Impact of Digitalization on Process Optimization and Decision-Making towards Sustainability: The Moderating Role of Environmental Regulation

Abstract

Digitalization has brought a significant improvement in process optimization and decision-making processes, in particular in pursuing the goal of sustainability. This study examines how digitalization has affected process optimization and decision-making towards sustainability, focusing on Pakistan’s manufacturing sector. This study also examines the moderating role of environmental regulations between digitalization and sustainable practices. This study is based on quantitative methodology. Purposive sampling was used to gather primary data from 554 managers and engineers working in manufacturing industries in Pakistan through a closed-ended questionnaire. Smart PLS was used for data analysis. The findings show digitalization’s positive and significant influence on process optimization and decision-making. The results also show that environmental regulations have a significant moderating effect on the digitalization of processes and decision-making towards sustainability practices. The findings provide a guideline for industries, decision-makers, and researchers for developing strategies that effectively use digitalization for sustainability and assist in achieving the Sustainable Development Goals (SGD-9, SGD-11, SGD-12, and SGD-13).