Abstract
An empirical investigation of the relationship between IT and competitiveness of Japanese manufacturing companies, this paper finds an indirect correlation between the two variables. IT improves competitiveness through labor empowerment and strategic alliances rather than directly. The paper further argues that sustainability of IT‐based competitive advantages depends on the nature of IT systems. Competitive advantages based on stand‐alone IT systems that can be implemented with little internal and external cooperation are not sustainable, while competitive advantages based on cooperative IT systems that can be implemented with substantial internal and external cooperation are sustainable.
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