Information technology capability and firm performance: Role of industry

Despite several calls for considering industry in the IS value research, few studies investigated the relationship between benefits of IT and industries. This study extends Chae et al. (2014) by investigating how industry influences the relationship between IT capability and business performance. Unexpectedly, it finds that the control group in the industries in which the "transform" IT strategic role dominates showed superior performance than the IT leader. Also, the IT leaders in the "automate" IT strategic industry did not exhibit better business performance than the control firms. We discuss the implications of these findings.     

IT capability and organizational performance: the roles of business process agility and environmental factors

The business value of information technology (IT) has been one of the top concerns of both practitioners and scholars for decades. Numerous studies have documented the positive effects of IT capability on organizational performance but our knowledge of the processes through which such gains are achieved remains limited due to a lack of focus on the business environment. Such a linkage therefore remains the subject of debate in the information systems literature. In this study, we fill this gap by investigating the mediating role of business process agility and the moderating roles of environmental factors. On the basis of matched survey data obtained from 214 IT and business executives from manufacturing firms in China, our analyses show that even though firm-wide IT capability presents the characteristics of rarity, appropriability, non-reproducibility, and non-substitutability, its impact on organizational performance is fully mediated by business process agility. Our results also show that the impact of the environment is multifaceted and nuanced. In particular, environmental hostility weakens the effect of IT capability on business process agility, while environmental complexity strengthens it. The theoretical and practical implications of this study, and its limitations, are also discussed.     

An information technology trilogy: business strategy,technological deployment and organizational performance

The objective of this empirical study is to identify various profiles of technological deployment specific to various types of business strategy that best support organizational performance. Top managers from 223 organizations completed two questionnaizres analyzed using a Partial Least Squares tool (PLS graph). Profiles of technological deployment based on the strategic impact of the information system department, the technological architecture, the information system performance evaluation and technological scanning were identified. Using Miles and Snow's typology to characterize business strategy, an outward technological profile contributes directly to organizational performance for the analyzer strategic activities, while an inward profile of technological deployment contributes indirectly to organizational performance for the prospector strategic activities.     

Artificial intelligence capability: Conceptualization,measurement calibration,and empirical study on its impact on organizational creativity and firm performance

Artificial intelligence (AI) has been heralded by many as the next source of business value. Grounded on the resource-based theory of the firm and on recent work on AI at the organizational context, this study (1) identifies the AI-specific resources that jointly create an AI capability and provides a definition, (2) develops an instrument to capture the AI capability of the firms, and (3) examines the relationship between an AI capability and organizational creativity and performance. Findings empirically support the suggested theoretical framework and corresponding instrument and provide evidence that an AI capability results in increased organizational creativity and performance.     

Information technology: a study of performance and the role of human and organizational factors

The aim of this study was to gather and collate information from the major researchers and consultancies in the UK regarding the performance of Information Technology (IT) and the role of human and organizational factors. The findings are based on the experience of 45 of the leading experts in the UK, drawing on a collective sample of approximately 14,000 organizations, covering all major sectors of economic activity and a comprehensive range of information technologies. The main findings are that 80–90% of IT investments do not meet their performance objectives and the reasons for this are rarely purely technical in origin. The context of technical change, the ways in which IT is developed and implemented, a range of human and organizational factors, and the roles of managers and end-users, are identified as critical areas affecting performance. A major implication is that the poor performance of IT systems is the result of a complex set of interacting forces that will be difficult to change. The study reports ideas concerning ‘best practice’ within companies, along with some suggestions for what needs to be done on a national scale to improve performance and practice in this area. A key goal is that action on these human and organizational issues becomes embedded in practice, part of the natural way of managing organizational and technical change.     

