How to be agile: the distinctive roles of IT capabilities for knowledge management and process integration

Abstract

PurposeThe purpose of this study is to understand how IT capabilities for knowledge management and process integration can build a firm's agile process capabilities for sensing, strategic decision and responding. The study also investigates how the three agile capabilities affect firm performance in different competitive environments.Design/methodology/approachThis study conducted a large-scale field survey with firms in the United States. Survey invitations were sent to business executives of the target firms. A total of 254 complete samples were collected for our hypotheses test.FindingsThe results confirm the overall significant roles of IT capabilities in the three agile capabilities. The results further reveal that the IT capability for knowledge management has a higher influence on sensing capability, while the IT capability for process integration has a higher influence on responding capability. Moreover, strategic decision and responding capabilities are more important in the high market competition. However, in the low market competition, sensing capability becomes more important while responding capability demonstrates a negative impact on firm performance.Originality/valueThis study helps both academics and practitioners better understand a firm's IT-agility-performance mechanism. Particularly, our findings guide how to achieve agile capabilities and what to focus on under the different levels of market competition.