Business Continuity Innovation in Disruption Time: Sociotechnical Systems, Business Analytics, Virtual Business, and Mediating Role of Knowledge Absorptive Capacity

Abstract

The continuity strategy of business innovation to deal with the disruption condition, it is still many to be designed and explained. Referring to a sociotechnical systems (STSs) approach, this article conceptualizes and practically examines the business analytics, virtual business, and knowledge absorptive capacity that increase and produce the continuity capability of business innovation in uncertain business environment (e.g., COVID-19). We used SmartPLS to empirically evaluate the model based on 145 companies in a developing country of Indonesia that is currently under high disruption. Drawing a technical perspective, business analytics has successfully enhanced business continuity innovation and knowledge absorptive capacity. In a socio perspective, knowledge absorptive capacity significantly produces business continuity innovation. Business continuity innovation suffers if firms adopt virtual business without increasing their knowledge capabilities. Furthermore, mediating effects present higher support from management level to knowledge absorptive capacity strategy, a bigger impact for business analytics, and virtual business to improve and increase the goals opportunities of business continuity innovation. A novel contribution is the integration of STSs (business analytics, virtual business, and knowledge absorptive capacity) that drives business continuity innovation to deal and recover from uncertain environment. Our efforts also align several fields such as information technology-business alignment strategy, knowledge management, and knowledge-business services. Future research would be worthwhile and interesting whether our framework will suitable to different companies/respondents, business context, industry area, and crisis condition.