Entrepreneurship, knowledge integration capability, and firm performance: An empirical study

From the knowledge-based view, an organization is considered an entity that integrates and distributes knowledge to produce products and services. Knowledge is acknowledged as a sustainable basis of competitive advantage that many organizations possess. Entrepreneurial activity also has been viewed as an essential feature for organizations to survive and prosper in today??s turbulent environment. In this study, we explore the effect of entrepreneurship on organizational performance through knowledge integration capability. Our research model depicts the firm as a knowledge integration institution that produces its offerings through specialized knowledge integration capability that consists of learning culture, knowledge management process, and information technology capability. The results show a strong support for the relationship between entrepreneurship and knowledge integration capability. We also found that the effect of entrepreneurial activities on firm performance was mediated by knowledge integration capability.     

Information systems strategizing,organizational sub-communities,and the emergence of a sustainability strategy

The realized strategy contents of information systems (IS) strategizing are a result of both deliberate and emergent patterns of action. In this paper, we focus on emergent patterns of action by studying the formation of strategies that build on local technology-mediated practices. This is done through case study research of the emergence of a sustainability strategy at a European automaker. Studying the practices of four organizational sub-communities, we develop a process perspective of sub-communities’ activity-based production of strategy contents. The process model explains the contextual conditions that make sub-communities initiate SI strategy contents production, the activity-based process of strategy contents production, and the IS strategy outcome. The process model, which draws on Jarzabkowski’s strategy-as-practice lens and Mintzberg’s strategy typology, contributes to the growing IS strategizing literature that examines local practices in IS efforts of strategic importance.     

IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type

Previous empirical studies examining the relationship between IT capability and accounting-based measures of firm performance reported mixed results. We argued that prior work has relied on aggregate overall measures of the firm's IT capability, ignoring the specific type and nature of IT capability; and also has not fully considered important environmental conditions that influence the relationship. Drawing on a resource-based view, we advanced a contingency perspective and proposed that IT capabilities’ impact on firm resources was contingent on the “fit” between the type of IT capability/resource a firm possesses and the demands of the industry in which it competes. Specifically, using publicly available rankings as proxies for two types of IT capabilities (internally and externally focused), we empirically examined the degree to which three industry characteristics (dynamism, munificence, and complexity) influenced the impact of each type of IT capability on measures of financial performance. After controlling for prior performance, we found there was general support for the posited contingency model. The implications of these findings are also discussed.     

Information technology,strategic decision making approaches and organizational performance in different industrial settings

The present study considers potential performance effects associated with the communication enhancing capacity of information technology. Enhancement of an organization's communication capabilities may influence performance through improved strategic decision making, better coordination of strategic actions and by facilitating learning from strategic initiatives. Accordingly, the paper investigates the effects of internal communication through use of computer networks, Intranet, and external communication via the Internet in association with autonomous and participatory strategic decision making approaches and strategic planning. These relationships are tested in two different industrial settings characterized by low and high levels of dynamism and complexity to assess possible environmental contingencies. In less dynamic and complex industries, the results show a positive association between Intranet use and innovation, while Internet use has a positive association to profitability and to innovation in organizations adhering to a participatory decision approach. In more dynamic and complex industries, Intranet use combined with an autonomous decision approach is associated with high profitability and sales growth, while Internet use combined with participatory decision making is associated with higher innovation. Hence, the study finds evidence that innovation relates to use of the Internet and participation across industries, and that economic efficiency relates to use of Intranet and autonomy in dynamic and complex industries.     

Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance

The contribution of IT to business performance has been studied from two main perspectives: a ‘strategy as positioning perspective,’ which underlines a market power imperative, and a resource-based view perspective, which conceptualizes the enterprise as a ‘bundle of unique resources.’ The objective of the present study is to improve our understanding of the contribution of IT to firm performance in building upon the complementarity between the two perspectives. To do so, a model proposed by [Spanos, Y.E., Lioukas, S. 2001. An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource-based perspective. Strategic Management Journal 22(10), 907–934], which comprises both a competitive strategy framework and the resource-based perspective was adapted to reflect the role played by IT. More precisely, the model encapsulates the effects of both IT support for business strategy and IT support for firm assets on firm performance. To test the model, a survey of 96 small- and medium-sized enterprises (SME) was conducted.     

