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IT strategy and business strategy mediate the effect of managing IT on firm performance: empirical analysis
Abstract
Purpose
The multifaceted effect of IT in organizations has been widely examined. However, the intervening role of IT strategy and business strategy on the effect of managing IT on firm performance remains less strong. This study examines how managing information technology (MIT) effects on firm performance by looking at the mediating role of IT strategy and business strategy.
Design/methodology/approach
Drawing on the resource-based view of IT and contingency perspective, theoretical insights for managing IT and the mediating effect of IT strategy and business strategy on firm performance are established. The model is empirically tested by using hierarchical regression and structural equation modeling for the data collected through the survey of 194 senior IT and business managers in China.
Findings
The significant and impactful relationship found in the model for the proposed idea. The results show that both IT strategy and business strategy partially mediate the effect of managing IT on firm performance.
Research limitations/implications
The findings highlight that managing IT does not merely influence better firm performance; instead, the coherent amalgamation of IT strategy and business strategy can enrich firm performance. The theoretical and practical implications are also discussed.
Originality/value
In line with the call for rigorous research to integrate the managing IT and firm strategies, this study demonstrates the mediating role of business strategy and IT strategy between the managing IT and the firm performance relationship, hence contributing to the IS research literature.
... It is even more astonishing to be informed that there is a shortage of literature devoted to investigating how the aforementioned elements of IT strategy can affect the strategic flexibility dimensions and how the effects of IT strategy dimensions can in turn, lead to performance improvements, either financial or non-financial. These theoretical gaps in previous strategic flexibility-related researches have left this opportunity for researchers to extend the current knowledge (Brozovic, 2018;Herhausen et al., 2013Herhausen et al., , 2014Herhausen et al., , 2021 and broaden the previously explored paths through which IT strategy can generate value for businesses (Astuti et al., 2018;Chan, 2021;Chang and Yen, 2019;Ilmudeen and Bao, 2020;Lai et al., 2007;Mithas and Rust, 2016) by studying the interactions of the IT strategy dimensions with the strategic flexibility types and the financial/non-financial business performances. This is indeed a response to Brozovic (2018)'s calls on studying the capacity of technology primarily IT in enabling or disabling strategic flexibility. ...
... These studies generally found a positive relationship between strategic flexibility and performance. These studies examined the performance effects of strategic flexibility by considering various corporate-level outcomes such as firm performance (Ilmudeen and Bao, 2020), organizational performance (Nuhu et al., 2019), business performance (Chang and Yen, 2019), corporate performance (Chan, 2021), and small and medium-sized enterprises (SMEs) performance (Gorondutse et al., 2020). They also explored functional outcomes such as sustainability performance (Mai et al., 2021), supply chain performance (Arnold et al., 2015), and strategic performance (Majid et al., 2020). ...
... Notably, within this cluster, the strategic use of IT appears to have a greater influence on performance than IT environment scanning. These results align with previous studies (Ilmudeen and Bao, 2020;Chan, 2021;Chang and Yen, 2019;Astuti et al., 2018), which have found positive relationships between IT strategy and performance. ...
Purpose
In spite of intensive research that explained the strategic flexibility-performance and information technology (IT) strategy-performance relationships, there is a little insight regarding how these notions ideally affect business performance. Accordingly, this study attempts to investigate how businesses can translate IT directions and strategic practices into actual increases in business performance. More precisely, the primary purpose of this paper is to explore the influential role of strategic flexibility and IT strategy on business performance considering balanced scorecard (BSC) dimensions in the context of the tourism industry.
Design/methodology/approach
An empirical investigation of 331 tourism businesses was performed to explore the relationship between strategic flexibility, IT strategy and business performance. A non-probability convenience sampling was applied to select the sample. Factor analysis, descriptive statistics and cluster analysis were used to analyze the data.
Findings
The findings include the clustering of the studied businesses in terms of strategic flexibility and IT strategy. A cluster analysis based on strategic flexibility indicates that businesses can be divided into four main clusters, and based on IT strategy, they can be classified in three main clusters. The results show that businesses with a high level of strategic flexibility and a high level of IT strategic practices have high performance. More importantly, it was known that proactiveness and strategic use of IT have more predictor role on performance.
Originality/value
A review of the strategic management literature reveals a lack of empirical studies that adequately explore the significant roles of strategic flexibility and IT strategy on business performance in the tourism industry. This paper provides actionable insights into these two main determinants that explain why some tourism businesses outperform others. The primary contribution of this study is to address the gap in our understanding of the interconnections between strategic flexibility, IT strategy and business performance through cluster analysis in the tourism industry.
... Prior studies suggest that the complementarity relationship between IT and organizational practices results in a significant portion of the generated business value by IT Turel et al. 2019;Ilmudeen and Bao 2020). According to Wade and Hulland (2004), top management commitment to IT interacts with IT capabilities to positively affect the firm's performance. ...
... These findings support the RBV theory, which indicates that board IT governance increases the involvement of the board members in IT governance, consequently improving the firms' performance. Moreover, they are in line with the prior studies' results (e.g., Santhanam and Hartono 2003;Weill 2004;Boritz and Lim 2008;Jewer and McKay 2012;Turel and Bart 2014;Chen et al. 2015;Hao and Song 2016;Turel et al. 2017Turel et al. , 2019Ilmudeen and Bao 2020). Figure 2. ...
... These findings support the RBV theory, which indicates that board IT governance increases the involvement of the board members in IT governance, consequently improving the firms' performance. Moreover, they are in line with the prior studies' results (e.g., Santhanam and Hartono 2003;Weill 2004;Boritz and Lim 2008;Jewer and McKay 2012;Turel and Bart 2014;Chen et al. 2015;Hao and Song 2016;Turel et al. 2017Turel et al. , 2019Ilmudeen and Bao 2020). ...
This paper aims to investigate the perceptions of Iraqi medium-sized enterprises’ board members on how board information technology governance mechanisms affect their companies’ performance with the help of IT capabilities as a mediator. The study is based on a survey of 223 board members using a stratified random sampling technique. The Structural Equation Model (SEM) method results show that board IT governance structure and board IT governance relational have a significant direct and indirect positive relationship with firm performance through IT capabilities. Contrariwise, IT capabilities do not interfere with the relationship between board IT governance processes mechanisms and firm performance. Our study contributes to the IT business literature by addressing new relationships and providing empirical evidence that explains the inconsistent and mixed results of prior studies. Moreover, it extends and complements these prior studies by considering three board IT governance mechanisms, four IT capabilities, and merges the two dimensions of firm performance in a developing country that offers different institutional settings and litigation environment. The study findings offer notable implications for business practitioners and industry leaders to enhance the IT environment and maximize their corporate outcomes. In addition, these findings draw the attention of the board members, management, and corporate general assemblies to recognize the importance of intensifying the investment in IT capabilities to gain superior firm performance.
... Information technology (IT) has significantly changed how organizations work and has become indispensable to business processes (Ilmudeen and Bao, 2020). ITstrategy (ITS) refers to "the extent to which a firm leverages IT to support the way the organization positions and competes in the product/service market" (Wang et al., 2014). ...
... As expected, we find that the interdependent (joint) regulating role of BS and ITS assists in explaining the different performances of BDU. Notably, our research identifies a balancing association between BS and ITS in BDU's value recognition process, revealing the theorized ambidexterity between BS and ITS (Wei et al., 2023;Ilmudeen and Bao, 2020). Our findings support the notion that dynamic capabilities impact firm performance (Schilke, 2014;Teece et al., 1997). ...
Purpose
Considerable research has been done to analyze big data applications in organizations, but more needs to be known about how big data use (BDU) assists firms, particularly small and medium-sized enterprises (SMEs), in improving their export performance. Building on the dynamic capability view, we aim to inspect the influence of BDU on textile SME export performance (SEP) and how business strategy (BS) and IT strategy (ITS) moderate this linkage.
Design/methodology/approach
The current research recruited 271 SME managers from textile manufacturing firms in the different cities of Zhejiang Province, China, via a survey approach. Further, we tested the research model and hypotheses in Mplus, theorizing the dynamic capability view.
Findings
The findings illustrate that BDU is positively related to SEP. BS and ITS positively and jointly moderate the linkage between BDU and SEP. Moreover, a high level of BS and ITS is crucial to improve SME export performance.
Practical implications
Our research outcomes assist SME managers in formulating a vibrant business and IT strategy in the light of BDU, which enables the firms to boost their export performance. Specifically, BDU in the textile supply chain develops unique capabilities for SMEs compared to competitors. In this way, BDU creates firm capacity in building firms’ operations while integrating and coordinating the functional units and stakeholders.
Originality/value
This research adds to the textile industry and BDU literature by examining BDU’s direct role in contributing to SEP. It is the first to investigate the dual moderation (BS and ITS) model in the linkage between BDU and SEP.
... RBV also underpins IT management, focusing on an organization's capacity to develop new capabilities. A robust IT infrastructure and strategic IT management enable organizations to adapt effectively to change (Seddon, 2014;Ilmudeen and Bao, 2020). This framework positions RBV as crucial for leveraging IT benefits and digital work practices, facilitating the achievement of organizational goals through resource optimization. ...
... The model shown in Figure 4 extends prior studies that either separately consider institutional theory (Selznick, 1948;Scott, 2013;Lawrence and Buchanan, 2017;Thornton et al., 2012) or resource-based views (Hunt and Morgan, 1995;Lockett et al., 2009;Ilmudeen and Bao, 2020), namely by explaining the relevance of their interplay over time. Based on our aforementioned refinement, it can be inferred that the trajectory of their development is oriented towards fostering an organization's growth through the structure (i.e. ...
Purpose
The digital era requires organizations to realign their work practices, culture, and structure. This study investigates the complex dynamics of organizational adaptation to rapid technological advancements by examining the interplay between technological resources and institutional factors over time.
Design/methodology/approach
An in-depth long-term case study of a public sector organization forms the basis of this research. The study employs the resource-based view (RBV) and institutional theory as theoretical frameworks to analyze the organization’s digital transformation journey, integrating qualitative and quantitative data collection methods.
Findings
The findings reveal a gradual evolution in the organization’s digital maturity, transitioning from a focus on IT infrastructure to a comprehensive integration of technological resources with organizational processes and human capital. The study underscores the critical synergy between institutional factors and technological adaptation, with key milestones marking the organization’s progress toward a digitally integrated and employee-centric state. External factors, such as the COVID-19 pandemic, are shown to accelerate digital transformation.
Practical implications
The study outlines a tailored roadmap for public sector organizations to align institutional culture and structure with technological resources, facilitating successful digital transformation.
Originality/value
This study provides a novel long-term perspective on digital transformation, emphasizing the importance of balancing resource optimization with institutional alignment. It offers strategic guidance for organizations embarking on digital transformation journeys, highlighting the role of institutional culture, employee engagement, and external catalysts in achieving sustainable digital integration.
... The results of data analysis showed that Organizational Agility was able to mediate the relationship between knowledge application and organizational performance. Besides that, organizations that have a tendency towards better IT management will positively contribute to the organization's IT strategy, which in turn will have a positive effect on organizational performance (Ilmudeen & Bao, 2020). ...
... This allows organizations to stay relevant, adapt quickly to change, and achieve better performance. The results of this study support Li et al. (2020) and Ilmudeen & Bao (2020) who found that organizational agility can positively mediate the relationship between information technology capabilities and organizational performance. ...
The performance of the Technical Implementation Unit and Office Branches of the East Java Province is an indicator of the success of the implementation of development and governance, especially in public services. The purpose of this research is to describe knowledge management capabilities, information technology capabilities, organizational agility and organizational performance, to analyze the effect of knowledge management capabilities, information technology capabilities and organizational agility, to analyze the effect of knowledge management capabilities and information technology capabilities on organizational performance, to analyze the effect of organizational agility on organizational performance and analyze the effect of knowledge management capabilities, information technology capabilities on organizational performance through organizational agility. The data analysis technique used is Descriptive Analysis and SEM (Structural Equation Modeling). The results of the study show that knowledge management capabilities have the greatest contribution to knowledge application. Information technology capabilities have the greatest contribution to IT proactive stance. Organizational agility has the biggest contribution to Quickness. Organizational performance has the greatest contribution to the learning and growth process perspective. Knowledge management capabilities, information technology capabilities affect organizational agility. Knowledge management capabilities, information technology capabilities can affect organizational performance. Organizational agility is needed in organizations that have knowledge management capabilities and information technology capabilities in order to improve organizational performance.
... Managing IT has been taken into consideration in both practice and theoretical debates for long years (Ilmudeen & Bao, 2020). In recent years, business organizations have invested a huge amount of money in IT. ...
... Similarly, the empirical studies in the management of IT or the multifaceted socio-technical study that impact firm performance has fairly received limited attention (Davison, Kien, & Ying, 2008;Ji, Min, & Han, 2007;Peng, Quan, Zhang, & Dubinsky, 2016). In this tenet, past studies warrant further examination of the importance of managing IT (Ilmudeen & Bao, 2020). ...
