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

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  • Yang Chen
  • Yi Wang
  • Saggi Nevo
  • Jiafei Jin
  • Luning Wang
  • Wing S Chow

Abstract

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.

Suggested Citation

  • Yang Chen & Yi Wang & Saggi Nevo & Jiafei Jin & Luning Wang & Wing S Chow, 2014. "IT capability and organizational performance: the roles of business process agility and environmental factors," European Journal of Information Systems, Taylor & Francis Journals, vol. 23(3), pages 326-342, May.
    • Handle: RePEc:taf:tjisxx:v:23:y:2014:i:3:p:326-342
    DOI: 10.1057/ejis.2013.4
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    Cited by:

    1. Thamir Hamad Alaskar & Amin K. Alsadi, 2023. "Drivers of mobile commerce adoption intention by Saudi SMEs during the COVID-19 pandemic," Future Business Journal, Springer, vol. 9(1), pages 1-13, December.
    2. Hossain, Md Afnan & Akter, Shahriar & Yanamandram, Venkata & Strong, Carolyn, 2024. "Navigating the platform economy: Crafting a customer analytics capability instrument," Journal of Business Research, Elsevier, vol. 170(C).
    3. Sullivan, Yulia & Fosso Wamba, Samuel, 2024. "Artificial intelligence and adaptive response to market changes: A strategy to enhance firm performance and innovation," Journal of Business Research, Elsevier, vol. 174(C).
    4. Broccardo, Laura & Tenucci, Andrea & Agarwal, Reeti & Alshibani, Safiya Mukhtar, 2024. "Steering digitalization and management control maturity in small and medium enterprises (SMEs)," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    5. Koo, KwangJoo & Le, Linh, 2024. "IT capability and innovation," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    6. Zhu, Minghao & Liang, Chen & Yeung, Andy C.L. & Zhou, Honggeng, 2024. "The impact of intelligent manufacturing on labor productivity: An empirical analysis of Chinese listed manufacturing companies," International Journal of Production Economics, Elsevier, vol. 267(C).
    7. Uddin, Mohammad Rajib & Akter, Shahriar & Lee, Wai Jin Thomas, 2024. "Developing a data breach protection capability framework in retailing," International Journal of Production Economics, Elsevier, vol. 271(C).
    8. Talaei-Khoei, Amir & Yang, Alan T. & Masialeti, Masialeti, 2024. "How does incorporating ChatGPT within a firm reinforce agility-mediated performance? The moderating role of innovation infusion and firms’ ethical identity," Technovation, Elsevier, vol. 132(C).
    9. Chaudhuri, Ranjan & Chatterjee, Sheshadri & Mariani, Marcello M. & Wamba, Samuel Fosso, 2024. "Assessing the influence of emerging technologies on organizational data driven culture and innovation capabilities: A sustainability performance perspective," Technological Forecasting and Social Change, Elsevier, vol. 200(C).

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