2025

Saunila Minna; Nasiri Mina; Ukko Juhani; Gastaldi Luca

This study contributes to the understanding of the connections between Internet of Things (IoT) implementation, performance measurement and management (PMM), and social sustainability. Among the widely utilized technologies characterizing Industry 5.0, the IoT enables social sustainability through equal access to various resources, without any limitations regardless of the location. On the other hand, the literature has already demonstrated that such technological development enables efficient decision-making processes by improving all aspects of business operations, thereby offering new opportunities for PMM. However, there is a lack of research on how the connection between IoT and social sustainability is facilitated by PMM. This study contributes to filling this research gap. A quantitative approach based on a questionnaire was adopted to collect data from 280 Finnish small and medium-sized enterprises (SMEs). Empirical evidence revealed that IoT implementation does not directly improve the social sustainability of SMEs. However, IoT implementation improves social sustainability through the mediating influence of PMM. As an implication, this paper shows that managers should utilize PMM if they wish to gain the full benefits of implementing IoT. The results of this study clearly demonstrate that IoT technology-oriented firms that adopt PMM are more likely to achieve enhanced social sustainability, thus making a strong case for the adoption of PMM in sustainable business practices.