The many-sided view or the role of information technology (IT) towards firm performance has been extensively examined. The academic scholars and industry practitioners agree that there are underlying theories for managing IT, still, the literature is suffering the comprehensive review-based research. Similarly, though there is extensive empirical evidence on managing information technology investment and firm performance, complete thoughtful research directions and the recent progress in the field are limited. Hence, a strong understanding of the present lay of the paradigm is required to assist in this research domain. Against these backdrops, this study explores an overview of this research field using a bibliometric approach focusing on the published academic journal articles in Web of Science for the period between 2000 and 2021. This study demonstrates maps for the journal name, keywords, title and abstract section keywords, co-authorship for counties, co-citation for a cited author, and cited sources are demonstrated.
... We included a filter question asking individuals from various Jordanian firms about their organizational usage versus non-usage of BI tools to ensure participants' suitability. Consistent with past studies, only individuals with managerial capacity were asked to participate because of their superior knowledge regarding BI capabilities, decision-making, and performance as evident in past studies (i.e., Hayajneh et al., 2022;Ilmudeen & Bao, 2020;Mikalef & Gupta, 2021). A multiple respondent approach was used to ensure the validity, robustness, and completeness of the data as per expert suggestions (see Chen et al., 2022;Elbashir et al., 2011;She et al., 2020;Shepherd et al., 2021). ...
... Fourth, other scale items could measure decisionmaking speed and comprehensiveness, permitting corroboration. Extensive consideration of financial, marketing, and operational performance could provide detailed firm performance and progress (See Ilmudeen & Bao, 2020;Ilmudeen, 2021;Ilmudeen et al., 2019). Last, this research did not control for the variable of the contextual effects of sectorial and/or industrial structure. ...
Scholars and practitioners have trumpeted business intelligence (BI) capability as a game-changer due to its significant impact on firm performance. Despite these claims, the amplifying and underlying mechanisms governing the relationship between BI capability and organizational performance are still in their infancy. This research examines the nexus between BI capability, decision-making speed, comprehensiveness, and organizational performance. This study, drawing on knowledge-based theory, proposes a conceptual model to explain how BI capability influences organizational performance through decision-making speed and comprehensiveness and the moderating role of firm size. The proposed moderated-mediated model was tested using survey data from 236 respondents occupying leadership positions in various Jordanian industries. Partial least squares structural equation modeling (PLS-SEM) was used to diagnose the proposed model. BI capability indirectly affects firm performance through decision-making speed and comprehensiveness. These mediating effects do not vary by company size. This paper contributed theoretically and practically to the BI framework considering decision-making, firm performance, and firm size. Implications for theory-building and practice are described.
... It includes the management of IT people and business-IT processes. IT management strategy is primarily related to the roles and structures of IT activities in the company (Ilmudeen & Bao, 2020;Shamekh, 2008). Wang, Peng, and Prybutok (2022) indicated that IT in interaction with business operations and leadership makes a significant difference in quality management and thus improves organizational performance. ...
... The main goal of IT management is to create value from technology that is achieved through strategic alignment (Ghonim et al., 2020;Slim et al., 2021). Ilmudeen and Bao (2020) indicated that IT and business strategic alignment to some extent induce the effect of IT management on performance. Strategic alignment is defined as the coordination between business strategy with IT strategy and infrastructure and organizational process with IT infrastructure and process. ...
Today, organizations make significant investments in information technology (IT) as a strategic resource to achieve their goals. If these investments are managed properly, they can create value for the organization. However, companies face problems in evaluating IT investment plans to gain value from them and improve organizational performance, which can be attributed to different reasons such as environmental uncertainty. Therefore, this study used a resource-based view and evaluated the impact of IT investment, IT management as two important IT resources, and strategic alignment on organizational performance by considering the moderating role of environmental uncertainty as one of the most important challenges of companies in IT usage. The quantitative approach was used and the required data was gathered using two questionnaires (one for IT managers and one for executives). The questionnaires were collected randomly from 70 IT managers, and 70 CIOs, and CEOs of small and medium-sized IT organizations (SMEs). Then data was analyzed using Structural Equation Modeling through using PLS software. Based on the results, strategic alignment and IT management are effective on organizational performance. Besides, environmental uncertainty moderated these relationships. The results of the study will help managers to nurture IT resources in their company to develop their strategies based on their perceived level of environmental uncertainty.
... Businesses have invested a massive amount of money in IT; however, the payoff from IT is always a major concern for managers and executives (Ilmudeen & Bao, 2020). In spite of the growing amount of IT investment, IT governance decisions have ever more become complicated due to vague cost relationships, uncertain payoffs, rapid technological changes, and uncertain business environments (Ilmudeen, 2021a). ...
... The key informant approach is used for the data collection, as it was a common method in prior IS research (Ilmudeen & Bao, 2020;Ilmudeen, Bao, & Alharbi, 2019;Nevo & Wade, 2011;Wu et al., 2015). The data collection process started from mid of July to mid of September 2019. ...
Drawing on the resource-based theory and dynamic capability theory this study examines how IT-enabled dynamic capabilities impact on business capabilities (business process agility and firm innovative capability) with moderating role of turbulent environment. The purpose of this study is to test the impact of ITenabled dynamic on business process agility and innovative capability that in turn drive firm performance under turbulent environment. This study conceptualizes that IT governance mechanism positively effect on ITDC, that in turn positively impact on business process agility and firm innovative capability to achieve firm performance. Data were collected in offline and online by using convenient and snowball sampling technique from the senior IT and business managers in Sri Lankan. Using the partial least squares (Smart PLS 3.0) hierarchical regression analysis for various model were performed. The finding from 188 senior IT and business manager’s responses from Sri Lanka reveals the strong and positive relationship in the hypothesized relationship. In contrary to the expectation, the turbulent environment’s both hypotheses (H6a and H6b) failed to show a significant moderating effect. This study adds to the existing literature and extends the managerial practice by focusing on the key constructs such as IT governance mechanism, ITDC, turbulent environment, and firm performance.
... On the other hand, IT executives, not informed of the organizational goals, will be unable to understand the needs of business decisions. Last but not least, managers and IT executives are often at odds with each other and appear not to trust each other, a fact that has a negative impact not only on their relationship but also on their company competence [7], [24], [44]. ...
... The questionnaire hinged on the current research about and firm performance [28], [54]. Researchers measured business performance using variables such as profitability, sales growth [24], sales growth, innovation, profitability, cost reduction, revenue-growth, qualityimprovement [32], improvement internal efficiency of operations, growth of ROI, growth of customer satisfaction, growth of market share of products and services and growth of annual sales revenue [30], sales, ROA, growth and profitability [10]. Fig. 1 indicates the criteria used on the basis of prior researchers to assess IT managers' satisfaction with IS performance. ...
The current challenging environment may cause difficulties in the financial dimension of firms and particularly for small–medium-sized enterprises (SMEs), which may lead to the lack of administrative, technical, and human capabilities which, in effect, may constrain the capacity to deal with the crisis. In light of technological advances, scholars and practitioners have concluded that the greatest obstacle to the adoption of innovative technologies is the lack of information systems (IS) strategy. IS strategy is a critical dimension of innovation and competitive advantage for SMEs. IS strategy includes multiple conflicting objectives and the use of multiple criteria decision analysis (MCDA) is to support better decision making. SMEs need a guide for effective decision making in the information technology (IT) field and decision-making processes that are based on MCDA methods increase innovation and entrepreneurship. Thus, this article aims to investigate the effect of the use of IS strategic planning on IT executives’ satisfaction using MCDA. All data are obtained in 294 Greek SMEs from IS executives. The results of this article could enable managers to understand how IS strategy supports the development of innovative technologies that incorporate opportunities to enhance business development and innovation.
... Studies have shown that components of Value IT (Val-IT), such as value governance, portfolio management, and investment management, significantly impact IT management, which in turn affects firm performance (Ilmudeen & Bao, 2018). This mediating effect emphasizes the importance of aligning IT strategy and business strategy to enhance overall firm performance (Ilmudeen & Bao, 2020). Additionally, the positive association between corporate real estate (CRE) investment and firm performance further underscores the significance of strategic investments in different assets, including property, to drive firm success (Naz et al., 2023). ...
Indonesia's economic growth has been steady at 5% in recent years, supported by the development of the real sector, and market demand for property needs has also increased. According to the Central Bureau of Statistics, in 2022, the property industry sector absorbed 4,373,950 workers or 4.6% of the total workforce in Indonesia. It contributed significantly to the country's economic growth in the national GDP. This research will test whether, if companies can increase the value of their investments, their performance will improve, supported by the solution variables: Property Management, Quality Project Management, Digital Innovation, and the factor of Environmental Dynamism, to strengthen the statement of the impact of Value Investing on firm performance. This study employs SEM-PLS version 3 software to measure the variables used. The sample consists of the largest property companies in Indonesia listed on the IDX over five years (2018-2022) with the criteria of having more than 10 entities. The research results were obtained using a questionnaire (survey). An interesting finding from this research is that environmental dynamism has no moderating effect on value investing on company performance. Good environmental dynamism cannot increase or decrease value investing to improve company performance. The influence of investment value on company performance does not only depend on its intrinsic principles but is also influenced by environmental dynamics.
... Sophisticated management focuses on a firm's ability to develop and deploy new capabilities with an effective IT strategy, leading to higher business performance. Therefore, firms with robust IT infrastructure, well understood by management, and effective ITG can efficiently implement new applications, modify or redesign enterprise systems with advanced Sophistication, and address maintenance challenges (Ilmudeen & Bao, 2020). Elevated business performance underscores the impact of managerial roles, IT knowledge, and technological complexity on organizational performance. ...
Sophisticated healthcare managers understand that managing information and selecting technology are two related but separate skill sets. Information Technology Governance (ITG) allows healthcare organizations to deal with complex issues, compete effectively, and support patient needs by integrating managerial and IT sophistication to improve business performance. An organizational model that merges IT and managerial sophistication by improving ITG to forecast business outcomes must grasp the intricacies of technology to acquire, manage, and utilize information technology in alignment with business strategies. The proposed model differentiates between internal and external IT management strategic thinking, emphasizing the critical need to govern IT effectively by having a deeper understanding of IT to better engage internal and external stakeholders through suitable structures, processes, and relational mechanisms.
... However, there is a considerable amount of empirical evidence recognising the benefits of aligning the respective IT and business strategies and processes within organisations, especially during this era of digital transformation [2]. Multiple theories and models have also been conceptualised, tested and applied, with many different perspectives, including maturity evaluation [3,4], performance implications [5,6,7], scope of conceptualisations [8] and its antecedents [9]. Despite the perceived maturity as a research area and the extensive empirical studies investigating BITA, the phenomenon remains a top concern for leaders seeking rewarding returns from their IT investments and increased competitive advantage [10]. ...
Only a few studies have investigated the nexus between knowledge management practices and the social dimension of business-IT alignment (BITA), despite the critical roles of both in fostering collaboration between business and IT as well as achieving organisational goals. This study aims to bridge this gap by investigating how knowledge management practices can improve the social dimension of BITA by overcoming barriers and supporting enablers. A single-case study at a large Swedish company was conducted by using internal organisational documents and interviews with respondents from both business and IT units as a data collection method. The thematic analysis of interview transcripts and document reviews revealed various barriers to the social dimension of BITA that might be overcome by knowledge management practices. Specifically, the results suggest that (1) knowledge exchange and socialisation practices can mitigate barriers to the social dimension of BITA, (2) shared access to knowledge repositories and communication channels can facilitate short-term alignment, and (3) externalisation processes, where knowledge is codified and shared, can improve shared domain knowledge between business and IT within an organisation. These findings contribute to both research and practice by enhancing our understanding of how knowledge management practices can strengthen the social dimension of BITA, ultimately leading to improved collaboration between business and IT and organisational effectiveness.
... The resource-based view is widely recognized as the dominant theory explaining how information technology resources shape business value (Shibin et al., 2020;Zhang et al., 2023). Existing studies have explored the impact of various information technology resources on organizational performance, such as information technology infrastructure (Benitez et al., 2018;Zhang et al., 2023), information technology capabilities (Chae et al., 2018) and information technology investment management (Ilmudeen & Bao, 2020). As a source of competitive advantage, information technology resources can be used to improve communication and productivity, reduce internal operating costs, and improve firm financial performance (Liang et al., 2010;Zhang et al., 2023). ...
With the rapid development of digital technologies, digital transformation is becoming a critical way for enterprises to improve their performance. However, the current literatures lack sufficient research on whether and how the usage of digital technology improve supply chain performance. Based-on resource-based view and information processing theory, this study examines the impact of digital transformation on supply chain performance, as well as the mediating role of supply chain integration. The proposed hypotheses are tested empirically using data collected from Chinese A-share listed manufacturing firms for the years 2015 to 2022. The results show that digital transformation has a significant impact on supply chain performance, in which supply chain integration plays a partial mediating role. After a series of endogeneity and robustness tests, the results remain valid. Further analysis also reveals that the impact of digital transformation on supply chain performance is more significant for small and medium-sized enterprises (SMEs) than for large enterprises. In addition, firm size has a significant heterogeneous effect on this relationship, which implies that digital transformation is better able to improve SMEs’ supply chain performance. The findings provide guidance for enhancing supply chain performance through digital transformation and supply chain integration.
