión, R., Casuso-
Holgado, M. J., & Pinero-Pinto, E. (2022). Entrepreneurial intention, expectations of success
and self-efficacy in undergraduate students of health sciences. BMC Medical Education, 22(1),
679. [Link]
Rout, A., Dawande, M., & Janakiraman, G. (2022). Cloud kitchens: Value creation through co-
location (SSRN Scholarly Paper No. 4217188). [Link]
Sarangdhar, M. P. (2021). A study on emerging concept of cloud kitchen in India. UGC Care
Journal, 44(1), 2249–6661.
Sufi, T., & Ahmed, S. (2021). Surviving COVID-19 crisis by new business models: A case study
of the Indian Restaurant Industry. In Handbook of research on entrepreneurship, innovation,
sustainability, and ICTs in the post-COVID-19 Era (pp. 301–316). IGI Global.
Susilowati, E., Yuwono, A. A., & Leonnard, L. (2021, December). Cloud kitchen development
analysis in food and beverage industry: A case study in Jakarta. In RSF Conference Series:
Business, Management and Social Sciences (Vol. 1, No. 6, pp. 29–39).
The Restaurant Times. (n.d.). Cloud kitchen model decoded: All you need to know about cloud &
delivery kitchens. [Link]
[Link]. Accessed 08 Aug 2019.
Venkteshwar, A., & Warrier, U. The role of values, attitudes and believes in the emotional intel-
ligence of net generation students.
Warrier, U., & Venkteshwar, A. (2020). Birth order as a catalyst in the emotional intelligence of
students. Journal of Engineering Science, 11, 263–268.
White B. (2017). 8 restaurant KPIs that help evaluate your pizzeria’s delivery service. [Link]
[Link]/blog/8-restaurant-kpis-that-help-evaluate-your-pizzerias-delivery-service.
Accessed 21 Feb 2019.
Zhang, J., & Huang, J. (2021). Entrepreneurial self-efficacy mediates the impact of the post-
pandemic entrepreneurship environment on college students’ entrepreneurial intention.
Frontiers in Psychology, 12. [Link]
The Implementation of Blockchain
Technology in the Development
of Socioeconomic Environment:
A Conceptual Framework

Nabil Ahmed Mareai Senan and Imran Ahmad Khan

1 Introduction

The reality of the twenty-first century reveals a long list of problems and social and
economic situations, some of which have only recently appeared, that require atten-
tion. The construction of systemic solutions that make possible adequate responses
represents a real challenge for our society, which in some cases is still not suffi-
ciently prepared. The aging of society, the depopulation of the rural world and its
consequent concentration in urban environments, the financial exclusion also in
these environments, climate change, migrations and the realities that arise with
them, and the structural increase in unemployment are just samples of the evidence
of which societies are progressively becoming aware and demanding solutions from
governments.
Another demographic phenomenon that, although it has occurred throughout
history, takes on special relevance in the current context due to its impact on the
composition of the demographic profile is that of migratory flows. Migrants consti-
tute a subset of the population that will require specific services to enable them to
achieve the objective for which they have left their countries of origin. In this new
situation, one of the most relevant aspects of the migrant collective is made up of the

N. A. M. Senan
Department of Accounting, College of Business Administration, Prince Sattam bin Abdulaziz
University, Al Kharj, Saudi Arabia
Accounting Department, Administrative Science College, Albaydha University,
Al-Bayda, Yemen
I. A. Khan (*)
Consultant, Pacelile Corporate Consulting, Aligarh, India

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 415
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
416 N. A. M. Senan and I. A. Khan

management of the so-called remittances, concretized in the sending of economic

resources to the part of the family that remains in the country of origin, and with
which a percentage of the economic resources obtained in the new destination
is shared.
In this same area, the financial one, and direct and transversal relation with
migrations or depopulation in the rural world, there is an additional problem. This
is none other than the financial exclusion that has occurred in India, mainly due to
the merger process, for subsequent bankarization, of a large part of the savings
banks, and the resulting resizing of the sector. This has implied a process of closure
of numerous bank branches considered to be less profitable, although mainly located
in small municipalities, where traditional banks had not been present. The direct
impact on the welfare of society has been more than evident. Thus, the difficult
access to financial services in rural areas or disadvantaged urban spaces has been
producing very negative economic effects, directly affecting minority groups living
in these areas and suffering situations of social exclusion.
Frey and Osborne (2017) conducted a rigorous analysis of the professions likely
to disappear due to the computerization of the economy, concluding that, in the US
labor market, there is a risk of 47% of jobs disappearing in the next 15 to 20 years.
Similarly, the final report of the 2016 World Economic Forum in Davos predicts the
disappearance of 7.1 million jobs in the 15 most industrialized countries in the
world, and the creation of 2.1 million new jobs by 2020, mostly related to new digi-
tal skills and abilities. The conclusion of all of these is clear: the current economic
model will be unable to provide enough jobs to allow large segments of the popula-
tion to obtain sufficient resources to cover their basic subsistence needs.
One of the solutions that technology itself has offered in the field of financing
social entities, and therefore related projects or undertakings, has been the use of
crowdfunding, which allows the collection of financial resources from small dona-
tions from a large number of donors. However, this type of financing requires the
use of platforms offering crowdfunding services that require a percentage of dona-
tions for their maintenance, as well as online payment services offered by financial
institutions, giving the paradox that, sometimes, the collection of resources by
social entities generates a flow of commissions whose beneficiaries may be part of
the problem being addressed.
All of the above is leading to a crisis of confidence that calls into question the
current social, political, and economic systems, which are witnessing the emer-
gence and expansion of social groups of different kinds that are suspicious of the
functioning and results derived from the market economy. For this part of the citi-
zenry, globalization is seen as a threat and a challenge that demands greater control
and stricter regulation from governments in all industrial sectors (Roth, 2009).
Following the distrust generated in the financial system after the collapse of
Lehman Brothers in 2008, the technological guru Satoshi Nakamoto presents a tool
that will allow online peer-to-peer payments to be sent from one party to another
without the intervention of any financial institution (Nakamoto, 2008) This system
The Implementation of Blockchain Technology in the Development of Socioeconomic… 417

is none other than Bitcoin, the first cryptocurrency that, using different already
existing techniques such as software that supports P2P applications and cryptogra-
phy among others, can create an environment of trust in which transfers of value
occur between peers without the need for the involvement of a third party, which is
usually a financial institution. The technology on which Bitcoin has been built, and
which is being used to develop new applications in very diverse fields of life, is
known as blockchain technology, more commonly referred to as the blockchain.
Bitcoin has been the first digital asset that has no intrinsic value, is backed by a
third party, and at the same time does not require a centralized issuing entity
(Buterin, 2013). It has also been the first proposal to emerge under the shelter of
blockchain technology.
Subsequently, given the potential applications offered by Bitcoin, not only as a
financial tool but software, developers were also faced with a dilemma, having to
decide between building these applications on Bitcoin itself and doing so from a
new blockchain. That is why at the end of 2013, a Bitcoin enthusiast software devel-
oper named Vitalik Buterin launches a white paper in which he presents the idea of
Ethereum, a blockchain with a general purpose that adds the possibility of code
fragment execution (Antonopoulos & Wood, 2018). The so-called world computer
is thus built, a virtual machine that runs on multiple computers connected to the
Ethereum blockchain and provides it with the ability to execute computer code in
the form of small programs that are called smart contracts. This code contains the
conditions that must be met for the execution of a transfer, whether economic
or data.
Blockchain technology is categorized by Iansiti and Lakhani (2017) as a funda-
mental technology that has the potential to create new foundations for our economic
and social system. It thus endows the concept of the crypto economy with new
content. The set of characteristics on which this technology is based means that, as
underlined by the European Economic and Social Committee (2019), blockchain
technology has a suitable fit for the social economy, stating that “some characteris-
tics of these technologies make blockchain a digital infrastructure that could be used
to advantage by Social Economy organizations to improve the fulfillment of their
purposes, increasing their capacity to generate positive social impact and promote
social innovation.”
On this basis, the objective of this paper is to analyze how blockchain technology
is being used de facto for the creation of decentralized applications (DApps) that
support projects with a relevant social and environmental impact, assessing its
potential for social economy entities, through case studies. To this end, and beyond
a broad presentation of blockchain technology in its conception and operation, a
synthesis of its main features is necessary to facilitate the understanding of what this
technology brings to each of the cases to be analyzed, and which form the core of
this analysis. A section dedicated to the methodology followed precedes the results
of the work, which concludes with a section containing its main contributions.
418 N. A. M. Senan and I. A. Khan

2 The Blockchain Technology: Structure and Operation

As already indicated, one of the main consequences of the international economic

crisis that followed the collapse in September 2008 of the Lehman Brothers bank
has been the emergence of a crisis of confidence on the part of the public both in the
banks and in the global stability of the financial system, as well as in the institutions
and their underlying values (Roth, 2009).
At the same time, and within the aforementioned framework of weak interna-
tional trust, a group of computer developers grouped under the pseudonym of
Satoshi Nakamoto presented a paper published in the Cryptography Mailing List, an
electronic peer-to-peer value transfer system that did not require intermediate agents
to endow it with trust, as this was implicit in the system itself (Nakamoto, 2008).
This system was based on the assignment of value to a digital asset, which could
subsequently be used to transfer its implicit value between peers irreversibly, being
recorded in a decentralized and immutable database, thanks to the use of various
computer control technologies. Bitcoin, which is the name given to this digital asset,
burst onto the technological-financial scene as the first cryptocurrency with no
intrinsic value and without any institution to back it up (Buterin, 2013).
This entire system was based on the technology known as the blockchain.
Blockchain consists of a decentralized database in which all securities or data trans-
actions occurring between the parties participating in the system are recorded. Each
transaction is verified and recorded in this database after the consensus of the major-
ity of the participants in the system. Transfers are grouped into blocks for verifica-
tion, blocks that are placed on a chain. That is, each block is linked to both the
preceding and subsequent block, hence the name of the technology blockchain.
A concept of particular importance in this environment is that of the digital
token, which is conceived as the digital representation of any value, created by a
specific entity and which can be used in various ways thanks to the large amount of
information it can contain. Thus, it can be used for the representation of a cryptocur-
rency, to grant a right, or to represent a physical good (Rohr & Wright, 2017).
The operating steps of a blockchain that has “n” nodes, understanding by node
each of the computers that are part of the network, can be schematized as follows:
1. Two nodes in the network decide to perform an exchange of value or data through
the blockchain system to which they are connected. For its effective realization,
they disseminate the data of the same to the rest of the nodes that are connected.
2. The connected nodes receive this transaction and include it, together with others
that have been received and are pending, in a block. This block is then transmit-
ted to the rest of the network.
3. The nodes evaluate the transactions included in the block, and once validated,
the connected nodes use consensus mechanisms based on a set of agreed rules.
When consensus is reached, which requires the agreement of more than 51% of
the connected nodes, the transactions included in the block are verified.
4. Once the block has been validated, a one-way cryptographic function is applied
to it, returning a value (called a hash) that can be used to detect any subsequent
The Implementation of Blockchain Technology in the Development of Socioeconomic… 419

alteration of the block’s contents. Each block contains a link to the hash of the
previous block, thus creating an unalterable blockchain thanks to the properties
of the hash function(x).
In this way, a system is obtained that provides security, anonymity, and integrity in
the data it uses and independently, i.e., without the need for third parties to control
and certify them. This eliminates, in a parallel way, the concentration of analytical
and decision-making power.
The management of digital assets, which are key pieces of the blockchain’s oper-
ation, is done through the use of digital wallets, usually referred to as wallets, by the
users. These wallets are pieces of software that allow blockchain users to monitor
transfers and store and manage digital assets related to the blockchain. They can
also be continuously connected to the Internet (hot wallets) or remain offline, in
isolation from the blockchain (cold wallet) storing assets on paper, a piece of hard-
ware, or an external USB storage drive (Antonopoulos & Wood, 2018).
In 2013, the computer developer Vitalik Buterin proposed to the Bitcoin develop-
ment community the introduction of modifications to the Bitcoin scripting system
that would provide the ability to execute complex computer programs, thus appears
the Ethereum platform which, using blockchain technology, creates a decentralized
open-source space with the ability to execute code fragments with which smart
contracts are implemented. These smart contracts consist of code fragments built
following the conditions set out in a contract between parties and which are auto-
matically executed when these conditions are met.
The Ethereum blockchain supports two types of transactions, those that transfer
value through the use of a cryptocurrency and additionally others that perform data
transfers. The latter are those used for the execution of smart contracts, which are
performed in the virtual machine that Ethereum (EVM) builds with the connected
nodes (Antonopoulos & Wood, 2018). EVM is a sort of global computer containing
millions of fragments of executable objects, each of which has its permanent
data store.
An additional element contributing to the potential use of blockchain technology
is decentralized applications (DApps). DApps are the basis of Web3, a decentralized
application environment that endows it with resilience, transparency, and resistance
to censorship. These are applications that run on the Internet in a decentralized way,
without the presence of a central agent (middlemen) that oversees their operation or
manages information related to users.
Another important concept, which emerges with the application of the tools that
blockchain technology provides, is decentralized autonomous organization (DAO).
A DAO is an organization that, under a set of predetermined rules, runs a business
or social activity (both online and offline) in a completely autonomous way in an
open-source environment that is decentralized (distributed among stakeholders’
computers), transparent, secure, and auditable. It is a group of smart contracts and/
or autonomous agents linked together and endowed with initial capital.
On this basis, numerous cryptocurrencies have been built mainly to obtain the
financial resources necessary for the implementation of business projects, mainly
420 N. A. M. Senan and I. A. Khan

based on the development of applications in the Internet environment, and to be

used as the means of payment used in them. The blockchain thus introduces tools
and procedures that change the way people organize their economic activities and
social environments, allowing the development of new governance schemes based
on more democratic and participatory decision-making.
Each of these proposals is based on the drafting of a document that includes the
technical characteristics and business model proposed for each project. For this pur-
pose, the expression white paper is used, which is usually the initial basis for raising
the resources that make the development of the proposal possible, usually through
an initial coin offering (ICO). This is a cryptocurrency issue that goes on sale to
raise funding for the implementation of projects based on blockchain technology.

3 Research Methodology

The recent irruption of blockchain technology on the technological scene has

opened the door to the emergence of new applications capable of providing a trusted
environment to processes that until now have depended on third-party actors that
endorsed and generated, in one way or another, the aforementioned reliable space
for action. Despite the rapid dynamics of development of this technology, it is still
short history makes it necessary to use an exploratory approach of a qualitative and
quantitative nature simultaneously as a methodological approach to research.
On this basis, this work has focused on the case study of different proposals for
the use of blockchain technology, from a socio-technological perspective, through
which to assess the possibilities that the use of this technology opens to the social
and solidarity economy sector in the generation and development of projects with
positive social and environmental impact.
Yin (2018), Dźwigoł and Dźwigoł-Barosz (2018), and Rashid et al. (2019) sup-
port the use of this methodology by allowing the analysis of the phenomenon under
study through different sources of evidence, quantitative and/or qualitative simulta-
neously. The construction of a theory is thus made possible through the analysis of
a theoretical sample made up of one or more cases, rather than through the extrac-
tion of a representative sample, which is necessary for a quantitative study (Dźwigoł
& Dźwigoł-Barosz, 2018). In this sense, Yin (2018) considers the case study as a
valuable research tool, as it is the way used to assess and record behaviors of the
actors present in the phenomenon under study, as opposed to quantitative methods
focused on verbal information obtained through questionnaire surveys.
Thus, the empirical work of this study starts with a process of identification,
observation, and interaction of the set of initiatives that use blockchain technology
in social and environmental sectors with potential positive impact. After that, a
small number of initiatives, or cases, are selected for further exploration and analy-
sis with rigor and depth. The cases have been selected for their representativeness,
both in terms of pioneering, and their quantitative significance, or for their qualita-
tive potential in the context of action in which they have arisen and developed.
The Implementation of Blockchain Technology in the Development of Socioeconomic… 421

The variables used for the selection of the cases under analysis were based on
three main factors:
1. The scope of action deployed to address the problems they address, giving prior-
ity to those that do not develop in a specific geographic area, but deploy their
actions globally. Although the cases studied are not the only ones that meet this
requirement, their dynamics have already been studied in other works by the
authors of this article, which is why the starting point of knowledge is higher.
2. The existence of pre-eminent performance spaces with the presence of develop-
ers of decentralized applications using blockchain technology.
3. Their innovative or pioneering nature in the use of blockchain technology in
their field of activity and outside traditional financial applications. This becomes
of utmost importance to assess in what way they contribute a vision that ques-
tions the dominant socioeconomic system within which they have appeared, thus
fulfilling one of the main functions of the social economy, as is its political vec-
tor of pioneering in the generation of nonexistent social initiatives.
In procedural terms, the information-gathering work has been carried out in three
stages. The first stage involved the review and analysis of the white papers that each
of the selected initiatives or cases presented on their web pages. A second stage was
dedicated to the interaction with these tools through their use as active technological
users. Finally, a series of contacts were made with those responsible for the target
cases, through open conversations via e-mail, Twitter, instant messaging, and
videoconferences.
The cases selected for study and analysis were the following. In the field of
energy, the proposal presented by the Pylon Network platform was chosen because
it is a tool for use by consumers and user cooperatives working in the production
and commercialization of renewable energies. At the same time, it acts as an enabler
for the development of collective self-consumption initiatives, one of the keys to the
construction of a new energy model that is presented as an alternative, under market
conditions in line with the competition and against the oligopoly of large energy
companies that dominate the market in India in this second decade of the twenty-
first century.
Secondly, the Arcadia platform, aimed at providing financial services to refu-
gees, won first place in the Startup Days Bern 2019 Pitching Battle. This award gave
visibility to its proposal and it was one of the eight startups selected to participate in
the Fintech Solutions for Refugees Summit. Although there are other proposals in
this field that could have been selected for analysis, the Arcadia platform has been
chosen for its accessibility and willingness to share information.
Additionally, Binance Charity has been selected as a crowdfunding platform pro-
posed by [Link], one of the main cryptocurrency exchanges that proposes and
creates the Blockchain Charity Foundation with the aim of improving transparency
in philanthropic donations, expanding the use of cryptocurrencies, and accelerating
sustainable global development. Its choice is motivated by its pioneering nature in
this area of activity.
422 N. A. M. Senan and I. A. Khan

Finally, the evolution and operation of two of the three proposals that have been
working since 2018 in the field of universal basic income (UBI) generation, UBU,
and Mannabase have been analyzed. Through their study, it has been possible to
capture and analyze the changes that have occurred in their mission from a “con-
structive perspective” typical of the multistage and cyclical nature that occurs in
innovation processes and more specifically in social innovation. Processes built on
evidence of trial and error introduce different perspectives to achieve the final objec-
tive that does not vary.
In this context, all the information provided by the GoodDollar initiative (also
known as the GoodDollar experiment), which began its implementation at the end
of the same year to assess the feasibility of using blockchain technology to reduce
economic inequality in twenty-first-century society, was collected and analyzed.
The method of collecting information was based on periodic tests and question-
naires addressed to people who voluntarily made their mobile devices available to
the project by installing a Beta version (or test version of the programmed material),
as well as their commitment to interact periodically, thus ensuring their traffic and
the verification of its operation.

4 Empirical Analysis: Case Studies

4.1 Democratization of Energy Production

In the energy sector, the case of the Pylon Network has been selected and analyzed.
This project is defined in its white paper as “an energy-neutral database, using
Open-Source blockchain technology, specially designed to meet the needs of the
energy sector. It is a blockchain code that is fast, scalable, and with minimal energy
requirements, designed to play the role of digital communication infrastructure for
greater participation of distributed assets in energy markets, as well as the provision
of digital energy services in the future of our energy systems.”
The Pylon Network is thus presented as a decentralized platform, in which the
different stakeholders of the energy sector (i.e., consumers, traders, distributors,
energy producers) can “dump” information on their trading history and will also be
able to access it on an open-source basis, with greater security and transparency. At
all times the project is conceived as an improvement solution oriented to the end
customer, to enable a more transparent, open, and competitive energy market for the
end user.
The ultimate objective of this project is to enable companies offering energy
services to analyze them and, based on the results obtained, to build a set of services
that will enable them to use energy more efficiently. The aim is to generate efficient
energy use, which will determine a saving in economic costs for the energy
consumed.
The Implementation of Blockchain Technology in the Development of Socioeconomic… 423

For this purpose, the Pylon Network provides users with an app that allows them
to access their energy data and share it with energy service providers. This tool is
part of the wide range of instruments through which an alternative ecosystem is
being built, formed by consumer and user cooperatives with proposals, all grouped
under the second-degree cooperative, which works for a new energy model in India.
The blockchain algorithm used in the Pylon Network, Pylon Coin CORE, has
been specifically designed for the energy sector and aims to meet the needs of scal-
ability, security, and privacy, as well as sustainability based on minimum energy costs.
The technical characteristics of Pylon Coin Core are accessible through the
Github platform, being relevant to highlight the critical aspects that have been taken
into account in the design of this algorithm, such as the carbon footprint involved in
its operation and the scalability of the system. The coherence with the aforemen-
tioned critical aspects underpins a proposal with a cooperative and noncompetitive
vision in the block mining process, which is decisive in achieving a much lower
energy consumption per transaction than those existing in other consensus protocols.
While the tool is accessible to any operator in the energy sector, regardless of its
legal form, the Pylon Network aspires to the democratization of information and the
consequent construction of a cooperative ecosystem that allows a real decentraliza-
tion of the sector. In fact, and coherence with this, a pilot test was carried out in
March 2018 within the cooperative. For this purpose, smart metering devices were
installed that made it possible to acquire consumption data in real time, to trace the
origin of the energy consumed, and thus to be able to pay for energy exchanges
between users participating in this decentralized network.

4.2 Crowdfunding

In the late 1990s of the last century, the tools of information and communication
technologies were introduced in various types of crowdfunding proposals. This
funding modality, commonly known as crowdfunding, consolidates small contribu-
tions, about the overall amount pursued, from multiple donors to cover the economic-
financial needs of certain projects proposed by specific individuals or entities.
Among them, an endless number of projects aimed at social action have been
generated, which sometimes face a double problem: technical and ideological. On
the technical side, the use of platforms that provide crowdfunding services implies
the payment to them of a percentage of the funds raised for their maintenance,
which usually ranges between 4% and 8% of the total amount raised, and on the
other hand, the use of payment gateways that introduce an additional cost to the
amount donated by the people participating in the project. In most cases, this type
of financing requires a factor of trust in the entity or its managers, to which resources
are contributed, since this type of operation does not make it feasible to track the
final destination of the funds applied.
From an ideological perspective, and taking into account these collateral pay-
ments that arise from the mere fact of participating in a traditional crowdfunding
424 N. A. M. Senan and I. A. Khan

campaign, sometimes there is the paradox that the bank fees paid go to the coffers
of financial institutions that play a role in this scheme of operation that also deter-
mines the problem to be addressed. For example, think of projects that try to help
people who are victims of war conflicts, and that with the creation and management
of a crowdfunding campaign for this purpose, generate a flow of commissions to
financial institutions that are possibly using these same funds to finance companies
producing the weapons that are used in this same conflict.
However, the emergence of blockchain technology and its use in crowdfunding
schemes for social action projects solves most of these problems. The use of cryp-
tocurrencies can minimize the amount of possible payments to third parties and
adds a trust factor regarding the final destination of the donation since it enables the
traceability of the donation. This trust factor is provided by the very nature of block-
chain technology, which enables a traceability system that allows knowing in which
expenditure each of the units of value that have been donated has been applied.
The possibility of dividing each cryptocurrency unit into values that occupy deci-
mal positions very far from the unit, as shown by the Bitcoin (BTC) and a Satoshi
or minimum unit of measurement of value that is equivalent to 10–9 BTC, giving
them a negligible value if they are observed in isolation, opens the door to the emer-
gence of nano-donations. However, if this type of donation is observed in a massive
environment, with a sufficient critical mass of contributors, it adds value to the
concept of crowdfunding and the construction of large collectives around specific
projects.
An example of the use of blockchain technology for these applications is the
Binance Charity platform offered by the Binance Charity Foundation (BCF). This
platform presents different projects with positive social impact that have passed due
diligence carried out by the foundation’s technical team, which guarantees the
appropriateness of the project to be financed on it, always seeking to optimize the
social impact of each monetary unit used. The donor or entity has the possibility of
choosing among the set of projects presented, and to which of them he/she wants to
make his/her donation. If the donation is not directed to any specific project, it is
managed through the Binance Charity Wallet, which unilaterally distributes the
funds received.
The operating costs involved in the donations received through this platform are
assumed by Binance ([Link]), a proposed financial ecosystem around
blockchain technology, thus maximizing the percentage of donations that reach the
final beneficiaries.
Donations can be made through the use of different cryptocurrencies, which
allows the implementation of mechanisms to track donations by anyone, as the
Binance blockchain is a public blockchain.
BCF is just one example of the potential that blockchain brings to the field of
donations. Other examples that can be taken into account in this context are BitGive,
BitHope, Helderbit, and GiveTrack. There are also proposals for the creation of
digital currencies for social purposes to support specific programs, such as Clean
Water Coin, PinkCoin, or AidCoin.
The Implementation of Blockchain Technology in the Development of Socioeconomic… 425

4.2.1 Financial Inclusion

In 2018, the number of refugees fleeing war conflicts in their countries of origin,
including due to situations of climate change that made it enormously difficult to
access a dignified life, reached 70.8 million forcibly displaced persons, twice as
many as 20 years ago (UNHCR, 2020). The dimension of this reality has placed it
in the focus of attention of global civil society constituting a problem of political
and humanitarian urgency.
Among these problems is the inability to access banking and financial services,
either due to the lack of proof of identity and/or roots in the destination country or
due to the host country’s policies. According to the World Bank’s Identification for
Development (ID4D) initiative, around one billion people around the world lack
official proof of identification, making it difficult for them to access multiple ser-
vices, including banking services. This situation undermines the potential integra-
tion of refugees, their access to work and finance, and undoubtedly their ability to
pursue entrepreneurship as an economic outlet (UNHCR, 2020).
Faced with this situation, the Arcadia Blockchain for Refugees Association has
built the Arcadia platform through which resources are offered to nongovernmental
organizations (NGOs) working in the field of refugees, to provide cash transfer
services to this group that lives in a situation of financial exclusion. This group is
quantitatively very significant, as evidenced by a recent study conducted by Arcadia
according to which, as an example, 80% of Myanmar refugees had no access to
financial services. This exclusion arises mainly due to the refusal of financial insti-
tutions to open bank accounts. Blockchain technology offers these people the pos-
sibility of having an account where they can receive and manage their money, under
the supervision of the NGO that offers these services through the Arcadia platform.
According to the Ethereum community’s website ([Link] this is
“the world’s largest and most active blockchain community. It includes core proto-
col developers, crypto-economic researchers, cypherpunks, mining organizations,
ETH holders, application developers, ordinary users, anarchists, Fortune 500 com-
panies….” The size of this community makes it possible to guarantee that, if the
NGO through which you are managing your account with Arcadia should stop
offering the service for any reason, it will continue to be available to users without
the need for intervention from the former.
This blockchain has a cryptocurrency, the Ether (ETH), which is the element that
will be used to transfer, to the users of this system, the value with which to make
payments. Likewise, the choice of Ethereum guarantees the existence of a large
community among developers and users that constitutes a mainstream ecosystem
that has been operating since 2015.
The objective of this entity is to enable the inclusion of these groups in the local
economy of the place where they establish their residence, either temporarily or
permanently, under equal conditions. To this end, Arcadia has created tools that are
easy to understand and use, even for people unfamiliar with cryptocurrencies and
their operations, to simplify the entire process of receiving funds from refugees,
426 N. A. M. Senan and I. A. Khan

who are currently its main target users, and their use in their real economic
transactions.
This operation begins with the registration of the person who is going to use this
form of payment on the Arcadia platform. All that is required is an email account
and a postal address to which the Arcadia application management entity will send
a physical card containing the public key of the ETH wallet, which is issued at the
same time, and the private key of the same account in another complementary card.
The aforementioned public key is valid for accessing the platform and performing
all the necessary operations, such as checking the balance of the wallet through
which the user receives the funds, obtaining those funds, and even sharing them
with other people who may need them. The private key is necessary to perform
transactions and pay for products and services and is used together with a pass-
phrase that protects it from misuse in case of loss.
Likewise, and for the approach of charging for products and services, ETH is
used as a unit of value. For this purpose, Arcadia provides a platform that makes it
understandable to merchants, without technical knowledge about blockchain, the
use of ETH as a means of payment. To this end, they simply need to register their
business in this application, associating an ETH wallet in which to receive pay-
ments, and indicate the fiat currency, which can be in euros, dollars, or other curren-
cies, in which the prices to be used in transactions are marked.
This operating scheme, as is to be expected since it is based on a technology that
is still at an incipient stage of development, has certain drawbacks that must be
taken into consideration when it is used.
Cryptocurrencies in general, except those known as stablecoins that have been
designed to maintain a stable value against fiat currencies, such as the DAI or the
USDT, present a certain component of volatility that introduces a certain factor of
uncertainty in this scheme. To minimize these effects, Arcadia proposes to the dif-
ferent users to convert ETH to fiat currency in a reasonably short time and thus
obtain an exchange rate close to that existing at the time of the transaction. Arcadia’s
future action plan contemplates obtaining the necessary license to directly exchange
cryptocurrencies to fiat currencies, to subsequently launch its token, designed with
the stablecoin vision, referenced to various fiat currencies. All this is possible thanks
to the possibilities that the Ethereum blockchain offers for the creation of proprie-
tary tokens in a standard format (ERC20), which enables them to be used in the
construction of new applications using smart contracts.

