The moderator effect of balance of power on the relationships between the adoption of digital technologies in supply chain management processes and innovation performance in SMEs

Managing supply chain (SC) relationships to deal with challenges posed by contemporary social and business environments is a difficult task that can be facilitated with the use of digital technologies. The growing complexity of supply chains, characterized by over-dependencies on geographically dispersed partners across different regions, increases risks related to managing these relationships and highlights the importance of collaboration and balancing the power dynamics between SC partners. Previous studies have shown that small and medium enterprises (SMEs) can be considered the weakest link in terms of digitization and balance of power. This article aims to analyse how buyer-seller power relations moderate the relationship between the adoption of digital technologies in supply chain management (SCM) processes and innovation performance in the context of SMEs. Data were collected from manufacturing SMEs operating in Portugal. The results support the assumption that the use of digital technologies in processes related to SCM has a positive effect on SMEs innovation performance. The results also suggest that non-mediated power and reward-mediated positively moderate the relationship between the adoption of digital technologies and innovation performance, while the impact of coercive-mediated power was not confirmed. The article contributes to theory and practice by advancing the literature and guiding managers in the challenging task of carrying out digital transformation initiatives, considering their relationship with the power dynamics in the complex context of SMEs.