... The issue of "turnover" has been plaguing organizations across the length and breadth of the industry at large (Stamolampros et al., 2019;Ilmudeen and Bao, 2020). High turnover negatively impacts the overall work environment, and results in reduced performance and productivity (De Winne et al., 2018). ...
Purpose
The recent pandemic (COVID-19) and the continuous ICT advancements have resulted in increased levels of technostress. On this basis, the present work tried to explore how technostress influences employees’ turnover intention with the mediation of work-exhaustion. Deploying the theoretical lens of job demands-resources theory, the authors also aim to investigate the part that positive psychological capital (PsyCap) has to play as a moderator in between technostress and work-exhaustion.
Design/methodology/approach
The study utilizes a time-lagged methodological design; data was gathered from 544 Indian IT employees. Additionally, PLS-SEM was used to carry out the aforementioned moderation-mediation analysis.
Findings
All the hypotheses proposed were confirmed. It was found that technostress significantly impacts employees’ turnover intention. Additionally, work-exhaustion does mediate the relationship between technostress and employees’ turnover intention. Furthermore, PsyCap did play the role of a moderator between Technostress and work-exhaustion.
Practical implications
This paper provides an augmented understanding of technostress in IT organizations and highlights the role of personal resources in aiding employees’ to deal with technostress.
Originality/value
This study is one of the early studies to highlight the role of positive psychological capital in mitigating the impact of technology-induced exhaustion and employees’ turnover intention.
... Similarly, Ilmudeen and Bao provide empirical evidence on the impact of managing IT through strategic alignment on firm performance [8]. Their research demonstrates that organizations that effectively align their IT and business strategies, supported by AI and EA frameworks, experience significant improvements in efficiency, agility, and overall business performance. ...
In the current digital era, aligning IT strategies with business goals is not only a priority but a necessity for organizations aiming to enhance efficiency, agility, and growth. This research examines the integration of Artificial Intelligence (AI) within IT strategies to achieve strategic alignment with business objectives, highlighting the critical role of Enterprise Architecture (EA) as a framework to facilitate this process. By leveraging AI, organizations can enable data-driven decision-making, optimize processes, and foster innovation, leading to a more adaptive and responsive IT infrastructure. The research draws from empirical studies, case studies, and theoretical frameworks to illustrate how EA provides a structured approach to managing the complexities of IT systems and ensuring their alignment with business processes and strategies. Furthermore, this paper addresses the challenges and ethical considerations of integrating AI into IT strategies, emphasizing the importance of governance structures to manage risks such as data privacy, bias, and transparency. The findings suggest that organizations that effectively incorporate AI within the EA framework not only achieve better alignment between IT and business goals but also position themselves for sustained success in an increasingly competitive market. This research contributes to the growing body of knowledge on IT-business alignment by offering insights into the practical application of AI and EA, providing a roadmap for organizations seeking to navigate the complexities of digital transformation and drive strategic initiatives that lead to long-term growth and innovation
... The considerations and their results often focus on the selection and implementation of a technological strategy (Ivanova et al., 2009;Dogan, 2017;De Moraes et al., 2020). Researchers also emphasize the importance of digitization as a key enterprise development trend (Jasińska, 2021;Ilmudeen & Bao, 2020). ...
... Scholar and manager alike have taken note that the strategies of IT/IS project exploration and exploitation in firms remain unexplained, particularly in the current digital era innovation of business process (Caliskan et al., 2020;Daniel et al., 2015;Ilmudeen, 2020). Based on the results, we found path-goal leadership (House, 1971) helps to foster both tacit and explicit knowledge creation (Nonaka, 1994) that can increase IT/IS project exploration and IT/IS project exploitation (Daniel et al., 2015). ...
Purpose
This study aims to build an integrated model for information technology (IT)/information system (IS) team exploration and exploitation innovation in the business-to-business (B2B) enterprise context by empirically investigating the mediating role of tacit-explicit knowledge co-creation and exploring the behavior approach of servant leaders for IT/IS team exploration-exploitation innovation.
Design/methodology/approach
The authors' analysis was supported by 182 enterprise-IT/IS teams (403 participants) in Taiwan. The authors used a questionnaire and Structural Equation Model (SEM)-SmartPLS to validate the development model. This study examines IT/IS exploration-exploitation innovation using a combination of quantitative survey research and qualitative case studies.
Findings
The specific roles of direct and mediating effects for two innovations of IT/IS team exploration and exploitation were investigated. The findings show a direct effect of knowledge creation (tacit and explicit) on IT/IS team exploration-exploitation innovation. Servant leader behavior positively influences tacit-explicit knowledge co-creation practices, IT/IS team exploration and exploitation. Moreover, knowledge creation (tacit and explicit) successfully mediates the correlation between servant leaders and IT/IS team innovations (for exploration and exploitation).
Practical implications
Managers, IT/IS consultants and enterprises at the executive level are suggested to encourage knowledge co-creation practices, both tacit and explicit to support their IT/IS team innovation. The greater the degree of explicit knowledge (i.e. socialization and internalization) and tacit knowledge creation (i.e. externalization and combination), the greater will be the opportunities for meeting the enterprise-IT/IS team exploration and exploitation innovation goals. The project manager may follow servant leadership behavior to promote effective knowledge co-creation process on the IT/IS team.
Originality/value
This effort contributes to greater and new understanding of how ambidexterity capability, tacit-explicit knowledge co-creation (mediators) and servant leaders for IT/IS team exploration-exploitation innovation in the B2B enterprise context and new foundations for future studies on a cross-enterprise IT/IS team. This research is also the first empirical effort to understand how a servant perspective leadership contributes through the knowledge co-creation process for IT/IS exploration-exploitation innovation.
... The findings of this study highlight the significant role of digital transformation in the upgrading of Chinese enterprises. By reshaping traditional operational, management, and business models, digital transformation enhances total factor productivity and improves overall business performance (Ilmudeen & Bao, 2020). To empirically examine the impact of digital transformation on over-investment, this paper focuses on Chinese A-share listed companies in Shanghai and Shenzhen from 2016 to 2020. ...
This paper examines the impact of digital transformation on over-investment behavior among Chinese A-share listed companies in Shanghai and Shenzhen from 2016 to 2020. The study reveals that enterprise digital transformation effectively inhibits over-investment. Compared to firms without digital transformation, those undergoing or possessing a higher degree of digital transformation exhibit lower probabilities and degrees of over-investment. Moreover, digital transformation has a stronger inhibitory effect on enterprises characterized by high levels of over-investment. These findings hold true even after accounting for factors of robustness and endogeneity. Heterogeneous group testing further demonstrates that the impact of digital transformation on over-investment is particularly prominent in non-state-owned, manufacturing, and high-tech enterprises. The study identifies “rational decision-making” as a mechanism through which digital transformation influences over-investment, and it finds that good corporate governance partially mediates this relationship. The research provides empirical evidence of the governance effect of digital transformation on investment decisions and expands our understanding of the economic consequences of digital transformation. The findings offer valuable insights for market investors and enterprise management as a meaningful reference in decision-making processes.
... Despite the extensive literature exploring the individual relationships between organizational behavior, information technology business strategic maturity, and firm performance, only a few studies have investigated the mediating effect of information technology business strategic maturity on the relationship between organizational behavior and firm performance (Ilmudeen & Bao, 2020;Gerow et al., 2014). ...
This study aims to investigate the impact of organizational behavior and information technology business strategic maturity on firm performance within the Jordanian maritime industry. A quantitative research approach was employed, and data were collected through a questionnaire distributed to 157 IT managers and 190 managers from 347 operating maritime companies in Jordan. The research data underwent descriptive and analytical analysis to examine the proposed model. The findings indicate that organizational behavior significantly and positively affects firm performance, while information technology business strategic maturity also has a significant positive influence on firm performance. Additionally, the study reveals that IT-business strategic maturity mediates the relationship between organizational behavior and firm performance. These results highlight the significance of enhancing IT-business strategic maturity to strengthen the association between organizational behavior and firm performance in the Jordanian maritime industry. By leveraging effective organizational behavior practices and implementing robust information technology business strategic maturity, maritime companies can improve their performance, achieve operational efficiency, and facilitate strategic decision-making, ultimately enhancing their competitive position in the dynamic business environment.
... From E2's (IT Coordinator) account, it is apparent that the organization acknowledges the strategic significance of IT in supporting business operations and fostering a culture of innovation. E2 underscores the need for structural power for the key IT decision-maker [35,38] and the establishment of an IT Committee to facilitate collaboration between the IT department and senior management [4,36]. ...
IT, increasingly recognized as a vital contributor to competitive advantage, plays an indispensable role in augmenting business value. Effective implementation of IT Governance (ITG) mechanisms, comprising structures of responsibility, control processes, communication protocols, and decision rights, has been found to foster alignment between IT and business objectives. Such alignment is particularly critical for Small and Medium-sized Enterprises (SMEs), where the amplified business value can be realized. Yet, SMEs often grapple with challenges in implementing ITG, owing to resource constraints, communication hurdles, resistance to change, and technological complexity. The present study delves into this complex dynamic within a medium-sized industry located in southern Minas Gerais, Brazil, investigating the deployment of ITG mechanisms as a means to enhance business value through IT. An interpretivist approach characterizes the qualitative, inductive study, drawing on a case study to probe the links between ITG mechanisms, IT capabilities, and business value. Four hypotheses are put forth in the discourse, shedding light on the intricate relationships that these elements share. The findings indicate that ITG mechanisms exert a positive impact on IT business value, albeit with identifiable weaknesses and potential areas for enhancement. More effective alignment between IT and business can be achieved by addressing these shortcomings, thereby mitigating risks such as demotivation among IT professionals and resistance to change.
... Scholar and manager alike have taken note that the strategies of IT/IS project exploration and exploitation in firms remain unexplained, particularly in the current digital era innovation of business process (Caliskan et al., 2020;Daniel et al., 2015;Ilmudeen, 2020). Based on the results, we found path-goal leadership (House, 1971) helps to foster both tacit and explicit knowledge creation (Nonaka, 1994) that can increase IT/IS project exploration and IT/IS project exploitation (Daniel et al., 2015). ...
An emerging information communication technology (ICT) triggers circular supply chain management (CSCM), there is still much to be addressed effectively, especially at the microlevel of CSCM. The purpose of this article is to build an integrated model for ICT team exploratory and exploitative innovation in the lens of CSCM and circular economy context. Our analysis was supported by 124 industries-ICT teams (368 participants) in Indonesia. We used structural equational model SmartPLS to validate the development model and Sobel approach to confirm the mediation hypothesis. Supply chain manager, ICT department, and industries executive level are suggested to encourage knowledge sharing practices both explicit and tacit knowledge. Firm's supply chain may follow path-goal leaders to promote effectively circular supply chain management. It is also highlighted that exchange ideology as a moderator help leader to understand their team orientation and contribution to knowledge sharing activities and leader's characteristics. We contribute to a microlevel of CSCM context and new understanding of how explicit-tacit knowledge sharing (mediator), exchange ideology (moderator), and leaders support in ICT team exploratory-exploitative innovation, and as new foundation for future studies on cross-CSCM ICT team including encourage more detailed analysis of exchange ideology orientation.
... The assets for reaching enterprise resilience include, among others, IT project success (Park et al., 2008), the individual capacity of the employee (Velu et al., 2019), Company performance (Hudakova and Lahuta, 2020) and IT strategy (Gomes, 2015). The rapid evolution of information technologies influences how organizations plan, design, develop and deploy their IT projects; the need to improve the implementation of strategic IS plans is inescapable (Gottschalk, 1999;Ilmudeen and Bao, 2020). The strategic planning theory of IS establishes a link between the project and its implementation. ...
Purpose
Managerial practices are essential in the success of information technology (IT) projects of digital transformation (DT). However, the literature has not yet specified all these managerial practices. This study aims to address this gap by investigating the influence of change management on the success of IT projects of DT. Additionally, the author examines the consequences on SMEs in the economic context of the Democratic Republic of the Congo (DRC).
Design/methodology/approach
This study draws on a research model that elucidates aspects of the resource-based view (RBV) framework, notably the transformation of human resources based on change management. This model demonstrates the relationship between change management, DT and IT project success, which facilitates the performance and resilience of SMEs. To empirically validate and test the developed research model, we gathered 299 responses from SME managers in the DRC through cross-sectional data collection using a structured questionnaire. The author performed statistical analyses using variance-based structural equation modeling (PLS-SEM) with the help of SmartPLS 3.0.
Findings
This paper reveals how SME managers can succeed in DT projects with the change management of human resources. Furthermore, it establishes that the success of IT projects of DT is an essential for enhancing the performance and resilience of SMEs in the DRC.
Originality/value
This study contributes to the information systems (IS) literature on developing countries by highlighting the DRC context. Little research deals with the success factors of DT projects and their organizational impact on SMEs in developing countries. This study thus enriches the IS literature by filling this void.
... Unlike transactional IT, strategic IT aims on expansion rather than efficiency. It is likely to influence firm performance (Boadi et al., 2007;Ilmudeen and Bao, 2020) through sales growth or market share, and hence, m-commerce adoption by improving customer service (Blaise et al., 2018) or spawning a new business. ...