4.2.2 Universal Basic Income

Universal basic income (UBI) consists of the periodic and unconditional transfer of
income to all people in a society who find themselves in conditions of poverty and
exclusion, and this is in terms of an established right. It is beyond the scope of this
paper to analyze its relevance or the possibility of its implementation in the twenty-
first century, as there is a large number of works on this subject to which the reader
is referred. However, the concept of UBI has been considered in this study since
The Implementation of Blockchain Technology in the Development of Socioeconomic… 427

blockchain technology enables a corpus of tools that will make it possible, together
with the will of the members of society, to build alternative social and economic
ecosystems where the concept of UBI is contemplated.
At the very core of these new ecosystems is the possibility of introducing alterna-
tive operating dynamics that give a different meaning to the concept of the value of
tangible goods and to that of human relations. These dynamics are based on the
establishment of automatic and decentralized systems for the creation and distribu-
tion of cryptocurrencies that guarantee equality among the different participants.
Such proposals can indeed be seen as an attempt to question the current status
quo, however, and regardless of this, what is relevant is that within them are differ-
ent proposals that are born under the shelter of cryptocurrencies created ad hoc, as
well as a set of smart contracts based on which the rules for their distribution and
use are defined.
In the blockchain technology space, there are different proposals revolving
around the concept of the UBI and its implementation that use this technology as a
way to solve people’s income inequality and as a tool to fight extreme poverty.
One example, which has a relevant track record, is the UBU project ([Link]-
[Link]). This is an initiative developed by a DAO (decentralized autonomous
organization) that distributes 100 UBU tokens daily, through a specific digital wallet
for this value, among all the people who have registered as a citizen in the applica-
tion created for this purpose. In parallel, the UBU project builds a network of ven-
dors (merchants) that use this platform as a tool to promote their brands and
products, establishing different pricing strategies such as the introduction of part of
them in UBUs. As stated on its website “The UBU project is an ambitious effort to
monetize the waste and inefficiencies present in all economic ecosystems, and re-
distribute that value to all participants in the UBU world.”
A UBU is a free token that is distributed daily among all citizens registered on
the platform, forming the central part of an autonomous and decentralized UBI
ecosystem. This token can be used to make value transfers between citizens and
make payments at participating merchants as an alternative to traditional means
(cash, credit, and debit cards). One of the main features of this proposal is the pro-
cess by which the balance of each citizen’s wallet is reduced daily by 1% of its
volume, which returns to the system to be distributed again among citizens follow-
ing the usual scheme. This fact can be understood as part of an oxidation process
that encourages the use of this token as an instrument of measurement and value
transfer and penalizes its accumulation. This process arises from the concept cre-
ated by Silvio Gesell (1862–1930) which refers to the expiration or loss of value of
money with time to avoid its speculative accumulation.
The UBU project in its early stages was presented as a tool to fight extreme pov-
erty based on the creation of a new ecosystem of citizens and suppliers. The same
was provided with a set of actors with tools that make it possible to extract value
from dying assets (products not accepted by the traditional market either by the
proximity of its expiration, its design out of current trends, being items already
used, etc.), and inject them back into the ecosystem itself creating a network of
equitable distribution of wealth. Currently, the project’s operating fundamentals
428 N. A. M. Senan and I. A. Khan

maintain the automatic and decentralized distribution of UBUs with an objective

focused on establishing relationships with commercial brands that introduce their
use in their marketing strategies.
Another example of the use of blockchain technology in this field is presented
under the name Mannabase. This proposal carries out the distribution of a UBI
among all the people registered on its platform and whose identity has been verified.
A specific cryptocurrency created for this purpose, manna, is used for this purpose.
This cryptocurrency is the basis of value distribution proposed by the People’s
Currency Foundation as part of a set of tools built using blockchain technology,
which under the common denominator of Hedge for Humanity ([Link]-
[Link]) covers the spaces of generation (humanity fund) and distribution
(manna) of wealth, as well as the identification of the people receiving the transfers
([Link]) as unique human beings.
Similar to what happened with the UBU project proposal, a strategic and sustain-
ability reflection has been carried out around the whole project itself. These reflec-
tions have had a lot to do with the scalability of the project and its sustainability
based on the costs that the use of the technology itself implies. In this last sense, the
inherent cost of maintaining the servers that host the hot wallets used for the distri-
bution of assets, and the lack of profitability for Mannabase block miners in an
exclusive blockchain, forcing migration to another more robust and scalable block-
chain, should be identified. The project remains a pilot project that has been financed
with funds provided by its founders and through the dedication of volunteers and
supporters. From a future perspective, this group of actors is focused on the search
for more funding that will allow the project to be scaled up to a level where it can
have a significant impact on people’s lives.
Finally, a third example that deserves consideration along the same lines is the
GoodDollar. This proposal is presented as a research program focused on reducing
inequality based on the appropriate use of blockchain technology. To this end,
thanks to the participation of volunteers as users of the service, a distribution test of
its cryptocurrency is carried out. As detailed on its website, its mission is “…to
build a new open-source global cryptocurrency, called GoodDollar, that serves to
distribute money using the principles of the UBI.”
This is a nonprofit project that, like the projects considered previously in this
section, aims to promote the creation of an alternative ecosystem aimed at reducing
inequality among people from an economic perspective.
The research areas of the GoodDollar project are aimed at finding solutions to
the challenges that condition the operation of a UBI on a global scale. These
areas are:
1. Social identity, guaranteeing the unique identity of the user in the blockchain
technology paradigm
2. Social interest, implementing a system in which the participation and commit-
ment of the community are capable of creating added value
3. Social governance, seeking a governance model that allows communities,
regardless of their size, to self-manage their economy
The Implementation of Blockchain Technology in the Development of Socioeconomic… 429

5 Conclusions

Blockchain technology is still at a very early stage of development and requires

improvements in the areas of standardization of developments, security, and regula-
tion. There is a significant disparity between the different blockchains in cyber-
space, so standardization will facilitate the interaction between different blockchains,
making these interactions and the development of applications created on the same
blockchain more efficient. Likewise, the lack of a legal framework around it creates
a situation of legal uncertainty, similar to what happened in the early stages of the
development of crowdfunding platforms, which is a conditioning factor for its
development. The creation of this regulatory framework will be decisive for the
more agile deployment of this technology in an atmosphere of security, generating
confidence for the different interest groups that arise around each of the proposals
that appear.
Glimpsing the future of blockchain technology is complicated beyond the con-
viction, evidenced throughout this work, of its implementation in many of the
exchange processes, both of value through the different fungible tokens that cur-
rently exist and the continuous appearance of new tokens over time, and of physical
assets through the use of non-fungible tokens. However, the number of applications
of this technology outside the purely financial sphere is increasing, and, thanks to its
characteristics, it offers distributed, transparent, and secure solutions to a wide vari-
ety of economic, social, and environmental problems.
The vision behind this technology bets on a perspective of values that go beyond
the concentration of economic power that occurs in the dominant capitalist system,
opening the door to the construction of a new paradigm that references the value of
things, behaviors, and the exchange itself built on different bases than the traditional
ones, and with transaction instruments that do not necessarily have to have a direct
reference to those existing today.
While the advantages of new technologies usually favor consumers who have a
personal situation of wealth and connection, blockchain technology can be directed
towards the creation of opportunities for the weakest and/or most marginalized part
of the citizenry. In this sense, the elements that form part of the framework of the
cryptographic community that creates these new opportunities will play a relevant
role. Thus, there are more and more initiatives for the use of this technology in areas
of social impact sponsored by relevant actors in this sphere, such as
UNICEF. Similarly, these impact applications can pave the way for the achievement
of the Sustainable Development Goals (SDGs) of the 2030 Agenda, by placing
decentralized tools in the hands of civil society that enable it to meet the demands
for action that this entails.
Blockchain technology is at an early stage, but is developing rapidly, and is being
used in a wide range of fields. The speed of growth of this transformative tool will
depend on how the deficit of developers and programmers with sufficient knowledge
of it in the market is solved, on the regulatory framework that is established around it,
and, of course, on the vision that entrepreneurs have of social and environmental
problems and their willingness to face them since blockchain is just the tool.
430 N. A. M. Senan and I. A. Khan

References

Antonopoulos, A. M., & Wood, G. (2018). Mastering ethereum: Building smart contracts and
dapps. O’Reilly Media.
Buterin, V. (2013). Ethereum white paper: A next-generation smart contract and decentralized
application platform.
Dźwigoł, H., & Dźwigoł-Barosz, M. (2018). Scientific research methodology in management sci-
ences. Financial and Credit Activity: Problems of Theory and Practice, 2(25), 424–437.
Frey, C. B., & Osborne, M. A. (2017). The future of employment: How susceptible are jobs to
computerization? Technological Forecasting and Social Change, 114(C), 254–280.
[Link]
Iansiti, M., & Lakhani, K. R. (2017). The truth about Blockchain. Harvard Business Review, 95(1),
118–127.
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system.
Pylon Network. (2018). The energy Blockchain platform white paper.
Rashid, Y., Rashid, A., Warraich, M. A., Sabir, S. S., & Waseem, A. (2019). Case study method: A
step-by-step guide for business researchers. International Journal of Qualitative Methods, 18.
Rohr, J., & Wright, A. (2017). Cardozo Legal Studies Research Paper No. 527. University of
Tennessee legal studies research Paper no. 338, available at SSRN. Blockchain-based token
sales, initial coin offerings, and the democratization of public Capital Markets. SSRN Electronic
Journal.
Roth, F. (2009). The effect of the financial crisis on systemic trust. Intereconomics, 44(4), 203–208.
Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage.
The Impact of Smart Technologies on SME
Sustainability: The Mediation Effect
of Sustainability Strategy – Literature
Review

Fatema AlZayani, Allam Hamdan, and Haneen Mohammad Shoaib

1 Introduction

In the last few decades, enterprises have had great potential through the utilization
of smart technologies to sustain their competitiveness. Smart technologies are
defined as information, material and social-political technologies with advanced
and intelligent features (Mizintseva, 2020). Such technologies include big data, the
Internet of Things, cloud computing, and artificial intelligence, and contributed to
digital economy trends (Kusiak, 2017).
However, small and medium-sized enterprise (SMEs) experienced challenges to
their survival during uncertainty among larger enterprises, although customers and
suppliers may increase their expectations through effective technology (Zutshi
et al., 2021). The literature finds that organizations have to adopt sustainability strat-
egies in their management practices, to help to obtain successful business perfor-
mance in profitability, while ensuring environmental stability and social sustainability
(Saunila et al., 2019).
Therefore, the study contributes by examining the problem of the failure of
SMEs to sustain the business, as strategic and financial planning are considered a
major key to business success. Smart technologies can help SMEs to gain sustain-
able and growth performance achievements along with effective strategic practices.
Many authors have found that the sustainable performance of SMEs is determined

F. AlZayani (*)
Ministry of Health, Manama, Kingdom of Bahrain
A. Hamdan
College of Business & Finance, Ahlia University, Manama, Kingdom of Bahrain
H. M. Shoaib
University of Business and Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 431
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
432 F. AlZayani et al.

by three sub-factors: profitability, social sustainability, and environmental sustain-

ability (Kumar et al., 2020).
The literature review has covered the theoretical framework, and scholars have
contributed to the adoption, of smart technologies in the sustainable performance
of SMEs.
“Environmental, social sustainability and profitability” performance factors,
which indicated the quantitative statistical analysis of the study.
The framework is determined by two theories, as follows.

1.1 Institutional Theory

Institutional theory is defined as the ability to inspect business or society borders,

whereby SMEs are shaping their business strategies upon borders, in order to sus-
tain their businesses and lead to growth (Shibin et al., 2020). Sustainable processes
are not voluntary activities, whereas a firm's performance is affected by various
challenges, such as governmental regulations and global pressures. Such theory
focuses on internal or external factors of a firm centralized in sustainably innovative
ways (Caldera et al., 2019).
The implications of institutional theory have many creative ways in the context
of institutional limitations, such as developing business strategies in a proactive
way, a firm strengthening its development, and participation activities within com-
munities and authorities. A sustainability term in institutional theory belongs to the
three factors that act as a driving force on behalf of a firm's actions, forceful pres-
sures, imitative pressures, and normative pressures. The factors were aimed at
enhancing a firm's initiatives for a sustainably objective, environmental, and social
growth performance by which SMEs achieve and create a value (Nimfa et al., 2021).
The theory view of gaining innovative capabilities with SME sustainability
growth by pursuing the factors of a firm's culture, social environment, cultural val-
ues, economic schemes and market value, sustainable business models, and obtain-
ing efficient opportunities (Hadjimanolis, 2019).
In addition, the behavioral action demonstrated by enterprises behind institu-
tional theory are to fulfill stakeholders’ needs and society stability. Moreover, the
theory forwards factors pressure to sustainability directions by enterprises, although
its framework facilities offer an innovative approach through cooperation with a
large group of stockholders to increase the sustainable factor growth of SMEs
(Ratten & Usmanij, 2020; Ahmad et al., 2020).
It was concluded that the sustainability concept of SMEs is theoretically sup-
portive by using the institutional theory, which reshapes business practices, creates
sustainable business models, besides addressing environmental, social, and eco-
nomic factors. The theory meets the needs of stockholders and increases profitabil-
ity on objective ways towards business growth in the marketplace.
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 433

1.2 Diffusion of Innovation Theory

The diffusion of innovation (DOI) theory illustrates the innovation and technologi-
cal orientation concept transferred over decades for different purposes. The DOI is
defined as the process of adopting and introducing a new innovative approach. One
of the theory's frameworks is the strategic management field; another framework
used the theory in the adoption of technologies and spreading innovation with a
wide range, which contributes to the business effectiveness of SMEs (Stuart, 2000).
The term diffusion is defined as “the process while innovation function commu-
nicated internally between social systems members through selective channels over
time”. Innovation is defined as a practice and an idea that are specific to a large
scope of components that have been adopted. Therefore, the main elements of the
DOI concept are innovation, time, channels of communication, and social structure.
The adoption of technology is involved in DOI theory; one of the major drivers of
SME sustainability and optimization objectives is adopting new technology innova-
tion (Anderson & Eshima, 2013). It has led to significantly better income ratios,
creative business processes, and growing employment factors toward economic
growth (Jia et al., 2020).
The capabilities of innovation extend the enterprise competitiveness by the adop-
tion of technologies and reengineering of strategic businesses operations; it pro-
motes sustainable opportunities for SMEs in the context of businesses stakeholders,
suppliers, customers, and governmental organizations (Miola & Schiltz, 2019).
According to Sustainable Development Goals (SDGs) 2030, the DOI involves the
establishment of dynamic capabilities in order to improve innovation culture to
enhance SME growth, and it is contributing significantly to global economic stabil-
ity (Francke & Alexander, 2019; Nimfa et al., 2021).
It is concluded that adopting smart technologies in the SME sector considers a
theoretical lens used to establish the diffusion of innovation theory. It is the innova-
tive way of improving the strategic business model, extending innovation to busi-
ness processes toward technology orientation, and growing economic and social
systems. Institutional and DOI theories carry through the concept of the study, and
smart technologies examine DOI theory. Moreover, institutional theory performed
by SME sustainable performance factors, which are profitability, and environmental
and social performance.

2 Literature Review

In recent decades, SMEs considered engines that drive the development of the eco-
nomic era. SMEs support businesses account for 99% in developing countries, a
result of economic development through job creations, tax provision, and participat-
ing in gross domestic product (GDP).
434 F. AlZayani et al.

Well-managed SMEs with a healthy image are an important source of global

economic stability. They contribute to social justice activities and increase tax rev-
enues. As studied by the International Finance Corporation, there is an imperative
relationship between the country income level and the large group of SMEs per
1000 people. SMEs in Arab countries drive the three main forces to strengthen per-
formance. First, an imperative vehicle of stabilizing the economy by the terms of
employment and alleviation of poverty power, and contributing a big share of the
labor force. Second, they are one of the key components in sustaining the national
economy and export power. Third, they significantly extend the economy to be
adaptable to global fluctuations and crises (Elasrag, 2011).
In Arab countries, SMEs are the emergence of the private sector, which led to
total growth of the national economy. However, it is important to address the chal-
lenges in the growth of the role of SMEs toward maintaining the growth of develop-
ing countries (Vrgović & Jošanov-Vrgović, 2018).

2.1 Smart Technologies

The development of new technologies is considered a revolution, because of their

ability to induce a wide range of changes in activities. Smart technologies have
influenced business models and disrupted traditional business practices. Moreover,
the implications of smart technologies need to be utilized by firms, to enhance their
business practices and achieve their business goals.
Smart technology is defined as an artifact intended to offer consumers consider-
able control and its ability to interact. In other words, the technology beyond the
normal sending and receiving, or consumer searching for information (Liu
et al., 2020).
Liu et al. (2020) also provide a definition that considers smart technologies to
have the attributes of self-monitoring, analysis, and reporting. The implications are
that smart technologies interact with the user and guide their behaviors.
Fiorentino et al. (2020) identifies three types of smart technologies that include
smart devices, smart connected devices, and Internet of Things (IoT) devices. In
addition, smart devices have basic automation and are programmed through an intu-
itive user interface. Smart connected devices are remotely connected or monitored
by Bluetooth, Wi-Fi, or other technologies. Although IoT devices are defined as
software products that generate more value than smart or connected devices, the
implications are that smart technologies are scalable, upgradable, automated, and
future ready.
Many studies have sought to define the concept of smart technologies by evaluat-
ing their attributes. Roy et al. (2018) find that smart technologies are programmable
and addressable because they can accept new reconfigurations and answer messages
individually. The implications are that smart technologies interact with users, or are
modified for new functions.
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 435

Another study identifies smart technologies as possessing communicability and

memorability, which helps in message communication, recording, and archived
information, which is created, sensed, or communicated. The features are impres-
sive, as it shows the potential of smart technologies to enhance business processes
and understand the changes in the business environment (Cedeño et al., 2018).
Lee and Trimi (2018) have conducted a study to demonstrate the characteristics
of smart technologies. The findings conclude that interactivity, editing and distribu-
tion, and openness options have specific characteristics. Interactivity refers to tech-
nologies that communicate with users and understand their needs. The editing
option refers to updating content, items, and data, whereas openness allows digital
technologies to be accessible and modifiable. The distribution option allows tech-
nologies to bypass geographical or time-related constraints.
The researchers identify the characteristics of digital technologies and evaluate
their efficiency in business applications. Moreover, these technologies are utilized
to enhance the quality of life and provide objectives for all the stakeholders of an
organization. Smart technologies can assist organizations in gaining higher reve-
nues, enhancing customer experience, and boosting employee satisfaction, as it
restructures their organizational environments to improve productivity and output
(Lee & Trimi, 2018; Fiorentino et al., 2020; Cedeño et al., 2018).
As a contribution, smart technologies represent the next level in the evolution of
technology. Organizational growth and integration have led to disruptions in tradi-
tional business models. Moreover, there is considerable potential for smart tech-
nologies to be applied in various sectors. Such an approach will be beneficial, as it
will help to solve many problems faced by human society and economic challenges
(Lee & Trimi, 2018).

2.2 Smart Manufacturing in Industry 4.0

Kahle et al. (2020) explain that, in order to achieve the capacity to build smart prod-
ucts that represent a high level of technical and economic feasibility, SMEs need to
build collaborative systems. The ability and competence to build such products are
rarely found in one company. Hence, the best approach for SMEs is to collaborate
with each other to create smart products using smart technology. It is expected that
such collaboration enables them to overcome the financial constraints to the acquisi-
tion of smart technology.
A study by Rauch et al. (2019), suggests that SMEs in developing countries,
which benefit from Industry 4.0 technologies, might promote smart manufacturing.
It ensures that supply and manufacturing match accurately with demand by using
IoT technologies that integrate manufacturers’ internal processes with those of sup-
pliers and customers.
In addition, Rauch et al. (2019) suggest that the results of such integration might
be immense. However, it requires close collaboration between the different stake-
holders. Furthermore, they explain that sizable barriers exist to the adoption of
436 F. AlZayani et al.

smart manufacturing technology such as 3D printing that could help SMEs to man-
age their production costs, to be more efficient, while contributing less toward envi-
ronmental pollution.

2.2.1 Big Data

Iqbal et al. (2018) argue that SMEs can benefit greatly by adopting big data systems
and methods. They explain that SMEs can achieve sustainability with big data usage
in many ways. For example, big data promote the openness and transparency of
information, which can help managers to make quicker and more effective deci-
sions. They can store data in electronic form, which increases the speed during
access. Customer-related data could be used to generate reports and decision-
making tools for more accurate predictions about customer behavior.
Iqbal et al. (2018) also claim that SMEs can use big data to make their logistics,
supply chain, and customer service operations more efficient. The interesting thing
about big data is that it allows firms to benefit at all stages of their development, as
it is extremely beneficial for SMEs and other firms at an early stage of their develop-
ment. Through joining the big data revolution, SMEs can not only identify trends in
customer behavior and develop products accordingly, they can also spot environ-
mental threats and risks that might pose a risk to their growth and survival in the
industry. For this reason, it argued that big data is a critical element of the smart
technology strategy of SMEs.
Liu et al. (2020) also touch upon the role of big data, in that it is helping SMEs
to achieve sustainability. They criticize SMEs for being late to big data, mainly
because of the common perception that big data are utilized for more by large orga-
nizations than by SMEs. However, Coleman et al. (2016) argue that since SMEs are
an important part of the economy, they should lead the big data movement to address
complex issues relating to stakeholder management, quality management and even
influencing national economic policies. That has contributed SMEs addressing the
issues that affect their productivity, using data-based policies and strategies.
It concluded that big data analytics provide opportunities for the sustainable per-
formance of SMEs. It is achieved when SMEs understand their need to analyze
critical data and apply them to their strategic goals. Moreover, data analytics have to
develop in a robust and sophisticated way, so that SMEs achieve their sustainabil-
ity goals.

2.2.2 Cloud Computing

Asiaei and Rahim (2019) find that cloud computing offers many benefits to SMEs,
whether they adopt this technology at an early stage or migrate to it later in their
development. The biggest benefit comes in the form of cost savings as SMEs do not
need to spend as much on hardware, such as servers that represent a lot of unused
capacity, and wasted funds while the firm is still in a growing phase. By making
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 437

accurate strategic decisions with regard to their IT investments, SMEs can not only
achieve a flexible position concerning their IT resources and capacity, but it also
reduces the carbon footprint of their IT operations. The support provided by cloud
companies ensures that their systems are responsive to customers’ requests perma-
nently, and it maintains smooth coordination with supply chain partners.
Assante et al. (2016) have a view that finds that cloud computing offers various
advantages to SMEs, mainly in the area of learning. Cloud computing allows data
to be more accessible to teams working on different projects, regardless of their
access to particular hardware or networks. This significantly increases their produc-
tivity, as they can continue to work flexibly from different locations. For the growth
targets of SMEs, such flexibility is of paramount importance, especially when the
organization is in the process of acquiring customers, studying the competition, or
developing a new product.
According to Assante et al. (2016), when employees have greater and more open
access to data, their capacity for learning increases dramatically and they make bet-
ter decisions regarding the growth and sustainable performance of the SME. Neicu
et al. (2020) suggest that one of the major benefits of cloud computing for small
businesses is that they only pay for resources used, and can easily access additional
resources on demand. Their response to IT-related issues is more flexible as they are
not bound by technology or geography for their need to access data.
Despite previous advantages and the fact of cloud computing being conceptually
close to the existing computer networks that firms use, there is limited awareness of
the benefits that cloud computing offers to SMEs, especially with regard to their
sustainable performance goals (Assante et al., 2016, Neicu et al. (2020).
It is concluded that cloud computing is a viable smart technology; it enhances the
productivity and robustness of SME business performance. It can reduce resources
and energy usage through an effective approach. However, SMEs need to select the
best cloud computing platforms that are reliable and flexible solutions to meet their
specific needs.

2.2.3 Internet of Things

The impact of IoT adoption in the context of SMEs has various results and improve-
ments in a number of areas of SME operations reported. For example, SMEs s uggest
that processing speed be optimized when automation is introduced into the supply
chains. At the same time, innovation is enhanced and the SME is able to produce
products of higher value than previously (Vitkauskaitė et al., 2019).
The study suggests the potential of IoT to create profitability for SMEs; it also
has an indirect positive effect on the overall sustainability of SMEs, as it develops
efficient relations with suppliers and customers that lead to efficient supply chains
and minimization of waste, as well as achieving environmental sustainability
(Vitkauskaitė et al., 2019).
Voda et al. (2021) have suggested that SMEs have different resource and market
profiles than large firms, which makes it challenging to transfer sustainability
438 F. AlZayani et al.

strategies of large firms to the SME environment. However, although the IoT
requires initial financial investment to make and integrate the technology into the
enterprise, which may not be possible for all SMEs, especially those in developing
countries, government funding can support and alleviate this concern to a consider-
able extent and assist SMEs to derive the sustainability benefits and business growth
by the adoption of smart technologies.
When it comes to the IoT, there are many benefits to SMEs aiming for sustain-
ability. At the same time, there are some challenges, as noted by Nylander et al.
(2017). By focusing on a single case study, Nylander et al. (2017) argue that the IoT
creates opportunities to improve relations with customers, which contributes toward
steady sales and sustainability of operations.
As mentioned in several other studies, access to funds is considered a major chal-
lenge for SMEs planning to implement an IoT system across their organization. The
best solution to this challenge is proposed by Nylander et al. (2017), that govern-
ments support SMEs with their funding requirements. As the government facilitates
the funding and resourcing, the benefits of the IoT may be achieved relatively
smoothly, resulting in greater organizational sustainability.
It is concluded that the IoT contributes to assisting SMEs to achieve sustainabil-
ity by identifying the priority areas and using their core competencies to make
change and growth. SMEs can integrate the technology into their decision-making
processes and supply chain management systems to achieve systematic growth and
development. Moreover, they need to develop a collaborative model in order to
overcome any problems.

