Strategic users of information technology: a longitudinal analysis of organizational strategy and performance

Abstract

While discussed extensively, very few studies have attempted to formally integrate the notions of organizational strategy, competitive advantage, and the strategic use of information technology. Utilizing the typology of Miles and Snow, this study attempts to identify the strategic orientation (prospector, analyzer, defender) of widely cited users of ‘strategic information technology’ before and after the launch of their innovative systems. Also, measures of financial performance are compared between emergent groups in order to determine if any particular strategic orientation consistently outperforms the others. In general, this study reports four findings. First, it appears that strategic users of information technology are not concentrated along a singular strategic dimension. The firms examined in this study exhibited characteristics associated with each of Miles and Snow's strategy types. Second, it seems that many firms shifted strategic orientation after the launch of their systems. Interestingly, these shifts were rather dramatic and seem to represent a fundamental change in strategic direction from earlier ‘pre-system’ operating philosophies. Third, case descriptions along with narratives of annual reports suggest that usage or competitive intent of these strategic systems matches the prevailing strategic profile of the initiating firms. In other words, the systems seem to support organizational strategy. Finally, it seems that prospectors and defenders realized significantly higher measures of financial performance immediately after the implementation of ‘strategic information technology’; however, in the long-term no strategic orientation seemed to outperform the others.