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How business intelligence capability impacts decision-making speed, comprehensiveness, and firm performance

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Abstract

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.

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... Third, the results reveal that BI capabilities are related to the ability to move quickly from ideas to actual products in the marketplace (speed to market). This finding is consistent with the findings of Alzghoul et al. (2022) and Khaddam et al. (2021). They found that BI capability empowers decision makers with fast access to information and knowledge from diverse sources, allowing them to make timely decisions and providing their organisation with a first-mover advantage. ...
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With the aim of bridging the gap between the firm’s internationalization speed research and the emerging study of business intelligence (BI), this study draws on knowledge transformation as the theoretical lens for exploring how business intelligence leverages organizational agility to promote the speed of internationalization. By analyzing data collected from 258 Chinese firms in the Yangtze River Delta area, we conclude that: (1) Business intelligence has a significant influence on the speed of internationalization, and the organizational agility positively mediates such causal relationship. (2) Cultural distance negatively moderates the relation between organizational agility and speed of internationalization. The managerial implications of these findings and future research directions regarding the firm’s internationalization speed are discussed.
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The principal aim of this study is to provide theory and testing to elucidate the role of decision-maker's decision process and speed during the global sourcing decision-making process (GSDP). In order to achieve this goal, we examine the behavior of a sample of 202 decision-makers belonging to Italian SMEs in the manufacturing sector. Our main finding suggests that faster decisions during the GSDP process lead to superior financial and non-financial performance of the selected supplier. Moreover, we find support for dual processing theory wherein rationality and intuition of the GSDP are associated with increased supplier performance both directly and through their effects on decision speed. Results are discussed in terms of the GSDP, SME and strategic decision-making literatures and practical implications for managers in SMEs.
Article
To survive in a dynamic and hyper-competitive business environment, firms are compelled to simultaneously introduce incremental and radical innovations. While it is recognised that business intelligence and analytics (BI&A) can support innovation and provide organisational value, the literature provides a limited understanding of its impact on balancing different innovation activities and ensuring performance gains. In this study, we examine the relationship between BI&A use, innovation ambidexterity, and firm performance by relying on the process theory of IS value creation as well as the dynamic capabilities perspective. We test our model using data collected from medium- and large-sized firms in Slovenia, applying partial least squares modelling. The results support the notion that BI&A use is positively associated with successful balancing between explorative and exploitative innovation activities, which in turn enhances firm performance. Our results also indicate that innovation ambidexterity is enhanced in two ways: indirectly through interaction with the firm’s absorptive capacity, and directly by increasing the possibilities of faster experimentation with offerings of products or services and improved predictability of the value of new products or services.
Article
Firms continuously report increased competitive value gains from the use of business intelligence and analytics (BI&A), however, little is known about how insights from BI&A are transformed to added value to date. We have conducted fourteen in-depth, semi-structured interviews with a sample of informants in CEO positions, IT managers, CIO, Heads of R&D, as well as Market Managers from nine medium or large-sized European firms. Applying the absorptive capacity’s theoretical lens, we have provided evidence that absorptive capacity’s capabilities are an underlying foundation in the process of transforming BI&A triggered insights into valuable knowledge. Moreover, this process is supported by technological, human, and relationship assets.
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.
Article
Purpose Big data analytics (BDA) guarantees that data may be analysed and categorised into useful information for businesses and transformed into big data related-knowledge and efficient decision-making processes, thereby improving performance. However, the management of the knowledge generated from the BDA as well as its integration and combination with firm knowledge have scarcely been investigated, despite an emergent need of a structured and integrated approach. The paper aims to discuss these issues. Design/methodology/approach Through an empirical analysis based on structural equation modelling with data collected from 88 Italian SMEs, the authors tested if BDA capabilities have a positive impact on firm performances, as well as the mediator effect of knowledge management (KM) on this relationship. Findings The findings of this paper show that firms that developed more BDA capabilities than others, both technological and managerial, increased their performances and that KM orientation plays a significant role in amplifying the effect of BDA capabilities. Originality/value BDA has the potential to change the way firms compete through better understanding, processing, and exploiting of huge amounts of data coming from different internal and external sources and processes. Some managerial and theoretical implications are proposed and discussed in light of the emergence of this new phenomenon.