2.2.4 Artificial Intelligence and Machine Learning

Bauer et al. (2020) explain that machine learning (ML) and artificial intelligence (AI)
have enabled large organizations to attain a reasonable degree of sustainability through
adoption into their operations and customer-facing activities. Using chat-bots, for
example, the need for dedicated human resources to manage customer queries and
feedbacks is reduced, without any loss of customer satisfaction with the service.
According to Bauer et al. (2020), companies can incur substantial savings
through these innovations; however, the challenge to SMEs is that they lack an
adequate understanding of ML and AI to appreciate how these applications add
value and contribute toward their sustainability. One of the ways of reducing the gap
is by collaborating with partners that possess knowledge about AI and can imple-
ment their systems within these organizations. Through such measures, SMEs can
begin the transition toward AI and derive benefits within a short time.
Hansen and Bøgh (2020) argue that SMEs in the manufacturing sector in particu-
lar have great potential to use AI to their sustainability goals. These organizations
need to identify the enablers and barriers to change in their organizations, to imple-
ment such systems.
In fact, Hansen and Bøgh (2020) propose a model in which IoT and AI are used
in a collaborative way of gathering manufacturing data and feeding it into an
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 439

intelligent decision system that operates under an AI model. This creates a complete
solution by which SMEs can simplify and systematize their data gathering and anal-
ysis processes. Every member of the team, from the operator to the team leader and
manager, can access data at any point of this system for their respective decision-
making needs.
According to a report published by the OECD (2019), AI has the potential to
create an enabling external environment for SMEs that makes it easier for them to
access customers and markets while navigating the complex competitive landscape.
In addition, AI can help SMEs to construct such business models that enable them
to achieve results in scale and productivity. This inevitably leads to the efficient use
of resources and less of an impact on the environment.
Brynjolfsson et al. (2019) indicate that AI has been the most significant trend for
SMEs since the introduction of computers into the workplace. They explain that by
the inclusion of AI into the organization’s systems, the ability to tap into the tacit
knowledge of the organization becomes stronger, whereas previously the members
of the organization had access to explicit knowledge in a comprehensive way. This
has been made possible by the use of sensors, machine language, and other aspects
of AI. Some of the most beneficial applications of AI to SMEs as well as large orga-
nizations include facial recognition systems, processing data in natural language,
big data, and automation. Moreover, most of the previously determined applications
are discussed in previous sections of the literature review.
However, as explained by Huang and Rust (2018), AI also enables SMEs to
achieve a high degree of process automation, which helps products, as well as
service-oriented SMEs, to achieve large-scale efficiencies in their systems. The sys-
tems become self-learning by developing the capacity to access real-time data in
large volumes from multiple sources and using intelligent systems to make deci-
sions responding to changes in the data.
The OECD (2019) report also states that AI plays an active role in sustainable
development as it is a general-purpose technology that is applied across industries
and market segments. A study also finds that AI can help SMEs to achieve financial
transparency and identify ways of reducing costs by integrating sustainability strate-
gies into the business environment. Automated audit processes will lead to an
increased security level, as it will also reduce human error, manipulation, and time-
consuming issues. Moreover, it will reduce the time spent on searching documents
and file maintenance and will lead to the automated maintenance of digital files.
Auditors can find any file or any data they require by using the AI data management
systems (Hansen & Bøgh, 2020).
In addition, it was found that AI contributes to the use of human judgment by
providing comprehensive and elaborate data, as it will reduce their time consump-
tion and increase their performance. AI will help in recording individual financial
transactions in the system. Also, AI will help organizations to analyze their histori-
cal financial figures and estimated future cash flows and cash requirements, which
will result in business profitability (Hansen & Bøgh, 2020).
A conclusion to previous studies in the ML and AI literature review is that AI
enhances the sustainability approaches to SMEs. It can develop a collaborative
440 F. AlZayani et al.

approach to overcoming the survival challenges of SMEs over time. Moreover,

SMEs have to pay attention to their required strategies to achieve the strategic goals
of sustainability and achieve success in the environment.

2.3 SME Sustainable Performance

The rapid industrialization, migration, and development of technologies have

brought prosperity and quality of life for humans. These have improved economic
development in many societies. Technology contributes to enhancing society and
provides humans with comfort and satisfaction. In addition, it contributes to helping
to facilitate communication and provide access to information.
In the world of corporations, technology has brought many opportunities to
develop new models, leading to an increase in revenues and customer acquisition.
However, technologies and rapid developments have resulted in steep prices,
because of degradation and social issues (Bansal & Song, 2017).
Poverty, illiteracy, mismanagement, human rights violations, and others are con-
siderable problems faced by the world. Consequently, the need to fulfil human
development requirements and protect natural resources has given rise to the term
sustainability. The term is defined as pursuing human development activities through
an efficient approach and protecting natural resources (Lyon et al., 2018).
The rationale is that resources require protection for future generations. Business
firms have undergone monitoring in terms of their practices, manufacturing, supply
chain, and other activities that have an impact on society and the environment.
Consequently, the concept of corporate sustainability assumes and is aimed at pro-
viding a business framework, to monitor and track profitable, environmental, and
social value simultaneously. It was found that firms are engaged in corporate sus-
tainability, as it needs to meet the expectations of multiple stakeholders, avoid gov-
ernment regulation, retain their customers, and perform in a highly competitive
industry (Landrum, 2018).
The implications of the previous studies contribute to sustainability embedded in
the organizational model. However, it could not use a standalone approach, as it also
requires to be aligned with the overall business goals. Business firms are rapidly
investing in policies and practices to promote SME sustainability.
Kiron et al. (2017) argue that business firms are using corporate sustainability, as
its belief that sustainable development will not be the domain of policy makers and
regulators. Corporations have been the drivers of economic development; mean-
while, they need to be proactive in balancing the goal with social equity and envi-
ronmental protection. Firms have been partly responsible for unsustainable
conditions (Kiron et al., 2017). In addition, corporations consider the resources to
address such problems.
Saunila et al. (2019) find that the concept of the triple bottom-line has gained
prominence in business entities. The concept considers sustainability to revolve
around three dimensions, which are social, environmental, and profitable outcomes.
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 441

Environmental sustainability refers to actions that conserve the environment, reduce

pollution, mitigate greenhouse gas emissions and apply practices that do not harm
the surrounding environment (Saunila et al., 2019). Social sustainability refers to
welfare and humanitarian programs that empower local communities and support
charitable causes. Profitability refers to achieving revenues after deducting expenses,
satisfying stakeholders, and generating new markets (Alarussi, 2018).
Furthermore, sustainability is considered to be a broad and dialectical concept
that balances the need for economic growth with environmental protection and
social equity, as it is a process of transformation that benefits resources and redirects
investments in an efficient way (Fehrer & Wieland, 2021). Moreover, technological
development and institutional changes are used to meet human needs and aspira-
tions. Thereby, it includes economics, social justice, environmental science, and
business management (Wu et al., 2018).
A brief analytical definition defines sustainability as being continuously rede-
fined under the circumstances of transformations. It has been recognized that gov-
ernment and policymakers would not achieve sustainability. On the contrary, the
industry has to play a significant role, by being proactive in balancing the need for
economic development, social equity, and environmental protection. In addition, it
is consider to be the cause of unsustainable conditions, as well as having the objec-
tive of overseeing resources to address the problems (Atwood, 2018).
Based on the corporate social responsibility concept, the social contract concept
argues that society has multiple interest groups, organizations, individuals, and
institutions, as there are explicit and implicit contracts among all the above groups.
The agreements between the various groups demand trust and harmony. Corporations
as organizations enter into contracts with other members of society and receive
resources, goods, and societal approval to operate in exchange for good behavior.
The above perspective can view SME sustainability as strategic firms emulating
good behavior and showing that they are responsible for the multiple needs of
society.
The implications that firms need to develop their strategies in such a way, it can
also provide benefits for the entire society. Such an approach will help to achieve the
strategic goals. Another useful concept is that social justice states that fairness and
distributive justice create a just and balanced society, as the principles of justice and
fairness are implemented in society, and societal good is distributed among the
members of society. A fair society is defined as the needs of all the members being
met and considered without distinction by groups or individuals with power and
wealth. Moreover, this implies that the term sustainability helps to create fairness
and equity, as a manager works toward appropriately distributing goods in society
(Alda, 2019).
It has concluded that firms need to evaluate their core competencies and identify
areas in which it can contribute toward social and environmental values. Such an
approach will assist the firms to achieve their strategic goals and create a posi-
tive image.
442 F. AlZayani et al.

2.3.1 Profitability

Profitability is defined as company earnings generated by revenues after all expenses

incurred within a certain period have been deducted. Profitability is one of the
important factors considered for business success, satisfaction of shareholders,
investment influence, and corporate sustainability indicators (Alarussi, 2018).
Sooksan Kantabutraab (2020) finds that firms have to be economically sustain-
able, as they can achieve the principle of surplus equal distribution. The implica-
tions refer to practices that support the long-term profitable value of the organization
without a negative impact on social, environmental, and cultural aspects of society
and other stakeholders.
The implantation of innovation in business processes and innovative strategic
practices allow increase the profitability target to be increased, which describes the
term sustainability, and firms can differentiate themselves toward maximizing prof-
its. Such business practices prove the possibility of making a profit while pursuing
such innovative tactics, as they benefits the social and natural environment
(Bekmezci, 2015).
Bekmezci (2015) also finds that the efficient use of resources is driven by prevent-
ing environmental pollution, although by producing products that are in high demand
with consumers, in addition to improving developing countries and their social condi-
tions, such innovative practices lead to an increase in companies’ production regions
and generate new markets for societies toward maximizing business profits.
Meuer et al. (2020) find that good corporate governance refers to economic prac-
tices, whereas the board of directors and management align the shareholders’ inter-
ests with the community, value chains, and end-user customers. The implications
are that accurate and transparent accounting methods are allowing investors to
ensure full knowledge of the company’s transactions, as they are able to vote on
specific issues.
In contrast, profitable and economic sustainability create changes in phases,
which help to attain the strategic goals of the firm in efficient ways. Profitable ways
have the potential to find new, innovative products and processes, in order to pro-
mote economic growth without sacrificing the environment or social variables. The
study finds that recycling resources are sustainable activities that help to reduce
resource depletion and environmental pollution (da Cunha Bezerra et al., 2020).
Moreover, a wide range of green products are available for customers that are
created with a minimal impact on the environment and society. The study also finds
that green industries have begun the process of innovation and creativity, in order to
identify new products aimed at helping firms to remain competitive and strong with
regard to profitable businesses objectives (da Cunha Bezerra et al., 2020).

2.3.2 Environmental Sustainability

Environmental sustainably, or in other words, stabilizing the environment. The con-

cept refers to companies striving to safeguard the environment. The study finds that
environmental stability allows firms to reduce their carbon footprints, packaging
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 443

waste, and overall impact on the environment. The implications are that environ-
mental stability is beneficial for the firm in terms of financial indicators. The overall
spending on materials used for packaging may decrease while the company is
focusing on environmental sustainability (Testa et al., 2020).
Currently, environmental stability is considered a systematic approach pursued
by companies. The study by Zhang et al. (2020) finds that companies will not
engage in superficial actions, as it has to integrate it with the business model. Such
a strategy assists the organization to achieve its key targets. The study also finds that
firms have a negative impact on the environment, by causing air and water pollution,
releasing greenhouse gas emissions, and affecting human health and well-being
(Nunhes et al., 2020).
Consequently, environmental stability is considered vital in order to reduce legal
risks and liabilities. Furthermore, companies have to create sustainable processes
that protect the natural environment.

2.3.3 Social Sustainability

Social sustainability states that firms need to operate with the support and approval
of employees, stakeholders, and local communities. The study by Kitsios et al.
(2020) finds that approaches to managing and securing the social license are multi-
ple. However, it can involve treating employees fairly, being a good neighbor and
community member at the local and global levels. The study states that businesses
focus on retention and engagement with their employees (Silvestre & Fonseca, 2020).
It provides responsive benefits such as superior maternity and paternity benefits,
flexible working, and learning and development opportunities. In contrast, the com-
munity engagement strategies include fundraising, scholarships, sponsorship, and
investments in local public projects (Silvestre & Fonseca, 2020). Another study
finds that businesses on a global scale can be socially sustainable by identifying the
way in which the supply chain is being filled (Aksoya et al., 2020).
For instance, firms may investigate child labor and unfair wages as it makes
efforts to ensure that work in the environment is safe. Social sustainability plays a
vital role in the firm’s success, as it has developed and maintained its image, as well
as ensuring its response to different types of challenges in an effective way.

2.4 SME Challenges and Benefits by Adopting

Smart Technologies

Several strategies address supporting enterprise growth during critical times, such
as innovation in providing products, new techniques in financial resources, supplier
alliances with a different approach, and intelligent management information sys-
tems. Strategic management of critical times inspired SMEs with a new innovative
culture by adding a valuable strategic tool to their business growth on a large scale
(Bourletidis & Triantafyllopoulos, 2014).
444 F. AlZayani et al.

Billing (2016) explains that at times size becomes a barrier to SMEs that seek to
achieve sustainability, as they have limited funds to invest in such areas. Kumar
et al. (2020) note that by using big data analytics, cloud computing, AI, and the IoT,
SMEs can speed up operational tasks such as responding to queries from customers,
increasing the life cycle of current products, promoting innovation, and 3D printing
to minimize inventory requirements. All of these changes in the long run contribute
toward the performance of SMEs by radically minimizing the resources required to
manufacture products and meet customers’ needs.
Smart technology offers SMEs numerous benefits for achieving sustainable per-
formance in the long term through changes in their operational structure and control
mechanisms. As a result, their staff can deliver more orders in a day within the time
that they would spend receiving and accounting for cash payments using manual
methods (Yang et al., 2017).
Another feature of SMEs is that smart technologies can help SMEs to manage
payables and receivables automatically, without human involvement. Energy man-
agement is also an emerging area in which SMEs can be successful in sustainability.
The best example is the smart factory or IoT, which can regulate energy consump-
tion by aligning energy systems in such a way that human error, which would result
in wasteful consumption of energy or causing machines to run at idle capacity, is
reduced (Warren, 2017).
The Government of Bahrain has been considering a program of Economic Vision
for 2030 within a proactive framework, with a future view of the equitable distribu-
tion of national development gains. Therefore, SMEs are aligned with the economic
vision, which will assist Bahrain’s economy to achieve various national goals
(Al-Shakar, 2017).
Linan et al. (2020) find that developing technology innovation can orient global
competitiveness strategies, which leads to sustainable growth for SMEs in the
long run.

2.5 Sustainability Strategy

As the world makes the shift toward sustainability, enterprises are at the forefront of
change and innovation. They are under pressure to achieve their economic value and
generate profits while keeping in mind the social and environmental aspects.
Wijethilake (2017) finds that limited business firms have implemented previous
goals mainly because data to support such a strategy are hard to come by. Such a
problem may not be an obstacle from now on. In the Industry 4.0 revolution, with
the assistance of digital technologies it has become possible to use concepts such as
AI, robotics, and the IoT to support efficient operations that lead to an environmen-
tally sustainable organization. Furthermore, managers may feel compelled to imple-
ment environmentally sustainable policies, in terms of evidence of environmental
degradation, and the role of corporations as irrefutable. In addition, they can no
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 445

longer claim, while there is no proof that factory emissions cause global warming
and drag ecosystems at risk of irreversible damage organization.
Currently, managers have realized that traditional business models are not ade-
quate to meet the needs of a future generation of consumers while maintaining the
ecological balance. Digital technology offers immense support to environmental
performance, as it assists companies to visualize the effects of its polluting activities
in the natural environment. A complete understanding as regards sustainability can
help businesses to justify their investments, and divert funds into more sustainable
projects that gives a better return in the long run (Bansal & Song, 2017).
Hence, sustainable operations are in the strategic interest of businesses, while
being beneficial for the environment. In addition, they ease the pressure of regula-
tors and nongovernmental organizations constantly watching over their shoulders,
to spot the polluting activities of businesses. By merging new software into the
infrastructure and production systems, organizations can maintain functional pro-
ductivity as well as environmental sustainability (Zimek & Baumgartner, 2017).
Likewise, in the fourth industrial revolution smart technologies have also enabled
firms to achieve social sustainability, which is a highly desirable goal for organiza-
tions today. Lyon et al. (2018) concludes that social sustainability is a relatively new
concept but one that is easy to understand. Social sustainability is aimed at develop-
ing products that are accessible and useful to all, as manufacturing itself reduces the
tools needed, in addition to employment systems that benefit workers’ health and
wellbeing. Moreover, it has a positive impact on society by breaking down barriers
to equal opportunities for different categories of people.
An example of the previous study can be found in the form of intelligent vehicle
systems that improve the efficiency of supply chains in organizations, while reliev-
ing human workers of their need to place their safety at risk performing dangerous
activities. Furthermore, the increasing efficiency of job design assists in the design
of ergonomic tools and workstations, and enhancing safety systems, although alarm
systems can ensure that workers operate in a much safer environment than before
(Singh & Kim, 2018). The drive toward implementing smart technologies to attain
sustainability goals has been studied extensively by scholars mainly from an eco-
nomic or efficiency-based perspective. Landrum (2018) finds that climate change
and the associated environmental concerns pose questions regarding the future
shape of operations, especially for energy companies. An example of the previous
study, using systems based on smart technologies, energy companies can save on
resources that are used in cooling operations, which contributes to cost and environ-
mental savings (Akeju, 2021).
In the approach to utilizing the potential of technological development, smart
technologies can help firms to positively reduce their overall costs and increase the
pace toward profitability objectives, while achieving their sustainability goals
(Landrum, 2018). Energy firms benefit as well, and smart technologies offer many
benefits to other industries. Regardless of the industry in which they are used, smart
technologies can help organizations to dramatically decrease costs by reducing the
time taken to produce products and minimizing waste in the production process
(Kiron et al., 2017).
446 F. AlZayani et al.

In particular, it helps to prolong the serviceable life of production machinery, as

it is used to produce a larger output using the same amount of resources. Through
smart technologies, firms can improve the efficiency of their systems, by enabling
production equipment to self-organize output levels and detect errors, in addition to
carrying out machine maintenance at fixed intervals, and schedule fleet systems
according to high demand and availability (Ashrafia et al., 2018).
The acquisition of new materials, products, and equipment can be planned, using
smart technology systems, by managing an integral part of the company’s drive to
reduce expenditure in a host of areas. In addition to this, the overall speed of opera-
tions, product quality, and output volume increases, while maintaining economic,
profitable, and environmental sustainability concepts (Ashrafia et al., 2018).
It is concluded that the integration of smart technologies with SMEs platform
dimensions of environmental, social, and profitable performance, leading to
improvements in their business models. It creates flexible and deliverable values
with faster solutions of business platforms, as it enables firms to achieve their stra-
tegic goals. Moreover, SME sustainability is a systematic process supported by
smart technologies, and contributes to achieving the highest levels of efficiency and
effectiveness; such approaches have led to economic growth of the Kingdom of
Bahrain and to the development of the objectives of the Economic Vision of
Bahrain 2030.

2.6 Innovative Benefits for SMEs Toward the Kingdom

of Bahrain Economic Vision 2030

The Economic Vision of 2030 has been established since 2008, with the various
purposes of implementing the vision of minimizing the high dependence of the
Bahrain economy on gas and oil, promoting the manufacturing sectors, and assist-
ing the Kingdom to face a decline in oil and gas production. Bahrain has made
efforts to empower the industrial sectors such as manufacturing, and the Government
has strived to support strategic practices as a key success to empowering SMEs, fill-
ing the gaps that appear in Bahrain labor force skills (Almuslamania & Daud, 2019).
The Government of Bahrain is considering a program of economic vision within
a proactive framework, with a future view of an equitable distribution of national
development gains, the development of changes in investment, and stimulation of
the private sector, which includes SMEs and large enterprises (Khairy, 2017). In the
same context, SMEs are aligned to the Bahrain economic vision; thus, such govern-
mental strategic goals are important to build entrepreneurial economic develop-
ment, which will assist Bahrain’s economy to achieve various national and strategic
goals, including the Economic Vision of 2030 (Al-Shakar, 2017).
Linan et al. (2020) find that developing technological innovation can orient
global competitiveness strategies, which leads to sustainable competitiveness and
growth for SMEs in the long run. Accordingly, countries are advised to design
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 447

technology innovation tools oriented toward economic strategies in order to achieve

sustainable global goals.

2.7 The Mediating Role of the Sustainability Strategy

in the Relationship Between Smart Technologies
and Sustainable Performance

Small and medium-sized enterprises (SMEs) contribute toward local and national
economies by providing employment and tax revenues. They stimulate local econo-
mies and contribute to the GDP of countries. Furthermore, SMEs assist urban and
rural growth by contributing toward economic strategic visions; this can be a useful
strategy in reducing poverty and empowering local communities (Gherghina
et al., 2020).
Therefore, they have low starting costs, to make it easier to start and develop an
SME. Many SMEs perceive the term sustainability to be relevant for large compa-
nies. However, SMEs integrate sustainability into the core business strategy, to gen-
erate significant dividends in the form of lower costs, reduced risks, and new
opportunities on the way to the target profitability. Sustainability goals are strong in
SMEs, as they need to measure and manage the impact on the environment.
Regulatory and legal frameworks have sought to monitor SMEs; accordingly, they
reduce the negative impact on the environment (Bagheri et al., 2019).
Small and medium-sized enterprises ensure that they have resources that enable
them to offer their products and services in the future. Sustainability initiatives can
be beneficial for the growth and development of SMEs, as they improve their bot-
tom line, as well as offsetting the initial costs by achieving cost savings, positive
brand association, risk reductions, and the ability to meet investor and supplier
demand for environmentally conscientious products and services (Bagheri et al.,
2019; Tukamuhabwa et al., 2021).
Even though traditionally the role of smart technologies was observed to pro-
mote innovation and efficiencies in organizations, Burlea-Schiopoiu and Mihai
(2019) argue that in the context of SMEs, this relationship moves one step further.
They explain it by promoting innovation within their organizations; SMEs can help
in the promotion of SDGs. Hence, innovation leads to promoting a culture of learn-
ing within SMEs, as it enables their workers to propose better and more efficient
ways of working. In fact, adopting smart technologies can help SMEs to leap ahead
of larger organizations instead of making incremental changes.
Small to medium-sized enterprises are often characterized by a constraint of
financial resources. The use of smart learning technologies toward innovation can
help them to maximize the value of available financial resources (Burlea-Schiopoiu
& Mihai, 2019). A report published by the European Commission (n.d.) discusses
six different initiatives to increase SMEs’ access to smart technologies in order to
achieve a sustainability strategy. These include initiatives specifically developed for
448 F. AlZayani et al.

industries as varied as fashion, automotive, logistics, tourism, food, and

construction.
The initiative for the automotive industry, for example, suggests that SMEs in
this sector can gain easier access to markets by significantly reducing their opera-
tional costs, by way of incorporating information and communication technologies
into their systems. The observed benefits of the study include a 30% increase in the
productivity of their staff, an 80% reduction in errors and operational costs, in addi-
tion to superior flexibility and faster actions in business activities. In the long run,
these results contribute toward SDGs for SMEs in different sectors (Neirotti
et al., 2018).
Wiesner et al. (2018) explain that environmental sustainability is a major chal-
lenge for SMEs, as they need to achieve it alongside their business objectives. In
addition, Wiesner et al. (2018) argue that smart technologies help to bridge this gap
and eliminate this false binary by aligning environmental sustainability with the
overall financial wellbeing and sustainability strategy of the organization.
Previous findings have been used to investigate the role of smart technologies in
organizations at an early stage of growth. In addition, the investments that are made
at this stage will set the course for their future development; then it remains rela-
tively difficult for organizations to transition to a different technology at a later stage.

2.8 Incremental Sustainability Versus Value Creation

A distinction needs to be drawn between the sustainable performance of SMEs,

which is implemented as add-on model and embedded within organizational pro-
cesses. According to Larrán Jorge et al. (2016), it needs to be understood that SMEs
develop a holistic understanding of their processes and supply chains as its ability
to incorporate smart technology at every step and activity of the value chain.
Incorporating technology has a direct impact on the ability of SMEs to generate
high levels of quality in their operations, which is a basic requirement for achieving
a sustainability strategy.
It has been explained by Klein and Todesco (2021) that a sustainability strategy
is largely technology driven, and in the age of the COVID-19 pandemic, with
reduced headcounts, SMEs have to leverage the available technologies to the maxi-
mum possible extent. Another distinction that needs to be achieved is between inno-
vations that lead to cost savings and reductions in environmental impact versus
innovations that create value for customers.
According to Rao and Kumar (2019), SMEs have to focus more on the final
stages of business initiations by the adoption of smart technologies, as these activi-
ties create a competitive advantage for SMEs, instead of showing savings on the
balance sheet at a simple level. A major issue for SMEs is to pursue the same
approach as large firms, as they intend to improve their technology infrastructure in
an incremental manner. This approach deprives them of achieving the target prog-
ress, the cause of their small size and greater flexibility. Hence, the best approach is
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 449

to invest their resources in acquiring smart technologies and building their value
chain around them.
An interesting argument contributed by Tarí (2011), who explains by incorporat-
ing recent technologies as part of a total quality management (TQM) approach that
it is possible for SMEs to meet their quality targets, which helps them to save costs
while having a positive impact on the environment through the minimization of
waste. His study also explains that the use of technology helps SMEs to bring their
suppliers and vendors on board with the TQM program and to derive substantial
benefits in terms of production efficiency and environmental conservation. As smart
technologies are embedded in the process, a high degree of automation is achieved,
which helps to simplify and streamline the entire process. Through these initiatives,
it becomes possible for SMEs to compete with their larger counterparts on increas-
ing sustainability.

2.9 Summary of Literature Review Gaps

The scholars contributing to the literature review focused on clarifying an effective

assessment as regards the relationship between the adoption of smart technology
and the sustainable performance of SMEs. Moreover, various studies shed light on
the effective impact of SMEs’ sustainability strategy as a mediating effect on the
relationship between smart technology and SME s’ sustainable performance;
Industry 4.0 technologies were the key strategy in assisting the sustainability target
of SMEs toward innovative and profitable business operations and productivity
(Saunila et al., 2019; Silvestre & Fonseca, 2020).
However, the gap in the conducted literature review indicates the limitation of
research in studying the effect of the adoption of smart technologies on the sustain-
ability solution of SMEs and examining the mediating effect of a sustainability
strategy. In the Kingdom of Bahrain, a lack of research, statistical reports, and data
related to applicable technologies and managerial practices, although the scholars
of governmental support in terms of supporting SME growth were limited to carry-
ing out and depending on, and to conducting full information in order to get a deeper
look at the strategic moves of SMEs.