Environmental change,competition, strategy,structure and firm performance: an application of data envelopment analysis in the airline industry

The impact of a significant environmental change, namely, deregulation, on strategic management and performance in the U.S. airline industry is examined. Firm performance is deemed to be affected by a configuration of competitive environment, strategy and structure. Using a new methodology, Data Envelopment Analysis (DEA), airline performance before and after deregulation is compared. The results support the gestalt proposition that the configurations under regulation differ significantly from those under deregulation. The promising use of DEA in strategic management research is underlined.     

Impact of absorptive capability on software process improvement and firm performance

Software process improvement (SPI) is a continual organizational learning process with the goal of obtaining and sustaining competitive advantage in rapidly developing business and software environments. However, no research has focused on a firm’s capability to increase effective external SPI knowledge acquisition and utilization. Thus, this study uses dynamic capability theory in order to investigate empirically the capability of a firm to absorb external knowledge and achieve SPI. Specifically, we propose a research model and examine the relationships among a firm’s potential absorptive capability (PAC), realized absorptive capability (RAC), SPI success, and firm performance. In this regard, we surveyed 108 respondents in 56 SPI-certificated Taiwanese firms. We then tested our model using a partial least squares structural equation modeling technique. The results indicate that SPI success is significantly influenced by PAC through RAC. The results also suggest that absorptive capability is critical to SPI success and that the latter ultimately influences firm performance.     

Ergonomics capability in product design and development: an organizational analysis

This paper suggests that the emergence and development of ergonomics capability in product design and development can be understood as a dynamic process of innovation, which is shaped by a combination of forces both internal and external to an organization. The comparative case study method was used to focus on six organizations (three pairs) operating from a manufacturing base in New Zealand. Data were collected from in-depth interviews, documents, archival sources and through observation. A framework for understanding the emergence and development of ergonomics capability in product design and development is presented. While ergonomics capability is a core concept in the model, four other major elements are identified. These are staffing routines, top management orientation, organizational configuration, and the external environment.     

Exploring the relationship between information technology investments and firm performance using regression splines analysis

Identifying the business value of information technology (IT) investments has been a major concern of managers and researchers. Various studies have addressed this issue but have provided contradictory results. Here, we explore the relationship between IT investments and firm performance using a relatively new technique, multivariate adaptive regression splines (MARS), and attempt to answer two questions: (1) do investments in IT have a positive impact on organizational productivity? and (2) for a given level of investment, what portion of the total should be invested in IT to maximize organizational productivity? Our results suggest that depending on the conditions that applied, an unbiased observer could either conclude that investments in IT has a positive statistically significant effect on productivity, or that there is a ‘productivity’ paradox. This suggests that the relationship between IT investments and organizational performance is much more complex than that found in some other studies. Our results could also provide guidance to managers who are responsible for determining the allocation of organizational resources.     

The synergistic effects of IT-enabled resources on organizational capabilities and firm performance

Computing the value of IT investments and clarifying how the portfolio of IT/IS resources affect a firm's performance and sustainable competitive advantage are critical issues today. We attempted to develop an effective measurement technique and use organizational theory to discover the strategic role of IT-enabled resources in the firm's competitive agenda. Based on a resource-based view of the firm, we proposed a way to evaluate the synergistic effect of such resources on the firm's capabilities, as they, influence the firms’ strategic objectives and improve its financial performance. The technological, human, and organizational resources work together to generate sub-additive cost and super-additive value synergies. Operations, R&D, and marketing capabilities allow firms to implement a business strategy that reflects its customer needs. A survey was conducted to check our framework. Our findings should provide valuable decision guides for practitioners when choosing a portfolio of IT/IS resources for implementing business strategies.     