Article
Although big data analytics have been widely considered a key driver of marketing and innovation processes, whether and how big data analytics create business value has not been fully understood and empirically validated at a large scale. Taking social media analytics as an example, this paper is among the first attempts to theoretically explain and empirically test the market performance impact of big data analytics. Drawing on the systems theory, we explain how and why social media analytics create super-additive value through the synergies in functional complementarity between social media diversity for gathering big data from diverse social media channels and big data analytics for analyzing the gathered big data. Furthermore, we deepen our theorizing by considering the difference between small and medium enterprises (SMEs) and large firms in the required integration effort that enables the synergies of social media diversity and big data analytics. In line with this theorizing, we empirically test the synergistic effect of social media diversity and big data analytics by using a recent large-scale survey data set from 18,816 firms in Italy. We find that social media diversity and big data analytics have a positive interaction effect on market performance, which is more salient for SMEs than for large firms.
Article
Purpose Flock leadership theory explores how different collective learning capacities emerge when interacting individuals work through challenges. While research has link other leadership styles with knowledge management systems (KMS), studies examining flock leadership and KMS are largely lacking. This study investigated the nexus between flock leadership, knowledge content quality, perceived usefulness of KMS, KMS use for sharing and KMS use for retrieval. Design/methodology/approach Using survey data (n=442) from healthcare establishments in Jordan, we apply structural equation modeling (SEM). Findings The results show that: (1) flock leadership influences knowledge content quality; (2) knowledge content quality influences perceived usefulness of KMS; (3) perceived usefulness of KMS influences KMS use for sharing and retrieval; (4) knowledge content quality and perceived usefulness of KMS mediates the link between flock leadership and KMS use for sharing and retrieval. Originality/value Existing research considered KMS through a narrow lens, without consideration of the social context (collective capacities) that surrounds knowledge workers. This study responds to call for research concerning the motion that says technical and adaptive capacity are the underlying norm that configures flock behaviors. Implications for research and practice are discussed.
Article
Current research on organizational speed has been disjointed, which has left organizational speed as an underdeveloped area of study. In this essay, we expand the view of organizational speed as a multidimensional gestalt-like construct that may influence firm performance and competitive advantage. We offer a capability-based definition of organizational speed and identify and review the building blocks of organizational speed. We propose new avenues and questions for future research based on our perspective.
Article
This study draws on the sense-seize-transform view of dynamic capabilities as the theoretical lens for examining the role of BI&A in organizations. It views BI&A as the sensing and seizing components of dynamic capabilities that contribute to firm performance by enabling business process change. Findings confirm a positive relationship between BI&A and performance, mediated by business process change capabilities. This study answers the call for a theoretically grounded examination of the relationship between BI&A and firm performance by highlighting the significance of the BI&A seizing capabilities, and the importance of business process change in translating BI&A output into improved performance.
Article
This study develops a measure for business analytics (BA) maturity and empirically examines the relationships between managerial perception of IT, BA maturity and BA success. The findings suggest that (1) BA maturity can be measured via BA integration & management support, process-level benefits of BA and technology & data analytics capabilities, (2) BA maturity positively affects organizations’ overall BA success, and (3) managerial perception of IT positively influence organizations’ achievement of BA maturity.
