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

The role of enterprise information systems strategies enabled strategy-making on organizational innovativeness: a resource orchestration perspective

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.

How big data analytics use improves supply chain performance: considering the role of supply chain and information system strategies

Purpose

Drawing on the dynamic capabilities theory, this paper proposes that supply chain (SC) strategies (i.e. the lean SC and agile SC strategies) will mediate the relationship between big data analytics (BDA) and SC performance. Furthermore, from the perspective of strategic alignment, this study hypothesizes that the effect of the SC strategy on SC performance is differently moderated by the information system (IS) strategy (i.e. the IS innovator and IS conservative strategies).

Design/methodology/approach

This study used 159 match-paired questionnaires collected from Chinese firms to empirically test the hypotheses.

Findings

Results show the positive direct and indirect impact of BDA on SC performance. Specifically, the lean and agile SC strategies mediate the relationship between BDA and SC performance. Furthermore, the results indicate that the IS innovator and IS conservative strategies differentially moderate the effect of the lean and agile SC strategies on SC performance. Specifically, the IS innovator strategy positively moderates the effect of the agile SC strategy on SC performance. By contrast, the IS conservative strategy positively moderates the effect of the lean SC strategy on SC performance but negatively moderates the effect of the agile SC strategy on SC performance.

Originality/value

This study provides a comprehensive understanding of how SC and IS strategies can help firms leverage BDA to improve SC performance.

IT Governance mechanism and IT-enabled dynamic capabilities drives firm performance: An empirical study in Sri Lanka

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

How can Strategy-as-Practice Enable Innovation under the Influence of Environmental Dynamism?

ABSTRACT Purpose: the objective of this study was to analyze innovation in Brazilian organizations when enabled through SIS, in the strategy-as-practice approach, on the influence of moderating environmental dynamism. Methods: we performed structural equation modeling using the statistical technique of partial least squares path modeling (PLS-PM) and post hoc analysis to identify unobserved heterogeneity, with a sample of 256 Brazilian companies from different sectors. Results: the results revealed that the SIS had a strong and significant influence on the innovation of exploitation and exploration. The environmental uncertainty of dynamism moderation was not present in the relationship between SIS and the innovation of exploitation. However, SIS showed a strong and significant influence on innovation of exploration in high levels of dynamism. The existence of unobserved heterogeneity was identified for two segments of the sample, demonstrating a strong path effect between SIS and innovation of exploration and exploitation on the high presence of dynamism in service companies with a size greater than 500 employees. Conclusions: the study contributed to the extension of the strategy-as-practice and innovation literature, by identifying SIS as an alternative in the planning process to enable innovation in the organization, in environments with a high rate of change and unpredictability.

Como a Estratégia como Prática pode Habilitar a Inovação sob Influência do Dinamismo Ambiental?

ABSTRACT Purpose: the objective of this study was to analyze innovation in Brazilian organizations when enabled through SIS, in the strategy-as-practice approach, on the influence of moderating environmental dynamism. Methods: we performed structural equation modeling using the statistical technique of partial least squares path modeling (PLS-PM) and post hoc analysis to identify unobserved heterogeneity, with a sample of 256 Brazilian companies from different sectors. Results: the results revealed that the SIS had a strong and significant influence on the innovation of exploitation and exploration. The environmental uncertainty of dynamism moderation was not present in the relationship between SIS and the innovation of exploitation. However, SIS showed a strong and significant influence on innovation of exploration in high levels of dynamism. The existence of unobserved heterogeneity was identified for two segments of the sample, demonstrating a strong path effect between SIS and innovation of exploration and exploitation on the high presence of dynamism in service companies with a size greater than 500 employees. Conclusions: the study contributed to the extension of the strategy-as-practice and innovation literature, by identifying SIS as an alternative in the planning process to enable innovation in the organization, in environments with a high rate of change and unpredictability.

Information technology (IT) governance and IT capability to realize firm performance: enabling role of agility and innovative capability

Purpose

With the ever-growing turbulent business setting, there is a great interest to study how a firm tailors information technology (IT) capability to shape agility and innovation capability to stay ahead of the competition. This study examines how IT governance and IT capability can be tailored to achieve firm performance through agility and innovative capability in a turbulent environment.

Design/methodology/approach

Drawing on the dynamic capability theory, this study based on the primary survey data of 253 responses from senior IT and business executives in China proves the hypothesized relationship in the proposed model.

Findings

This study shows that the IT governance mechanism positively impacts on IT-enabled dynamic capabilities. Further, IT-enabled dynamic capabilities positively impact on agility and innovative capability that in turn support to achieve firm performance. The environmental uncertainty is only significant in the IT-enabled dynamic capabilities–business process agility relationship.

Research limitations/implications

This study suggests corporate leaders and executives to better exploit their resources and tailor IT capabilities in the turbulent environment. Further, this study offers theoretical and practical implications.