Purpose
This study aims to investigate the relationship between all three dimensions of perceived strategic value of m-commerce (operational support, managerial productivity and strategic decision aids), antecedents of m-commerce (organizational readiness, external context and m-commerce competence) and m-commerce adoption. The present study will further examine a mediation model in which all three dimensions of perceived strategic value of m-commerce affect m-commerce adoption through IT investment.
Design/methodology/approach
An online survey questionnaire was adopted to test the validity of this research and hypotheses. Data were collected from 178 Chinese family businesses via snowball sampling.
Findings
The results show that all three dimensions of perceived strategic value of m-commerce (operational support, managerial productivity and strategic decision aids) are positively connected to m-commerce adoption. Also, it was found that IT investment partially or fully mediates the relationship between all these dimensions of perceived strategic value of m-commerce and m-commerce adoption.
Originality/value
This study would enhance owners' and managers' understanding of the relationship between perceived strategic value of m-commerce, IT investment, antecedents of m-commerce and m-commerce adoption, thus contributing to their future adoption.
... Following the R&D capability definition, the design capability is described as a firm's ability to employ design-related resources to generate a superior and new design compared to other products in the market. The technological environment is the current level of technology in the country and it generally affects all firms in that country (Ilmudeen et al., 2019;Ilmudeen and Bao, 2020;Moeini Gharagozloo et al., 2020). For a technologically advanced country such as the USA, all firms benefit from the advanced technological environment, especially innovative firms with high design capability (Apple, Adobe). ...
Purpose
Firms use design capability across the globe to compete and increase sales, e.g. Apple. However, the payoff from design know-how has been overlooked thus far. Academic research lags in this space despite the intersection of sales, technology and design in practice. This paper provides researchers and managers with implications of the interplay between design capability and technological market conditions to enhance a firm's sales.
Design/methodology/approach
Firms' capability design, and sales impact have been studied in this paper across different technological market conditions. Primary technological conditions of the industry under which firms operate are captured, which are technological intensity (TI), technological competitive intensity (TCI) and technological maturity (TM). Their interplay has been studied using panel data analysis, examining fixed and random effects.
Findings
Design is an important, interesting and non-imitable capacity that yields positive firm execution results. It provides an urgent differentiator and improves deal development. This study found that all four hypotheses are generally supported. The main finding is that, provided underlying technology is good, design significantly improves sales, but design alone cannot substitute for poor technology.
Practical implications
The results of this study link the three technological environment conditions, namely, TI, TCI and TM with sales growth. The authors find that design can and does add to superior performance, provided technological excellence exists prior. But, in the absence of good technology, design alone will hinder performance.
Originality/value
This paper examines the effect of firm design capability on sales growth. The paper finds a positive moderating effect of TCI and TM but a negative moderating effect of TI. The researchers believe these aspects of the design have not been studied before.
... Alignment of IT and security investments can lead to higher firm performance, leading to valuable, rare, inimitable, and non-substitutable advantages (Farrell, 2014;Weixun et al., 2022). Investments in security safeguard the business value of IT by identifying and reducing various security threats (Pelley, 2019), which reduces business risks and can lead to superior firm results (Ilmudeen & Bao, 2020). Security integration with IT reduces firm risk when implementing new IT solutions and making IT investments (Spears & Barki, 2010). ...
IT investments can generate value for businesses, but ignoring security risks can cause firms to lose value. This study investigates the impact of IT investment and IT security intensity on the financial performance of firms. Anchoring to prior research on firm performance, we employ the resource-based view (RBV) as the theoretical lens for this study. We conducted an OLS regression analysis on a cross-sectional dataset of 360 United States firms. The findings of this study indicate that IT investments and the strategic alignment of IT and security investments generate strategic business value, resulting in improved firm performance. However, IT security investments have a marginally negative impact on firm performance, suggesting that they may be viewed more as "insurance" to protect against security threats rather than strategic investments. The study suggests that IT security investments can generate short-and long-term business value for firms if they are viewed as strategic investments.
... Despite the evidence of the mediation effect of the strategy on the entrepreneur characteristics and firm performance nexus, contrary observations exist. Studies indicate that the mediating effects of the strategy are either none existent (Mohsenzadeha & Ahmadia, 2016), partial (Ilmudeen & Bao, 2020;Sidek et al., 2019;Soewarno & Tjahjadi, 2019;Zulfiqar et al., 2019) or direct/additive (Phan & Butler, 2003). Equally, studies (Kemp & Verhoeven, 2002;Sidik, 2012;Spanos & Lioukas, 2001) have not found a clear relationship between strategy and performance. ...
Although entrepreneur characteristics and competitive strategy are dominant constructs within business studies, there is still no consensus about how they act jointly to influence firm performance. The paper, therefore, tries to expand the understanding of the joint and individual effects of entrepreneur characteristics and competitive strategy on firm performance in the context of resource-based view advancing that sustainable competitive advantage can be obtained by being in possession of strategically relevant resources and capabilities. The sample units are selected using stratified random sampling procedures and data collected by administering a questionnaire to 314 entrepreneurs dealing with non-timber forest products in Kenya. The data is analysed using multiple linear regression analyses. The results reveal that: (1) a significant relationship exists between entrepreneur characteristics and firm performance before the introduction of competitive strategy in the relationship; (2) a non-significant relationship prevails between entrepreneur characteristics and firm performance after the introduction of competitive strategy; (3) entrepreneur characteristics influence competitive strategy; and (4) competitive strategy influences firm performance. The observations meet conditions defined for mediating effect. It is concluded that the relationship between entrepreneur characteristics and firm performance is indirect and hidden requiring mediation of strategy. Thus, an integrated fit between the entrepreneur and strategy improves firm performance. The findings strengthen arguments advanced by the resource-based view that firms can obtain sustainable competitive advantage through their strategically relevant resources. The theoretical contribution of the study is the integrated approach and review of the multidimensional alignment of strategy with entrepreneur characteristics of education, skills and experience that depict the knowledge capital and entrepreneur’s age and gender to improve performance. The study provides entrepreneurs/managers with insights on the importance of aligning their strategies to resources possessed for better performance. It is important that entrepreneurs strengthen their knowledge capital to formulate and implement successful strategies for better performance.
... Chen, 2010;Ilmudeen et al., 2019;Preston & Karahanna, 2009; S. P.-J. Wu et al., 2015), and IT _ENREF_7practitioners and scholars (Coltman et al., 2015;Ilmudeen & Bao, 2020;Luftman et al., 2015;Yayla & Hu, 2012). Successful and efficient utilization of IT requires the alignment of IT strategies with business strategies (Alreemy et al., 2016;Tiwana & Konsynski, 2010). ...
Studies on the effect of business-IT alignment between the management of IT investment and firm performance are scarce. This study focuses on process theory, resource-based view, and Val-IT 2.0, to investigate how business-IT alignment mediates the management of IT investment and firm performance using 194 Chinese IT and business managers’ responses. Findings reveal a significant impact on the hypotheses, whereas alignment mediates the proposed link. This study theoretically contributes and suggests insightful implications for practitioners.
... According to Melville et al. (2004) and Kohli and Grover (2008), the ET influences the focal firm's operations by decision-making and operational capabilities, which shape how IT and organizational resources are applied within the focal firm to gain firm performance. Management and IS researchers have used ET dimensions in their studies of the external contingencies and identified the influence of strategic IS applications as well as the integration of IS and business strategy to gain superior performance (Ilmudeen and Bao, 2020;Mikalef et al., 2021;Wolf and Floyd, 2017). ...
Abstract
Purpose
The paper aims to establish the role of enterprise information systems strategies (ISS) enabled by business strategies for attaining organizational innovativeness (ORIN) mediated by performance (decision-making and business processes) under environmental turbulence.
Design/methodology/approach
The research framework is developed based on theoretical grounding and validated with the help of 408 responses from Brazil using SmartPLS path modeling.
Findings
The results of the research suggest that the resource orchestra of enterprise information systems strategy-enabled strategy-making can be a viable alternative to enhance innovation activities in the organizations through the mediated role of performance (decision-making and business process).
Practical implications
The research demonstrates the role of business function (information systems) strategy enabled overall business strategy-making for achieving innovations in the organization. Fortune organizations are exploiting the information systems strategy enabled business strategy for innovations in the organization; such as Amazon, Walmart, Costco, etc.
Originality/value
The proposed and validated model is a contribution to the enterprise information systems strategy theory. This model presents the role of resource orchestras in achieving innovations in organizations.
... As in studies like Chan et al. (1997), Ilmudeen and Bao (2020), Ilmudeen, Bao, and Alharbi (2019) and Sabherwal and Chan (2001), ERP/ES Strategic Attributes were developed through a mirroring approach for alignment as matching approach where the same categories were used for both business and ES strategy attributes. The categories include ERP Support for aggressiveness, analysis, defensiveness, futurity, pro-activeness, riskiness, and innovativeness. ...
... Manufacturing strategy has gained the trust of an expert as a component that can help SMEs increase competitiveness (Dohale et al., 2020;Amoako-Gyampah and Acquaah, 2008). According to Ilmudeen and Bao (2020), the evolving competitive landscape has compelled businesses to understand manufacturing strategies thoroughly. Recently, Akpinar (2020) pointed out the importance of selecting an appropriate manufacturing strategy since its role changes according to economic, technological, and demand conditions, competitors' strengths and weaknesses and product lifecycle. ...
Purpose
This paper examines the mediating role of manufacturing strategies in the relationship between competitive strategies and firm performance.
Design/methodology/approach
This study gathered 250 responses from firms in a developing country's key manufacturing sectors, including mechanical, electronics, automotive, textile and food. First, descriptive statistics were applied to fix outliers like respondent biases, missing values and normality issues. Second, exploratory factors analysis (EFA) ensured data adequacy and homogeneity through Kaiser–Meyer–Olkin (KMO) and Bartlett tests. Finally, confirmatory factors analysis (CFA) was used to identify the interactions (direct, indirect and total effects) between latent variables representing manufacturing strategies (quality, cost, delivery and flexibility), competitive strategies (cost-leadership and differentiation) and firms' performance (sales growth and profitability). In total, two structural equation modelling (SEM) models (SEM-I, SEM-II) were created to test the hypotheses.
Findings
Of the 40 items identified by the literature review, four were outliers, and three could not satisfy the EFA criteria (eigenvalue >1). Only 33 items could therefore reach CFA. SEM–I and SEM-II study results found no direct relationship between competitive strategies and firm performance (−0.03 = β = 0.08; p > 0.05). However, the findings revealed that cost-leadership could be an appropriate strategic choice and improved firms' performance if the quality and delivery are focussed (0.20 = β = 0.87; p < 0.001). While competitive strategies impact manufacturing strategies positively, the latter is only a mediator between the cost-leadership strategy and the firms' performance.
Originality/value
This research shows that the cost-leadership approach currently seems viable; however, flexibility and cost requirements were not satisfied due to infeasible product differentiation. These results will be beneficial to executives interested in investing in India's industries.
... The key informant approach used for the data collection, which is a common method in prior IS research (Ilmudeen et al., 2019;Ilmudeen and Bao, 2020;Ilmudeen and Yukun, 2018;Nevo and Wade, 2011;Wu et al., 2015). The data collection process started from mid of July to mid of September 2019. ...
Despite the growing amount of IT investment, IT governance decisions have ever more become complicated due to vague cost relationships, uncertain payoffs, rapid technological changes, and uncertain business environments. This study examines how IT governance mechanism and IT-enabled dynamic capabilities (ITDC) impact on firm performance in the turbulent environment. Drawing on the resource-based theory and dynamic capability theory this study conceptualizes that IT governance mechanism positively effect ITDC, that in turn positively impact on business process agility and firm innovative capability to achieve firm performance. Further, the moderating effect of turbulent environment is hypothesized between ITDC - business process agility and ITDC - firm innovative capability relationship. The finding from 188 senior IT and business manager's responses from Sri Lanka reveals the strong and positive relationship in the hypothesized relationship. In contrary to the expectation, the turbulent environment's both hypotheses (H6a and H6b) failed to show a significant moderating effect. This study proposes the theoretical and practical implications by empirically testing the proposed model in the Sri Lankan context. This study adds to the existing literature and extends the managerial practice by focusing on the key constructs such as IT governance mechanism, ITDC, Turbulent environment, and firm performance
... Thirdly, China's growing position in the world economy and improved knowledge about China has huge practical implications for Western firms, thus Chinese experience can shed light on other emerging economies (Su et al. 2013). Similarly, research in China adds to the global relevance of business expectations (Ilmudeen and Bao 2020). Hence we selected China as the empirical testing ground. ...
Today, the business environments are ever more becoming dynamic hence, firms have to be agile and innovative to respond to turbulence. Drawing on the multi-theoretic lens, this study proposes that IT-enabled Dynamic Capabilities (ITDC) are leveraged to shape firm business process agility and firm innovative capability in a turbulent environment. The 254 IT and business executives survey from Chinese firms uncover a positive and significant link in the proposed model. Marketing and technological turbulence significantly moderate ITDC–agility relationship. Similarly, marketing turbulence is significantly moderate, but contrary to the expectation the technological turbulent has an insignificant moderating effect between ITDC–firm innovative capability relationship. This study exhibits the effect of ITDC on firm performance mediated by firm agility and innovative capability. Theoretical anchoring and practical implications are also discussed.