2.10 Added Contributions by the Research

This paper generates a new strategic model for the SME sector by carrying out the
conducted study, targeting a sustainability concept, social justice, saving the envi-
ronment, and increasing profitability driven significantly by filling the gap of the
adoption of technological innovation in the SME sector in the Kingdom of Bahrain.
Accordingly, this study contributes significantly to Bahrain’s economic growth,
by studying the proactive and innovative methods toward increasing the efficiency
450 F. AlZayani et al.

of SMEs, furthermore adding value to the national economy of Bahrain by investi-

gating the role of SMEs and their strategic practices by implementing smart
businesses toward developing business empowerment in Bahrain’s Economic
Vision 2030 and meeting SDGs regionally and globally.
In addition, the study contributed to the digital transformation trends in Industry
4.0, which from a personal perspective increases knowledge-based technological
innovation, flexibility, and productivity in efficient ways, in addition to increasing
optimal future opportunities for various business industries. Another valuable con-
tribution is that the study shed light on the great potential of SMEs to adopt the
concept of “sustainability,” reshaping business operations, which will enhance
national economic development while balancing nature and protecting the resources
of future generations.

3 Conclusion

Owing to economic conditions, SMEs play a critical role in developing countries.

The research was aimed at investigating the utilization of smart technologies such
as big data, AI, and IoT devices in the sustainable performance of SMEs by study-
ing profitability, environmental, and social sustainability performance factors, in
addition to measuring the mediating effect of a sustainability strategy. Theoretically,
the research concludes the significant impact of utilizing smart technologies on
SMEs’ performance factors, which includes environmental and social sustainability
and profitability. Also, the research concludes that institutional and division of inno-
vation theories supported the research significantly. Literature review gaps summa-
rized the limitation of research in investigating the impact of smart technologies on
SME sustainability. In Bahrain, there is a lack of research and statistical reports
related to utilizing technology in SMEs. The scholars of governmental support in
terms of supporting the growth of SMEs was limited to depending on gaining a
deeper look at the strategic moves of SMEs, which rely on conducting empirical
study and measuring the effect of smart technologies on the sustainability of SMEs
in Bahrain.

References

Ahmad, N. H., Rahman, S. A., Rajendran, N. L., & Halim, H. A. (2020). Sustainable entrepre-
neurship practices in Malaysian manufacturing SMEs: The role of individual, organisational
and institutional factors. In World Review of Entrepreneurship, Management and Sustainable
Development (pp. 153–171).
Akeju, M. E. (2021). Profitability strategies of solar energy businesses in Lagos, Nigeria (Doctoral
dissertation). Walden University.
Aksoya, M., Yilmaz, M. K., Tatoglu, E., & Basar, M. (2020). Antecedents of corporate sustain-
ability performance in Turkey: The effects of ownership structure and board attributes on non-
financial companies. Journal of Cleaner Production, 276, 124284.
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 451

Alarussi, A. (2018). Factors affecting profitability in Malaysia. Journal of Economic Studies.,

45, 442.
Almuslamania, H. A., & Daud, S. (2019). Strategic human resource practices and organisational
culture in SMEs and large manufacturing companies in Bahrain. International Journal of
Innovation, Creativity and Change, 66–80.
Al-Shakar, A. (2017). Entrepreneurship: A new era for Bahrain’s economy? Global Policy, 8(3),
418–421.
Anderson, B. S., & Eshima, Y. (2013). The influence of firm age and intangible resources on
the relationship between entrepreneurial orientation and firm growth among Japanese SMEs.
Journal of Business Venturing, 28, 413–429.
Ashrafia, M., Adams, M., Walker, T. R., & Magnan, G. (2018). How corporate social responsibil-
ity can be integrated into corporate sustainability: A theoretical review of their relationships.
International Journal of Sustainable Development & World Ecology, 25, 672–682.
Asiaei, A., & Rahim, N. Z. (2019). A multifaceted framework for adoption of cloud computing in
Malaysian SMEs. Journal of Science and Technology Policy Management, 708–750.
Assante, D., Castro, M., Hamburg, I., & Martin, S. (2016). The use of cloud computing in SMEs.
Procedia Computer Science, 83, 1207–1212.
Atwood, R. (2018). An opportunity for scenario planning in corporate sustainability strategy.
Duke University.
Bagheri, M., Mitchelmore, S., Bamiatzi, V., & Nikolopoulos, K. (2019). Internationalization ori-
entation in SMEs: The mediating role of technological innovation. Journal of International
Management, 25, 121–139.
Bansal, P., & Song, H. C. (2017). Similar but not the same: Differentiating corporate sustainability
from corporate responsibility. Academy of Management Annals, 11, 105–149.
Bauer, M., van Dinther, C., & Kiefer, D. (2020). Machine learning in SME: An empirical study on
enablers and success factors. Association for Information Systems, AMCIS, 2020.
Bekmezci, M. (2015). Companies’ profitable way of fulfilling duties towards humanity and envi-
ronment by sustainable innovation. Procedia-Social and Behavioral Sciences, 181, 228–240.
Billing, M. A. (2016). Small scale sustainability: A qualitative study of corporate sustainability in
Swedish SMEs, Master’s Thesis. Uppsala University.
Bourletidis, K., & Triantafyllopoulos, Y. (2014). SMEs survival in time of crisis: Strategies, tactics
and commercial success stories. Procedia-Social and Behavioral Sciences, 148, 639–644.
Brynjolfsson, E., Rock, D., & Syverson, C. (2019). Artificial intelligence and the modern pro-
ductivity paradox: A clash of expectations and statistics. National Bureau of Economic
Research, 23–57.
Burlea-Schiopoiu, A., & Mihai, L. S (2019). An integrated framework on the sustainability of
SMEs. Sustainability, 1–22.
Caldera, H. T. S., Desha, C., & Dawes, L. (2019). Evaluating the enablers and barriers for suc-
cessful implementation of sustainable business practice in ‘lean’ SMEs. Journal of Cleaner
Production, 218, 575–590.
Cedeño, J. M. V., Papinniemi, J., Hannola, L., & Donoghue, I. (2018). Developing smart services
by Internet of Things in manufacturing business. LogForum, 14, 59–71.
Coleman, S., Göb, R., Manco, G., Pievatolo, A., Tort‐Martorell, X., & Reis, M. S. (2016). How
can SMES benefit from big data? Challenges and a path forward. Quality and Reliability
Engineering International, 32, 2151.
da Cunha Bezerra, M. C., Gohr, C. F., & Morioka, S. N. (2020). Organizational capabilities towards
corporate sustainability benefits: A systematic literature review and an integrative framework
proposal. Journal of Cleaner Production, 247, 119114.
Elasrag, H. (2011). Enhancing the Competitiveness of the Arab SMEs. SSRN.
European Commission. (n.d.). Internal market, industry, entrepreneurship and SMEs.
Retrieved from [Link]
industrial-applications-artificial-intelligence-and-big-data/smart-use-ict-smes_en
Fehrer, A. J., & Wieland, H. (2021). A systemic logic for circular business models. Journal of
Business Research, 125, 609–620.
452 F. AlZayani et al.

Fiorentino, R., Grimaldi, F., Lamboglia, R., & Merendino, A. (2020). How smart technologies
can support sustainable business models: insights from an air navigation service provider.
Management Decision, 58, 1715.
Francke, E., & Alexander, B. (2019). Entrepreneurial development in South Africa through innova-
tion: A model for poverty alleviation. Acta Commercii, 19, 1–11.
Gherghina, S. C., Botezatu, M. A., Hosszu, A., & Simionescu, L. N. (2020). Small and medium-
sized enterprises (SMEs): The engine of economic growth through investments and innovation.
Sustainability, 12.
Hadjimanolis, A. (2019). Drivers and barriers to sustainable innovation in SMEs in the context of
small countries. In Managing sustainable innovation (pp. 66–86). Routledge.
Hansen, E. B., & Bøgh, S. (2020). Artificial intelligence and internet of things in small and medium-
sized enterprises: A survey. Journal of Manufacturing Systems Environmental Management,
203, 569–582.
Huang, M. H., & Rust, R. T. (2018). Artificial intelligence in service. Journal of Service Research,
21, 155–172.
Iqbal, M., Kazmi, S. H. A., Manzoor, A., Soomrani, A. R., Butt, S. H., & Shaikh, K. A. (2018).
A study of big data for business growth in SMEs: Opportunities & challenges. In 2018
International Conference on Computing. Mathematics and Engineering Technologies –
iCoMET 2018.
Jia, C., Tang, X., & Kan, Z. (2020). Does the nation innovation system in China support the sus-
tainability of Small and Medium Enterprises (SMEs) innovation? Sustainability, 12.
Kahle, J. H., Marcon, É., Ghezzi, A., & Frank, A. G. (2020). Smart Products value creation in
SMEs innovation ecosystems. Technological Forecasting and Social Change, 156, 120024.
Khairy, H. (2017). Exploring the Implementation of Government Work Program towards Bahrain
Economic Vision 2030 with Respect to Strategic and Project Management (A Retrospective
Study for the Period 2011-2014). Journal of Inspiration & Resilience Economy, 14–27.
Kiron, D., Unruh, G., Reeves, M., Kruschwitz, N., Rubel, H., & ZumFelde, A. M. (2017).
Corporate sustainability at a crossroads. MIT Sloan Management.
Kitsios, F., Kamariotou, M., & Talias, M. A. (2020). Corporate sustainability strategies and deci-
sion support methods: A bibliometric analysis. Sustainability, 12, 521.
Klein, V. B., & Todesco, J. L. (2021). COVID-19 crisis and SMEs responses: The role of digital
transformation. Knowledge and Process Management, 28, 117–133.
Kumar, R., Singh, R. K., & Dwivedi, Y. K. (2020). Application of industry 4.0 technologies in
SMEs for ethical and sustainable operations: Analysis of challenges. Journal of Cleaner
Production, 275, 124063.
Kusiak, A. (2017). Smart manufacturing must embrace big data. nature.
Landrum, N. E. (2018). Stages of corporate sustainability: Integrating the strong sustainability
worldview. Organization & Environment, 31, 287–313.
Larrán Jorge, M., Herrera Madueno, J., Lechuga Sancho, M. P., & Martínez-Martínez, D. (2016).
Development of corporate social responsibility in small and medium-sized enterprises and its
nexus with quality management. Cogent Business & Management, 3, 1228569.
Lee, S. M., & Trimi, S. (2018). Innovation for creating a smart future. Journal of Innovation &
Knowledge, 3, 1–8.
Linan, F., Paul, J., & Fayolle, A. (2020). SMEs and Entrepreneurship in the era of Globalization:
Advances and Theoretical Approaches. Small Business Economics, 55, 695–703.
Liu, Y., Zhang, Y., Ren, S., Yang, M., Wang, Y., & Huisingh, D. (2020). How can smart technolo-
gies contribute to sustainable product lifecycle management? Journal of Cleaner Production,
249, 119423.
Lyon, T. P., Delmas, M. A., Maxwell, J. W., Bansal, P., Chiroleu-Assouline, M., Crifo, P., Durand,
R., Gond, J. P., King, A., Lenox, M., & Toffel, M. (2018). CSR needs CPR: Corporate sustain-
ability and politics. California Management Review, 60, 5–24.
Meuer, J., Koelbel, J., & Hoffmann, V. H. (2020). On the nature of corporate sustainability.
Organization & Environment, 33, 319–341.
The Impact of Smart Technologies on SME Sustainability: The Mediation Effect… 453

Miola, A., & Schiltz, F. (2019). Measuring sustainable development goals performance: How to
monitor policy action in the 2030 Agenda implementation? Ecological Economics, 164, 106373.
Mizintseva, M. F. (2020). Smart Technologies for Smart Life. In Institute of Scientific
Communications Conference, Springer, Cham., pp. 653–664.
Neicu, A. I., Radu, A. C., Zaman, G., Stoica, I., & Răpan, F (2020). Cloud computing usage in
SMEs. An empirical study based on SMEs employees perceptions. Sustainability, 12, 4960.
Neirotti, P., Raguseo, E., & Paolucci, E. (2018). How SMEs develop ICT-based capabilities in
response to their environment: Past evidence and implications for the uptake of the new ICT
paradigm. Journal of Enterprise Information Management, 31, 10.
Nimfa, D. T., Latiff, A. S., & Wahab, S. A. (2021). Theories underlying sustainable growth of small
and medium enterprises. African Journal of Emerging Issues, 3(1), 43–66.
Nunhes, T. V., Bernardo, M., & Oliveira, O. J. D. (2020). Rethinking the way of doing business:
A reframe of management structures for developing corporate sustainability. Sustainability,
12, 1177.
Nylander, S., Wallberg, A., & Hansson, P. (2017). Challenges for SMEs entering the IoT world:
success is about so much more than technology. In Proceedings of the Seventh International
Conference on the Internet of Things (pp. 1–7).
OECD. (2019). Artificial intelligence: Changing landscape for SMEs. Retrieved from [Link]
oecd-[Link]/sites/01a4ae9d-en/[Link]?itemId=/content/component/01a4ae9d-en
Rao, J. J., & Kumar, V. (2019). Technology adoption in the SME sector for promoting agile manu-
facturing practices. Smart Intelligent Computing and Applications, 659–665.
Ratten, V., & Usmanij, P. (2020). Entrepreneurial opportunities: Economics and sustainability for
future growth. In Entrepreneurial Opportunities (pp. 1–6). Emerald Publishing Limited.
Rauch, E., Dallasega, P., & Unterhofer, M. (2019). Requirements and barriers for introducing
smart manufacturing in small and medium-sized enterprises. IEEE Engineering Management
Review, 47, 87–94.
Roy, S. K., Shekhar, V., Lassar, W. M., & Chen, T. (2018). Customer engagement behaviors: The
role of service convenience, fairness and quality. Journal of Retailing and Consumer Services,
44, 293–304.
Saunila, M., Nasiri, M., Ukko, J., & Rantala, T. (2019). Smart technologies and corporate sustain-
ability: The mediation effect of corporate sustainability strategy. Science Direct, 108, 178–185.
Shibin, K. T., Dubey, R., Gunasekaran, A., Hazen, B., Roubaud, D., Gupta, S., & Foropon,
C. (2020). Examining sustainable supply chain management of SMEs using resource based
view and institutional theory. Annals of Operations Research, 290(1), 301–326.
Silvestre, W. J., & Fonseca, A. (2020). Integrative Sustainable Intelligence: A holistic model to inte-
grate corporate sustainability strategies. Corporate Social Responsibility and Environmental
Management, 27, 1578–1590.
Singh, M., & Kim, S. (2018). Branch based blockchain technology in intelligent vehicle. Computer
Networks, 219–231.
Sooksan Kantabutraab, N. K. (2020). Toward a theory of corporate sustainability: A theoretical
integration and exploration. Science Direct.
Stuart, W. (2000). Influence of sources of communication, user characteristics and innova-
tion characteristics on adoption of a communication technology, Doctoral dissertation, The
University of Kansas. ProQuest Digital Dissertations.
Tarí, J. J. (2011). Research into quality management and social responsibility. Journal of Business
Ethics, 623–638.
Testa, F., Todaro, N., Gusmerotti, N. M., & Frey, M. (2020). Embedding corporate sustainabil-
ity: An empirical analysis of the antecedents of organization citizenship behavior. Corporate
Social Responsibility and Environmental Management, 27, 1198–1212.
Tukamuhabwa, B., Mutebi, H., & Kyomuhendo, R. (2021). Competitive advantage in SMEs:
effect of supply chain management practices, logistics capabilities and logistics integration
in a developing country. Journal of Business and Socioeconomic Development. [Link]
org/10.1108/JBSED-04-2021-0051
454 F. AlZayani et al.

Vitkauskaitė, E., Varaniūtė, V., & Bouwman, H. (2019). Evaluating SMEs readiness to trans-
form to IoT based business models. In 30th European Conference of the International
Telecommunications Society (ITS).
Voda, A., Tudor, A., Chitu, L., Dovleac, L., & Bratucu, G. (2021). IoT Technologies as Instruments
for SMEs’ Innovation and Sustainable Growth. Sustainability.
Vrgović, P., & Jošanov-Vrgović, I. (2018). Open innovation systems in developing countries:
Sustainable digital networks and collaboration in SMES. Dynamic Relationships Management,
7(2), 5¬11.
Warren, P. (2017). The potential of smart technologies and micro-generation in UK SMEs.
Energies, 10.
Wiesner, R., Chadee, D., & Best, P. (2018). Managing change toward environmental sustainabil-
ity: A conceptual model in small and medium enterprises. Organization & Environment, 31,
152–177.
Wijethilake, C. (2017). Proactive sustainability strategy and corporate sustainability performance:
The mediating effect of sustainability control systems. Journal of Environmental Management,
203, 569–582.
Wu, J., Guo, S., Huang, H., Liu, W., & Xiang, Y. (2018). Information and communications tech-
nologies for sustainable development goals: State-of-the-art, needs and perspectives. IEEE
Communications Surveys & Tutorials, 20, 2389–2406.
Yang, Z., Sun, J., Zhang, Y., & Wang, Y. (2017). Green, green, it’s green: A triad model of technol-
ogy, culture, and innovation for corporate sustainability. Sustainability.
Zhang, Q., Loh, L., & Wu, W. (2020). How do environmental, social and governance initiatives
affect innovative performance for corporate sustainability? Sustainability, 12, 3380.
Zimek, M., & Baumgartner, R. (2017). Corporate sustainability activities and sustainability per-
formance of first and second order. In 18th European Roundtable on Sustainable Consumption
and Production Conference (ERSCP 2017), Skiathos Island, pp. 1–5.
Zutshi, A., Mendy, J., Sharma, G. D., Thomas, A., & Sarker, T. (2021). From challenges to creativ-
ity: Enhancing SMEs’ resilience in the context of COVID-19. Sustainability, 13.
Development of a Cloud Business Process
Architecture Using the Riva Method

Mohammad Omar Sabri and Mahmoud Odeh

1 Introduction

A business process architecture (BPA) is a systematic overview of all main pro-

cesses that manage the business in an organization (Dumas et al., 2013; Ould, 2005).
Specifically, it is deployed as an organization high model that reflects the structuring
of crucial business processes (BPs) and their connections (Gonzalez-Lopez &
Bustos, 2019).
The development of a BPA is applied in different areas than the business of an
organization. It is adopted to implement significant disciplines such as change man-
agement (Samhan et al., 2018). This could be explained due to the comprehensive-
ness, simplicity, and usefulness that BPA provides in presenting any business,
especially if we are using essential business entities (EBEs) that identify this busi-
ness. Thus, exploitation of BPA in presenting new technology such as cloud com-
puting (CC) is suggested to reflect these features that BPA achieves in addition to
other benefits such as interoperability and integration.
Cloud computing is a freshly established computing sector that has been utilized
for information technology activities by a considerable number of enterprises
throughout the globe (Jamsa, 2012). Cost savings, increased efficiency, increased
agility, increased flexibility and scalability of services, and environmental sustain-
ability are all advantages of moving to cloud computing (Odeh, 2020). Cloud com-
puting grew in popularity as a result of its ability to transform the IT industry’s
physiognomies via the usage of virtualization (Odeh, 2019). Meanwhile, several
fundamental worries about cloud computing, such as security and privacy breaches,
stem from the virtualized environment. Accordingly, the functioning of cloud com-
puting is similar to that of information technology (IT) outsourcing (Joshi & Shah,

M. O. Sabri · M. Odeh (*)

Business Information Technology Department, Zarqa University, Zarqa, Jordan

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 455
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
456 M. O. Sabri and M. Odeh

2019). However, the complexity of security makes quality control in cloud comput-
ing a challenging task (Halpert, 2011).
Cloud computing (CC) can be defined as a model through which users can access
a shared combination of configurable software and hardware resources using the
internet (Sultan, 2014). These resources are rapidly provided with minimum mana-
gerial effort (Siebel, 2019). It can be applications, servers, computer networks, data
storage, or any other service. Companies with problems in adopting CC will be at
risk due to market competition (Buyya et al., 2008). These problems include factors
of high complexity from the review of the previous literature to determine the gap
in this study. They include factors of high complexity, low compatibility, and less
technological preparedness in cloud computing technology (Lynn et al., 2020).
Nevertheless, CC still requires development and progression in computer sys-
tems, software engineering, and performance engineering (Papadopoulos et al.,
2019). It is also demanding as a modern technology to address caused-problems
disasters in the Middle East and North Africa (MENA) (Al Kurdi, 2021). Cloud
computing has emerged as one of the most influential IT paradigms of our time,
addressing users’ needs for dynamic, high-capacity computing in a variety of appli-
cations like business intelligence and data collected and stored while effectively
creating business value for cloud service providers out of (at least initially) surplus
computing resources (Hugos & Hulitzky, 2010). Therefore, like with all emergent
technologies, the lifespan of the paradigm will be decided by how specific difficul-
ties are addressed.
In this paper, we use Riva method with its elements of units of work (UOWs), 1st
and 2nd cut process architecture diagrams to introduce cloud computing business
process architecture (CCBPA). A CCBPA is developed to present the CC domain
and describe its elements. It is also used to clarify CC capabilities to integrate and
support other fields. Evaluation of the CCBPA is accomplished using several crite-
ria which imply perceived ease of use (PEoU) and perceived usefulness (PU). These
criteria were argued to predict initial technology adoption (Liu & Prybutok, 2021).
They also present cognitive beliefs, in the theory of reasoned action, that affect
attitudes, intentions of use, and eventual use of objects such as CC (Karahanna &
Straub, 1999).

2 Cloud Computing Definition

However, it seems that there are several definitions of cloud computing (Lehrig
et al., 2015). According to Sultan (2014) (a multinational management consulting
firm), there are a considerable number of different definitions of cloud computing.
In reality, there seems to be no clear definition or standard for cloud computing.
Clusters of dispersed computers (often massive data centers and server farms) that
deliver on-demand resources and services across networked media are a more
widely used definition (usually the internet) (Armbrust et al., 2010). The word
“cloud” was most likely inspired by drawings in IT textbooks that represented
Development of a Cloud Business Process Architecture Using the Riva Method 457

distant settings (such as the Internet) as cloud pictures to hide the complexity that
lay behind them. Understanding the types of services provided by cloud computing,
on the other hand, helps to clarify what this new approach is all about (Armbrust
et al., 2009).

3 Cloud Computing’s Main Features

Cloud computing is a recent and cutting-edge pattern of Information Technology

(IT) service that provides software and hardware services on customer demand
across the internet in a customer-operated mode and is unrestricted to device and
location. It also has several features that support either integration or flexibility (Liu
et al., 2011). Flexibility includes features of scalability, elasticity, pay-per-use, ubiq-
uitous access, and low cost. On the other hand, CC supports the integration of IT
resources. Resource pooling, data concentration, and a shared environment are criti-
cal features that increase an organization’s ability to integrate its data and multiple
applications (Lehrig et al., 2015).

3.1 Scalability

Cloud computing service companies provide solutions that are both elastic and scal-
able. Despite their similarities in appearance, scalability and elasticity in cloud
computing are not identical. Elasticity is the capacity of a system to expand or
shrink dynamically in response to varying workload needs, such as an increase in
website traffic. A flexible system adapts in real time to match resources as closely
as feasible with demand. A company with fluctuating and unplanned requirements
may use the public cloud as a flexible option (Jansen & Grance, 2011). As stated
before, a system’s scalability relates to its capacity to expand workload while retain-
ing current hardware resources. A scalable solution permits predictable, long-term
expansion, while an elastic solution accommodates more urgent, unpredictable fluc-
tuations in demand. In cloud computing, both elasticity and scalability are essential
characteristics, but which one takes precedence relies in part on whether the organi-
zation’s workloads are highly predictable or very changeable (Lehrig et al., 2015).
Due to virtualization, it is now possible to design a scalable cloud infrastructure. In
contrast to actual computers, which have relatively fixed resources and perfor-
mance, virtual machines (VMs) are very flexible and can be scaled with relative
ease (Odeh, 2019). As needed, they may be transferred to a new server or hosted
simultaneously on many servers, and workloads and applications can be migrated to
larger virtual machines. In addition, cloud providers already own the great majority
of the infrastructure and software resources required for rapid growth, which a sin-
gle firm could not pay. Due to virtualization, it is now feasible to develop a scalable
cloud infrastructure. Unlike traditional computers, which have set resources and
458 M. O. Sabri and M. Odeh

performance, virtual machines (VMs) are very versatile and may be rapidly scaled
up or down. They may be relocated to a new server or hosted on many servers simul-
taneously, and applications and workloads can be migrated to bigger virtual
machines as required. In addition, the great bulk of infrastructure and software
resources necessary for fast development are already owned by third-party cloud
providers, which a single business could not afford. The following are the important
cloud scalability aspects that encourage large and small company adoption: With a
few mouse clicks, IT managers may build new VMs that are immediately accessible
and customized to the business’s requirements. As a result, IT staff will save time
(Masdari et al., 2016). Instead of investing hours or days to installing physical
equipment, teams may devote their time to more crucial tasks. IT’s agility enables it
to respond fast to changing and expanding business requirements, including unan-
ticipated spikes in demand. Even the smallest companies now have access to for-
merly prohibitively expensive high-powered resources. Companies are no longer
constrained by outmoded technology; they can quickly upgrade their systems and
expand their power and storage capacity. Due to the scalability of the cloud, organi-
zations may be able to save money by eliminating the upfront expense of acquiring
costly, soon obsolete equipment. By using cloud service providers, consumers only
pay for the services they use, hence reducing waste. Cloud-based disaster recovery
minimizes the need to build and operate alternative data centers, hence decreasing
the expenses associated with disaster recovery (Jamsa, 2012).

3.2 Elasticity

The solutions provided by cloud computing service providers are both elastic and
scalable. Despite seeming similar, scalability and elasticity in cloud computing are
not the same. Elasticity is the ability of a system to dynamically expand or contract
in response to fluctuating workload demands, such as an increase in web traffic. A
flexible system dynamically changes in real time to match resources with demand
as closely as possible. A business with changing and unanticipated demands might
use the public cloud as a flexible solution (Jansen & Grance, 2011). As mentioned
earlier, a system’s scalability refers to its ability to increase workload while using
existing hardware resources. A scalable solution allows for predictable, long-term
growth, while an elastic solution handles more urgent, volatile changes in demand.
In cloud computing, elasticity and scalability are both crucial qualities, but whether
one takes priority over the other depends in part on whether the organization’s
workloads are highly predictable or very variable (Lehrig et al., 2015). It is now
feasible to construct a scalable cloud architecture due to virtualization. Unlike phys-
ical computers, which have relatively fixed resources and performance, virtual
machines (VMs) are very flexible and can be scaled up or down with reasonable
ease (Odeh, 2019). As required, they may be relocated to a new server or hosted on
many servers concurrently, and workloads and applications can be migrated to big-
ger virtual machines. Additionally, third-party cloud suppliers already own the vast
Development of a Cloud Business Process Architecture Using the Riva Method 459

bulk of the infrastructure and software resources necessary for fast development,
which a single company could not afford. It is now possible to design a scalable
cloud architecture due to virtualization. In contrast to conventional computers,
which have fixed resources and performance, virtual machines (VMs) are very
adaptable and may be scaled up or down fast. They may be moved to a new server
or hosted on many servers concurrently, and programs and workloads can be shifted
to larger virtual machines as necessary. In addition, third-party cloud providers
already own the vast majority of the infrastructure and software resources required
for rapid expansion, which a single organization could not pay. The following are
the essential cloud scalability features that stimulate adoption by both big and small
businesses: With a few clicks, IT administrators may create new VMs that are
instantly available and tailored to the specific needs of a business. IT employees will
save time as a consequence (Masdari et al., 2016). Instead of devoting hours or days
to assembling physical equipment, teams may focus on more important activities.
IT’ s agility allows it to react rapidly to changing and growing corporate needs,
including unplanned surges in demand. Even tiny businesses now have access to
formerly prohibitively costly high-powered resources. Companies are no longer
restricted by obsolete technology; they can easily update their systems and increase
their power and storage capacity. Due to the scalability of the cloud, businesses may
save money by avoiding the initial costs of purchasing expensive equipment that
will quickly become outdated. By using cloud service providers, customers only
pay for what they need and reduce waste. Cloud-based disaster recovery reduces the
need to construct and run alternative data centers, hence reducing disaster recovery
costs (Jamsa, 2012).