Originality/value

This study proposes ways for executives to examine the multifaceted nature of environmental uncertainty to achieve agility, innovation and firm performance rather than simply investing in IT.

Following the MAP (Methods, Approaches, Perspectives) in Information Systems Research

Following the Methods, Approaches, Perspectives (MAP) in IS Research

Knowledge complexity and firm performance: evidence from the European SMEs

Purpose

This study aims to theoretically discuss and empirically investigate to what extent the interplay between the domains of knowledge complexity (managerial, strategic and operational) facilitates firm performance and the role of organizational resilience in this relationship.

Design/methodology/approach

This paper uses primary data collected from 102 European small and medium-sized firms (SMEs) in Belgium, Bulgaria, Denmark, Spain and the UK during 2012–2015 and 2010–2020. This study corrects for potential data disclosure and technology adoption bias in two survey ways.

Findings

First, compared to other acumens of knowledge complexity, managerial and operational acumens contribute most the most to a firm’s performance (sales and productivity). Firm resilience positively moderates managerial skills and negatively moderates inter-organizational collaborations. Taking SMEs and their inter-organizational relationships, skills and resilience in focus, considering that they are transitive organizations whose business model is based on innovation and productivity to outcompete larger counterparts it is found that resilience and agility in SMEs are important to leverage the effect of knowledge complexity on firm performance.

Research limitations/implications

One of the limitations of this study is that SMEs are expected to face more problems in achieving organizational ambidexterity with all three acumens, as they have restricted managerial expertise, less structured procedures and fewer resources than larger firms. In addition to regression analysis which is limited in answering “how” and “why” knowledge complexity is managed within and outside a firm, future research will consider a mixed-method approach of both interviews with high growth SMEs and online surveys. To unveil the role that firm resilience in SMEs and in the volatile environment, future research may focus specifically on firms that lack resources, skills and time, however, continue innovating, commercializing new knowledge and create new jobs.

Practical implications

One of the most important mechanisms which facilitate the managerial acumen was found to be information technology (IT) investment and management decision-making, exploitation of new information and communication technology trends and markets, innovating business models and driving change management, innovating new mobility and digital technologies, as well as use inter-disciplinary staff and knowledge to influence external stakeholders. The most relevant elements of the operational acumen of knowledge for performance in SMEs are various mechanisms and forms of inter-organizational collaboration such as collaboration on business and IT applications and infrastructure, administration and operations with data and information exchange, collaboration on data availability, accumulation and exchange.

Social implications

The findings call for innovation policy to account for the need for interactions between various elements of strategic, managerial and operational acumens of knowledge complexity in SMEs. Prime support should be focused on facilitating inter-organizational collaboration and providing “soft support” in the time of agility and adversity. This paper founds that lack of budget, skills and resources would significantly affect a firm’s resilience, potentially “locking in” within an organization.

Originality/value

First, it emphasizes that the returns from inter-organizational collaboration as part of the operational acumen of knowledge complexity depend upon the firm’s ability to manage infrastructure, mobility and data. The relationship is negatively moderated by firm resilience, which means that the most resilient firms may focus on the exploitation of internal resources and substitute it for inter-organizational collaboration. Second, this study demonstrates that SMEs’ growth and productivity strategy should be management skills and competencies driven, rather than strategy-driven, with strategy facilitating managerial decision-making on business and IT.

Organizational Ambidexterity: Exploration and Exploitation

Systematic Review of Literature is done by this research with the purpose that it could be possible to analyze the existent interaction between exploration and exploitation that leads organizations to become ambidextrous ones. That is to say, that they have the faculty to look for opportunities at the same time they work to obtain a good performance in their daily activities. The methodology was based on a documentary review, through a chronological reading. The investigation was made using articles that deal with the issue of ambidextrous organizations, based on the Scopus scientific database, published between 2006 and 2016.

Learning organizational ambidexterity

Purpose

The purpose of this paper is to reexamine exploration-exploitation’s reciprocality in organizational ambidexterity (OA) research. OA figures prominently in a variety of organization science phenomena. Introduced as a two-stage model for innovation, theory specifies reciprocal reinforcement between the OA processes of exploration (eR) and exploitation (eT). In this study, the authors argue that previous analyses of OA necessarily neglect this reciprocality in favor of conceptualizations that conform to common statistical techniques.

Design/methodology/approach

The authors propose joint-variance (JV) as a soluble estimator of exploration–exploitation (eR-eT) reciprocality. An updated systematic literature synthesis yielded K = 50 studies (53 independent samples, N = 11,743) for further testing.

Findings

Three primary findings are as follows: JV reduced negative confounding, explaining 45 per cent of between-study variance. JV quantified the positive confounding in separate meta-analytic estimates of eR and eT on performance because of double-counting (37.6 per cent), and substantive application of JV to hypothesis testing supported OA theoretical predictions.

Research limitations/implications

The authors discuss practical consideration for eR-eT reciprocality, as well as theoretical contributions for cohering the OA empirical literature.

