Coordination in the Age of Industry 4.0

The purpose of the paper is to find the role of competitiveness parameters in international markets with particular reference to Indonesia. Coordination, competition and cooperation are the three main types of strategic interactions. Coordination, despite its importance in structuring business interactions and its impact on firm performance, remains an understudied phenomenon, with the bulk of the research on business interactions focusing on competition and cooperation, and, more recently, on their simultaneous use in coopetition. However, growing complexity and specialization of enterprises increase coordination needs and call for renewed academic interest in the topic. Advances in digitalization and the rise of Industry 4.0, predicated on the growing interconnectedness and interdependence of technologies and business organizations, make the topic of coordination more relevant than ever before. The aim of this paper is to present a simplified model of coordination reflecting both the demands of Industry 4.0, and the possibilities it creates. Following the established conceptualizations of coordination, the model has two main components – interdependencies and coordination mechanisms. However, the conventional models presented the relationship as direct and unidirectional, with interdependencies viewed as given and the mechanisms of coordination as organizational responses aimed at achieving coordination. In contrast to the traditional approach, we allow for two-way causality between interdependencies and coordination mechanisms, as the latter not only are set to manage existing interdependencies, but also can elicit specific interdependencies, particularly those connectivity- and communication-related, as these are needed to induce all parties to follow the overall or common goal. ICT plays a central role in the model as mediating in managing interdependencies. Finally, the Industry 4.0-related public policy is recognized as capable of affecting business organizations’ ability to effectively manage interdependencies.