Browsing Business and management by Department
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The link between information processing capability and competitive advantage mediated through decision-making effectivenessWhile research underpinned by the resource-based view (RBV) appears to suggest that IT-enabled capabilities are positively linked to competitive advantage, such a link is often seen as a black box as the processes through which competitive advantage can be gained appears unclear. In particular, research appears to suggest that information processing capability is linked to decision-making effectiveness and competitive advantage; however little research appears to examine the interrelationship among them. This study, drawing on the RBV, develops a mediation model to examine the link between competitive advantage and the key tenets of value, rarity, inimitability and non-substitutability of information processing capability in the context of business analytics; and whether this link is mediated through decision-making effectiveness. Based on data collected from 633 UK companies, this study shows that there is a positive link between the value, rarity and inimitability characteristics of information processing capability and competitive advantage, which is partially mediated by decision-making effectiveness. The findings contribute to the theoretical development of the RBV by developing a mediation model that looks inside the black box. They also contribute to managers’ knowledge and understanding of the mechanism through which the strategic value of information processing capability can be maximized.
Systemic capabilities: the source of IT business valuePurpose – The purpose of this paper is to develop, and explicate the significance of the need for a systemic conceptual framework for understanding IT business value. Design/methodology/approach – Embracing a systems perspective, this paper examines the interrelationship between IT and other organisational factors at the organisational level and its impact on the business value of IT. As a result, a systemic conceptual framework for understanding IT business value is developed. An example of enhancing IT business value through developing systemic capabilities is then used to test and demonstrate the value of this framework. Findings – The findings suggest that IT business value would be significantly enhanced when systemic capabilities are generated from the synergistic interrelations among IT and other organisational factors at the systems level, while the system’s human agents play a critical role in developing systemic capabilities by purposely configuring and reconfiguring organisational factors. Practical implications – The conceptual framework advanced provides the means to recognise the significance of the need for understanding IT business value systemically and dynamically. It encourages an organisation to focus on developing systemic capabilities by ensuring that IT and other organisational factors work together as a synergistic whole, better managing the role its human agents play in shaping the systems interrelations, and developing and redeveloping systemic capabilities by configuring its subsystems purposely with the changing business environment. Originality/value – This paper reveals the nature of systemic capabilities underpinned by a systems perspective. The resultant systemic conceptual framework for understanding IT business value can help us move away from pairwise resource complementarity to focusing on the whole system and its interrelations while responding to the changing business environment. It is hoped that the framework can help organisations delineate important IT investment considerations and the priorities that they must adopt to create superior IT business value.