Practical implications

The authors discuss design limitations and JV measurement extensions for the future.

Social implications

Learning in OA literature has been neglected or underestimated.

Originality/value

Because reciprocality is theorized, yet absent in current models, existing results represent confounded or biased evidence of the OA’s effect on firm performance. Subsequently, the authors propose JV as a soluble estimator of eR-eT learning modes.

Effects of strategic information systems on competitive strategy and performance

Purpose

This study argues that strategic information systems (SISs) are necessary for organizations’ survival and corporate performance in turbulent economic environments. Applying Miles and Snow’s strategy typology, the purpose of this paper is to explore how SIS supports business strategy and corporate performance.

Design/methodology/approach

This study uses quantitative survey data from 389 Brazilian companies during economic crises and analyzes them using structural equation modeling.

Findings

There is strong evidence that SIS promotes capacity and flexibility to create competitive strategies in response to environmental changes. SIS significantly and positively predicts firms’ use of prospector strategies, reducing the need to sacrifice efficiency for innovation. SIS can predict corporate performance more strongly than firms’ strategic orientations can.

Practical implications

The results provide organizations insights on how SIS enables strategic planning processes to create competitive strategy and improve performance during economic turbulence.

Originality/value

This research demonstrates SIS’s positive effects during economic turbulence on competitive strategy and performance, revealing that corporate performance is influenced more by SIS (strategic process) than strategic orientation (content). Hence, this study fills a research gap in the information systems strategy literature by contributing new insights about SIS.

Sistemas de Informação Estratégicos Habilitando Estratégia-como-prática na Incerteza Ambiental

Resumo Recentes pesquisas da nova era do planejamento estratégico (PE) destacam a sua capacidade ambivalente de racionalidade prescritiva como forma de orquestrar a criação de estratégias emergentes e flexíveis para enfrentar os desafios da turbulência ambiental. Contudo, há um número limitado de pesquisas sobre como essa capacidade pode ser desenvolvida e, ainda menos, sobre o papel das práticas do PE habilitadas pelo strategic information systems (SIS). Investigou-se sobre a lente da teoria da Contingência e da Prática, como o SIS habilita a efetividade do PE na dimensão da prática sobre a influência da incerteza ambiental. Utilizou-se da técnica estatística de PLS-PM com uma amostra de 139 empresas. O estudo confirmou que o SIS habilita a efetividade do PE em todas as suas fases sobre a influência dos diferentes níveis de contingência de dinamismo, heterogeneidade e hostilidade. Resultados a partir do estudo pós-análise: (a) o SIS demonstrou maior poder preditivo na formulação e no controle da estratégia e da menor ênfase para executá-la; (b) o SIS apresentou maior influência da efetividade do PE em ambientes de alta heterogeneidade; (c) as empresas mostraram maior ênfase para controlar e formular do que para executar a estratégia. O estudo contribuiu para compreensão da criação de valor do SIS na abordagem da estratégia-como-prática frente aos desafios da incerteza ambiental.

Are Dynamic Capabilities the Missing Link Between the IS Strategy and Performance Relationship?

This study examines two dynamic capabilities which are possible intervening mechanisms by which an information systems strategy relates to information systems performance. It also explores the relevance of the dynamic capabilities absorptive capacity and agility at three different levels of environmental dynamism. Responses from a sample of over 200 CIOs suggest that absorptive capacity and agility are indeed intervening mechanisms by which information systems strategy is linked to performance, particularly for innovative strategies and in environments that are highly dynamic. It suggests that pursuit of the strategy that is able to develop and maintain the highest levels of dynamic capabilities would be the one to likewise gain the most ground on performance. The findings also bring to light the fact that even in relatively stable environments, dynamic capabilities still play major roles in effectuating performance.

The Relationship between Information Systems Strategy and the Perception of Project Success

This article reports an explorative study on the relationship between Information Systems Strategy and the Perception of Project Success. The authors built upon the theoretical foundations of prior research and constructed their conceptual research model from literature. The authors' study defines IS strategy as the degree to which the organization has a shared perspective to seek innovation through IS. The authors operationalize project success by grouping six project success criteria into process-orientation and outcome-orientation. The authors use a quantitative and conclusive descriptive design to study associations between these variables. The type of design they follow is cross-sectional where IS strategy and perceived project success are assayed in a sample of subjects once and the relationships between them are determined. The authors' data is collected using an online questionnaire by a combination of business and IT managers and executives, working at organizations with a certain level of IS maturity. The authors' research finds good support to posit that organizations with an innovative IS strategy are more focused on the outcome of a project than on the project process itself and that organizations with a conservative IS strategy do show some characteristics of a process-oriented view. Furthermore, their research indicates that a more innovative organization relates to a lower perceived importance of Cost and a higher perceived importance of Value and Learning. On the other hand, they find support that a more conservative organization relates to a higher perceived importance of Cost and a lower perceived importance of Use. Next to these findings the authors' study concludes with implications for practitioners and suggestions for further explorative research.