Exploring the relationship between information technology investments and firm performance using regression splines analysis

Identifying the business value of information technology (IT) investments has been a major concern of managers and researchers. Various studies have addressed this issue but have provided contradictory results. Here, we explore the relationship between IT investments and firm performance using a relatively new technique, multivariate adaptive regression splines (MARS), and attempt to answer two questions: (1) do investments in IT have a positive impact on organizational productivity? and (2) for a given level of investment, what portion of the total should be invested in IT to maximize organizational productivity? Our results suggest that depending on the conditions that applied, an unbiased observer could either conclude that investments in IT has a positive statistically significant effect on productivity, or that there is a ‘productivity’ paradox. This suggests that the relationship between IT investments and organizational performance is much more complex than that found in some other studies. Our results could also provide guidance to managers who are responsible for determining the allocation of organizational resources.     

Can technology build organizational social capital? The case of a global IT consulting firm

Knowledge management (KM) and knowledge management systems (KMS) have been positioned as strategies and tools that enable organizations to create and transfer knowledge in order to sustain competitive advantage. While KM as a strategy gained legitimacy, KMS have struggled to show a causal relationship to knowledge creation and knowledge transfer. KMS contribution to the economic performance of organizations has been harder to prove, mainly because of a lack of collection of data and thus analysis of knowledge metrics. This has lead to an unjustifiable move to underplay the role of technology in creating and transferring knowledge. We strived to revive interest in KMS by exploring their ability to accumulate social capital and showing its effect on the creation and transfer of knowledge. We posited that social capital was the mediating factor between KMS and knowledge creation and transfer and hypothesized that: (1) KMS will positively affect an organization's ability to build social capital, and that (2) social capital will enhance a firm's ability to create and transfer knowledge. Qualitative data collected from a multinational IT consulting firm was used to validate the framework.     

Big data and firm performance: The roles of market-directed capabilities and business strategy

Despite being the object of much interest, deep insights regarding why and when investments in big data resources enhance firm performance are lacking in the literature. Building on the resource-based view (RBV) and data provided by 301 senior marketing managers, this study reveals that big data resources primarily improve firm performance by enhancing the market-directed capabilities of the firm. In addition, the data indicate that firms pursuing a differentiation rather than cost-leadership strategy gain most from big data resource investments and that such resources account for 13 % of the variance in the performance of firms pursuing a differentiation strategy.     

Information technology and new organizational forms: choosing chaos over panaceas

This paper examines five aspects of the critical relationship between information technology (IT) and new emergent forms of organizations. First, there appears to be an unhealthy tendency among IT professionals to elevate any single, highly successful practical experience instantly into an overarching paradigm for managerial success. Second, there is a corresponding tendency for IT researchers to focus their efforts on the search for the single universal formula that will transform any type of organization in any situation from mediocrity to excellence. Third, IT researchers assign a pre-eminence to IT in organizational transformation that neglects many other important social and environmental factors. Fourth, management theorists seem unable to cope with the unpredictability, the multivariate nature and the ‘messiness’ of human organizations in cultural contexts. Even studies that make qualitative allowances will still imply a surreal causal analysis that is mostly speculation. Fifth, several critical factors influence the interaction of changes in IT and emergent organizational forms: these include organizational learning, structural premise and power.     

An empirical investigation of the relationship of IS strategy with firm performance

Given the important impact that an IS strategy has on the potential value IS brings to an organization, we develop and test a model of IS Strategy and Firm Performance. Our survey-based study provides strong evidence that firms with defined IS strategies (either IS Innovator or IS Conservative) perform better than those without defined IS strategies. Organizations without a clearly defined IS strategy actually experienced a negative relationship with firm performance. These organizations should realize the potentially negative outcomes of such a lack of strategy and work to extricate themselves before a consistent pattern of investing in IS without clear organizational benefit develops. Furthermore, the study suggests that the IS Innovator strategy is, in particular, associated with more superior firm performance than the IS Conservative strategy under conditions of environmental dynamism. Organizational leaders need to consider the external environments under which their organizations are operating and evaluate the influence those environments may have on their IS strategy’s ability to impact performance. Post hoc analysis results also reveal a fourth potential IS strategy, one that strives for ambidexterity. Ambidextrous firms were found to be associated with the most superior performance, leading to a potential extension of the existing IS strategy typology and a call for future research.