3.3 Pay-Per-Use Business Model

The pay-per-use model offers the advantage of not wasting resources since custom-
ers only pay for the services they use, as opposed to pre-purchasing a certain quan-
tity of resources that may or may not be used (Odeh & Yousef, 2021). In traditional
business architecture, users create data storage to handle the heaviest burden. In
contrast, the pay-as-you-go model in the public cloud allows you to pay just for the
data you store. Pay-per-use systems, such as Amazon EC2, enable clients to person-
alize their computing resources and pay only for what they use. The CPU, memory,
storage, operating system, security, networking capacity, and access limitations, as
well as any additional programs, are selected by the user. As mentioned earlier,
cloud computing is a new paradigm for computer service delivery. As with any new
service of this magnitude and complexity, there will be questions, ambiguities, and
worries over the maturity of the technology. Control, vendor lock, performance,
latency, security, privacy, and reliability are among the most urgent issues (Armbrust
et al., 2009). However, security is one of the greatest issues for cloud computing,
and it is one of the reasons why many firms are hesitant to use cloud solutions.
Cloud computing requires a high level of security. Cyber-attackers’ other kinds of
460 M. O. Sabri and M. Odeh

black hats try to get access to your network for personal gain, and the annual cost of
cyber-attacks is enormous (Al-Ramahi & Odeh, 2020). Firewalls, anti-virus and
anti-malware software, physical security measures including guarded data centers,
and sophisticated authentication and authorization processes are used to protect our
data and networks. Notably, though, the security challenge has a cloud-based solu-
tion that is gaining popularity. Security is increasingly provided as a managed ser-
vice by a third-party provider, which bolsters the relevance of cloud computing
(Halpert, 2011).
There are multiple obvious reasons why cloud-based security outsourcing is an
excellent solution. As with many other types of cloud-based services, security is a
highly specialized field. As a result, having access to the greatest security profes-
sionals in the market via a third-party vendor will offer greater protection, more
knowledge and experience, and the capacity to move to more modern security sys-
tems and equipment than these organizations could deliver on their own. The defin-
ing characteristic of a cloud platform is that it enforces an instance of common
software components that developers may “bolt on” to their applications rather than
having to build them from scratch. This advantage is dangerous in terms of security.

4 Cloud Computing Models

Cloud computing can be classified into two main categories: deployment models
and service models (Seethamraju, 2015). The first classification focuses on the man-
agerial approach that the service provider represents. In comparison, the service
model focuses on the technical process provided to the customers. In cloud comput-
ing, the phrase “services” refers to employing reusable, fine-grained components
throughout a vendor’s network. This is often referred to as “as a service.”
Characteristics of offerings with as a service as a suffix include the following: low
entry hurdles, making them accessible to small enterprises, extensive scalability,
and multitenancy, which enables several users to share resources. Device indepen-
dence allows users to utilize the systems on various devices (Rao et al., 2015).
Cloud computing is not just a futuristic notion with a lot of potential. It has
already become a reality, with several commercial applications. Cloud computing
seems driven by economics, simplification, and ease in the delivery of computer-
related services (Armbrust et al., 2009). Many authors believe that technology offers
significant potential for lowering IT costs for businesses and relieving them of the
price and trouble of having to install and maintain software locally.
From the technical perspective, cloud computing presents several types of ser-
vice models: application as a service (AaaS), platform as a service (PaaS), and
infrastructure as a service (IaaS) (Jamsa, 2012). Applications are offered as a ser-
vice across the internet at IaaS. Instead of installing and maintaining software, you
just use the internet to access it, eliminating the need for complicated software and
device maintenance. This cloud service provides full application capability, ranging
Development of a Cloud Business Process Architecture Using the Riva Method 461

from productivity (e.g., office-type) apps to programs like customer relationship

management (CRM) or corporate resource management.
PaaS is a platform that gives web application developers access to development
tools and hosting alternatives. Cloud computing is a new business model, distinct
from those described by authors, who saw service as either a supplement to an exist-
ing physical product or a service relying on a provider using skills and knowledge
(i.e., competencies) to provide clients with a solution (Tsui et al., 2011).
IaaS provides customers with the processing, storage, networking, and other
computer resources they need to execute specific software (operating systems and
applications) on their servers. The only disadvantage is that cloud providers are in
charge of the infrastructure (Seethamraju, 2015).
Despite the several types of cloud service models, all of such classes are pre-
sented based on the same business model, which is pay-per-use. As mentioned
before, the service provider will charge the cloud customers with the only actual
uses. Such features may help customers save significantly in both the short- and
mid-terms. However, the decision to adopt cloud technology in the long term
requires a careful calculation and comparison between leasing and owning the
information technology equipment. However, with the flexibility of cloud comput-
ing, none of those mentioned earlier providers can guarantee that their cloud goods
will operate right out of the box. Google Apps, for example, is an example of an
out-of-the-box messaging and collaboration cloud solution, even though it still
requires some configuration (Arif et al., 2019). Using the cloud providers’ APIs,
some level of development (i.e., programming) will be necessary (application pro-
gramming interfaces). These are the programming instructions cloud service pro-
viders produce and make available to anyone who wishes to use their goods. Many
of the APIs are now proprietary. This topic will be discussed more when we look at
some of cloud computing’s limits and concerns.
The cloud deployment model consists of four main types. The first type is the
public deployment model. In this type, the model provides an almost free cloud
computing service with nearly zero cost. However, the public model is considered
the less secure model level (Jamsa, 2012). In contrast, the second model, i.e., the
private model is the most expensive cloud deployment type, which provides the
highest security level. The community model is the third deployment model type,
which focuses on the same type of customers who share the same interests, such as
universities, tourism companies, and libraries. In this model, the cost will be shared
in the community. The security level is usually fair compared with the cost of this
type. The last deployment model type is the hybrid model, which is simply a com-
bination of two or more models (Sultan, 2010).
Cloud computing is considered an umbrella, including several online services
and models. It uses servers hosted on the internet to process and store data instead
of using in-house resources based on a pay-per-use business model. The pay-per-
use business model could be presented according to the following equation based on
an assumption:
462 M. O. Sabri and M. Odeh

C1 : Pi ; A; P (1)

C1 : Pi P; A Pi A H (2)

Where Pi is the cost of the process, N represents the number of activities “a” in
the process of Pi, and cost (a) denotes the cost of each activity a ε A. While device
H with area A(H) and pins T(H) (number of programmable input/outputs (I/Os) per
device).
k k
C 2 : TCCost CCost Pm i, j T H (3)
i 1 m 1T P
i m ;T j Pm

Where TC Cost denotes total communication cost, CCost (Pm) denotes the com-
munication cost of the partition Pm and the weight αi,j of an edge, and ei,j defines the
amount of data transferred from Ti to Tj.

5 Methodological Approach

In this study, the data was collected using the qualitative approach through semi-
structured interviews with experts in the domain. The reason for selecting inter-
views as a data collection method is to collect high-quality data from experts instead
of surveys with a random sample. Experts in this domain include IT managers,
professors in cloud computing, and experts in Riva methods. On the other hand,
primary data was collected from the literature review. For the data analysis process,
the authors have adapted the Miles and Hebrman data analysis approach, which
includes data reduction, data display, and conclusion drawing/validation and verifi-
cation. In addition, several software tools are employed, such as Nvivo and Microsoft
Visio (Huberman & Miles, 2002).

6 BPA and Riva Method

Malinova et al. (2013) present two tracks to process architectures (PAs) based on the
outcome of an empirical study. The first one is the decomposition PAs which include
the pipeline, the hierarchical, and the divisional PAs. The second one is the service-
oriented PAs. PAs in this classification can be described as non-systematic since no
clear steps or rules are followed by these organizations to design their PAs. Another
classification by Dijkman et al. (2016) stems from the basis on which processes and
their relations are identified. Accordingly, five types of modeling approaches are
suggested: object-based, action-based, goal-based, function-based, and reference
model-based.
Development of a Cloud Business Process Architecture Using the Riva Method 463

The Riva method (Ould, 2005) is defined as one of the object-based BPA
approaches that exist in this field. Ould proposes Riva as a simple, obvious, practical
and systematic approach for developing PAs from the essential business entities
(EBEs). He also affirms that Riva BPA is unaffected by an organization in the same
business.
The development of a BPA using the Riva method includes several steps. The
steps are followed in this paper to generate a UOWs diagram for the CC discipline.
The steps of the Riva method are the following:
Step One: Agree on domain and business boundaries.
Step Two: Brainstorm the EBEs candidates (CEBEs) and filter them into EBEs.
Step Three: Determine the units of work (UOWs).
Step Four: Determine each dynamic relationship between UOWs and generate a
UOWs diagram.
Step Five: Translate the diagram of UOWs into first cut PA diagram.
Step Six: Translate the first cut PA into the second process architecture.

6.1 Demonstration of Riva BPA on CC

In this section, we apply the four steps of the Riva method to generate the UOWs
diagram of CCBPA.
A. Step One
According to Ould (2005), we define in this step what we are looking at. In our
case, we are looking at the CC discipline which is the domain and boundary we are
identifying.
B. Step Two
Brainstorming CEBEs of the CC domain and filtering into EBEs are the most
critical steps in building a CCBPA. This is due to its importance in carrying on the
remaining steps and discovering the probability of generating a BPA for a CC
domain using the Riva method. CEBEs are suggested to be identified through Ould’s
suggested prompt questions, which facilitate listing these CEBEs. The questions are
customized to be appropriate for BPA development of a domain rather than an orga-
nization business. Table 1 presents these questions and their corresponding CEBEs
in the CC domain.
After identifying these CEBEs by using (Ould, 2005) suggested questions, we
discussed them with experts in the domain and we concluded that all these CEBEs
characterize cloud business and can be reported as EBEs.
C. Step Three
In this step, determining the units of work is the main task that is required. A unit
of work is an EBE with a lifetime during which we look after. Excluding non-
UOWs from the EBEs list does not depend on this definition alone. Further filters
464 M. O. Sabri and M. Odeh

Table 1 Extracting CC domain CEBEs/EBES corresponding to Ould prompt questions

Riva prompt questions CEBEs of CC domain
What things do we produce? Or Public cloud, private cloud, hybrid cloud, community
what things do we take care of? cloud, management of cloud deployment models
What do we deliver? SaaS (software as a service), IaaS (infrastructure as a
What line of products do we have? service), PaaS (platform as a service), pay-per-use,
What services do we present? on-demand computing
What lines of service do we have?
What kind of things do we handle Application, structure, server, storage, program unit,
during the daytime? information, database, hardware component, software
component, operating system, middleware, data,
networking
Are there things that customers of Vendor, customization
our organization have, need, or do,
which could be EBEs?
What issues can we simply not Service provider, internet connectivity, cloud
leave behind? standardization
Who are the customers of the End user, developer, expert, cloud user
organization?

should also be applied to EBEs to identify UOWs. These filters include (1) exclud-
ing EBEs that are not classified as UOWs, (2) excluding also EBEs that are not
UOWs, even if they are for someone else, such as national standards, which can be
a UOW for quality group and not for a hotel or other businesses, (3) excluding EBEs
that are roles which contribute partly in processes, and (4) excluding any that is
implicitly part of other EBE and does not have its own lifetime.
By applying these filters, we remove the following EBEs from the UOWs list:
• Vendor and Cloud Standardization are not EBEs with a lifetime we look after.
• Hardware Component, Software Component, Customization, Operating System,
Middleware, Data, and Networking are only part of IaaS EBE and do not have
their own lifetime.
• Application, Storage, Structure, Database, and Information are only part of SaaS
EBE and do not have a separate lifetime.
• Program Unit is only part of PaaS EBE and does not have a separate lifetime.
• Internet Connectivity is part of Service Provider EBE.
• End User, Developer, and Expert are part of Cloud User EBE.
D. Step Four
After filtering EBEs into UOWs, we identify the dynamic relationships between
them and draw the UOWs diagram. In the UOWs diagram, each dynamic relation-
ship emerges when a UOW (such as X, for example) involves or generates another
UOW (such as Z, for example) during the lifetime of X. The relationship is imple-
mented using an arrow from the generating UOW (X) to the generated UOW (Z).
Figure 1 shows the UOWs diagram of CCBPA after the identification of dynamic
relationships between the UOWs.
The arrow between any two UOWs is nominated by “g” in addition to the rela-
tionship number. The relationship number is for discrimination and does not always
Development of a Cloud Business Process Architecture Using the Riva Method 465

Fig. 1 Riva UOWs diagram of CCBPA

466 M. O. Sabri and M. Odeh

mean the sequence or the synchronization in generating these relations. For exam-
ple, g6, g9, g12, and g15 are different relationships that indicate the generation of
SaaS UOW. However, the number of each one does not reflect the sequence in their
occurrence. Thus, a SaaS case or UOW could be generated asynchronously by one
of the cloud models, whether it is a hybrid, public, community, or private cloud model.
E. Step Five
Riva’s first cut process architecture is generated in this step. Each UOW is trans-
lated into a case process (CP), case management process (CMP), and case strategy
process (CSP). CSP is not considered in this paper as it is still not well developed or
clear as other Riva remaining elements, i.e. CP and CMP. A new CP means a new
case instance we are handling. The CP and CMP are sequentially recognized by the
word “Handle” and the phrase “Manage the flow of.” Relationships between UOWs
are also translated into “starts,” “requests,” and “delivers” relationships. By apply-
ing these rules to the UOWs diagram in step four, we can generate the first Riva cut
process architecture of CCBPA (see Fig. 2).
F. Step Six
After the development of the first cut Riva BPA in Fig. 2, a series of heuristics
are applied in this step, where they can be applied. Heuristics are a kind of reduction
that is applied to Riva first cut architecture to reflect or simulate the actual practice
that exists in the real business world. These heuristics include (1) merging CMP into
the requesting CP when CMP is a task force, (2) replacing two CMPs by one when
we cannot distinguish between these two CMPs, (3) delivering interactions or
chains when there is no delivery between the requested CP and the requesting one,
then delivery interaction is removed or short-circuited, i.e, the drawn arrow between
the requested and requesting CPs is omitted, (4) merging CMP in the requesting CP
when its root UOW is part of another UOW, (5) and emptying CMP when we have
only one case instance of CP.
The heuristics that we have identified in CCBPA first cut architecture are as
follows:
• Merging CMP into the requesting CP when CMP is a task force. The merged
CMPs are as follows: management of the flow of the public model, management
of the flow of the private model, management of the flow of the community model,
and management of the flow of the hybrid model. These CMPs are merged in the
requesting CP, which is handling the management of cloud deployment models.
• Emptying CMP when we have one instance of CP. In CCBPA, we have one
instance of Service Provider, which is the company that offers cloud services. A
one-case instance does not require a CMP to manage. Thus, we remove the man-
agement of the flow of Service Providers CMP.
The researchers identify no other heuristics. However, we have identified previous
heuristics that require reconfiguring start (s) relationships by changing their source
from CMP to CP. These new start relationships in Riva second cut process architec-
ture of CCBPA are g0s, g2s, g3s, g4s, and g5s. Thus, the Riva second cut of CCBPA
is generated by applying these heuristics and their required changes (see Fig. 3).
Development of a Cloud Business Process Architecture Using the Riva Method 467

Fig. 2 Riva first cut diagram of CCBPA

468

Fig. 3 Riva second cut diagram of CCBPA

M. O. Sabri and M. Odeh
Development of a Cloud Business Process Architecture Using the Riva Method 469

6.2 Evaluation of CCBPA

An evaluation of CCBPA has been conducted after the generation of Riva-based

CCBPA. The evaluation includes validation of CCBPA by checking the validity of
its elements. It also involves checking the CCBPA support to understanding, pre-
senting, and the ease of use of the CC domain; recognizing CC usefulness; deciding
to adopt CC in business; and integrating CC with other related disciplines. EBEs,
UOWs and their relationships, CMPs, CPs, first cut process architecture, and the
adopted heuristics to the second cut process architecture are the essential elements
that are hired to test validity. The evaluation has been performed with the collabora-
tion of a few experts in the domain. Table 2 shows the results that indicate this
evaluation through which the whole Riva-based CCBPA is evaluated.

Table 2 Evaluation of Riva-based CCBPA

Elements of Riva
BPA Elements of CCBPA Validation check
EBEs 32 elements were identified as EBEs Are these the right EBEs that
after a brainstorming conducted using characterize cloud computing?
Ould prompt suggested questions Answer: checked and right
UOWs 12 EBEs were classified as UOWs Are these the right UOWs that
have a lifetime during which we
look after?
Answer: checked and right
UOWs 24 relationships were generated Are these the right generated
relationships between UOWs relationships between UOWs?
Answer: checked and right
CPs 12 CPs matching to UOWs belong to Are these the right CPs that
1st and 2nd cut process architecture match to UOWs?
diagrams Answer: checked and right
CMPs 12 CMPs matching to UOWs belong to Are these the right CMPs that
the 1st cut and 7 out of 12 belong to the match to UOWs?
2nd cut process architecture diagram Answer: checked and right
Applied heuristics 4 CMPs were merged in CPs and 1 Are these the right merged and
in the 2nd cut empty CMP with no instances of CP omitted CMPs in the CCBPA
diagram was omitted 2nd cut diagram?
Answer: checked and right
Other evaluation criteria Approval check
Support understanding, presenting, and the ease of use of the Approved to support
CC domain understanding, presenting, and
the ease of use of the CC
domain
Recognizing CC usefulness Approved recognizing CC
usefulness
Supporting the decision to adopt CC in business Approved supporting the
decision to adoption
Supporting the integration of CC with other related Approved supporting the
disciplines integration of the CC with other
related disciplines
470 M. O. Sabri and M. Odeh

7 Conclusion

Developing a BPA for CC can support the understanding and simplifying of this
domain. It also allows CC utilization and integration with other fields. An object-
based BPA method called Riva has been adopted to achieve this aim. Riva has pre-
cise steps that have been applied to the CC domain. Accordingly, the main elements
of Riva BPA have been generated. These elements characterize the CC domain
including EBEs, UOWs diagram, and first and second cut process architectures.
Developing a CCBPA using the Riva method implies many implications. These
implications are reflected through clarification and high-level presentation of CC
models, services, and elements that a business might need, in addition to determin-
ing the track that an organization should follow in CC. The implications are also
reported in support of resolving problems of complexity, compatibility, and techno-
logical readiness in CC. Furthermore, the managers’ awareness of CC usefulness is
higher, and their decision on CC adoption is getting easier.
In conclusion, developing a CCBPA has provided a comprehensive view of CC
and its business flow. It also paves the way to further business modeling and cloud
computing research.

8 Research Limitations and Future Direction

Different business process architecture model lines that could be used as a bench-
mark to evaluate CCBPA in this paper are still not evident to the researchers. This
includes approaches such as goal, action, and function-based approaches.
Further research is recommended to evaluate CCBPA by engaging new case
studies that plan to adopt CC in the work environment. Also, knowledge life cycles
and knowledge management processes are suggested to be mapped with elements
of CCBPA.

References

Al Kurdi, O. F. (2021). A critical comparative review of emergency and disaster management in the
Arab world. Journal of Business and Socio-economic Development, 1(1), 24–46.
Al-Ramahi, N., & Odeh, M. (2020). The impact of innovative technology on the quality assurance
at higher education institutions in developing countries: A case study of Jordan. International
Journal of Information and Education Technology, 10, 826–831.
Arif, H., Hajjdiab, H., Al Harbi, F., & Ghazal, M. (2019). A comparison between Google cloud
service and iCloud (pp. 337–340).
Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R. H., Konwinski, A., Lee, G., et al. (2009).
Above the clouds: A Berkeley view of cloud computing (Technical report UCB/EECS-2009-28)
(Vol. 17). EECS Department, University of California.
Development of a Cloud Business Process Architecture Using the Riva Method 471

Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R., Konwinski, A., Lee, G., Patterson,
D., Rabkin, A., & Stoica, I. (2010). A view of cloud computing. Communications of the ACM,
53(4), 50–58.
Buyya, R., Yeo, C. S., & Venugopal, S. (2008). Market-oriented cloud computing: Vision, hype,
and reality for delivering it services as computing utilities. In 2008 10th IEEE international
conference on high performance computing and communications (pp. 5–13). IEEE.
Dijkman, R., Vanderfeesten, I., & Reijers, H. A. (2016). Business process architectures: Overview,
comparison and framework. Enterprise Information Systems, 10(2), 129–158.
Dumas, M., La Rosa, M., Mendling, J., & Reijers, H. A. (2013). Fundamentals of business process
management (Vol. 1), Heidelberg: Springer.
Gonzalez-Lopez, F., & Bustos, G. (2019). Business process architecture design methodologies–a
literature review. Business Process Management Journal, 25(6), 1317–1334.
Halpert, B. (2011). Auditing cloud computing: A security and privacy guide (Vol. 21). Wiley.
Huberman, M., & Miles, M. B. (2002). The qualitative researcher’s companion. Sage.
Hugos, M. H., & Hulitzky, D. (2010). Business in the cloud: What every business needs to know
about cloud computing. Wiley.
Jamsa, K. (2012). Cloud computing.
Jansen, W. A., & Grance, T. (2011). Guidelines on security and privacy in public cloud computing.
Joshi, N., & Shah, S. (2019). A comprehensive survey of services provided by prevalent cloud
computing environments. In Smart intelligent computing and applications (pp. 413–424).
Karahanna, E., & Straub, D. W. (1999). The psychological origins of perceived usefulness and
ease-of-use. Information & Management, 35(4), 237–250.
Lehrig, S., Eikerling, H., & Becker, S. (2015). Scalability, elasticity, and efficiency in cloud com-
puting: A systematic literature review of definitions and metrics. In Proceedings of the 11th
international ACM SIGSOFT conference on quality of software architectures (pp. 83–92).
Liu, X., & Prybutok, V. R. (2021). An empirical investigation of factors that drive a user decision to
continue using cloud storage services. Journal of Decision Systems, 30(1), 4–26.
Liu, F., Tong, J., Mao, J., Bohn, R., Messina, J., Badger, L., & Leaf, D. (2011). NIST cloud com-
puting reference architecture. NIST Special Publication, 500(2011), 1–28.
Lynn, T., et al. (2020). Understanding the determinants and future challenges of cloud computing
adoption for high performance computing. Future Internet, 12(8), 135.
Malinova, M., Leopold, H., & Mendling, J. (2013). An empirical investigation on the design of
process architectures.
Masdari, M., Nabavi, S. S., & Ahmadi, V. (2016). An overview of virtual machine placement
schemes in cloud computing. Journal of Network and Computer Applications, 66, 106–127.
Odeh, M. M. (2019). A proposed theoretical solution for transferring from physical to virtual
machines based on cloud computing. In 2019 5th international conference on information
management (ICIM) (pp. 221–226). IEEE.
Odeh, M. (2020). A novel framework for the adoption of cloud computing in the higher educa-
tion sector in developing countries. International Journal of Scientific & Technology Research,
9(02), 5660–5667.
Odeh, M., & Yousef, M. (2021). The effect of Covid-19 on the electronic payment system: Usage
level trust and competence perspectives. Indonesian Journal of Electrical Engineering and
Computer Science, 22(2), 1144–1155.
Ould, M. A. (2005). Business process management: A rigorous approach. BCS, The Chartered
Institute.
Papadopoulos, A. V., Versluis, L., Bauer, A., Herbst, N., Von Kistowski, J., Ali-Eldin, A., Abad,
C., Amaral, J. N., Tůma, P., & Iosup, A. (2019). Methodological principles for reproducible
performance evaluation in cloud computing. IEEE Transactions on Software Engineering,
47(8), 1528–1543.
Rao, T. V. N., Naveena, K., & David, R. (2015). A new computing environment using hybrid cloud.
Journal of Information Sciences and Computing Technologies, 3(1), 180–185.
472 M. O. Sabri and M. Odeh

Samhan, A., Odeh, M., Kossmann, M., & Tbakhi, A. (2018). Business process architecture-driven
change management applied to a cancer care organization in a systems of systems context
(pp. 205–214).
Seethamraju, R. (2015). Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information Systems Frontiers,
17(3), 475–492.
Siebel, T. M. (2019). Digital transformation: Survive and thrive in an era of mass extinction.
RosettaBooks.
Sultan, N. (2010). Cloud computing for education: A new dawn? International Journal of
Information Management, 30(2), 109–116.
Sultan, N. (2014). Discovering the potential of cloud computing in accelerating the search for
curing serious illnesses. International Journal of Information Management, 34(2), 221–225.
Tsui, E., Cheong, R. K., & Sabetzadeh, F. (2011). Cloud-based personal knowledge management
as a service (PKMaaS) In 2011 International Conference on Computer Science and Service
System (CSSS) (pp. 2152–2155). IEEE.
Solar Farms, Sustainability and Mitigating
CO2 Emissions: A Technological Approach

Ahmed Sami, Allam Hamdan, and Salem Aljazzar

1 Introduction

For the past 250 years, humans have been burning coal, oil, and gas as means to
produce energy. The industrial revolution was possible due to the exploitation of
fossil fuels. This revolution provided the world with economic growth and an
increase in technological progress, but these came with a price. As the world
economy grows, the reliance on fossil fuels increases, and the emission of carbon
dioxide (CO2) into the atmosphere causes major threats to the earth’s climate. Since
1760, the earth’s temperature has increased by 1 °C, and by continuing the use of
fossil fuels, it is expected to increase by 2 or 3 °C. This increase in temperature
causes ice to melt, thus leading to an increase in sea levels. Rising sea levels can
affect Bahrain, as 27–50% of its islands may be covered by water by 2100. Without
any other sources of energy, Bahrain relies heavily on fossil fuels, from which it
obtains more than 99% of the energy consumed. The population of Bahrain depends
on electricity for cooling due to the arid climate, thus increasing CO2 emissions.
This has resulted in 36.672 megatons of CO2 in 2020 alone, an increase of 206%
since 1990. Therefore, building a solar farm may help lower Bahrain’s fossil fuel
usage and reduce CO2 emissions. The purpose of this study is to shift Bahrain from
the second industrial revolution (relying on non-renewable resources) to the third
industrial revolution (relying on renewable resources) by studying and implementing
solar energy as an energy source. The research objectives are listed below:

A. Sami
George Washington University, Washington, DC, USA
A. Hamdan (*)
College of Business & Finance, Ahlia University, Manama, Bahrain
S. Aljazzar
University of Business and Technology, Jeddah, Saudi Arabia

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 473
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
474 A. Sami et al.

• To identify the viability of using solar energy as an energy source

• To uncover the benefits that may be gained from using solar energy in Bahrain
• To analyze the effectiveness of solar energy in Bahrain’s economy
• To calculate the amount of CO2 emissions reduced while using solar power

2 Literature Review

This chapter highlights the meteorological location of Bahrain (by discussing global
horizontal irradiance [GHI], direct normal irradiance [DNI], and horizontal diffuse
irradiance [HDI]), types of solar panels, and types of inverters. It also explores
articles about solar power plants in terms of financial evaluation, software used, and
cost–benefit analysis.

