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

The business value of information technology (IT) has been one of the top concerns of both practitioners and scholars for decades. Numerous studies have documented the positive effects of IT capability on organizational performance but our knowledge of the processes through which such gains are achi...

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Bibliographic Details
Published in:European journal of information systems Vol. 23; no. 3; pp. 326 - 342
Main Authors: Chen, Yang, Wang, Yi, Nevo, Saggi, Jin, Jiafei, Wang, Luning, Chow, Wing S
Format: Journal Article
Language:English
Published: London Taylor & Francis 01.05.2014
Palgrave Macmillan UK
Taylor & Francis Ltd
Subjects:
Analysis
Business
Business and Management
Business Information Systems
business process agility
Competition
Competitive advantage
Empirical Research
Environmental aspects
environmental factors
Executives
Executives (Business)
Freight forwarding
Hostility
Information systems
Information Systems and Communication Service
Information technology
Innovation/Technology Management
Investigations
IT capability
Operations Research/Decision Theory
Organization theory
Organizational effectiveness
Organizational performance
Reproducibility
Studies
IT capability
environmental factors
organizational performance
business process agility
ISSN:0960-085X, 1476-9344
Online Access:Get full text
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Summary:The business value of information technology (IT) has been one of the top concerns of both practitioners and scholars for decades. Numerous studies have documented the positive effects of IT capability on organizational performance but our knowledge of the processes through which such gains are achieved remains limited due to a lack of focus on the business environment. Such a linkage therefore remains the subject of debate in the information systems literature. In this study, we fill this gap by investigating the mediating role of business process agility and the moderating roles of environmental factors. On the basis of matched survey data obtained from 214 IT and business executives from manufacturing firms in China, our analyses show that even though firm-wide IT capability presents the characteristics of rarity, appropriability, non-reproducibility, and non-substitutability, its impact on organizational performance is fully mediated by business process agility. Our results also show that the impact of the environment is multifaceted and nuanced. In particular, environmental hostility weakens the effect of IT capability on business process agility, while environmental complexity strengthens it. The theoretical and practical implications of this study, and its limitations, are also discussed.
Bibliography:SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0960-085X
1476-9344
DOI:10.1057/ejis.2013.4