... However, having an ICT alone does not mean that it would automatically become a business function. Additional criteria of this category need to be fulfilled, too (Ilmudeen, & Bao, 2020). ...
This monograph focuses on issues related to identifying and developing the transdisciplinary factors to increase the ICT industry’s position as a central element of the economy. We see the necessity of the dialogue between the ICT industry and the educational sector, including higher education and the role of universities in framing trends on the market. This monograph is aimed also to enhance the employability of ICT specialists, foster entrepreneurship and formation of start-ups in the ICT industry, and thus to improve the position of higher education and lifelong learning. This monograph emphasizes the necessity of ICT courses programs to become more labor market- and society-oriented, practice-based, and trainees/students-centered. We are wondering how to combine the traditional professional skills and competencies with soft and transferable skills and to focus more on multidisciplinary studies and internationalization of the study environment.
... The use of IT augments the ability of firms to sustain in the highly turbulent environment. However, the effective use of IT depend on good IT governance [17,18]. Organizations are using a mixture of different structures, processes, and relational mechanisms that outline a layered system in order to provide higher levels of capabilities [19,20]. ...
The business value of IT has become one of the topmost concerns among scholars and industry practitioners. Enterprises are taking much effort for planning, evaluating, controlling, and aligning IT strategy with business strategy to create IT business value. Hence, the IT governance is aimed to bring alignment between IT strategy and business strategy while generating business value from IT investment. Similarly, the IT management has received greater attention among the business and IT executives as it proves the effectiveness and add business value for IT investment to business enterprises. This study used Web of Science core collection database to extract the dataset for the terms IT governance, IT management, and business value of IT. The bibliometric analysis is conducted for the 462 extracted publications in the dataset. The analysis includes various mapping by focusing co-authorship, co-occurrence, citation, bibliographic coupling, and co-citation. A comprehensive demonstration with mapping is presented to clearly explain each bibliometric map.
... To confirm the mediating effect of business-IT alignment, we used different approaches (Ilmudeen and Bao, 2020). First, the Sobel test where the indirect effect of management of IT investment through the mediated path of (MIT ! ...
Purpose
Though prior studies have attempted to explore the various effects of managing information technology (IT) investment on firm performance, the mechanism through which management of IT impact on firm performance rests less clear. The purpose of this study is to examine the impact of managing IT and business-IT alignment on firm performance.
Design/methodology/approach
Drawing on the resource-based theory and process theory, this study examines how managing IT impacts business-IT alignment and firm performance. The primary survey of 182 responses from IT and business managers from Sri Lanka was empirically examined.
Findings
The findings reveal that managing IT has a positive and strong impact on business-IT alignment and firm performance. Further, business-IT alignment partially mediates between managing IT investment and firm performance relationships.
Research limitations/implications
Today, businesses have invested a massive amount of money in IT investment, and the return on this investment is always a serious concern for managers and industry practitioners. This study finding proposes meaningful insights on managing IT, business-IT alignment and firm performance.
Originality/value
This study opens up the black box on the above nomological linkage and contributes to the literature by extending the theoretical lenses while suggesting insightful and practical implications.
This review paper explores the comparative impact of traditional information technology (IT) and digital technologies (DTs) on firm performance (FPER) through the theoretical lens of the resource-based view. Employing a two-study approach, the research synthesizes evidence from 245 empirical papers published between 2010 and 2024. The first study, based on 95 papers, examines the relationship between IT, organizational resources (OR), and FPER, while the second study, drawing from 150 papers, focuses on the influence of DTs and OR on FPER. Both studies utilize Meta-analytic Structural Equation Modeling (MASEM) to analyze direct and indirect effect models. The findings of the first study reveal that the direct effects of technological resources (TR) and OR on market value (MV) are more substantial than their indirect effects mediated by organizational capabilities. In contrast, the second study highlights a transformative shift: digital technological resources and OR directly and significantly impact both financial performance (FP) and MV, bypassing the mediating role of capabilities. These insights underscore the distinct value-generation mechanisms of IT and DTs, with DTs demonstrating more immediate and profound effects on firm performance. They also highlight research opportunities for future studies and implications for practitioners and policymakers.
Studies on the impact of strategic alignment between managing IT investment and firm performance are limited. Drawing on the multi-theoretic lens such as the resource- The IT investments simply do based theory, and process theory this study examines the impact of managing IT and strategic alignment on firm performance as a comparative study between China and Sri Lanka. This study uses the primary data of 206 responses from Chinese and 182 responses from Sri Lankan IT and business managers. Accordingly, the findings revealed a strong and positive relationship in the hypothesized relationships. Further, the strategic alignment partially mediates the relationship between managing IT investment and firm performance between the above two countries context. This study opens for a greater understanding of the dilemma in the nomological linkage for the above relationship and contributes to the literature by lengthening the theory while suggesting insightful, and practical implications.
Purpose
Facing the increasing competition and uncertainty, when and how to improve service innovation performance with the help of digital business strategy has become an important issue for global service firms. In this study, organizational memory level and dispersion are regarded as moderating variables and market intelligence response is introduced as a mediator, aiming at clarifying the boundary conditions and mechanism of digital business strategy affecting service innovation performance.
Design/methodology/approach
A survey was conducted among middle and senior managers from 245 service firms in China. The data were analyzed using SPSS and Mplus software for reliability and validity analysis, hypothesis testing and robustness testing.
Findings
Digital business strategy was positively related to the service innovation performance of service firms. Market intelligence responsiveness mediated the positive effect of digital business strategy on service innovation performance of service firms. The positive effect between digital business strategy and market intelligence responsiveness was strengthened when the level and dispersion of organizational memory were moderate.
Practical implications
This study suggests that it is a very effective approach for service firms to initiate digital business strategy to improve service innovation performance. Furthermore, market intelligence responsiveness is crucial because it can help service firms quickly respond to market changes and adapt them accordingly. Managers of service firms should recognize that the benefits of digital business strategy are maximized only when the level and dispersion of organizational memory are moderate.
Originality/value
This study is the first to address the question of how and when digital business strategy drives service innovation performance in the context of digitization. In addition, this study enriches and advances organizational learning theory because it discusses the differential impact of digital business strategy on service innovation performance under varying degrees of organizational memory level and dispersion.
How to cite this paper: Abdelwahed, N. A. A., Firm performance (FP) has become a significant challenge for every organization to survive in the markets. The present study investigates the FP directly through business strategy (BS) and environmental management process (EMP) and the mediating role of EMP between BS and FP among small and medium-sized enterprises (SMEs) in Saudi Arabia. The study's conceptual framework is based on vigorous literature, i.e., Ilmudeen and Bao (2020) and Al Doghan et al. (2022). We gathered quantitative cross-sectional data from employees of SMEs in Saudi Arabia. The conclusions of the study are based on 366 valid samples. Employing path analysis using Analysis of Moment Structures (AMOS) version 26.0, the study's results exert a positive and significant impact of BS and EMP on FP. Besides, BS also has a significant positive effect on EMP. Finally, EMP is a significant mediator between BS and FP. The study's findings will assist policymakers and the top management of SMEs in understanding BS and EMP's roles in connecting to FP and developing policies considering these links. Finally, the findings would enrich the fathom of literature providing empirical evidence from SMEs of Saudi Arabia. Authors' individual contribution: Conceptualization-N.A.A.A. and M.A.A.D.; Methodology-N.A.A.A. and M.A.A.D.; Software-B.A.S.; Validation-N.A.A.A.; Formal Analysis-B.A.S.; Investigation-N.A.A.A., M.A.A.D., and B.A.S.; Resources-N.A.A.A. and M.A.A.D.; Data Curation-N.A.A.A. and B.A.S.; Writing-Original Draft-N.A.A.A. and M.A.A.D.; Writing-Review & Editing-B.A.S. and N.A.A.A.; Visualization-N.A.A.A. and M.A.A.D.; Supervision-N.A.A.A. and M.A.A.D.; Project Administration-N.A.A.A.; Funding Acquisition-N.A.A.A. and M.A.A.D.
This paper draws upon the contingency theory and generic strategy framework to examine the impact of innovative culture and the strategic alignment between this culture and cost-leadership and differentiation strategy on restaurant performance of small restaurants in Vietnam. Data were collected by sending out an online survey to 175 small restaurants in Vietnam. Partial least-squared structural equation modeling was used to examine data. The results indicate that innovative culture enhances restaurant performance. Besides, the alignment between innovative culture and differentiation strategy induces restaurant performance, while the alignment between this culture and cost-leadership strategy does not. In this regard, this study addresses the role of strategic alignment in restaurant settings and contributes to the theoretical development of the contingency theory. In addition, this study also provides some practical implications for managers of small restaurants in Vietnam.
Purpose
In the context of the digital economy, information technology (IT) investment has become a necessary way for enterprises to transform digitally. However, why and how IT investment can enhance digital transformation is lacking in the literature. Based on the resource-based view (RBV), this study explored the impact mechanism of IT infrastructure on the digital transformation of enterprises from the perspective of the digital transformation strategy. Further, this study examined the moderating role of top management on the relationships between IT infrastructure and digital transformation strategy and between digital transformation strategy and enterprise's digital transformation.
Design/methodology/approach
Through a questionnaire survey of Chinese enterprises, 180 sample data were collected, and the partial least squares-structural equation modeling (PLS-SEM) method was used to test the hypothesis.
Findings
Digital transformation strategy fully mediates the relationship between IT infrastructure and enterprise digital transformation. Furthermore, top management has a significant positive moderating effect on the relationship between IT infrastructure and digital transformation strategy, as well as the relationship between digital transformation strategy and digital transformation.
Originality/value
This study explores the moderating role of top management in the relationship between IT and enterprise performance, as well as the mediating role of digital transformation strategy in the relationship between IT infrastructure investment and digital transformation performance. As a result, the study adds significantly to the body of knowledge on IT business value, digital transformation and strategic management. The authors' findings can help update managers' perceptions of IT value and provide theoretical guidance on deriving digital transformation performance from IT infrastructure investments.
The rapidly changing business climate and competition that has been getting stricter demand companies to have a proper strategy to grow and sustain their business. The objective of this quantitative study is to analyze the benefits of innovation in business strategy to create a competitive advantage for micro, small and medium enterprises (MSME). Inferential statistical analysis was performed on three mediating variables: people innovation, process innovation, and product innovation, in their involvement in business strategies as an independent variable, against competitive advantage as a dependent variable. Twenty-nine MSMEs in Indonesia were used as a sample of this study to examine four hypotheses. Thirty indicators of five variables were transformed into 50 questions in a Likert-scale questionnaire distributed to selected respondents using purposive sampling. The results of the T-test show that business strategy has a significant effect on competitive advantage, which means that business strategy without innovations creates only 20.2% of its competitive advantage. On the other hand, Sobel test results demonstrate that innovations significantly mediate the influence of business strategies on companies’ competitive advantages. Finally, product innovation potentially increases the competitive advantages by 53.1%, followed by process innovation and people innovation by 47.2% and 44.5%. AcknowledgmentThe author would like to express special gratitude to the Department of Industrial Engineering at Universitas Kristen Krida Wacana, who supported this investigation, as well as all participating MSMEs. This study received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.
ABSTRAKPada era bisnis yang semakin kompetitif, perusahaan diharuskan memiliki kinerja perusahaan yang cukup baik untuk bertahan di era ini. Kinerja perusahaan dapat ditingkatkan dengan menerapkan tata kelola perusahaan yang baik (good corporate governance), terdapat beberapa faktor yang mempengaruhi good corporate governance dari suatu perusahaan yakni karakteristik komite audit, karakteristik dari dewan direksi, serta struktur kepemilikan dalam perusahaan sehingga tujuan dari riset ini untuk mempelajari perkembangan dari kinerja perusahaan dari penerapan tata kelola perusahaan yang baik (good corporate governance). Good corporate governance melibatkan penerapan komponen penting seperti karakteristik dari komite audit, karakteristik dari dewan direksi serta struktur kepemilikan di perusahaan. penelitian ini berfokus pada perusahaan yang tercatat di Bursa Efek Indonesia dari tahun 2017 hingga tahun 2021. Purposive sampling digunakan dalam penelitian ini untuk menyeleksi data, hasilnya sebanyak 1.769 data yang memenuhi semua kriteria. Riset ini menyimpulkan bahwa pengaruh negatif yang signifikan ukuran dewan direksi terhadap kinerja perusahaan, selain itu ditemukan bahwa kepemilikan komite audit, ukuran dari komite audit, independensi komite audit, latar belakang komite audit, independensi dewan direksi, kepemilikan manajerial, konsentrasi kepemilikan saham, kepemilikan keluarga, dan kepemilikan saham oleh manajerial tidak ditemukan pengaruh signifikan terhadap kinerja perusahaan. Riset ini adalah riset perdana yang menyelidiki pengaruh antara kepemilikan komite audit dan kinerja perusahaan.Kata Kunci: Dewan Direksi; Kepemilikan; Kinerja Perusahaan; Komite Audit; Tata Kelola PerusahaanABSTRACTNowadays businesses environment become more and more competitive companies are required to have excellent firm’s performance to survive, to increase firm’s performance companies ought to apply good corporate governance there are several factors affect good corporate governance such as the qualities of the audit committee, the board, and the ownership structure so the major objective of this study is to assess how applying excellent corporate governance has affected a firm's performance. This study's focus is on companies that will be listed on the Indonesian Stock Exchange between 2017 and 2021. Purposive sampling was utilized in this study to filter the sample data, resulting in a total of 1,769 sample data that satisfied all criteria. The outcome demonstrates that elements like audit committee size, independence, and expertise, as well as audit committee stock ownership, audit committee meeting frequency, board independence, board meeting frequency, ownership concentration, family ownership, and managerial ownership don’t have a significant impact on a company's performance. This study discovered a board size has a significant negative impact on firm performance. This study is the first to investigate the connection between the firm performance and the stock that the audit committee owns.Keywords: Board; Ownership; Firm’s Performance; Audit Committee; Good Corporate Governance
The primary objective of this research is to assess the influence of moral emotions (empathy and anger) on consumer buying decisions of products made in disliked sources in the context of third-country national consumers. The study employs data collected from the UK, France, and Germany consisting of 260, 261, and 244 respondents, respectively. The empirical results provide evidence to the influence of moral emotions on consumers’ attitudes towards buying Israeli goods. Concurrently however, the results show that, while anger towards Israel comprises the main factor that prompts boycotting intention, empathic concerns towards Arabs in the West Bank and Golan Heights (the Territories) have negligible influence on buying decisions. In addition, the results point to differences across the populations studied in the current research, especially with respect to the influence of involvement and subjective norms on behavioral intention. Implications are identified together with consideration of the study limitations.