2.1 Meteorological Information

Bahrain has a high potential for the use of solar energy due to its location and land-
scape. Bahrain is near the equator, which means the sun’s rays strike the earth’s
surface at a narrower area when compared with higher latitudes. Because sunlight is
focused, the temperature is higher, and more energy is received. The sun’s energy
that is absorbed by the surface per unit area is represented by solar irradiance. The
three magnitudes related to solar irradiance used to measure solar energy are as
follows:
• GHI is an important measurement for predicting the output of solar panels. It is
the total electromagnetic radiation emitted from the sun above a surface at a
specific location and time. Its unit of measurement is watts per meter
squared (W/m2).
• DNI measures the amount of radiation emitted from the sun. Its values are
affected by the changes in the weather, including dust, smoke, and cloud cover.
• HDI is the measurement of scattered solar radiation. When there is cloud cover,
the HDI value increases.
Bahrain has high GHI and high DNI, meaning that its photovoltaic power poten-
tial is high (Singh, 2021). Figures 1 and 2 show the GHI, DNI, and photovoltaic
(PV) power potential of Bahrain (Solar Resource Maps of Bahrain, n.d.). The figures
are from the Global Solar Atlas, which specializes in calculating solar energy around
the globe (Figs. 1 and 2).
Bahrain has an arid climate with only two seasons. The summer is extremely hot
and the winter is mild. Table 1 shows the GHI, HDI, clearness index, ambient
temperature, wind velocity, and yearly averages in Bahrain. The meteorological
data were collected from a simulation program called PVsyst (Table 1).
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 475

Fig. 1 Global horizontal irradiance of Bahrain

476 A. Sami et al.

Fig. 2 Photovoltaic power potential of Bahrain

Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 477

Table 1 Meteorological data of Bahrain

Month GHI HDI Clearness index Ambient temperature Wind velocity
January 3.94 1.51 0.596 16.0 4.0
February 4.53 2.19 0.577 17.4 4.3
March 4.88 2.77 0.530 21.9 4.2
April 5.87 3.12 0.564 26.7 3.9
May 6.75 3.25 0.611 32.9 4.1
June 7.21 3.45 0.640 35.3 4.6
July 6.69 3.32 0.599 36.9 4.0
August 6.31 3.15 0.592 36.4 3.2
September 6.02 2.44 0.623 33.1 3.2
October 5.11 2.04 0.615 29.6 3.0
November 4.02 1.70 0.579 23.3 3.7
December 3.60 1.48 0.579 18.1 3.9
Yearly average 5.41 2.54 0.594 27.3 3.8

Fig. 3 Simplified silicone module

2.2 Solar Panels

Solar panels convert energy from the sun to electricity. A solar panel is composed of
individual solar cells made from layers of boron, silicon, and phosphorus. The
positive charge is provided by the boron layer, while the negative charge is provided
by phosphorus. The semiconductor is the silicon wafer. When the surface of a solar
panel is struck by the sun’s photons, electrons move from the silicon into the electric
field generated by the solar cells. This creates a directional current for usable power
(How Does Solar Work?, n.d.) (Fig. 3).
The conversion of light energy into electric energy is known as the PV effect,
which is why solar panels are also referred to as PV panels.
478 A. Sami et al.

Fig. 4 Overview of a solar inverter

2.3 Solar Inverters

By harnessing power from the sun to produce electricity, solar panels are the most
important piece of equipment when building a solar power plant. However, the
power they produce is alternating current (AC), while the power used in homes,
businesses, and industries is direct current (DC). Therefore, solar inverters are
needed to convert the electricity generated by solar panels into a more usable form
of electricity (Solar Inverter - What It Is and How to Choose the Right One, 2020)
(Fig. 4).

2.3.1 Types of Solar Inverters

Solar inverters are of four different types: string inverters, central inverters, micro-
inverters, and battery-based inverters/chargers (Solar Inverters: Types, Pros and
Cons, n.d.).
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 479

Fig. 5 String inverter

[Link] String Inverter

Solar panels are installed in strings, which is the term used for rows. For instance, if
30 solar panels are being installed, they are usually placed in six strings (rows) of
six panels. Each string is connected to a single string inverter (hence the name string
inverter). Multiple strings of solar panels produce DC electricity, which is directed
to the string inverter that converts it to AC electricity. A disadvantage of string
inverters is that when one of the solar panels is shaded, the performance is decreased.
However, they have been used extensively, and the technology is trusted and cheaper
than their counterparts Shoaib, (2022). They are mostly found in commercial and
residential applications (Fig. 5).

[Link] Central Inverters

Central inverters have many similarities to string converters; however, they are
larger in size and can handle more strings of solar panels. The strings of solar panels
are connected to a combiner box, which transmits the DC electricity to the central
inverter, thus converting it into AC. Central inverters are mostly found in solar
power plants and solar farms (Fig. 6).
480 A. Sami et al.

Fig. 6 Central inverter

Fig. 7 Microinverter

[Link] Microinverters

Microinverters are installed in each panel, as they are module-level electronic parts.
Whereas string inverters convert DC electricity to AC electricity on a string of
panels, microinverters perform the conversion right on the panels. Since each panel
has its own microinverter, if one panel is shaded, only that shaded panel will have
reduced performance. This is a major advantage compared with string inverters, but
the downside is that they are more expensive (Fig. 7).
The 200-MW solar power plant studied in this paper is built using monocrystal-
line solar panels. The PV modules are installed on fixed ground mounted racks and
arranged to ensure the most efficient capture of solar radiation. As explained in the
solar panel section, the purpose of the PV cells is to generate electricity by converting
solar radiation to electricity.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 481

2.4 Type and Orientation of PV Panels

The type of PV panels best suited for Bahrain has been studied in a research paper
titled “Solar Systems Analysis and Estimation for Buildings in Bahrain and GCC
countries,” which used a quantitative research methodology to examine the effects
of different PV modules. Monocrystalline panels stood out as the best in this
category due to their ability to withstand high temperatures. Monocrystalline panels
can operate efficiently and produce adequate power, and they have a long lifespan
and require less maintenance (Christine et al., 2017).
Various articles and research papers have studied the orientation of PV panels.
The research paper mentioned in the previous paragraph discussed the optimal
angles and orientation of PV panels in Bahrain. The tilt angle is determined by the
latitude of the location; Bahrain has a latitude of 26°, so the tilt angle is 26°. The
azimuth and orientation of the panels are based on the hemisphere. Bahrain is
located in the northern hemisphere, so the orientation of the panels should be toward
the opposite direction (south) with an angle of 0°. Thus, the optimum tilt angle,
azimuth, and orientation are 26°, 0°, and south, respectively. Moreover, Christine
et al. (2017) highlighted the rules to be followed for the angles of the PV panels,
such as the tilt angle should be within 0–50°, and the azimuth should not be above
70° from the south.

2.5 Design of the PV Power Plant

The design of the power plant was chosen from two research papers: “Design of
50 MW Grid Connected Solar Power Plant” and “The Cost Benefit Analysis of
Commercial 100 MW Solar PV: The Plant Quaid-e-Azam Solar Power Pvt. Ltd.”
Both used a quantitative research methodology to design a power plant in their
respective locations. PVsyst was the main software used for the designs and
simulations. The research papers showcased the types and sizes of power plants
used, the types of PV modules and inverters selected, and the financial evaluations
of the projects (Asad et al., 2022; Hindocha & Shah, 2020). The costs of the modules
and inverters were taken from ENF Solar, a website dedicated to solar energy prices.

2.6 Operations and Maintenance of the PV Power Plant

Two research papers provided the details of the operations and maintenance of the
power plant. The first studied the operations of a 200-MW photovoltaic power
project based in Egypt. It highlighted the construction of the power plant by
discussing the location, objectives, geological information, and cultural heritage of
the area. It also showcased key insights into how the power plant would be operated
482 A. Sami et al.

once it is completed, including the manpower required, shift patterns, and

organizational structure (200 MW Photovoltaic Power Project Kom Ombo – Aswan
Arab Republic of Egypt, n.d.).
The second research paper about the maintenance of the power plant was pro-
vided by the Electricity and Water Authority of Bahrain, which contained design
recommendations for solar PV systems, including the types of PV modules, the
mechanical design of the mounting systems, and, most importantly, weather-related
phenomena. The last section discussed sandstorms, hail, and debris and dust
accumulation and provided recommendations for cleaning the panels by addressing
the high humidity in Bahrain and the type of PV technology to use (Technical
Expert to Develop Grid Connection Guidelines and Standards ..., n.d.).

2.7 Cost–Benefit Analysis

For this study, we referred to a research paper that provided the cost–benefit analy-
sis of a commercial 100-MW power plant. It used a quantitative method to deter-
mine whether the project would be feasible. The RETScreen software analyzed the
financial information of the project by finding the net present value (NPV) and
payback period (Rikhi Ramkissoon, 2015).
Another research paper evaluated the performance and financial details of solar
power plants in Iran. The main takeaway from this paper was that the internal rate
of return (IRR) was used as a discount rate to evaluate the NPV of a 10-MW power
plant (Makkiabadi et al., 2021).

2.8 Literature Gap

The reviewed literature contains useful information for building a 200-MW solar
power plant in Bahrain. Sustainable energy has been researched extensively since
the discovery that fossil fuels are toxic to the environment; however, financially
evaluating a power plant in Bahrain is unique, since most of the research does not
involve a power plant of this size and capacity.

3 Methodology

The methodology used is a cost–benefit analysis. A quantitative research design and

a predictive model are implemented. The cost–benefit analysis highlights the total
cost of the project, the amount of electricity generated, economic development, and
the total profit from the project.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 483

Table 2 Initial framework

Costs Benefits
Total installation costs Electricity sold
Operating and maintaining the plant Carbon dioxide emissions
Note: The cost and benefit variables may increase or change as more research becomes available

3.1 Research Design

The methodology used for this research aims to determine the profitability of using
solar energy as the main source of energy in Bahrain.
The initial framework of the cost–benefit analysis is shown in Table 2.
The NPV and IRR are used in the calculations of the cost–benefit analysis. The
NPV is calculated as a ratio to determine the feasibility of the project. The equation
used in the cost–benefit analysis is

Present value of future benefits

CBA .
Present value of future costs

The first step is to determine the amount of electricity generated in Bahrain.

Bahrain’s peak electricity generation per month is 4000 MW, which occurs in July.
This is used as a reference point to figure out how much electricity the solar panels
need to generate.
PVsyst is used to simulate the electricity generation and economic evaluation of
the plant. PVsyst is a simulation program for solar energy, which determines the
total energy output and efficiency of a power plant. The 200-MW solar power plant
is designed with the help of PVsyst, including its solar arrays, mounting systems,
and inverters. The amount of CO2 emissions saved is also calculated using the
software.
The component requirements of a grid-connected PV power plant are as follows:
• Solar arrays
These are the solar modules connected in arrays. When the modules are con-
nected in a series, the voltage increases. When connected in parallel, the current
increases. The series of connections of the solar arrays are discussed in detail later.
• Mounting systems
For this design, we use fixed mounting systems, as they are cheaper and easier to
install and require less maintenance. The abundance of sunlight in Bahrain (an
average peak of 5.75 hours per day) means sufficient sunlight throughout the year.
The optimum tilt angle of the mounting systems is the latitude of Bahrain (loca-
tion of the site), which is 25.72°.
The ideal azimuth angle, which is the direction of the mounting systems, is geo-
graphically south, as Bahrain is located in the northern hemisphere.
484 A. Sami et al.

• Inverters
As the PV modules generate DC electricity, inverters must be used to convert it
to AC electricity. The inverters can be arranged either in a string or in a central
configuration. For this solar power plant, a central configuration is used, as it is
more applicable for multi-megawatt power plants.
• Data types and sources
The type of data used for this research is quantitative in order to conduct a finan-
cial evaluation of the project. The sources include documents from websites, journal
articles, database records, and internet pages.

3.2 Data Collection Techniques

The data are collected from the sources mentioned in the previous section. Database
records are used to collect the metrological and electricity generation data, which
can be found in government records. The Electricity and Water Authority in Bahrain
has comprehensive data about the monthly usage of electricity. Journal articles are
an extensive source containing valuable information about cost–benefit analysis
techniques and relevant solar farm information. Websites and internet pages provide
insights into performing specific types of calculations to find the costs and benefits
of the project.

3.3 Data Analysis and Interpretation

Before the data are entered into the PVsyst software, a supervisor verifies their
accuracy and reliability. PVSyst determines the NPV, payback period, and return on
investment. The main purpose of collecting these data is to investigate whether it is
profitable to run a solar plant in Bahrain and reduce Bahrain’s dependency on
fossil fuels.

3.4 Research Hypothesis

A cost–benefit analysis is used to determine whether the project is feasible. If the

calculated cost–benefit ratio is above one, then the project is deemed feasible.
Otherwise, the project is not feasible.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 485

4 Discussion

4.1 Location

The location of the project is next to Al Zallaq, a small town in the southern part of
Bahrain. It is 31 km south of Bahrain’s capital Manama, 12 km north of Durrat Al
Bahrain, and 7 km east of Isa Air Base. The total area of the project is 943.371 km2.
Figure 8 shows the proposed location of the project using Google Earth to configure
the land area required. The red square represents the solar power plant, which is
approximately 943.371 km2 in size. The coordinates of the project are shown in
Table 3.

Fig. 8 Location of the solar power plant

Table 3 Longitude and Latitude Longitude Altitude

latitude of the power plant 25.9668° N 50.5219° E 53 m
486 A. Sami et al.

4.2 Components

The solar system’s working process and different types of solar panels and inverters
are discussed in the previous sections. In this section, the main components of the
solar power plant are listed along with their specifications and prices. The Fig. 9
below represents the operations of a solar power plant.
The components of the solar power plant include the following:
• PV modules
The PV module selected for the power plant is from the Omnis Power USA
Cortex series. The specifications of the module are listed in Table 4 along with the
price (ENF Ltd., n.d.).
• Central inverters
The central inverter selected for the power plant is the Sungrow Trnsfo 6250kVA-
MV (ENF Ltd., n.d.). The specifications and price of the module are listed in
Table 5.
• Mounting system
The mounting system used for the power plant is a ground-mounted galvanized
steel solar mounting system from Xiamen Kseng Metal Tech. It has an anti-corrosion
resistance mechanism and scratch resistance. It is priced at €0.0899/Wp. Figure 9
shows the product.

Fig. 9 Solar ground-mounted system

Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 487

Table 4 Photovoltaic Omnis power USA Cortex Si-Mono

module specifications Module type OP600M60-P4
Power output 600 Wp
Open circuit voltage 41.5 V
Short circuit current 18.52 A
Panel efficiency 21.2%
Nominal operating cell temperature 41 °C (±3 °C)
Operational temperature −40 °C ± 85 °C
Price €0.26/Wp

Table 5 Inverter Sungrow

specifications Inverter type 6250kVA-MV
Maximum PV input 1500 V
Maximum inverter output current 2*3308 A
Efficiency 99%
Operating ambient temperature −35 to 60 °C
Price €0.21/Wp

Note: The prices are from [Link]. The prices are in euros, and the conver-
sion rate as of September 25, 2022, is 1 euro, i.e., 0.37 Bahraini dinars.

4.3 Operational Requirements

The operations and maintenance of the project are performed internally by hired
employees. The routine activities performed by the employees include the following:
• Cleaning the PV panels
• Maintaining the plant
• Providing security
• Staffing management and administration
• Supplying electricity from the plant to the grid
• PV plant operators and technicians
The manpower required to fulfill these duties is a minimum of 30 employees
operating the plant on a three-shift basis. The plant operates 24 hours a day, so a
shift system is a must. Shift employees work eight hours per shift, while non-shift
employees work during office hours. Office hours are from 7:00 am to 3:30 pm,
Sunday to Thursday. Table 6 shows each position, the number of employees, num-
ber of shifts, and salary per hour. The salaries are in euros (Salary and Cost of
Living Comparison, n.d.).
Figure 10 illustrates the organizational structure of the operations and mainte-
nance of the power plant. The plant manager acts as the head of operations, and the
488 A. Sami et al.

Table 6 Manpower requirements

Position Number of employees Number of shifts Salary per hour
Security 6 operators 3 shifts €1.99
Technicians 9 technicians 3 shifts €3.19
Operators 12 operators 3 shifts €4.28
Plant manager 1 manager Office hours €10.20
HSE officer 1 officer Office hours €2.56
Electrical engineer 2 engineers Office hours €5.13

Fig. 10 Organizational structure of the plant

HSE officer is responsible for promoting and maintaining the health and safety
requirements to operate the plant. The electrical engineers’ role is to design and test
the plant’s components, while the technicians are responsible for fixing and main-
taining the components. The operators take care of running the plant, while security
guards the plant and ensures everyone’s safety.

4.3.1 Maintenance Procedures

This section provides insights into how the solar panels, inverters, mounting sys-
tems, wiring, and connections should be maintained. These procedures are required
to increase the efficiency and lifespan of the equipment.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 489

[Link] Solar Panels

The solar panels must be cleaned regularly, as any dust settling or water drops
(because of humidity) on the panels can negatively impact the overall performance
of the plant. The surface of the panels can be maintained by following these steps:
1. If there is a layer of dust or dirt on the panels, a simple wash with water should
remove the debris. But if the panels have thick dirt or bird droppings, they should
be washed with cold water and cleaned with a sponge.
2. A visual inspection is required to locate any cracks, discoloration, delamination,
and water leaks on the panels (Fig. 11).

[Link] Central Inverters

A central inverter is an important component in a power plant. As mentioned earlier,

it converts DC electricity to AC electricity (usable electricity). Dust, dirt, and wear
and tear can negatively impact the performance of an inverter, so proper maintenance
is required to ensure that the inverter is running efficiently throughout its lifespan.
The required maintenance steps are listed below.
1. The cable connections should be inspected by the technicians.
2. Any debris should be cleaned.
3. Any worn or torn parts should be replaced (Fig. 12).

Fig. 11 Maintenance of the photovoltaic modules

490 A. Sami et al.

Fig. 12 Maintenance of the inverters

[Link] Wiring and Connections

The wiring installations should be checked regularly to ensure that there are no
cracks, breaks, or deterioration in the insulation. The connections should be
inspected for any corrosion or burning.

[Link] Sample Checklist for Solar Power Plant Maintenance

The sample maintenance checklist below shows the requirements during a general
maintenance procedure. These ensure that the solar panels run smoothly and
efficiently throughout their lifespan (Table 7).

4.4 Panel Orientation

The orientation of the solar panels comprises the tilt angle and azimuth, and it is
important because it affects the efficiency of the plant. For this design, the tilt angle
used is 25.7° and the azimuth is 0°. Figure 13 shows when the tilt angle and azimuth
are at these degrees, and the loss percentage is 0%.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 491

Table 7 Maintenance checklist

Maintenance checklist
Action Requirements
Electrical inspection (performed by shift The cables, conduits, and clamps should be intact
technicians): recommended once every and undamaged.
12 months The earthing point and earth cable should be
connected and corrosion-free.
The inverter should be operating normally
without any error code messages. If there is an
unexpected grid power loss, then the inverter
should be tested.
Visual inspection (performed by operators): The solar panels should not have any
recommended daily discoloration or cracks.
Any debris under the panels should be removed.
Dust or dirt around the inverter should be
removed.
The panels should be checked for dirt or animal
feces.
Panel cleaning (performed by operators): The solar panels should be cleaned similarly to
recommended once a week or if there are washing windows.
any deficiencies found during visual The panels should be cleaned with a detergent
inspection solution listed in the instruction manual provided
by the manufacturer.

Fig. 13 Orientation of the panels

492 A. Sami et al.

Fig. 14 Simplified sketch of the system

4.5 System

The PV modules for the solar power plant are from Omnis Power USA, and approx-
imately 333,330 modules are needed. Thirty modules are arranged in series, and
11,111 modules are arranged in strings. To convert DC electricity to AC electricity,
23 central inverters from Sungrow are necessary. The required space for the power
plant is 943.371 km2 (Fig. 14).
The diagram above is a simplified sketch of the layout, with the system connec-
tions and electricity flow. The power plant is grid connected, and it includes a PV
array, user load, grid connection, and inverters.

4.6 Simulation Results

The results of the simulation are discussed in this section. The 200-MW solar power
plant is simulated using the values obtained from the previous sections. The pro-
duced electricity, performance ratio, financial evaluation, and CO2 emissions are
detailed next.

4.6.1 Produced Electricity and Performance Ratio

The 200-MW solar power plant is expected to produce 375.9 GWh per year, and the
performance ratio is 81.74%. Table 8 lists the GHI, ambient temperature, energy
output of the array, energy injected into the grid, and performance ratio.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 493

Table 8 Main results from the simulation

GHI T_Amb EArray E_Grid PR
Month kWh/m2 °C GWh GWh ratio
January 114.4 17.64 28.39 28.07 0.884
February 130.2 19.13 29.28 28.95 0.870
March 165.5 22.36 32.58 32.22 0.855
April 187.2 27.60 32.22 31.86 0.832
May 223.8 32.85 33.67 33.29 0.799
June 240.3 35.25 33.23 32.68 0.772
July 231.6 36.82 32.87 32.50 0.771
August 221.6 36.59 33.59 33.22 0.764
September 198.6 33.70 34.13 33.76 0.779
October 171.1 29.55 34.62 34.25 0.813
November 125.1 24.49 29.42 29.10 0.853
December 103.9 19.95 26.14 25.84 0.878
Year 2113.3 28.04 380.13 375.92 0.817

Fig. 15 Yearly average performance ratio

The performance ratio indicates how well the power plant performs. Specifically,
it is a quality factor that determines whether a plant is running smoothly and whether
there is a substantial amount of losses in the system. At 81.74%, the performance
ratio of the power plant is exceptional. System losses are expected, so a perfor-
mance ratio of around 80% is a good indicator of the effectiveness and efficiency of
the system. Figure 15 shows the monthly performance ratio of the plant.
494 A. Sami et al.

Fig. 16 Normalized production

The next figure represents the normalized production of the solar power plant. It
highlights the losses of the PV modules, losses in the system, and the converted
energy output of the inverters (Fig. 16).

4.6.2 CO2 Emissions

The use of a solar power plant can have a positive impact on the environment.
Generally, it helps reduce greenhouse gas emissions, providing a green alternative
to burning fossil fuels for electricity. The amount of CO2 emissions saved during the
lifetime of the project (25 years) is 5,008,139.7 tons, as shown in Fig. 17.

4.6.3 Financial Evaluation

This section illustrates the total costs, total profits, and cost–benefit analysis per-
formed to determine the feasibility of the project. The inflation rate used is 3.5% (as
of 2022), the discount rate is 7%, and the lifespan of the project is 25 years.

[Link] Costs

The total cost of the power plant is in Table 9.

The operations and maintenance of the plant are performed internally by the
employees mentioned in the operational requirements. Comprising 5% of the total
installation cost of the power plant, “other components” include accessories
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 495

Fig. 17 Carbon dioxide emissions

Table 9 Costs of the power plant

Name Quantity Unit price € Total cost €
Solar modules 333,330 154.80 51,599,484.00
Mounting system 333,330 54.00 17,999,820.00
Inverter 23 1,799,982.00 41,399,586.00
Installation modules 333,330 53.40 17,799,822.00
Installation inverters 23 1,565,201.74 35,999,640.00
Other components – – 11,959,905.42
Automatic cleaners 30 1650.00 49,500.00
Land rent – – 1,000,000.00
O&M (per year) – – 1,026,912.92

Table 10 Total cost of the Costs Price €

power plant Total operating cost 2,026,912.92
Loan payment cost 15,171,965.82
Total yearly cost 17,198,878.74
Total installation cost 176,807,757.42

(fasteners and bolts), wiring, a combiner box, monitoring systems, measurement

systems, and a surge arrester (Rooij, 2022). A loan from the Kuwait Finance House
in Bahrain is expected to fund the project, with an interest rate of 7% for 20 years.
The land rental cost is estimated at €1 million per year (Dave, 2021). This value is
justified by the location and size. The size is around 943,371 m2 and the location is
in the desert, with the closest suburban area of Zallaq approximately 13 km away.
The land is flat with minimal shading to enhance the efficiency of the panels
(Table 10).
496 A. Sami et al.

The table above shows the total operating and installation costs of the plant. The
total operating costs is computed by adding the yearly salaries of the employees
(€2,026,912.92) and the lease of the land (€1,000,000). The loan payment cost rep-
resents the loan from Kuwait Finance House with a fixed annuity and a 7% interest
rate. The following formula is used to calculate the yearly loan payment cost, repre-
sented by LP:

1
1
1 r
n

Total Installation Costs LP

1
1
1 0.07
25

176, 758, 257.42 LP

0.07

LP = 15,167, 717.49.

The total yearly cost is the sum of the yearly loan payment and total operating cost.
The total installation cost includes the solar modules, inverters, mounting systems,
their installation, and the cost of other components.

[Link] Benefits

The total benefits are evaluated in Table 11.

The fixed in tariff is the price of the produced electricity, which is based on the
average household electricity cost in Bahrain. The energy sold per year is computed
by multiplying the fixed in tariff with the energy produced per year, as shown below.

Energy sold per year fixed in tariff energy produced per year

0.048 375, 918, 000

18, 044, 064.00

Table 11 Benefits of the power plant

Benefit Price €
Fixed in tariff 0.048/kWh
Energy sold per year 18,044,064.00
Emissions saved per year ≈200,325.59 (200,325.59 tons/year)
Total profit per year 18,244,389.59
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 497

The power plant can save around 200,325.59 tons of CO2 emissions per year. The
emissions are one of the main reasons for building the solar power plant; therefore,
utilizing the amount of emissions saved and equating it to a price may increase the
feasibility of the project. The value of €1 euro is assigned to 1 ton; hence, the benefit
is €200,325.59. Adding the energy sold per year and the emissions saved per year
results in the total profit per year.

[Link] Cost–Benefit Analysis

The cost–benefit analysis is conducted by using the IRR as a discount rate. The IRR
is calculated by utilizing the future values of the costs and benefits and setting the
inflation rate of 3.5% as the interest rate. The formula below shows how the future
value (FV) is determined:

FV PV 1 r .
t

Table 12 lists the future values of the costs and benefits of the project calculated
with Microsoft Excel. The profit column is used to compute the IRR (discount rate),
which is found to be 8% (Table 12).
In the previous section, the yearly loan payment was calculated to determine the
amount owed to the bank. Table 13 shows how the payment is taking care of the
installation costs and the interest that is owed to the bank.
For the first payment at the end of the year, the interest is paid to the bank along
with the loan payment. The loan payment decreases the value of the interest, and the
loan principal (remainder of the loan payment) helps reduce the beginning balance.
The calculations were performed using Excel. The equations below show how the
values were found:

Loan interest starting balance 7% loan interest rate ,

Loan principal loan payment Loan Interest, and

Year end balance starting Balance loan principal.

The cost–benefit analysis is also calculated using Excel. The operating costs, elec-
tricity sales, loan payments, and IRR are the most crucial values in determining
whether the project is feasible. Table 14 lists the operating costs and electricity sales
with inflation, loan payments, cash flows, and NPVs.
The results show that the NPV of the project is positive and it is around 57 mil-
lion euros. The cash flows indicate that the project will be positive from the start till
the end with a total of around 188 million euros. Figure 18 shows yearly cash flows
(Fig. 18).
The cost–benefit analysis is conducted using the sum of the present values of the
benefits divided by the sum of the present values of the costs. Table 15 shows the
498 A. Sami et al.