Article
There has been much research interest in the speed of innovation, although few consistent findings have emerged. In this study, we unpack the innovation process and focus on the commercialization stage to examine two questions: Which licensor and patent characteristics determine the speed of licensing? How does the speed of licensing impact the royalties and lump-sum payments to licensors? We addressed these questions by proposing that licensing speed is influenced by variables for licensor prominence (size and experience), licensor knowledge structuration (technological depth, technological breadth and experience), and patent appeal (forward citations, scope and complexity). We predict and find that these variables work to increase the size, complexity and duration of the licensing-out task, while also allowing licensors to take their time to review, negotiate and select agreements with higher royalty rates. These findings are counter to arguments for a fast-paced innovation strategy, as it suggests that for the commercialization stage of the innovation process the relationship between licensing speed and licensor royalty rates rewards a ‘less haste, greater payoff approach.
Article
This paper explores the probabilistic fuzzy analytic network process (PROFUZANP) approach in identifying the content of manufacturing strategy infrastructural decisions that attempt to integrate a sustainability and classical manufacturing strategy framework, in the presence of firm size as a relevant component in decision-making. Linguistic variables with equivalent triangular fuzzy numbers (TFNs) are used to elucidate the judgment of elements in pairwise comparison in the framework of the analytic network process (ANP). The ANP effectively handles the complexity of decision-making brought about by the subjectivity and relationships among components of the decision model. Integration of expert judgments conducted by introducing a normal probability distribution in each pairwise comparison with mean equal to the geometric mean of the judgment and standard deviation equal to a predefined perturbation of judgment around the mean. Pre-selected experts in manufacturing strategy and sustainability were asked to elicit judgment in pairwise comparison. Results show that the content of the infrastructural decisions of manufacturing strategy remains constant regardless of the types of firm size. However, the priority of each decision to the goal, which can be translated as the priority of implementation of each policy, varies between large firms and SMEs. The main contribution of this paper is a novel approach that holistically captures the judgmental uncertainty of individual decision-makers and the uncertainty of group decision-making.
Article
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
Article
Purpose Drawing on the resource-based theory and dynamic capability view, this paper aims to examine the mechanisms by which business analytics (BA) capabilities (i.e. the effective use of data aggregation, analytics and data interpretation tools) in healthcare units indirectly influence decision-making effectiveness through the mediating role of knowledge absorptive capacity. Design/methodology/approach Using a survey method, this study collected data from the hospitals in Taiwan. Of the 155 responses received, three were incomplete, giving a 35.84 per cent response rate with 152 valid data points. Structural equation modeling was used to test the hypotheses. Findings This study conceptualizes, operationalizes and measures the BA capability as a multi-dimensional construct that is formed by capturing the functionalities of BA systems in health care, leading to the conclusion that healthcare units are likely to obtain valuable knowledge through using the data analysis and interpretation tools effectively. The effective use of data analysis and interpretation tools in healthcare units indirectly influence decision-making effectiveness, an impact that is mediated by absorptive capacity. Originality/value This study adds values to the literature by conceptualizing BA capabilities in healthcare and demonstrating how knowledge absorption matters when implementing BA to the decision-making process. The mediating role of absorptive capacity not only provides a mechanism by which BA can contribute to decision-making practices but also offers a new solution to the puzzle of the IT productivity paradox in healthcare settings.
Book
Our newly digital world is generating an almost unimaginable amount of data about all of us. Such a vast amount of data is useless without plans and strategies that are designed to cope with its size and complexity, and which enable organisations to leverage the information to create value. This book is a refreshingly practical, yet theoretically sound roadmap to leveraging big data and analytics. Creating Value with Big Data Analytics provides a nuanced view of big data development, arguing that big data in itself is not a revolution but an evolution of the increasing availability of data that has been observed in recent times. Building on the authors' extensive academic and practical knowledge, this book aims to provide managers and analysts with strategic directions and practical analytical solutions on how to create value from existing and new big data. By tying data and analytics to specific goals and processes for implementation, this is a much-needed book that will be essential reading for students and specialists of data analytics, marketing research, and customer relationship management. © 2015 Peter C. Verhoef, Edwin Kooge and Natasha Walk. All rights reserved.