Purpose-This study aims to assess the mediating effect of sustainable competitive advantage (SCA) on the relationship between organisational innovativeness (OI) and performance of small-and medium-sized enterprises (SMEs) operating in Konya, Turkey. Design/methodology/approach-A survey method is used to collect the necessary data for this research. A total of 264 respondents from 83 SMEs partook in the study. In choosing the sample size, both purposive sampling and simple random techniques are used. The data gathered are analysed using SPSS program and Hayes PROCESS macro v.3.4.1. Findings-The results of the analyses reveal that OI has a statistically significant positive effect on SCA and firm performance (FP). Moreover, SCA is found to have a mediating effect on the relationship between OI and FP. Practical implications-Policymakers and management of SMEs need to show great commitment to innovativeness and relate it to SCA to create superior customer value, thereby leading to a holistic and long-term FP. Originality/value-This study brings to the fore empirical evidence on how SCA serves as a mediator between OI and FP. It also contributes to the literature by focusing on three distinct but related variables. The study makes theoretical contribution by highlighting the role of the resource-based theory in enhancing business performance and SCA through strategic internal resources and innovative activities.
Purpose
Using dynamic capability theory, this study investigates how information technology (IT) support affects firms' online and offline cross-channel integration (CCI). In addition, it applies institutional theory to examine how the relationships between IT support and CCI are moderated by firms' institutional environments.
Design/methodology/approach
A sample of 308 firms in China that conduct business in online and offline channels was empirically tested through hierarchical regression analysis.
Findings
The results showed two types of IT support facilitated CCI: IT support for strategy and IT support for process. The relationship between IT support for process and CCI was stronger than that between IT support for strategy and CCI. The results further indicated institutional environment (i.e. dysfunctional competition and government support) played differing roles in these effects, such that the relationship between IT support for strategy and CCI was significantly weakened by dysfunctional competition yet enhanced by government support. However, neither dysfunctional competition nor government support had a significant moderating role in the relationship between IT support for process and CCI.
Originality/value
This study identifies different IT support types as antecedents of CCI. It is also one of the earliest attempts to explore the influence of institutional environment on the relationship between IT support and CCI.
The growing importance of big data has headed enterprises to advance their big data analytics capability to strengthen their
firm performance. This study tests how big data capability impact on business intelligence infrastructure to achieve firm
performance measures such as operational performance and marketing performance. This study is based on the recent
literature on the knowledge-based view, big data capability, IT capability, and business intelligence. The primary survey of
272 responses from Chinese firms’ IT managers and big data analysts are used to uncover the relationship in the proposed
model. The finding shows that the big data analytics capability significantly impacts on business intelligence infrastructure
that in turn positively impact on operational performance and marketing performance. Further, the business intelligence
infrastructure partially mediates between big data analytics capability and operational performance, and fully mediates
between big data analytics capability and marketing performance. This research contributes to the information systems
literature such as big data analytic capability, business intelligence, and firm performance measures, and thus offers grounds
to extend more widespread studies in this field. This study adds to the literature on the theory and practical bases for big
data capability and business intelligence infrastructure.
We report on two empirical studies that explore key factors that help translating information technology (IT) governance by the board of directors into organizational performance. The first study shows that strategic alignment partially mediates the effect of board-level IT governance (ITGI) on performance. The second study demonstrates that authoritarian governance style negatively moderates the effect of board-level ITG on performance. Together, these studies open up the black box between board-level ITG and organizational performance.
Construction project managers (CPMs) with different types of personalities make various assessments in risky situations and draw up different risk management strategies. This research presents the findings of an empirical study in China that investigated whether and how CPMs with different personality traits differed in the way they perceived project risk. A conceptual model was developed and four hypotheses were proposed concerning the relationships among personality traits, risk propensity, and risk perception using the Big Five personality model. The Partial Least Squares Structural Equation Modeling analyses of a sample of 152 imply that 1) Extraversion, Agreeableness, and Conscientiousness significantly influence risk propensity; 2) risk propensity negatively affects risk perception; 3) Extraversion, Agreeableness, and Conscientiousness have significant effects on risk perception; and 4) risk propensity fully mediates the relationship between personality traits and risk perception. The results were complemented by qualitative evidence from 5 semi-structured interviews with project managers. This research contributes to a better understanding of how CPMs perceive risk.
We discuss common method bias in the context of structural equation modeling employing the partial least squares method (PLS-SEM). Two datasets were created through a Monte Carlo simulation to illustrate the discussion: one contaminated by common method bias, and the other not contaminated. A practical approach is presented for the identification of common method bias based on variance inflation factors generated via a full collinearity test. Our discussion builds on an illustrative model in the field of e-collaboration, with outputs generated by the software WarpPLS. We demonstrate that the full collinearity test is successful in the identification of common method bias with a model that nevertheless passes standard convergent and discriminant validity assessment criteria based on a confirmation factor analysis.
All research streams can trace their lineage to an initial paper or series of papers. The information systems (IS) field – despite its relative youthfulness – can point to examples of seminal research by Davis (1989) on technology acceptance or Brynjolfsson and Hitt (1996) on information technology (IT) payoffs as the foundation of whole new areas of research. After almost a quarter century and 3200 citations (as of October 2014), many researchers would also include work by Henderson and Venkatraman (1993) – first published in the IBM Systems Journal under the heading, ‘Strategic Alignment: Leveraging Information Technology for Transforming Organizations’ – on the list of seminal and transformative IS publications.
Aligning information technology (IT) strategy with business strategy has been one of the top concerns of practitioners and scholars for decades. Although numerous studies have documented positive effects of IT-business alignment on organizational performance, our knowledge about this relationship is still limited due to the complexity of contingent factors. The extant literature is largely based on research in the context of developed countries and few studies have explicitly considered the effects of contextual factors such as market environment and competitive strategy on this relationship. In this study, we attempt to fill these gaps by testing the alignment–performance relationship in a developing country setting and investigating the moderating roles of environmental uncertainty and strategic orientation on the performance effects of strategic alignment using survey data collected in Turkey. Our analyses show that this positive effect is statistically significant in highly uncertain environments and varies across performance measures. Our results also show that the strategic alignment between IT and business has a significant impact on performance across all choices of strategic orientation – defender, prospector, or analyzer. Theoretical and practical implications are discussed and future research directions are explored.
This paper examines two ways to create business value of information technology (BVIT): resource structuring and capability building. We develop a research model positing that IT resources and IT capabilities enhance a firm's performance by providing support to its competitive strategies and core competencies, and the strengths of these supports vary in accord with environmental dynamism. The model is empirically tested using data collected from 296 firms in China. It is found that IT resources generate more business effects in stable environments than in dynamic environments, while IT capabilities generate more business effects in dynamic environments than in stable environments. The results suggest that the BVIT creation mechanism in stable environments is primarily resource structuring while the mechanism in dynamic environments is primarily capability building.
oblem: Partial Least Squares (PLS), a form of structural equation modeling (SEM), can provide much value for causal inquiry in communication-related and behavioral research fields. Despite the wide availability of technical information on PLS, many behavioral and communication researchers often do not use PLS in situations in which it could provide unique theoretical insights. Moreover, complex models comprising formative (causal) and reflective (consequent) constructs are now common in behavioral research, but they are often mis-specified in statistical models, resulting in erroneous tests. Key concepts: First-generation techniques, such as correlations, regressions, or difference of means tests (e.g., ANOVA or t-tests), offer limited modeling capabilities, particularly in terms of causal modeling. In contrast, second-generation techniques (i.e., covariance-based SEM or PLS) offer extensive, scalable, and flexible causal-modeling capabilities. Second-generation techniques do not invalidate the need for first-generation techniques, however. The key point of second-generation techniques is that they are superior for the complex causal modeling that dominates recent communication and behavioral research. Key lessons: For exploratory work, or for studies that include formative constructs, PLS should be selected. For confirmatory work, either covariance-based SEM or PLS may be used. Despite claims that lower sampling requirements exist for PLS, inadequate sample sizes result in the same problems for either technique. Implications: SEM’s strength is in modeling. In particular, SEM allows for complex models that include latent (unobserved) variables, formative variables, chains of effects (mediation), and multiple group comparisons of these more complex relationships.
This paper reports the results of a study which offers an explanation for the relationship between Information Technology (IT) sophistication and performance of small and medium sized enterprises (SMEs), by incorporating into the model of the capability of management accounting systems to generate management accounting information (MAS capacity). To assess the relationship, data were collected from 310 (25% response rate) SMEs by way of questionnaire surveys. The results indicate that IT sophistication is a determinant of MAS capacity, which, in turn, is a determinant of firm performance. In other words, MAS capacity plays a mediating role in the relationship between IT sophistication and firm performance. An interpretation of the results is that those firms that employed sophisticated IT can generate sufficient management accounting information and thereby improve performance. Abstrak. Kertas kerja ini melaporkan hasil kajian yang menerangkan hubungan antara kecanggihan Teknologi Maklumat (IT) dan prestasi firma yang bersaiz kecil dan sederhana (SMEs), dengan memasukkan ke dalam model kajian, keupayaan sistem perakaunan pengurusan untuk menghasilkan maklumat perakaunan pengurusan (kapasiti MAS). Bagi menguji hubungan tersebut, data telah dikumpul daripada 310 firma menggunakan kaedah soal selidik. Hasil ujian menunjukkan bahawa kecanggihan IT merupakan penentu kepada kapasiti MAS, sementara kapasiti MAS pula akan menentukan prestasi firma. Dalam kata lain, kapasiti MAS memainkan peranan sebagai penghubung antara kecanggihan IT dengan prestasi firma. Interpretasi hasil ujian ini ialah firma yang menggunakan IT yang lebih canggih akan dapat menghasilkan maklumat perakaunan pengurusan yang mencukupi dan seterusnya dapat meningkatkan prestasi firma. Kata kunci: Teknologi Maklumat, sistem maklumat, sistem perakaunan pengurusan, sistem maklumat perakaunan, industri kecil dan sederhana
Common to all contingency approaches is the proposition that performance is a consequence of the fit between several factors: structure, people, technology, strategy, and culture. Unfortunately, unwarranted generalizations and fragmented and conflicting findings exist. These approaches need a greater theoretical grounding of key concepts and richer, more complex models to capture the process by which organizations adapt and change. A model is presented which argues that complex relationships exist among environmental, organizational, and individual/group variables, and that these relationships and their salience change with the strategic and organizational design choices made by members of the dominant coalition.
Purpose
Despite the existing literature on the impact of IT capability and innovation capabilities, this study examines how IT-enabled dynamic capability dimensions impact on firm innovative capability to achieve organizational performance.
Design/methodology/approach
Drawing on the dynamic capability theory, this study empirically investigates the entire chain of relationships among dynamic capability, innovative capability, organizational performance and turbulent environment.
Findings
Using the data from 254 Chinese firms, this study reveals IT-enabled dynamic capability dimensions have positive and significant relationship with firm innovative capability types, which in turn have significant relationship with organizational performance except the process innovation.
Research limitations/implications
This study contributes to the growing information systems literature and also suggests theoretical and practical implications.
Originality/value
This study examines IT-enabled dynamic capability with firm innovative capability types, which has received limited attention in the past.
Purpose
Despite the conceptual, empirical and theoretical advances in alignment–performance relationship, there is a limited research on the alignment dimensions and organizational performance measures. Though strategic alignment is believed to improve organizational performance, the purpose of this paper is to develop conjectures for understanding how different alignment dimensions influence organizational performance measures.
Design/methodology/approach
The data were acquired from 161 senior IT and business managers paired responses in China and were analyzed by using a structural equation modeling technique.
Findings
The hypothesized relationships are largely supported. Thus, quality-oriented strategic alignment dimension has a significant relationship with all performance measures. Contrary to expectations, both product and marketing-oriented strategic alignment dimensions do not show a significant impact on financial return. The marketing-oriented strategic alignment dimension also has an insignificant relationship with operational excellence.