Table 12 Future values of the costs and benefits

Year Costs € Benefits € Profit €
0 176,807,757.42 – 176,807,757.42
1 17,198,878.74 18,244,389.59 1,045,510.85
2 18,423,868.88 19,543,846.24 1,119,977.36
3 19,068,704.29 20,227,880.85 1,159,176.57
4 19,736,108.94 20,935,856.68 1,199,747.75
5 20,426,872.75 21,668,611.67 1,241,738.92
6 21,141,813.30 22,427,013.08 1,285,199.78
7 21,881,776.76 23,211,958.53 1,330,181.77
8 22,647,638.95 24,024,377.08 1,376,738.13
9 23,440,306.31 24,865,230.28 1,424,923.97
10 24,260,717.03 25,735,513.34 1,474,796.31
11 25,109,842.13 26,636,256.31 1,526,414.18
12 25,988,686.61 27,568,525.28 1,579,838.67
13 26,898,290.64 28,533,423.66 1,635,133.03
14 27,839,730.81 29,532,093.49 1,692,362.68
15 28,814,121.39 30,565,716.76 1,751,595.38
16 29,822,615.64 31,635,516.85 1,812,901.21
17 30,866,407.18 32,742,759.94 1,876,352.76
18 31,946,731.43 33,888,756.54 1,942,025.10
19 33,064,867.03 35,074,863.02 2,009,995.98
20 34,222,137.38 36,302,483.22 2,080,345.84
21 35,419,912.19 37,573,070.14 2,153,157.95
22 36,659,609.12 38,888,127.59 2,228,518.47
23 37,942,695.43 40,249,212.06 2,306,516.62
24 39,270,689.78 41,657,934.48 2,387,244.70
25 40,645,163.92 43,115,962.18 2,470,798.27

present values for electricity sales, emissions saved, operating costs, and loan pay-
ment costs. The following formula calculates the present value (PV):

FV
PV .
1 r
n

The equation below shows how the cost–benefit analysis was performed. The sums
of the benefits and costs were divided as follows:

245, 502, 890.34 2, 915, 511.54

CBA
29, 499, 416.72 161, 957, 339.47

= 1.28.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 499

Table 13 Loan payments

Starting balance Loan interest Loan payment Loan principal Year-end balance
Year € € € € €
1 176,807,757.42 12,376,543.02 15,171,965.82 2,795,422.80 174,012,334.62
2 174,012,334.62 12,180,863.42 15,171,965.82 2,991,102.40 171,021,232.22
3 171,021,232.22 11,971,486.26 15,171,965.82 3,200,479.56 167,820,752.66
4 167,820,752.66 11,747,452.69 15,171,965.82 3,424,513.13 164,396,239.52
5 164,396,239.52 11,507,736.77 15,171,965.82 3,664,229.05 160,732,010.47
6 160,732,010.47 11,251,240.73 15,171,965.82 3,920,725.09 156,811,285.38
7 156,811,285.38 10,976,789.98 15,171,965.82 4,195,175.84 152,616,109.54
8 152,616,109.54 10,683,127.67 15,171,965.82 4,488,838.15 148,127,271.39
9 148,127,271.39 10,368,909.00 15,171,965.82 4,803,056.82 143,324,214.57
10 143,324,214.57 10,032,695.02 15,171,965.82 5,139,270.80 138,184,943.77
11 138,184,943.77 9,672,946.06 15,171,965.82 5,499,019.76 132,685,924.01
12 132,685,924.01 9,288,014.68 15,171,965.82 5,883,951.14 126,801,972.87
13 126,801,972.87 8,876,138.10 15,171,965.82 6,295,827.72 120,506,145.15
14 120,506,145.15 8,435,430.16 15,171,965.82 6,736,535.66 113,769,609.49
15 113,769,609.49 7,963,872.66 15,171,965.82 7,208,093.16 106,561,516.34
16 106,561,516.34 7,459,306.14 15,171,965.82 7,712,659.68 98,848,856.66
17 98,848,856.66 6,919,419.97 15,171,965.82 8,252,545.85 90,596,310.81
18 90,596,310.81 6,341,741.76 15,171,965.82 8,830,224.06 81,766,086.74
19 81,766,086.74 5,723,626.07 15,171,965.82 9,448,339.75 72,317,746.99
20 72,317,746.99 5,062,242.29 15,171,965.82 10,109,723.53 62,208,023.46
21 62,208,023.46 4,354,561.64 15,171,965.82 10,817,404.18 51,390,619.29
22 51,390,619.29 3,597,343.35 15,171,965.82 11,574,622.47 39,815,996.82
23 39,815,996.82 2,787,119.78 15,171,965.82 12,384,846.04 27,431,150.77
24 27,431,150.77 1,920,180.55 15,171,965.82 13,251,785.27 14,179,365.51
25 14,179,365.51 992,555.59 15,171,965.82 14,179,410.23 (44.73)

Based on the cost–benefit analysis, the project is feasible, and Bahrain has a high
potential for the construction of solar power plants. As Bahrain’s electricity con-
sumption per capita is among the highest worldwide, introducing solar energy in
Bahrain will increase awareness of renewable energy. This solar power plant can be
a gateway to producing solar energy in Bahrain, as it has large uninhabitable desert
areas that can be converted to solar farms. Moreover, Bahrain is an archipelago, so
offshore wind energy can be used as an alternative clean energy source.

[Link] Sensitivity Analysis

A sensitivity analysis is conducted to determine the lowest price to sell electricity

and still achieve a profit. In Bahrain, electricity costs around €0.048/kWh for a
household and €0.077/kWh for a business. Table 16 shows the sensitivity analysis
performed by comparing electricity tariffs against revenues and NPVs.
Table 14 Net present values (NPVs)
500

Year Operating costs € Electricity sales € Emissions saved € Loan payments € Cash flows € NPVs €
1 2,026,912.92 18,044,064.00 200,325.59 15,171,965.82 1,045,510.85 968,065.60
2 2,097,854.87 18,545,785.74 207,336.98 15,171,965.82 1,483,302.03 1,271,692.41
3 2,171,279.79 19,061,458.03 214,593.78 15,171,965.82 1,932,806.20 1,534,323.88
4 2,247,274.59 19,591,468.78 222,104.56 15,171,965.82 2,394,332.94 1,759,906.19
5 2,325,929.20 20,136,216.67 229,878.22 15,171,965.82 2,868,199.88 1,952,048.64
6 2,407,336.72 20,696,111.48 237,923.96 15,171,965.82 3,354,732.90 2,114,050.78
7 2,491,593.50 21,271,574.36 246,251.30 15,171,965.82 3,854,266.33 2,248,927.39
8 2,578,799.28 21,863,038.19 254,870.09 15,171,965.82 4,367,143.19 2,359,431.58
9 2,669,057.25 22,470,947.90 263,790.54 15,171,965.82 4,893,715.37 2,448,076.06
10 2,762,474.25 23,095,760.75 273,023.21 15,171,965.82 5,434,343.89 2,517,152.70
11 2,859,160.85 23,737,946.75 282,579.03 15,171,965.82 5,989,399.10 2,568,750.61
12 2,959,231.48 24,397,988.96 292,469.29 15,171,965.82 6,559,260.95 2,604,772.77
13 3,062,804.58 25,076,383.89 302,705.72 15,171,965.82 7,144,319.20 2,626,951.34
14 3,170,002.75 25,773,641.83 313,300.42 15,171,965.82 7,744,973.68 2,636,861.80
15 3,280,952.84 26,490,287.28 324,265.93 15,171,965.82 8,361,634.55 2,635,935.93
16 3,395,786.19 27,226,859.32 335,615.24 15,171,965.82 8,994,722.55 2,625,473.77
17 3,514,638.71 27,983,912.01 347,361.77 15,171,965.82 9,644,669.26 2,606,654.65
18 3,637,651.06 28,762,014.83 359,519.44 15,171,965.82 10,311,917.38 2,580,547.31
19 3,764,968.85 29,561,753.08 372,102.62 15,171,965.82 10,996,921.02 2,548,119.27
20 3,896,742.76 30,383,728.34 385,126.21 15,171,965.82 11,700,145.97 2,510,245.34
21 4,033,128.76 31,228,558.92 398,605.62 15,171,965.82 12,422,069.97 2,467,715.60
22 4,174,288.26 32,096,880.32 412,556.82 15,171,965.82 13,163,183.06 2,421,242.57
23 4,320,388.35 32,989,345.71 426,996.31 15,171,965.82 13,923,987.85 2,371,467.95
24 4,471,601.94 33,906,626.42 441,941.18 15,171,965.82 14,704,999.84 2,318,968.73
25 4,628,108.01 34,849,412.46 457,409.12 15,171,965.82 15,506,747.75 2,264,262.82
Total 78,947,967.76 639,241,766.02 7,802,652.94 379,299,145.50 188,797,305.70 56,961,645.69
A. Sami et al.
Fig. 18 Yearly cash flows

Table 15 Cost–benefit analysis

Year Electricity sales € Emissions saved € Operating costs € Loan payments €
1 16,707,466.67 185,486.66 1,876,771.22 14,048,116.50
2 15,900,022.07 177,758.04 1,798,572.42 13,007,515.28
3 15,131,599.95 170,351.46 1,723,631.90 12,043,995.63
4 14,400,314.42 163,253.48 1,651,813.91 11,151,847.80
5 13,704,370.72 156,451.25 1,582,988.33 10,325,785.00
6 13,042,060.85 149,932.45 1,517,030.48 9,560,912.04
7 12,411,759.33 143,685.27 1,453,820.88 8,852,696.33
8 11,811,919.26 137,698.38 1,393,245.01 8,196,941.05
9 11,241,068.48 131,960.95 1,335,193.13 7,589,760.23
10 10,697,805.98 126,462.57 1,279,560.09 7,027,555.77
11 10,180,798.48 121,193.30 1,226,245.08 6,506,996.08
12 9,688,777.10 116,143.58 1,175,151.54 6,024,996.37
13 9,220,534.31 111,304.26 1,126,186.89 5,578,700.35
14 8,774,920.94 106,666.59 1,079,262.44 5,165,463.28
15 8,350,843.33 102,222.15 1,034,293.17 4,782,836.37
16 7,947,260.70 97,962.89 991,197.62 4,428,552.20
17 7,563,182.56 93,881.10 949,897.72 4,100,511.29
18 7,197,666.29 89,969.39 910,318.65 3,796,769.72
19 6,849,814.82 86,220.67 872,388.70 3,515,527.52
20 6,518,774.45 82,628.14 836,039.17 3,255,118.07
21 6,203,732.72 79,185.30 801,204.21 3,013,998.21
22 5,903,916.44 75,885.91 767,820.70 2,790,739.09
23 5,618,589.79 72,724.00 735,828.17 2,584,017.67
24 5,347,052.52 69,693.83 705,168.66 2,392,608.96
25 5,088,638.19 66,789.92 675,786.64 2,215,378.66
Total 245,502,890.34 2,915,511.54 29,499,416.72 161,957,339.47
502 A. Sami et al.

Table 16 Sensitivity analysis Electricity tariff € NPV € Revenue €

0.032 (24,872,651.09) 163,668,593.56
0.033 (19,758,007.54) 168,783,237.11
0.034 (14,643,363.99) 173,897,880.66
0.035 (9,528,720.44) 179,012,524.21
0.036 (4,414,076.90) 184,127,167.75
0.037 700,566.65 189,241,811.30
0.038 5,815,210.20 194,356,454.85
0.039 10,929,853.75 199,471,098.40
0.040 16,044,497.30 204,585,741.95
0.041 21,159,140.85 209,700,385.50
0.042 26,273,784.40 214,815,029.05
0.043 31,388,427.95 219,929,672.60
0.044 36,503,071.49 225,044,316.14
0.045 41,617,715.04 230,158,959.69
0.046 46,732,358.59 235,273,603.24
0.047 51,847,002.14 240,388,246.79
0.048 56,961,645.69 245,502,890.34
0.049 62,076,289.24 250,617,533.89
0.050 67,190,932.79 255,732,177.44
0.051 72,305,576.34 260,846,820.99

Based on the analysis, electricity can be sold at €0.037 per kWh, resulting in a
positive NPV of around €700,000 and revenue of €189 million. This indicates that
a solar power plant in Bahrain can reduce the cost of electricity and provide clean
energy throughout the kingdom.

5 Conclusion

The objective of this research was to help reduce CO2 emissions in Bahrain by using
a solar power plant as a clean energy source. In the literature review, research papers
were studied, and the findings could be summarized as follows:
1. The type of PV panel that best suits Bahrain is a monocrystalline panel.
2. The orientations of the panels should be 26° for the optimum tilt angle, 0° for the
azimuth, and south.
3. PVsyst is the simulation software used to design the power plant. The costs for
the modules and inverters are from a website dedicated to solar energy called
ENF Solar.
4. The operation and maintenance of the power plant can be done internally by hir-
ing qualified personnel.
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 503

5. The IRR is used as a discount rate to calculate the costs and benefits of the proj-
ect. The NPV is calculated along with the cost–benefit ratio to determine the
feasibility of the project.
A gap found in the literature was that building a power plant of this size and capac-
ity and financially evaluating the project have not been carried out in Bahrain.
The methodology for this study was a quantitative research design using a pre-
dictive model. Cost–benefit analysis helped determine whether the project is feasi-
ble. The hypothesis of this research was as follows: if the cost–benefit ratio is higher
than one, then the project is feasible; otherwise, it is not feasible.
The location of the simulated power plant was next to Al Zallaq, with a total area
of 943.371 km2. The precise location was 26° N latitude and 50° E longitude, with
an altitude of 53 m. The main components of the power plant were PV modules,
solar inverters, and mounting systems. The PV module used was from the Omnis
Power USA Cortex series, the central inverter was the Sungrow Trnsfo 6250kVA-MV,
and the mounting system was from Xiamen Kseng Metal Tech. The manpower
required to operate the facility was a minimum of 30 employees, with some working
in a three-shift system. The office hours were from 7:30 am to 3:30 pm, Sunday to
Thursday. The maintenance of the power plant was performed by the employees.
The tasks included inspecting and cleaning the solar panels, checking the inverters
weekly, and inspecting the wiring and connections of the power plant.
The results from the PVsyst simulation showed that a 200-MW solar power plant
could produce 375.9 GWh per year with a performance ratio of 81.74%. During the
lifetime of the project, the estimated carbon dioxide emissions saved was 5,008,139.7
tons. The total cost of the project was €176,807,757.42, while the yearly O&M cost
was €1,026,912.92. The total costs of the modules, mounting systems, and inverters
were €51,599,484.00; €17,999,820.00; and €41,399,586.00, respectively. In
addition, the installation costs of the modules, inverters, and other components were
€17,799,822.00; €35,999,640.00; and €11,959,905.42, respectively. The rental of
the land had a yearly cost of €1,000,000.00. The inflation rate was set at 3.5% and
the discount rate for the loan at 7%.
The total benefit of the project was determined as €18,244,389.59 per year with
an electricity tariff of €0.048/kWh and emissions saved per year of €200,325.59.
The NPVs, costs, and benefits were calculated at an interest rate of 8%, resulting in
a positive NPV of around €57 million euros and total cash flow of about €188
million. The cost–benefit ratio was 1.28, indicating that the project was feasible.
The sensitivity analysis showed that the electricity tariff could be set €0.037/kWh
while maintaining a positive NPV and positive revenue. The findings proved that
utilizing solar energy in Bahrain can be financially positive and reduce CO2
emissions.
504 A. Sami et al.

5.1 Recommendations

Based on these conclusions, we recommend the following:

• Bahrain can view this project in the public or private sector as a reference to start
developing solar power plant.
• This project can be executed in the public sector to demonstrate that Bahrain’s
energy consumption is too high and must be lowered by using less electricity or
creating renewable energy sources.

5.2 Limitations

The limitations of the study were that the prices for installation, land, and mainte-
nance tools were not widely available and could only be based on assumptions.

5.3 Future Work

• The project produced positive results; however, it is better to test a larger solar
power plant to see whether it can yield a positive NPV and favorable cost–
benefit ratio.
• Alternative renewable energies, such as wind energy, should be studied, as
Bahrain has a potential for producing wind energy, and it may yield more
than solar.
• This project would only increase renewable energy sources by 1% in Bahrain.
Thus, researching and studying different clean energy sources can help provide
a brighter and cleaner future for Bahrain.

References

200 MW Photovoltaic Power Project Kom Ombo – Aswan Arab Republic of Egypt. (n.d.).
Retrieved from [Link]
ombo-aswan-arab-republic-of-egypt
Asad, M., et al. (2022). The cost benefit analysis of commercial 100 MW solar PV: The Plant
Quaid-e-Azam Solar Power Pvt Ltd. Sustainability, 14(5), 2895. Available at: [Link]
org/10.3390/su14052895
Christine, G., et al. (2017). Solar systems analysis and estimation for buildings in Bahrain and
GCC countries. International Journal of Computing and Digital Systems, 6(6), 317–329.
Retrieved from [Link]
Dave. (2021). Lease rates for solar farms: How valuable is my land? Retrieved from [Link]
[Link]/lease-rates-for-solar-farms-how-valuable-is-my-land
ENF Ltd. (n.d.). Retrieved from [Link]
Solar Farms, Sustainability and Mitigating CO2 Emissions: A Technological Approach 505

Hindocha, K., & Shah, S. (2020). Design of 50 MW grid connected solar power plant. International
Journal of Engineering Research & Technology, 9(4) Retrieved from [Link]
ijertv9is040762
How does solar work? (n.d.). Retrieved from [Link]
how-does-solar-work
Makkiabadi, M. et al. (2021). “Performance evaluation of solar power plants: A review and a case
study,” PRO, 9(12), p. 2253. Retrieved from [Link]
Rikhi Ramkissoon, K. M. (2015). Cost benefit analysis of implementing a solar photovoltaic sys-
tem. International Journal of Innovative Research in Science, Engineering and Technology,
4(12), 11696–11703. Retrieved from [Link]
Rooij, D. D. (2022). Labor costs for installing solar panels, manage risks and maximize ROI
for your PV and energy storage projects. Retrieved from [Link]
center/consumers/labor-costs-installing-solar-panels/#:~:text=The%20average%20labor%20
cost%20for,labor%20charges%20would%20cost%20%243%2C000
Salary and cost of living comparison. (n.d.). Retrieved from [Link]
Singh, S. (2021). Solar irradiance concepts: DNI, DHI, GHI & GTI. Retrieved from [Link]
[Link]/solar-irradiance/
Shoaib, H. M. (2022). Digital transformation as a mediating variable in the relationship between
organizational culture and job satisfaction, International Journal of Business Ethics and
Governance, 5(1), pp. 70–104. [Link]
Solar inverter – What it is and how to choose the right one. (2020). Retrieved from [Link]
[Link]/renewable-energy/solar-inverters/
Solar inverters: Types, pros and cons. (n.d.). Retrieved from [Link]
inverter/#:~:text=To%20recap%2C%20there%20are%20three,energy%20usable%20for%20
your%20home
Solar resource maps of Bahrain. (n.d.). Retrieved from [Link]
download/bahrain
Technical expert to develop grid connection guidelines and standards ... (n.d.). Retrieved from
[Link]
Renewable Technologies: Solar Power
and Wind Power Energy Utilization –
Advantages and Disadvantages

Bayan Ahmed, Muneer Al Mubarak, and Mohammed Khouj

1 Introduction

Energy and technology work hand in hand to improve the economy. Nowadays,
many industries use technologies that are dependent on electricity such as housing,
schools, hospitals, manufacturing companies, and so on. With the increasing world-
wide population, the demand for technology and energy has been above average.
This began after the industrial revolution in Europe when the use of fossil fuels
increased at the same rate as the increased expectations of living standards. Using
conventional energy resources, such as oil, natural gas, and carbon, has limits, and
with the intensity of economic expansion, they might not be sufficient to keep up
with the growth. Experts have warned that these resources will be consumed before
2040. However, the consumption of resources is not the only issue. Although using
conventional energy in industry is effective, it leads to many environmental prob-
lems such as global warming (Dincer, 2000), which occurs via the process of using
energy and emitting greenhouse gases. Not only do emissions affect climate change,
but they also affect sea levels and wildlife lifecycles, creating an unbalanced system
around the world (Marks-Bielska et al., 2020).
Utilizing a limitless resource like renewable energy is a controversial topic, and
knowing what source to use and why is a cause for concern. Many factors should be

B. Ahmed (*)
The George Washington University, Washington, DC, USA
M. Al Mubarak
College of Business & Finance, Ahlia University, Manama, Bahrain
e-mail: malmubarak@[Link]
M. Khouj
University of Business and Technology, Jeddah, Saudi Arabia
e-mail: [Link]@[Link]

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 507
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
508 B. Ahmed et al.

considered such as environmental effects, cost, efficiency, cleanliness, and stability.

Unfortunately, many industries are still using and depending on fossil fuels to gen-
erate electricity, and there is no doubt that fossil fuels are very efficient in power
production quality. Nevertheless, it should be noted that the continued use of fossil
fuels will be harmful in the long run, and the fact that it is a limited resource should
encourage the use of other sources of energy such as renewable energy (NASA,
2018). Renewable energy can be defined as a continuous generation of energy
directly from the sun (photoelectric, photochemical, and thermal), indirectly from
the sun (energy stored in biomass, hydropower, and wind), or from the natural
movement of the environment (geothermal and tidal energy), which makes it a sus-
tainable solution for generating power. Even though many countries are leaning
toward renewable energy, it is not yet the main energy source across industries. Like
any system, the renewable system has shortcomings, and if many industries use
renewable energy, the advantages and disadvantages are easier to spot. This paper
aims to discuss the advantages of renewable energy regarding the three sources
mentioned above, that is, directly from the sun, indirectly from the sun, and from
natural movement. The advantages will be compared with the disadvantages of each
source, followed by a discussion about the new and improved technologies that have
been developed to create better systems and reduce the disadvantages as much as
possible (Ellabban et al., 2014).
The literature review will first discuss the background and history of renewable
energy sources, focusing on solar energy and wind energy. It will also outline how
to use each resource correctly, what to expect, and what to be aware of before choos-
ing a preferred source. The review will also highlight the mechanisms of each sys-
tem for a deeper understanding of the technology, compare the advantages and
disadvantages, and describe the latest technologies used in each system. Data are
collected from different sources to draw conclusions about how to improve the
existing technology to make it sustainable in the long run without harming the envi-
ronment. This research will help scientists understand the challenges in renewable
energy and how they might affect the environment.

2 Literature Review

2.1 Solar Energy

The sun is the earth’s most abundant energy source. Solar energy is the source of all
wind, fossil fuel, hydro, and biomass energy, and it falls at a rate of 120 petawatts (1
petawatt = 1015 watts) onto the earth’s surface. This indicates that all of the solar
energy captured from the sun in a single day could meet the world’s needs for
almost 20 years. Figure 1 presents the forecasts and calculations for the future
potential of each source of renewable energy based on today’s technology. The
more advanced the technology, the more potential it has as an energy source. The
Renewable Technologies: Solar Power and Wind Power Energy Utilization… 509

Potentials
(Exajoule)
2000
1600
World energy demand in 2050
1500 World energy demand in 2010

1000
600
500
500 250
50 1
0
Solar Wind Geothermal Biomass Hydropower Tidalpower

Fig. 1 Potential for renewable energy sources (based on today’s technology level)

world’s energy requirements are expected to increase by 5% every year; therefore,

solar energy might be the best option to fulfill the ever-increasing demand.

2.1.1 Background and History

Edmond Becquerel, a 19-year-old French experimental physicist, discovered photo-

voltaic effects during an experiment with electrolytic cells. During the nineteenth
century, inventors and businessmen in Europe and the United States created solar
energy technology that would later provide the foundation for current designs.
Augustin Mouchot, a French mathematician, received funding from the French gov-
ernment to study an alternative source of energy and constructed a solar-powered
steam engine in 1878. Using parabolic dish collectors, he built the first solar steam-
powered plant, which was a major draw at the 1878 World Exposition in Paris.
Although the French government did not grant more financing because it was too
expensive, this method of generating solar energy is still employed today. Over the
next few decades, there was a lot of buzz about the solar energy’s possibilities (Jones
& Bouamane, 2012).

2.1.2 Technology Mechanisms

Electromagnetic radiation and solar radiation are synonyms for light that is dis-
charged from the sun. Sunlight might vary from one country to another and from
one season to another, and it might also be scattered, absorbed, or reflected by
clouds, ducts, pollution, air molecules, etc. Solar technology captures light, or so-
called solar radiation, and converts it from one form of energy into a useful form of
energy such as electricity. Solar energy technologies can be divided into two main
types: photovoltaics (PV) and concentrating solar-thermal power (CSP). PV is the
most familiar technology as it comprises installed solar panels that turn light into
electricity. A single PV device is a cell that can produce 1 or 2 watts of power.
510 B. Ahmed et al.

Semiconductors are used to build these cells, which are of the same thickness as that
of human hair. The cell is between two isolated layers of plastic or glass, and it lasts
for decades. “When the sunlight passes on a solar panel, the PV cells in the panel
collect the energy from the sun. This energy causes electricity to flow through, forc-
ing electrical charges to move in response to an internal electrical field in the cell.”
CSP is on a larger scale and can be built in a very large power plant that contains
mirrors to reflect the sun onto a receiver that gathers the solar energy to transform it
into heat to produce electricity that can be used or stored. Many types of systems
use the same mechanism to convert the concentrated sunlight into heat to produce
electricity, for example, the Power Tower System CSP or CSP that uses concave
mirrors and many other methods (Figs. 2 and 3).
Solar power by PV or CSP is not only limited by the amount generated, but its
integration into these systems should be applied to existing electrical grids, busi-
nesses, and homes in different combinations of traditional and other renewable
energy sources (Office of Energy Efficiency & Renewable Energy 2017).

2.1.3 Advantages and Disadvantages

Solar energy has advantages and setbacks, both of which will be discussed in this
section. In terms of advantages, installing solar panels on homes and commercial
and educational buildings allows users to become less dependent on electric utili-
ties, as the solar panels will generate electricity and reduce the monthly electricity

Fig. 2 Solar panel tower ([Link]/eere/solar/how-does-solar-work)

Renewable Technologies: Solar Power and Wind Power Energy Utilization… 511

Fig. 3 Concave solar system ([Link]

power-plant-la-risca)

bill. It also gives the user a feeling of independence as they are generating their own
electricity. Another advantage is that solar panels will typically last between 20 and
25 years; therefore, monthly bills will be reduced for decades. Furthermore, it is
assumed that solar panels work better in hot climates, but they can function in more
than one climate and actually function more efficiently in colder weather because
extreme heat may lead to a voltage output reduction.
It is also a common assumption that the more a solar panel is exposed to sunlight,
the more electricity it might generate; however, today’s technologies are very effec-
tive, even when dealing with a minimal amount of light. One of the main advantages
of solar energy is that it is considered to be renewable energy that will not harm the
environment and, in particular, the climate. Additionally, solar power systems have
no moving parts, thus reducing the likelihood of noise pollution. The fact that it is
not noisy makes it favorable to other types of renewable energy that do create noise,
for instance, wind turbines. Solar panels just need to be positioned at the cor-
rect angle.
One of the core disadvantages of solar panels is that they are initially costly, and
they should be considered an investment for the future. Furthermore, solar panels
may cause problems during installation on some roofs, as they do not work on every
type of roof material. For example, old houses with slate or cedar roof tiles are
tough for solar technicians to work on and pose a challenge because certain solar
cells need to use elements that are both costly and scarce. This is particularly true
for thin-film solar cells made of cadmium telluride (CdTe) or copper indium gallium
selenide (CIGS). Some industrial procedures used in the production of solar panels
are linked to greenhouse gas emissions. Unfortunately, sulfur hexafluoride and
nitrogen trifluoride have been tracked back to the manufacture of solar panels. A
512 B. Ahmed et al.

subjective setback is that solar panels are sometimes considered ugly or unappeal-
ing once they are installed on buildings.
However, solar energy is gaining popularity in several European nations, includ-
ing Poland. It is frequently chosen by occupants in single-family dwellings who
build PV systems and allow them to generate power. When putting such systems in
place, the benefits and drawbacks of solar energy should be considered.

