The Effect of IT Resource Orchestration on Strategic Behaviors

Abstract

This study explores how conformity and differentiation in IT resource management influence the strategic behaviors of firms drawing upon the institutional theory literature. Prior studies have suggested two competing arguments (i.e., institutional isomorphism and strategic differentiation) and examined whether conformity or differentiation in IT resource deployment provides superior market performance. This study reconciles these two countervailing views and suggests a specific way that firms can conform to industry isomorphism and differentiate themselves simultaneously in deploying IT resources. Specifically, we introduce a novel concept, IT resource orchestration, which captures how a firm differentiates its IT resources compared to industry peers over time. Using a sample of 1,854 firm-year observations from the United States, we find that IT resource orchestration is associated with differences in the strategic behaviors of firms. Further, our results indicate that a firm’s business environments moderate the relationship between its IT resource orchestration and strategic behaviors. Overall, our research implies that orchestrated IT resources are useful for generating and supporting firms’ strategic behaviors without undermining their institutional legitimacy and competitive advantage.