Practical implications
This study suggests that the business–IT alignment can be dimensioned to better combine business strategy and IT strategy. Hence, managers can focus specific alignment dimension instead of entire strategies of a firm for a better decision making.
Originality/value
Findings suggest guidance for formulating combined business and IT strategic alignment into dimensions and proposing insightful and practical implications.
The purpose of competitive strategy is to achieve a sustainable competitive advantage (SCA) and thereby enhance a business's performance. The authors focus on the distinctive organizational skills and resources underlying SCA in service industries and the moderating effects of the characteristics of services, service industries, and firms within an industry on the skills and resources underlying a business's competitive positional advantages. The proposed conceptual model of SCA in service industries and propositions builds on relevant literature in the fields of marketing, strategic management, and industrial organization economics.
Purpose
Managing IT with firm performance has always been a debatable topic in literature and practice. Prior studies examining the above relationship have reported mixed results and have yet ignored the eminent managing IT practices. The purpose of this paper is to empirically investigate the relevance of Val-IT 2.0 practice in managing IT investment, and its mediating role in the firm performance context.
Design/methodology/approach
This paper developed on two themes of literature. First managing IT as a firm's IT capability in order to generate value from IT investment. Second IT as a firm’s resource under resource-based view offers firm's competence that deploys potentials in achieving firm performance.The structural equation modeling with PLS techniques used for analyzing data collected from 176 organization's IT, and business executives in China.
Findings
The results of this study show empirical evidence that Val-IT's components (value governance, portfolio management, and investment management) are significantly linked to the management of IT, and it found to be a significant mediator between Val-IT components and firm performance.
Research limitations/implications
This research contributes to the literature and practice by way of highlighting the value generation through managing IT on firm performance.
Originality/value
This study is fully based on Val-IT 2.0 with the firm performance where the managing IT mediate this relationship in a country-specific study in China. This study adds to the Chinese information system literature which suffers the lack of empirical studies in the context of management of IT research.
Purpose
With the increasingly collaborative nature of innovation and the expanding role of digital platforms on inter-firm collaboration, the purpose of this paper is to investigate the impacts of digital platforms on collaborative innovation capability (CIC) under conditions of two distinctive governance mechanisms. Furthermore, the competitive benefits of CIC at different levels of environmental uncertainty are examined to clarify the performance of collaborative innovation.
Design/methodology/approach
The research model is proposed based on dynamic capabilities theory, information technology (IT)-enabled organizational capability and governance mechanisms literature, and then validated by using partial least squares with data collected from 200 Chinese firms that engage in digital collaboration with their major channel distributors.
Findings
Empirical results show that the enabling effect of digital platforms capability on CIC is positively moderated by relational governance while negatively moderated by formal governance, and both governance mechanisms directly and positively influence CIC; the positive relationship between CIC and competitive performance is stronger for higher level of environmental uncertainty; and CIC is the key mediator converting digital platforms capability into competitive performance.
Originality/value
This study enriches the existing literatures in IT-innovation relationship by not only surfacing the interplay of digital platforms capability with two distinctive governance mechanisms in building CIC, but also clarifying the competitive benefits of CIC in an uncertain environment. Moreover, this study helps explain the controversial issue of the business value of IT capability by discovering the mediating role of CIC.
Purpose
Following the call for awareness of accepted reporting practices by Ringle, Sarstedt, and Straub in 2012, the purpose of this paper is to review and analyze the use of partial least squares structural equation modeling (PLS-SEM) in Industrial Management & Data Systems ( IMDS ) and extend MIS Quarterly ( MISQ ) applications to include the period 2012-2014.
Design/methodology/approach
Review of PLS-SEM applications in information systems (IS) studies published in IMDS and MISQ for the period 2010-2014 identifying a total of 57 articles reporting the use of or commenting on PLS-SEM.
Findings
The results indicate an increased maturity of the IS field in using PLS-SEM for model complexity and formative measures and not just small sample sizes and non-normal data.
Research limitations/implications
Findings demonstrate the continued use and acceptance of PLS-SEM as an accepted research method within IS. PLS-SEM is discussed as the preferred SEM method when the research objective is prediction.
Practical implications
This update on PLS-SEM use and recent developments will help authors to better understand and apply the method. Researchers are encouraged to engage in complete reporting procedures.
Originality/value
Applications of PLS-SEM for exploratory research and theory development are increasing. IS scholars should continue to exercise sound practice by reporting reasons for using PLS-SEM and recognizing its wider applicability for research. Recommended reporting guidelines following Ringle et al. (2012) and Gefen et al. (2011) are included. Several important methodological updates are included as well.
A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM), by Hair, Hult, Ringle, and Sarstedt, provides a concise yet very practical guide to understanding and using PLS structural equation modeling (PLS-SEM). PLS-SEM is evolving as a statistical modeling technique and its use has increased exponentially in recent years within a variety of disciplines, due to the recognition that PLS-SEM’s distinctive methodological features make it a viable alternative to the more popular covariance-based SEM approach. This text includes extensive examples on SmartPLS software, and is accompanied by multiple data sets that are available for download from the accompanying website (www.pls-sem.com).
While the information systems scholarly and practice literatures both stress the importance of senior executive engagement with IT management, the recommendations for doing so remain, at best, limited and general. Examining the influence of serious IT-related deficiencies on CEO/CFO turnover within the post-SOX financial reporting context, specific CEO/CFO IT management responsibilities are identified: CEOs are shown to be held accountable for global IT management responsibilities, and CFOs are shown to be held accountable for demand-side IT management responsibilities. Implications for information systems research, management research, and information systems practice are provided.
The relationship between IT investment and performance improvement has been a classic research subject. In earlier research it was characterized as the famous “IT productivity paradox.” Decades of research effort later, many IS/IT researchers no longer consider this relationship paradoxical, but it remains a challenge to fully explain “IT productivity variance,” that is, a large portion of unexplainable performance variance observed in empirical studies. In this paper, we take a theory development approach to this important issue. Our effort focuses on examining the theoretical foundation of “IT productivity variance.” Through literature review, we identify and contrast three prevailing theoretical perspectives to suggest the plausibility of a contingency approach. Contextual factors can significantly affect the relationship between IT investment and performance improvement. We identified three such factors that were not thoroughly examined: level of performance measurement, technology type, and technology life cycle. We subsequently propose a contingency model in light of these factors, and develop a set of research propositions. Our effort is a first-step toward bridging a major gap in the literature. The proposed model, while awaiting empirical validation, can provide useful guidance to practicing managers.
Corporate governance of information technology (CGIT) is targeted at maximizing IT investment to achieve business objectives and value. Yet there is little empirical evidence about organizations' attitudes to and use of CGIT to deliver such value, or the role of related policies, practices, frameworks and methodologies. This study explored the views of Chief Information Officers and executive managers of smaller and large, primarily Australian organizations, regarding governance of IT. Through a survey, we investigated their views regarding the perc eived relevance, influential drivers, challenges and perceived benefits from the use of CGIT. Regardless of organizational size, our findings demonstrate substantially the same benefits, influences and challenges. Further, besides the widely acknowledged importance of strategic alignment of business and IT, risk management was found to be significant both in influencing the decision to adopt CGIT and as a perceived key capability for delivering improved organizational performance and resource-based value. As such, the study contributes new knowledge related to delivering business value through governing IT.
The role of information technology (IT) in knowledge management has always been a debatable topic in literature and practice. Despite existing documentation regarding the relationship between IT resource and knowledge management, limited information is available on the different types of IT resources describing this relationship. We integrate two research streams emerging in knowledge management and extend the literature on IT–knowledge management linkage by investigating the moderating role of resource commitment to invoke a contingent resource perspective. Data from 168 organizations in China provide empirical evidence that three types of IT resources (i.e., IT infrastructure, IT human, and IT relationship) positively affect knowledge management capability (KMC), which is positively related to competitive advantage. Furthermore, this study identifies two positive quasi-moderating effects of resource commitment on the IT resource–KMC relationship. Specifically, resource commitment directly and positively enhances KMC, and strengthens the effects of IT human and IT relationship resources on KMC. We discuss the theoretical and practical implications of the results.
The aim of this paper is to explore the role of Quality Management (QM) theory and practice using a contingency theory perspective. The study is grounded in the role of QM in improving strategic alignment within Small and Medium Sized Enterprises (SMEs) using Contingency Theory rather than adopting best practice approaches. An inductive theory building research methodology was used involving multiple case analyses of five SMEs, involving repeat interviews (n=45), focus groups (n=5) and document analysis. From the findings, it was found that Contingency Variables (strategy, culture, lifecycle and customer focus) and their respective typologies were found to interact with QM practices in helping to shape strategic alignment between the SMEs and their environments. This shaping process based on contingency approaches occurred in a manner unique to each SME and their respective environments rather than in an overarching best practice manner.
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investments jointly influence profitability and the market value of the firm. We view IT strategy as an expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger IT-Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT-profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity increasingly pays off.
Purpose
– The purpose of this paper is to examine the impact of chief information officer’s (CIO’s) strategic knowledge and structural power on enterprise systems (ES) success in the context of systems usage.
Design/methodology/approach
– Drawing upon knowledge-based view, this study links CIO’s strategic knowledge, structural power, ES assimilation and firm performance in an integral model. Sample data were collected in China and partial least squares technique was used to test the model.
Findings
– Empirical results suggest that CIO’s strategic information technology (IT) knowledge, strategic business knowledge and structural power have significant influence on ES assimilation. While ES assimilation mediates the association between CIO’s strategic knowledge, CIO’s structural power and firm performance. Another interesting finding in the study is that the imbalance of CIO’s strategic business knowledge and strategic IT knowledge is negatively associated with ES assimilation.
Originality/value
– This study enriches the extant literatures in IS leadership by showing the significant role of CIO’s knowledge balance and authority in promoting the assimilation of ES within the organization. The empirical findings can provide guidelines for the top executive to select a person who is familiar with both strategic business and IT knowledge to take charge of ES, also, to provide the person with appropriate structural power, in order to achieve the benefits of ES successfully.
Understanding sources of sustained competitive advantage has become a major area of research in strategic management. Building on the assumptions that strategic resources are heterogeneously distributed across firms and that these differences are stable over time, this article examines the link between firm resources and sustained competitive advantage. Four empirical indicators of the potential of firm resources to generate sustained competitive advantage-value, rareness, imitability, and substitutability are discussed. The model is applied by analyzing the potential of several firm resources for generating sustained competitive advantages. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other business disciplines.
Motivated by the seeming presence of the productivity paradox in China, this research revisits the question of how information technology (IT) affects firm performance. Leveraging the process-based view of IT, we establish a theoretical framework for the mediation factors for the relationship between IT capabilities and performance. Based on a survey of 127 companies in China, we find that a firm's management capabilities to manage both its internal and external business processes fully mediate the impact of IT on firm performance. The two management capabilities in this study are business-process management capability and supply-chain management capability. Our results show that only the coherent integration of IT capability with firm's ability to optimize business processes and to improve management of supply chains can enhance firm performance. Firms should avoid the fallacy that IT investments are solely responsible for better firm performance. Based on our findings, we discuss the implications for research and practice.
As the business environment becomes more turbulent, firms ponder how to become more flexible in reallocating or reconfiguring resources, processes, and strategies to respond more efficiently and effectively. In this context, the question of whether and how information technology (IT) can support strategic flexibility remains unresolved. This paper theorizes that firms that use IT to support core competencies will experience improved strategic flexibility, which may enhance their performance. It further theorizes that these effects are contingent on the form and nature of the firm’s IT infrastructure, as well as its type of ownership – state-owned or private. Using data from a matched survey of IT and business executives in 148 Chinese manufacturing firms, we reveal positive, significant links between IT support for core competencies and strategic flexibility, and between strategic flexibility and firm performance. The findings further show that the effect of IT support for core competencies on performance is partially mediated by strategic flexibility, and that IT infrastructure positively moderates the link between IT support for core competencies and strategic flexibility. We also demonstrate that state-owned firms are less likely to apply IT applications to collect and analyse market information and thus surrender opportunities for achieving strategic flexibility and stronger firm performance.
This empirical study of 146 U.S. new ventures examines how strategic capabilities mediate the effect of technology-driven strategy on firm performance. The results reveal that technology-driven strategy is positively related to technology capabilities and information technology capabilities, but negatively related to marketing capabilities and market-linking capabilities. Furthermore, all types of strategic capabilities are positively related to firm performance. The findings provide evidence that strategic capabilities play a mediating role between technology-driven strategy and firm performance and show that, like market-driven strategy, technology-driven strategy is also an important and successful founding strategy because it can exert great impact on firm performance through strategic capabilities.
Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.
