Impact of the Strategic Role of IT on Explorative and Exploitative Innovation Activities: The Role of Environmental Uncertainty

Abstract

ABSTRACTWhile numerous studies have examined the relationship between IT and innovation, comparatively few explore IT's contribution to explorative and exploitative innovation activities. A better understanding of the influence of IT's strategic role on exploration and exploitation innovation is critical for tracing the complex IT–innovation relationship. To address this gap, we develop a theoretical model that describes the contingent relationship between IT's strategic role and explorative and exploitative innovation activities. By testing the model using a multisource, matched sample of data from Chinese firms, we find that the IT roles of automation, information, and transformation differentially influence exploration and exploitation, underscoring IT's multifaceted role in organizational innovation activities. Specifically, IT‐enabled transformation positively affects exploration, and IT‐enabled information positively affects both exploration and exploitation. We also evidence the moderating effect of environmental uncertainty in these relationships by uncovering that IT‐enabled automation is negatively related to exploration, whereas IT‐enabled transformation positively affects both explorative and exploitative innovation activities with high environmental uncertainty. Our article contributes to the knowledge in the field by demonstrating the value of a firm's transformative IT investments to develop explorative and exploitative innovation activities in the presence of environmental uncertainty.