Abstract
Information Technologies (IT) and IT-based capabilities represent a sovereign approach to firm survival and success in today’s business environment. The reflections of information technologies on company performance has always been a controversial topic in the management literature. As previous studies examining these kinds of relationships reported mixed results in terms of information technologies efficiency paradox, scholars are still trying to specify the underlying mechanisms and organizational factors linking IT to financial performance. Building on the resource-based view and positioning theory, this paper focuses on sustainable IT capabilities to generate value from IT investments. Moreover, the conflicting results regarding the effects of IT on firm performance lead to questions such as what sort of organizational contexts influence IT usage and enable firms to achieve business goals. This study considers IT capability as a three-dimensional construct—managerial IT capability, technical IT capability, and human support—and investigates the effects of sustainable IT capability on firm performance as well as analyzing the moderating effect of innovative climate. By studying the data from 221 managers of IT companies listed in the top 500 list of Information and Communication Technologies Authority (ICTA), we found that: (1) managerial and technical IT capabilities have significant and positive effects on quantitative performance, all aspects of IT capability—managerial IT capability, technical IT capability, and human support—are significantly and positively associated with qualitative performance, and (2) the relationship between technical IT capability and quantitative performance becomes stronger when the organizational climate is more innovation-oriented. (3) Similarly, the relationship between managerial and technical IT capabilities and qualitative performance becomes even stronger when the organizational climate is more innovative. The study concludes with a discussion of the theoretical and managerial implications.
Highlights
The contribution of information technologies (IT) to a firm’s survival and growth arises as an essential management topic in today’s rapidly changing business environment [1,2,3]
There are various studies indicating a positive relationship between IT capability and firm performance, and the results show that the IT capability increases the competitive advantage of a firm
As innovative climate is positively related to exploitation of IT related assets and resources, we expect an innovative climate, enabling the creation of new products, services, and approaches, to contribute to the benefits of IT capabilities in a superior manner, which leads to higher levels of performance
Summary
The contribution of information technologies (IT) to a firm’s survival and growth arises as an essential management topic in today’s rapidly changing business environment [1,2,3]. Sustainability 2020, 12, 4058 factors such as unavailable appropriate data, the existence of time lags among IT investments and the business value derived from those investments, the lack of an evaluation of the indirect advantages of IT, as well as the level of analysis of IT-related benefits [16,22] Concerning this gap, Bharadwaj [10] questions past studies’ methodological grounds such as deploying inappropriate measures of IT or using IT investments directly, which may have a long-term effect on performance. The existence of dominant companies that provide new technologies to the competitors and suppliers in the same sector and feed them as infrastructure means to be the actors that shape the market, especially for achieving superior performance [25] From all these aspects, the leading companies in the field of information technologies enable them to gain advantages in many fields, especially in terms of automation, technology development, cost leadership, and operational efficiency. The remainder of the paper is organized as a review of the relevant literature establishing a clear theoretical ground, a research model describing the related hypotheses, a discussion of the empirical results of the study with theoretical contributions, and managerial implications
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