There are still many organizations that face difficulties in achieving business/IT alignment. Prior research has focused on the positive impact of alignment on overall business performance, while the barriers in achieving business/IT alignment were largely unexplored, especially in regards to the social dimension that refers to the people involved in alignment. Therefore this research is focusing on identifying and investigating the barriers that inhibit achieving social dimension of business/IT alignment in large organizations. A case study is conducted in one of the largest Swedish companies. The data is collected through seven semi-structured interviews, field-notes and the use of company’s documents that were thematically analyzed. The research presents a unique case of 19 business/IT alignment barriers of social dimension that have been limited so far and which contribute to the business/IT alignment field. The main findings showed that low understanding of counterpart’s environment; poor communication; unclear specifications; limited cooperation and lack of mutual commitment and support inhibits the achievement of alignment between business and IT domains on the social dimension. The results could support the researchers to further elaborate frameworks on how to mitigate social barriers in order to achieve a better business/IT alignment. Besides, the discussed barriers can be of practical use for other organizations trying to achieve business/IT alignment with a focus on the social dimension.
Previous research has proposed different types for and contingency factors affecting information technology governance. Yet, in spite of this valuable work, it is still unclear through what mechanisms IT governance affects organizational performance. We make a detailed argument for the mediation of strategic alignment in this process. Strategic alignment remains a top priority for business and IT executives, but theory-based empirical research on the relative importance of the factors affecting strategic alignment is still lagging. By consolidating strategic alignment and IT governance models, this research proposes a nomological model showing how organizational value is created through IT governance mechanisms. Our research model draws upon the resource-based view of the firm and provides guidance on how strategic alignment can mediate the effectiveness of IT governance on organizational performance. As such, it contributes to the knowledge bases of both alignment and IT governance literatures. Using dyadic data collected from 131 Taiwanese companies (cross-validated with archival data from 72 firms), we uncover a positive, significant, and impactful linkage between IT governance mechanisms and strategic alignment and, further, between strategic alignment and organizational performance. We also show that the effect of IT governance mechanisms on organizational performance is fully mediated by strategic alignment. Besides making contributions to construct and measure items in this domain, this research contributes to the theory base by integrating and extending the literature on IT governance and strategic alignment, both of which have long been recognized as critical for achieving organizational goals.
This study analyzes the moderating effect of information systems (IS) strategy on the relationship between a firm's business strategy and organizational performance. From the resource-based view, the study analyzes the support that an innovative IS strategy and a conservative IS strategy can provide to low-cost and differentiation business strategies. Results of analysis for a sample of 166 firms from the Spanish food industry demonstrate the effectiveness of innovative IS strategies in firms with low-cost business strategies. In contrast, innovative IS strategies fail to compensate the risk of innovation in marketing activities and consequently in business strategies that rely on image differentiation. The relationship between IS strategy and business strategies that rely on innovative differentiation is ambiguous, but for the food industry, the innovative IS strategy is counterproductive. Conclusions provide guidance on strategic decision-making for developing information systems in firms according to business goals.
This paper reviews key concepts from the resource-based theory (RBT) of the firm, including evidence of “empirical support” for RBT. However, the paper then turns the conventional logic of empirical testing of RBT on its head, and argues that all that empirical testing does is to show researchers’ success in identifying valuable, rare, inimitable, and non-substitutable (VRIN) resources. Examining the IS literature from this perspective, the paper identifies a number of resources that really do seem to have been sources of competitive advantage. It concludes with recommendations on how RBT should be used in future strategic IS research.
This paper investigates linkages between information technology (IT) and firm performance. Although showing recent signs of advance, the existing IT literature still relies heavily on case studies, anecdotes, and consultants’ frameworks, with little solid empirical work or synthesis of findings. This paper examines the IT literature, develops an integrative, resource-based theoretical framework, and presents results from a new empirical study in the retail industry. The findings show that ITs alone have not produced sustainable performance advantages in the retail industry, but that some firms have gained advantages by using ITs to leverage intangible, complementary human and business resources such as flexible culture, strategic planning–IT integration, and supplier relationships. The results support the resource-based approach, and help to explain why some firms outperform others using the same ITs, and why successful IT users often fail to sustain IT-based competitive advantages. © 1997 by John Wiley & Sons, Ltd.
Information technology matters to business success because it directly affects the mechanisms through which they create and capture value to earn a profit: IT is thus integral to a firm's business-level strategy. Much of the extant research on the IT/strategy relationship, however, inaccurately frames IT as only a functional-level strategy. This widespread under-appreciation of the business-level role of IT indicates a need for substantial retheorizing of its role in strategy and its complex and interdependent relationship with the mechanisms through which firms generate profit. Using a comprehensive framework of potential profit mechanisms, we argue that while IT activities remain integral to the functional-level strategies of the firm, they also play several significant roles in business strategy, with substantial performance implications. IT affects industry structure and the set of business-level strategic alternatives and value-creation opportunities that a firm may pursue. Along with complementary organizational changes, IT both enhances the firm's current (ordinary) capabilities and enables new (dynamic) capabilities, including the flexibility to focus on rapidly changing opportunities or to abandon losing initiatives while salvaging substantial asset value. Such digitally attributable capabilities also determine how much of this value, once created, can be captured by the firm--and how much will be dissipated through competition or through the power of value chain partners, the governance of which itself depends on IT. We explore these business-level strategic roles of IT and discuss several provocative implications and future research directions in the converging information systems and strategy domains.
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 (IS) literature. In this study, we fill this gap by investigating the mediating role of business process agility and the moderating roles of environmental factors. Based on 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, nonreproducibility and nonsubstitutability, 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.
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.
The alignment between information systems (IS) and business strategy along with its implications for perceived IS effectiveness and business performance is an important question, which is rarely studied in China. Based on an empirical study, this paper summarized the significance of IS strategic alignment and its impact on business performance. This study also measured business strategy, information system strategy, and information system strategic alignment, built a conceptual model to describe the relationship between these factors, and investigated their implications for information system performance and business performance. A structural equation model was employed to test the conceptual model. Analyses of data gathered in a survey indicate that information system strategic alignment is a better predictor of business performance than business strategy or information system strategy alone, although business strategy can significantly influence business performance.
This paper presents a framework that links strategic MIS planning and business strategy and relates it to competitive advantage and company performance. To achieve this objective, the paper first delineates the dimensions of strategic MIS planning, focusing on both content and process issues. The notion of fit within dimensions, between sets of dimensions (process and content), and between MIS planning and competitive strategy is also introduced. Next, employing the Miles‐Snow typology of business strategy, the paper posits normative differences in the dimensions of strategic MIS planning along different business (or competitive) strategies. The implications of our study for both decision makers and scholars are discussed. Propositions that tie competitive strategy, strategic MIS planning, and company financial performance are then presented. The paper concludes by providing direction for future research.
Despite the possible benefits of implementing healthcare information technologies, successful implementation of effective healthcare information technology is constrained by cultural and regulatory concerns and technical obstacles encountered when establishing or upgrading an organisation's enterprise infrastructure. In this paper, we advance Ross' four-stage model of enterprise architecture maturity as a valuable IT resource for helping healthcare organisations sustain a competitive advantage. We use partial least squares (PLS) structural equation modelling to analyse survey data from 164 US hospitals at different stages of EA maturity. Our results provide evidence that enterprise architecture maturity directly influences the effectiveness of hospitals' IT resources for achieving strategic goals. Further, enterprise architecture maturity indirectly influences the effectiveness of IT resources when IT alignment is incorporated as a mediating variable. We discuss the implications of our findings for research and practice and suggest opportunities for future research. © 2012 Wiley Periodicals, Inc.
Strategic alignment remains a key area of focus among business executives. Methods exist with which to determine the type of alignment a firm is following and there has even been research into the factors which aid and hinder the achievement of alignment. What is currently lacking is a financial performance metric with which a firm can benchmark itself against its competition controlling for industry classification or similar alignment perspective. This paper explores the financial performance and alignment of over 500 firms over the past five years. From these data, a regression equation to measure performance controlling for alignment perspective and industry classification is proposed. Such an equation provides firms with an idea of where they stand, on average, within their respective industry and among firms following the same alignment perspective. Implications for managers are also discussed as well as general strategies for managers to facilitate and enhance information technology investment.
It is cleaaar that eventhough information technology (I/T) has evolved form its traditional orientation of administrative support toward a more strategic role within an organization, there is still a glaring lack of fundamental frameworks within which to understand the potential of I/T for tomorrow's organizations. In this paper, we develop a model for conceptualizing and directing the emerging area of strategic management of information technology. This model, termed the Strategic Allgnment Model, is defined in terms of four fundamental domains of strategic choice: business strategy, information technology strategy, organlzational infrastructure and processes, and information technology Infrastuvture and processes--each with its own underlying dimenslons. We illustrate the power of this model in terms of two fundamental characteristics fo strategic management: strategic fit (the interrelationships between external and internal components) and functional Integration (integration between business and functional domains). More specifically, we derive foru perspectives for gulding management practice in this Important area.
Previous studies have considered the importance of developing a link between information technology (IT) strategy and business strategy, arguing that IT alignment has advantages for firms. The issues surrounding IT alignment in small firms are considered, particularly the alignment or fit between the business strategy and the IT strategy adopted by individual small firms. After a review of the existing literature on IT alignment and IT in small firms, a research model is proposed, involving three hypotheses about achievement of IT alignment in small firms. The research model poses that three variables (IT Sophistication, CEO Commitment to IT, and External IT Expertise) influence the IT alignment. The data used to test the hypotheses was gathered through a survey of 256 small UK manufacturing firms, most of which were more than ten years old.Using a measure of IT alignment specifically designed for the study, two groups of small firms were identified: one group achieved some success in aligning their IT strategy with their business strategy; the second group had lower IT alignment. Findings suggest that the important factors influencing IT alignment were: (1) IT maturity, (2) technical IT sophistication, and (3) the CEO's software knowledge. The CEO's personal involvement in IT planning and personal IT usage had little influence on IT alignment. Future research is recommended on processes associated with IT alignment in small firms, in order to clarify the concepts of CEO commitment and external enterprise.(CBS)
ABSTRACTA critical decision problem for top management, and the focus of this study, is whether the CEO (chief executive officer) and CIO (chief information officer) should commit their time to formal planning with the expectation of producing an information technology (IT)-based competitive advantage. Using the perspective of the resource-based view, a model is presented that examines how strategic IT alignment can produce enhanced organizational strategies that yield competitive advantage. One hundred sixty-one CIOs provided data using a postal survey. Results supported seven of the eight hypotheses. They showed that information intensity is an important antecedent to strategic IT alignment, that strategic IT alignment is best explained by multiple constructs which operationalize both process and content measures, and that alignment between the IT plan and the business plan is significantly related to the use of IT for competitive advantage. Study results raise questions about the effect of CEO participation, which appears to be the weak link in the process, and also about the perception of the CIO on the importance of CEO involvement. The paper contributes to our understanding of how knowledge sharing in the alignment process contributes to the creation of superior organizational strategies, provides a framework of the alignment-performance relationship, and furnishes several new constructs.
Empirical research on the business value of IT has often been underpinned by the indispensable tenet of resource complementarity
in the resource-based view (RBV) and the crucial concept of fit rooted in contingency theory. Increasingly, it has been recognised
that IT needs to be integrated with other organisational factors to create business value. However, empirical studies differ
in varying degrees from what organisational factors to be examined and their research findings, but also have been largely
biased towards examining pairwise relationships between IT and organisational factors. This paper argues that IT is an integral
part of a system of interrelated organisational factors and that a holistic approach is required to further understand when,
how and why IT creates business value. After summarising what has been learnt from empirical studies of IT business value,
this paper discusses the key conceptual issues of internal fit and resource complementarity as currently conceptualised and
employed in the research domain. In order to continue advancing knowledge, this paper argues for and presents a contingency
RBV to provide an alternative conceptualisation of IT business value. Essentially, the contingency RBV conjectures that the
level of IT business value depends on the interaction of a whole system subject simultaneously to multiple moderators and
mediators. Finally, this paper concludes with a discussion of the value of the contingency RBV and its implications for future
research.
KeywordsIT business value–Resource-based view–Contingency RBV–Contingency theory–Fit–Misfit–Mediator–Moderator–Synergy–Complementarity
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.
This study evaluates information systems (IS) in four large Chinese state enterprises (CSEs) located in Beijing. The IS areas considered are IS planning support, IS planning methodology, data resource management, and the IS manager's role. While this study observes that these CSEs, among the largest in all China, have IS support only marginally better than that which existed 4 years earlier, it also finds evidence of slowly emerging change. An approach for evaluating IS in CSEs is proposed that focuses a lens on IS assets as an intermediate variable in benchmarking a CSE's strategic adjustment toward reform.
The concept of IT alignment has been discussed in the literature, but almost always in the context of large firms. Similarly, attempts to measure alignment and relate it to performance have been made, but primarily based on work in larger firms. This study focused on measuring the alignment of business strategy and IT strategy (ITS) among small UK manufacturing firms and then investigated the link between alignment and performance. The method built on prior studies, developing approaches to alignment used with larger firms and integrating other concepts and measures from the small firm literature. Using a mail questionnaire, data from 250 firms was collected on nine strategy areas so that business and ITS responses could be compared. IT alignment was explored using both the matching and moderation approaches. The moderation approach appeared more effective in identifying IT alignment. The results indicated that a significant proportion of small firms had achieved high IT alignment. Furthermore, the group of small firms with high IT alignment had achieved better organisational performance than firms with low IT alignment. This is consistent with findings in large firms and opens up possibilities for further study of IT alignment in small firms.