Competitive advantage of IT and effects on strategy and structure: knowledge-intensive vs manufacturing industries

Abstract

This paper empirically examines relationships between competitive advantage of information technology (CAIT), corporate strategy, organisational structure, and organisational performance in Korean knowledge-intensive and manufacturing industries. Effects of information technology on the linkage among corporate strategy, organisational structure, and performance are investigated and CAIT measures suggested by Sethi and King (1994) are tested for verification. Research results confirm that information technology provides several traits of strategic advantages such as efficiency, threat, functionality, preemptiveness, and synergy, directs corporate strategy, shapes organisational structure, and significantly contributes to corporate performance, especially for firms in the knowledge-intensive industry. Firms in the knowledge-intensive industry show quite different patterns of using CAIT, employing corporate strategy, forming organisational structure from firms in manufacturing industry.