Journal
JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
Volume 29, Issue 2, Pages 325-367Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.2753/MIS0742-1222290211
Keywords
business value of IT; capability building; competitive strategy; core competence; environmental dynamism; resource structuring
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This paper examines two ways to create business value of information technology (BVIT): resource structuring and capability building. We develop a research model positing that IT resources and IT capabilities enhance a firm's performance by providing support to its competitive strategies and core competencies, and the strengths of these supports vary in accord with environmental dynamism. The model is empirically tested using data collected from 296 firms in China. It is found that IT resources generate more business effects in stable environments than in dynamic environments, while IT capabilities generate more business effects in dynamic environments than in stable environments. The results suggest that the BVIT creation mechanism in stable environments is primarily resource structuring while the mechanism in dynamic environments is primarily capability building.
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