2.1.4 Latest Technologies

The continuous development of solar power has tried to achieve maximum effec-
tiveness at the lowest cost. As previously mentioned, solar panels use semiconduc-
tors to produce electricity, and the three main semiconducting materials that have
been developed are crystalline Si, thin films, and next-generation perovskite solar
cells (PSCs). Crystalline silicon is one of the most common and popular materials
that is low-cost and slightly less efficient than theoretical efficiency (which is around
20%). The National Renewable Energy Laboratory (NREL) is developing a hybrid
that is low-cost but more efficient at 11%. Thin film is a standout technology for the
future with a very narrow design (the light-absorbing layers are 350 times smaller
than standard Si-panels), and it is flexible, lightweight, and easy to install. Usually,
the following four materials are used for production: CdTe, amorphous silicon,
CIGS, and gallium arsenide (GaAs). The toxicity of CdTe is a problem because of
the cadmium, but CIGS solar cells are emerging as a more promising highly effi-
cient and cost-effective alternative for both residential and commercial installations,
with an efficiency of up to 21%. PSCs are an emerging technology yet to be tested
for their efficiency. However, it might have a bright future as it is less costly, has a
thinner design, is lightweight and flexible, and can work in lower temperatures.
The materials for capturing light are also improving along with the technology.
For example, the Swiss have developed Insolight, which uses embedded lenses as
optical boosters in the panels’ protective glass to focus light beams 200 times while
maintaining a 30% efficiency. Furthermore, a recent prototype development is a
reverse solar panel that generates electricity at night using the heat irradiating from
the panels (Fig. 4).
Another technology in the near future might be solar paints, including solar paint
hydrogen (which generates energy from PV water splitting), quantum dots (PV
paint), and perovskite-based paints. The innovative transparent solar window has
already achieved 10% efficiency. The solar energy industry is predicted to expand
in the next 5 years, thanks to the rapid development of low-cost, high-performance
semiconducting materials, space-saving thin films, and simple installable technolo-
gies. Despite the pandemic’s setback, the projected cost drop from 15% to 35% for
solar systems by 2024 is optimistic and might make this renewable energy more
accessible.
Renewable Technologies: Solar Power and Wind Power Energy Utilization… 513

Fig. 4 Graphical abstract showing how the concept of reverse solar panels works ([Link].
gov/eere/solar)

2.2 Wind Energy

Wind energy is a form of solar energy. Wind is created when the earth has different
temperatures in different places. Even though the wind consists of air particles that
are light and transparent, wind force can be powerful, but it can be used as an advan-
tage. One of the earliest applications of wind force is sailing, as wind is used to
guide and move a ship in the sea. Wind energy is the utilization of wind force to
generate electricity. Wind is generated when the atmosphere at the equator is warmer
than the rest of the world, and the warm air travels from the equator to the poles,
creating a low-pressure system. In contrast, cooler and denser air from the poles can
move to the equator to create a high-pressure system. The movement of the wind is
usually caused by moving from high to low pressure (National Geographic
Society, 2012).
514 B. Ahmed et al.

2.2.1 Background and History

The use of wind energy and wind power is rapidly expanding because it is cheaper.
According to the International Renewable Energy Agency (IRENA), the latest
global statistics suggest that capturing power has increased 75 times more in the last
20 years from 7.5 gigawatts (GW) in 1997 to 564 GW in 2018. Between 2009 and
2013, wind generation capture recorded twice the output of wind energy output, and
in 2016, it was 16% of the total renewable energy generation. The location of wind
turbines is very important, and the largest capture of wind power is either remote or
offshore, which is a promising sector, as wind turbines have been there for centu-
ries. In the 1830s, engineers tried to extract turbine movement and generate electric-
ity after the electric generator was invented. In 1887 and 1888, wind power was
generated in the United Kingdom and the United States, but modern wind power is
said to have been invented in Denmark, where horizontal-axis wind turbines
(HAWTs) were built in 1891, and a 22.8-meter wind turbine started working in
1897 (IRENA, 2016).

2.2.2 Technology Mechanisms

In the wind, the kinetic energy created by the flowing air is used to generate electric-
ity, which is then converted into electrical energy by wind turbines or wind energy
conversion equipment. The blades of a turbine are initially hit by the wind, causing
them to rotate and turn the turbine to which they are connected. Kinetic energy is
transferred to rotational energy by spinning a shaft coupled to a generator, thereby
producing electrical energy through electromagnetic energy. The power that is gen-
erated from the wind depends on the size of the turbine and the length of its blades.
The output is related to the diameter of the rotor and the cube of the wind speed. The
potential for wind energy grows by a factor of 10 (Fig. 5).
Humans have been using the HAWT concept since 5000 B.C. when they used
wind energy to move boats down the Nile River, and the design has been continually
expanded and upgraded since then. A HAWT is made up of horizontally aligned
blades that collect wind and are parallel to the ground. When facing wind flow per-
pendicularly, the blades rotate due to aerodynamic lift. The HAWT is the most com-
mon type of wind turbine and has received more money for research and development
because it has a significant advantage over a VAWT in that it is more efficient at
extracting energy from the wind when it is placed in a constant wind flow. Its unique
design allows it to absorb energy during the whole blade’s revolution, as the back-
tracking effect has no impact. However, one significant disadvantage is that to func-
tion properly, HAWTs must always point in the direction of the wind. As wind
direction is unpredictable, an additional mechanism is required to guarantee that the
blades are always facing the wind to extract maximum power production. Small
wind turbines employ a rudimentary wind vane to orient themselves in the direction
of the wind, but larger wind turbines need a yaw meter to determine the correct loca-
tion of the air movement and a yaw motor to position the turbine in the precise
Renewable Technologies: Solar Power and Wind Power Energy Utilization… 515

Fig. 5 (a) Horizontal-axis

wind turbine. (b)
Vertical-axis wind turbine
(VAWT) (https://
[Link]/
technology/
feasibility-study-of-
horizontal-axis-wind-
turbine/)

direction of the wind. Therefore, HAWTs function best in consistent and low turbu-
lence wind, as they do not need to change orientation as frequently.
In contrast to the HAWT’s blades, the VAWT’s blades revolve perpendicular to
the ground and along a vertical axis. This type of turbine employs drags, lifts, or a
combination of both to function. Before HAWTs were developed to become the
most common wind turbines, VAWTs were the first windmills that were ever seen.
VAWTs are separated into two main designs, each of which follows its own set of
rules. The first is Savonius, which uses drag forces to operate like a water wheel,
and the second is Darrieus, which uses aerodynamic blades to generate lift and
power the turbine. Although VAWTs are less researched and have received less
development funding, they have distinct advantages over HAWTs.
VAWTs are omnidirectional and can receive wind from any direction, unlike
HAWTs, which must constantly face the airflow for optimal performance. VAWTs
can be installed in sluggish and turbulent wind conditions, such as urban areas,
because they can start producing power at low wind speeds. The VAWT system,
which includes the gearbox and other components, may be bundled together and
placed closer to the ground, which lowers maintenance costs and simplifies regula-
tion. Furthermore, VAWTs are quieter than HAWTs.
Nevertheless, the VAWT’s disadvantages cannot be underestimated. In high-speed
wind settings, the VAWT is inefficient because of its modest beginning torque and
worries about dynamic stability. The VAWT’s blades are the same as the wind, so it
is prone to backtracking because it must return to the flow before being propelled. It
is worth mentioning that Johari et al.’s (2018) comparison of VAWTs and HAWTs
had mixed results, and possibly, there is not much of a difference between them.
“Wind turbine capacity has increased over time. Turbines with a rotor diameter of 15
meters and a rated capacity of 0.05 megawatts (MW) were common in 1985. In
today’s new wind power projects, onshore turbines with capacities of around 2 MW
and offshore turbines with capacities of 3–5 MW are available” (IRENA, 2016).
516 B. Ahmed et al.

2.2.3 Advantages and Disadvantages

Various advantages and downsides have been recognized as a result of the greater
use of wind power. The low cost of wind energy is one of its most significant advan-
tages, and it is certainly a low-cost alternative. After the production tax credit, a
land-based utility-scale wind is one of the cheapest energy sources accessible today,
costing 1–2 cents per kilowatt-hour. Wind energy mitigates the price volatility that
fuel prices bring to traditional sources of energy because its electricity is provided
at a fixed price over a long period (e.g., 20+ years) and its fuel is free. Additionally,
the wind energy sector provides new job prospects for those who are currently job-
less. Becoming a turbine technician is a rapidly expanding career option in the
United States, and over 100,000 people work in the industry, which could actually
support 600,000 jobs in production, installation, and maintenance.
Wind energy is a clean form of energy, as it does not pollute the air in the same
way as power plants that burn fossil fuels like coal or natural gas do or generate
particulate matter, nitrogen oxides, and sulfur dioxide, which are harmful to human
health and create economic losses. Pollutants that produce acid rain, pollution, and
other environmental issues are not released into the atmosphere by wind turbines.
Wind is also a sustainable energy source that may be used in local residences. The
good news is that there is plenty of wind in United States, and it may be exploited
freely. Wind energy has grown by 15% annually over the previous 10 years, and it
is one of the most important sources of renewable energy in the United States
because it is a long-term source, with the heat from the sun in the atmosphere being
the primary reason.
Wind turbines are frequently installed on farms or ranches. The wind turbine’s
electricity is sent into the grid and continues to generate as long as the wind blows
and the sun shines. This has a significant impact on the economics of rural commu-
nities because when it comes to wind, rural areas are the best. Even if the turbines
are installed on an existing farm or ranch, the benefit is that they only take up a small
amount of space, allowing the farmer or rancher to continue working. They also
benefit from the cash generated by renting the turbine’s location.
There are downsides to using wind power and issues associated with wind tur-
bines. In terms of cost, despite turbine prices decreasing dramatically over the past
decade, wind projects must compete economically to reduce costs and make them
feasible when certain areas are less windy than others. It is worth noting that wind
projects are typically built on excellent land, which is usually located in remote
areas distant from the towns and cities that demand power. Therefore, transmission
lines must be built to transport power from the land to the city. Some structures have
already made transmission line requests, but if more buildings request lines, the cost
will drop dramatically. Unfortunately, erecting a wind turbine on a piece of land
might not be the most effective solution. Land space can be used with other methods
of power generation that might produce more power on the same piece of land.
Turbines with moving parts will create sound pollution when the wind hits and
moves the blades. A wind farm might also look aesthetically unpleasant, which
causes another type of pollution.
Renewable Technologies: Solar Power and Wind Power Energy Utilization… 517

Using wind turbines as a renewable energy source is great; however, they might
cause environmental issues. For instance, they can potentially harm local animals,
especially birds that fly at the same height as the turbines and could get hit by the
moving blades. Bats are also at risk because of the moving blades. A current project
is trying to solve this problem by placing wind farms in the right locations (Office
of Energy Efficiency & Renewable Energy, 2021).

2.2.4 Latest Technologies

Wind energy has developed throughout the years to try and achieve the most cost-
effective solutions. Prototypes of next-generation wind turbines have been devel-
oped with a focus on stability and increased power production to megawatt levels.
Since 1999, the average generating capacity of turbines has grown, and turbines
erected in 2016 averaged 2.15 MW. Longer and lighter rotor blades, higher towers,
more dependable drivetrains, and performance-optimizing control systems have
been developed as a result of research from the Wind Energy Technologies Office
(WETO). Components like control systems, generators, and blades on generations
of turbine designs that run to General Electric - GE’s 1.5 MW model account for
almost half of the nation’s installed commercial wind energy fleet and are a key
competitor in worldwide markets.
Furthermore, component development is increasing with WETO’s collaborations
with industry partners to increase system component performance and reliability.
The Wind Blade Division of Knight and Carver in National City, California, col-
laborated with researchers at the Department of Energy’s Sandia National
Laboratories to create a new wind turbine blade that increased energy collection by
12%. The Sweep-Twist Adaptive Rotor (STAR) blade’s main distinguishing feature
is a gently curved tip, which, unlike the vast majority of blades, is uniquely engi-
neered to make optimum use of all available angles. An enormous amount of money
has also been spent on gearbox enhancement (Office of Energy Efficiency &
Renewable Energy, 2021).

3 Conclusion

Renewable energy is the future source of power. After the industrial revolution,
more energy and power were generated using fossil fuels, which was an effective
source with good power quality. However, fossil fuels are known to be a limited
resource, so unlimited resources need to be considered, such as renewable energy,
which is a continuous and clean source. Burning fuel is not only problematic
because it is limited, but it is also harmful to the environment and human beings; for
example, the production of greenhouse gases contributes to global warming. The
renewable industry is steadily improving, and two of the main resources, solar
energy and wind energy, have been discussed in this article.
518 B. Ahmed et al.

PV effects were first discovered by a 19-year-old French experimental physicist

who experimented with an electrolytic cell. This marked the beginning of solar pan-
els that use semiconductors to release electricity. Solar energy lasts between 20 and
25 years, and it is sustainable; therefore, users have a sense of independence in terms
of generating power. Using solar panels also makes it less expensive when it comes
to paying the monthly electricity bill. However, the installation of solar panels can
be problematic on certain types of roofs, they also require certain atmospheric condi-
tions, and they have space limitations. Solar energy has grown, and other types of
solar panels have been developed using thin films, PSCs, and solar paint.
Wind turbines are becoming more popular sources of renewable energy because
of their low cost. When different temperatures around the globe generate high and
low pressure, the air moves between the two pressures and creates wind. The mech-
anism used in wind turbines is easy and has been used for generations, as it converts
the mechanical movement of the turbine blades into electricity. Two types of wind
turbines are the HAWT and the VAWT, and each has advantages and disadvantages;
for example, a HAWT needs height to function properly, whereas a VAWT will
work effectively at a lower height. Placing wind turbines on farms and ranches will
produce electricity and allow farmers and ranchers to continue working because of
the small area needed to house the turbine. Unfortunately, turbines may cause noise
pollution and contribute to environmental factors such as killing birds.
It can be concluded that solar and wind energy are a large part of the renewable
energy sector. In every renewable project, site conditions and requirements must be
identified so that the right technology is used. When implementing projects, experts
should be involved to make the right decisions using lessons learned from previous
projects. Renewable energy is already applied worldwide as a limitless resource;
however, the disadvantages have not yet been revealed, especially in terms of its
effect on the environment. Wind turbines are already killing flying creatures, and
solar panels are taking up the space of growing trees. The world was excited about
the production of energy from fossil fuels without realizing how bad it would be for
the environment and potentially the economy. Similarly, research on renewable
energy is very important, not only for next-generation development but its effect on
the environment. Researchers should also focus on new technologies and how effec-
tive it is to use more than one technology to produce energy with fewer effects.

References

Dincer, I. (2000). Renewable energy and sustainable development: A crucial review. Renewable
and Sustainable Energy Reviews, 4(2), 157–175, [Link]/science/article/pii/
S1364032199000118. [Link] Last accessed 20
Mar 2019.
Ellabban, O., Haitham, A-R., Blaabjerg, F. (2014). Renewable energy resources: Current status,
future prospects and their enabling technology. Renewable and Sustainable Energy Reviews,
39, 748–764, [Link]/science/article/pii/S1364032114005656. [Link]
org/10.1016/[Link].2014.07.113
Renewable Technologies: Solar Power and Wind Power Energy Utilization… 519

IRENA, Wind Energy. (2016). [Link]/wind

Johari, M. K., Jalil, M. A. A., & Shariff, M. F. M. (2018). Comparison of horizontal axis wind
turbine (HAWT) and vertical axis wind turbine (VAWT). International Journal of Engineering
& Technology, 7(4.13), 74. [Link]
Jones, G., & Bouamane, L. (2012). “Power from sunshine:” A business history of solar energy.
Harvard Business School Working Paper, No. 12–105.
Marks-Bielska, R., Bielski, S., Pik, K., & Kurowska, K. (2020). The importance of renewable
energy sources in Poland’s energy mix. Energies, 13(18), 4624. [Link]
en13184624. Last accessed 18 Jan 2021.
NASA. (2018). The causes of climate change. [Link]/causes/
National Geographic Society, Wind. (2012). [Link]/encyclopedia/wind/
Office of Energy Efficiency & Renewable Energy. (2017). Advantages and challenges of wind
energy. [Link]/eere/wind/advantages-and-challenges-wind-energy
Office of Energy Efficiency & Renewable Energy. (2021). How does solar work? [Link].
gov/eere/solar/how-does-solar-work
Index

A 259–263, 284, 317, 318, 404, 405, 435,

AI adoption, 176–180, 242, 243, 250, 258, 260 438, 444, 445
AI concepts, 269–273, 275–277 Behavior intention (BI), 83, 84, 87, 89–94, 96
AI implementation, 17, 242 Bias, 107, 109–112, 146, 294
Algorithm, 4, 11, 12, 18, 81, 82, 90, 101, 102, Big data, 5, 11–14, 18, 52, 54, 58, 60, 69, 102,
104, 109, 111, 136–147, 169, 171, 172, 107–111, 242, 255, 256, 260, 268, 269,
174, 176, 241, 242, 251, 268, 269, 289, 287, 304, 431, 436, 439, 444, 450
300, 335, 338, 340, 350, 351, 423 Big Tech, 56, 57
Applications, 3, 4, 6, 7, 12–14, 16–18, 26–29, Bitcoin (BTC), 417–419, 424
31, 33, 39, 40, 45, 46, 49, 58, 69, 80, Blockchain, 4–6, 53, 55, 68, 415–429
81, 88, 103–105, 108, 110, 111, 115, Business education, 353–370, 373–382
135–147, 154, 157, 172, 174, 180, 181, Business intelligence, 9, 12, 15–17, 456
186, 187, 212, 213, 240–241, 248–252, Business process architecture (BPA), 455–470
254, 260, 262, 263, 269, 270, 272, 273,
275, 277, 290, 307–312, 318, 324, 339,
350, 381–382, 389, 405, 417, 419–421, C
424–427, 429, 435, 438, 439, 456–458, Carbon dioxide (CO2), 473
460, 461, 464, 479, 513 Carbon dioxide (CO2) emissions, 473–504
Artificial intelligence (AI), 3–7, 9–19, 50, 53, Chat, 216, 240, 361, 362, 364, 388–397
54, 67, 82, 96, 101–112, 135–147, Children’s obesity, 323–333
169–182, 212, 214, 237–263, 267–277, Cloud computing (CC), 67, 69, 102, 255, 288,
287, 289, 292, 304, 335–337, 350–352, 289, 436–437, 444, 455–470
376, 379, 438–440, 444, 450 Cloud kitchen, 401–412
Association of Advance Collegiate Schools in Competitive advantage, 3–7, 52–55, 59, 68,
Business (AACSB), 356, 374, 376, 106, 110, 217, 237, 296, 301–304, 311,
377, 379 316, 318–320, 380, 448
Augmented reality, 307–312 Computer-Supported Collaborative Learning
(CSCL), 387–397
Cost benefit analysis, 481
B COVID-19, 5, 26, 28–32, 35, 36, 45, 46, 65,
Bank customers, 153–166 66, 171, 188, 195, 199, 205, 206,
Barriers, 40, 67, 154, 155, 157–160, 162, 165, 211–234, 244, 248, 258, 286, 291, 294,
176–177, 190, 191, 202, 203, 215, 216, 311, 354, 356, 358–360, 365, 373, 376,
219, 238, 240, 242, 243, 254, 257, 377, 379, 381, 402, 403, 405, 448

© The Editor(s) (if applicable) and The Author(s), under exclusive license to 521
Springer Nature Switzerland AG 2023
M. Al Mubarak, A. Hamdan (eds.), Technological Sustainability and Business
Competitive Advantage, Internet of Things,
[Link]
522 Index

COVID-19 impact, 302 Financial technology (Fintech), 4, 6, 49–53,

Creative thinking skills, 267–277 55–63, 145, 153–166, 186–191,
Crowdfunding, 416, 421, 423–429 194–196, 239, 421
Food E-advertising, 323–333
Foodpreneur, 401–412
D
Data privacy, 109, 112, 189
Data security, 103, 112, 217 H
Deep learning, 10, 18, 82, 137–139, Healthcare technology, 315–320
268–270, 272 Hedonic values, 308, 310, 311
Diffusion of innovation (DOI), 35, 36, 433 Human intelligence, 5, 10, 101, 110, 135, 139,
Digital business risk management, 291, 292, 268, 350, 351
298, 300–304 Hybrid intelligence, 14, 18, 350–351
Digitalization, 6, 45, 56, 66, 102, 211–221,
228–230, 232, 233, 284, 354,
373–377, 379–382 I
Digital marketing, 65–76, 105, 106, 325, 333 Impulse buying behavior, 199–206
Digital sustainability, 374, 375, 378–382 Information and communication technology
(ICT), 67, 116, 117, 121, 124–126,
130–132, 195, 239, 287–289, 295–297,
E 300–304, 374–378, 388, 423, 448
E-learning, 376, 377, 387, 389–391, 394, 396 Information technology (IT), 12, 26, 51, 55,
Electronic banking services, 155, 156, 81, 116, 119, 122, 138, 156, 169,
160–162, 165, 166 176–177, 180, 181, 216, 217, 242, 252,
Emerging technologies, 69, 80, 115–132, 253, 260, 262, 286, 293, 357, 358,
218, 512 437, 455–462
Energy, 4, 5, 7, 81, 92, 102, 242, 293, Innovation management, 316–320
421–423, 437, 444, 445, 473, 474, 477, International accreditation bodies, 354, 356,
481–483, 492, 494, 496, 497, 499, 364–366, 369, 370
502–504, 507–518 Internet of Things (IoT), 3, 25, 67–70, 79, 87,
Environment, 3–7, 11, 12, 14, 18, 32, 49–63, 102, 140, 287, 304, 434, 437–438
69, 70, 81, 95, 115, 119, 132, 137, 138, Internet of Things (IoT) online education
140, 155, 165, 166, 171, 172, 180, 181, transformation, 79
199, 201–203, 205, 212, 241, 288, 291, IoT for healthcare, 25–46
301, 304, 308, 309, 311, 316, 324, 336, IoT for healthcare devices, 27, 33, 35
355, 362, 364, 387, 389, 392, 396, 397,
415–429, 432, 435, 438–443, 445, 447,
449, 455, 457, 470, 482, 494, 508, 511, K
517, 518 Kingdom of Bahrain, 212, 218–221, 223, 232,
e-tendering, 212, 213, 219–224, 233, 234 233, 237, 238, 243, 244, 258–260, 263,
323–324, 330, 333, 446–447

F
Factors to adopt AI, 237–263 M
Feedback, 12, 14, 92, 105, 140, 141, Machine learning (ML), 9, 10, 12, 14, 17, 18,
387–397, 438 67, 69, 101, 102, 104–112, 136–147,
Financial cycles, 116, 117, 121, 128, 131, 132 241, 251, 255, 263, 268–270, 272, 295,
Financial inclusion (FI), 155, 300, 319, 335, 339, 350, 438–440
185–196, 425–426 Marketing, 9, 54, 65, 101, 156, 199, 288, 325,
Financial institutions, 46, 49–62, 153–155, 339, 428
157, 161, 166, 185, 186, 189, 191, 192, Marketing decisions, 9, 104, 110
195, 196, 287, 416, 417, 424, 425 Marketing functions, 10, 13, 14, 18
Index 523

Middle East and North Africa (MENA), Rules, 12, 34, 59, 67, 86, 102, 109, 110, 112,
185–196, 239, 297, 300–302, 304, 456 136, 172, 176, 217, 268, 287, 323–333,
Moodle, 389, 391 338, 418, 419, 427, 462, 466, 481, 515

N S
Neural network, 10, 18, 102, 138–139, Sales performance, 65–76
143–145, 147, 171, 241, 268, 300 Satisfaction, 11, 82, 105, 122, 156, 176–177,
189, 215, 308–311, 319, 355, 380, 390,
394, 406, 435, 438, 440, 442
O SDG-8 and 9, 292, 304
Object-based business process modeling, 462, Small and medium-sized enterprises (SMEs),
463, 470 51, 66, 76, 215, 431–450
Operational costs, 81, 112, 115–132, 448 Smart technologies, 380, 431–450
Organization, 119–123, 211, 237, 269, 288, Social innovation, 55, 417, 422
316, 336, 354, 374, 379–381, 417, 419, Social media, 11, 12, 14, 28, 41, 65, 66, 70,
425, 431 71, 73–75, 103, 111, 139, 141, 142,
Organizational structure, 10, 18, 173, 174, 147, 199–203, 205, 324–326,
176, 180, 242, 260, 379, 482, 328–330, 407
487, 488 Solar power, 474, 478–486, 490, 492, 494,
497, 499, 502–504, 507–518
Strategic decision making, 379–380
P Sustainability, 25–46, 65–76, 318, 373–382,
Pandemic situation, 30, 403, 405, 406, 423, 428, 431–450, 455, 473–504
409, 410 Sustainable development, 3–5, 7, 269, 294,
Perceived ease of use (PEoU), 37–39, 41, 45, 304, 318, 354, 375, 380, 439, 440
83, 84, 87, 89–94, 96, 456
Perceived usefulness (PU), 37–39, 41, 43, 45,
80, 83, 84, 88–94, 96, 156, 189, 456 T
Porter’s five forces factor, 403–405 Technological innovation, 3–7, 52, 169, 188,
Power plant, 474, 478–487, 489, 490, 195, 294, 308, 309, 449
492–497, 499, 502–504, 510, 516 Technology, 3, 9, 25, 49, 66, 79, 101, 115,
Products, 5, 6, 11–16, 18, 34, 36, 38, 45, 49, 135, 153, 169, 186, 201, 213, 238, 268,
51–56, 58, 60, 61, 65, 67–70, 76, 102, 285, 307, 315, 324, 336, 354, 378, 387,
104–109, 121, 140, 141, 146, 154, 156, 401, 415, 431, 455, 479, 507
169, 185–187, 189, 195, 199–204, 213, Technology acceptance model (TAM), 35–37,
214, 219, 220, 262, 268, 290, 291, 39, 41–46, 82–84, 92, 218
308–311, 324–326, 328–330, 340, 350, Technology and sustainability, 378, 380, 428
401, 404, 426, 427, 434–437, 439, Technology industries, 136
442–447, 461, 464
Project management, 120, 211–234, 242
Purchase intention, 307, 308, 310, 311 U
United Nations Sustainable Development
Goals (UNSDGs), 374
R Utilitarian value, 309–311
Random forest tree (RFT), 295, 298–303
Renewable technologies, 507–518
Retail sector, 307, 308, 310 W
Riva method, 455–470 Wind power, 507–518

Common questions