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Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study
 

Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study

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  • 這是 outline 的部分, 首先是 Abstract 以及 Motivation 然後就是一些有關 IT 與競爭優勢的探討 之後是 Research Model 跟 Methodology 以及 Results 最後是 Limitations and Future Research 還有 conclusion
  • 這篇 paper 主要是根據 resource-based view 來探討:究竟有哪些 IT Capability 是競爭優勢的來源 概念上作者將 capability 分成三類,分別是: value, competitive 以及 dynamic capabilities 在每一個類別中,又定義了一些具體的能力: Value: quality of the IT infrastructure Competitive: IT business experience, relationship infrastructure Dynamic Capabilities: intensity of organizational learning 而這篇 paper 有別於以往類似的研究,作者是採用 primary data ,這些資料是從他們針對 202 個製造業的資深 IT 高層訪談的結果
  • 在這篇的 hypothesis 中,認為: IT infrastructure 的 quality 不是競爭優勢的來源, 而其他三個 IT business expertise 、 relationship infrastructure 以及 組織學習的強度 則是競爭優勢的來源, 也認為 組織學習的強度 (intensity of organizational learning) 會和前面三個 capabilities 有顯著的關係。
  • 其實在過去的十年間,有許多學者針對 IT 所扮演的角色進行研究: 較早的研究顯示出,其實 IT 與生產力是沒有什麼關係,他們稱之為「 productivity paradox ( 生產力矛盾 ) 」的現象 後來的研究則是發現, IT 對於 business processes 的 improvement 是有顯著的正向關係 其實就整體而言, IT 對可以提升組織的效益是不爭的事實, 但是所謂的競爭優勢,則是要達到差異化,也就是我有別人沒有的情況才是競爭優勢
  • Carr 認為:他比喻 IT 像是火車一樣,雖然火車可以帶來效益,但是每個地方都有,所以就沒有所謂的差異化效益的存在,也就因此無法為公司創造競爭的優勢 Ganesh D. Bhatt 以及 Varun Grover : Carr 你這樣想是很危險的ㄝ,因為如果像你這樣說的話,那就不需要那麼重視 IT 投資了,那這樣對 IT governance 會有很重大的影響。 另外,作者也認為 Carr 沒有考量到 Managing IT 的能力,因為 Managing IT 的能力在每個公司是有所不同的;比方說即使是相同的 ERP ,會依據不同的管理能力而在效益上會有所不同
  • 這裡主要是透過四種不同的觀點來分析 IT 與競爭優勢: Classical perspective: 理論:在競爭對手可能會涉及的活動中開發 strategy IT-based 的競爭優勢是:透過 IT 來提升競爭力,然後提升競爭地位 Limitations :假設公司的結構是靜態的 Economic perspective: 理論: customer 會因為向 supplier 採購特有的資產而造成 switching cost IT-based 的競爭優勢是:透過特定的協議 (idiosyncratic protocols) , IT 可以促進 switching cost Limitations :特定協議 (idiosyncratic protocols) 的假設太多 Complementary Resource: 理論:透過建立或取得獨特的 resource 來產生差異性 T-based 的競爭優勢是:當採用了其他人不容易快速取得的 resource 的時候,就可以建立優勢 Limitation :只提供了一些 insight 在 dynamic resource 是如何被開發與利用 Resource-based View: 理論:公司透過 resource-picking 以及 capability-building 的機制來產生價值 IT-based 的競爭優勢是:公司有開發跟別人不同的資訊系統的時候,在 IT 的使用上就會和別人不同 沒有 Limitations
  • Carr 聲稱 IT 資產是沒有獨特性、是可以模仿的,也沒有異執性, 但是作者認為利用這些 IT 資產是是需要有策略上的區別的, 就好比說,以 Economic 的觀點來看,它的理論是要創造 Switching cost ,就會有競爭優勢,但是以目前企業的狀況而言,一定要有策略才有變法達到 switching cost 而根據 RBV 的觀點,認為要建立「獨特」、「難以模仿」還有「可以獲取特殊資源」這樣的能力才是可以作為競爭優勢的來源。 所以作者認為, Resource-based View 適合用來反駁 Carr 的理論
  • 什麼樣的 IT-based capability 是: 有價值的? 跨公司之間是會有差別的? 以及其他公司是不容易取得的? 作者針對這部分做了一些 literature review ,整理成 table 2 (下一頁)
  • 我們可以看到有些可以拿來評估競爭優勢,有些則不行,我們就來看看這兩個可以的: 1. 用 managerial skills, technical skills 以及 infrastructure 來評估 IT 能力 採用 secondary data 主要發現: managerial skills 與競爭優勢的持久有正向的關係 2. 他是拿 Strategic IT alignment 以及他的 process 與 component 來評估 IT 能力 採用 primary data , 主要發現: IT plan 中反映了多少 business plan 會影響競爭優勢
  • 接下來就是有關作者評估 IT capabilities 以及這些 capabilities 與競爭優勢的關係 第一:作者透過 RBV 的觀點,將 IT capability 區分成三類,並且認為有些 IT capability 會像 Carr 所說的一樣,不是競爭優勢的來源 第二:作者引進了 dynamic capability 這樣的一個觀點,認為藉由組織的學習可作為競爭優勢的來源 第三:作者使用 primary data ,這些 data 是請一堆 CIO 評估 IT capabilities 與競爭優勢之間的關係 第四:作者用 primary data 以及 secondary data 對因變量 (dependent variable) 的評估去做 cross-check , 接下來就是有關作者如何利用 value capabilities, competitive capabilities, 以及 dynamic capabilities 這三類 Capabilities 來發展這篇研究的 hypotheses
  • 已經有很多的研究是針對 IT investment 與 business performance 之間的關係做探討,作者將這類的研究都歸類為「 value capability 」的研究,也就是投資 IT infrastructure 都是屬於 value capability ,所以作者就是以 IT infrastructure 來代表 Value 。 根據其他的文獻指出:「一個好的 IT infrastructure 是可以提供企業之間共享資訊、提升互動與開拓商機,並能夠靈活地應對變化的經營策略」, 所以作者認為 IT infrastructure 是有價值的,但是卻是組織中必須的 ( 也就是基本的門檻 ) ,因此不是競爭優勢的來源, 所以 Hypothesis I 為: IT infrastructure 的 quality 將不會與競爭優勢有關
  • 第二類 Capability 是 competitive capabilities ,這裡主要考量到 IT 的管理能力,原因是: 作者認為 IT 的管理能力不僅是有價值的而且還是難以轉換的, 在 Mata 的文獻中也明確地提到 IT 的管理能力就是是競爭優勢的主要來源: 因為他認為,公司是從歷史和「邊學邊做」中所演化的,使得這樣的經驗在不同的公司之間會有明顯的差異 另外,他也認為友誼、信任以及人際溝通是要花多年的時間所建立的,也就是 IT manager 之間的人脈是經年累月下來的 根據這樣的因素,就具體分為兩個能力: 1. IT business experience (IT 部門對 business 瞭解的程度 ) 2. relationship infrastructure (IT manager 與 business manager 之間正向的關係程度 )
  • 首先是有關 IT business experience 的部分: 從這兩位學者的觀點,認為: IT 產業的經驗讓一個公司可以有整合能力,開發可靠和具有成本效益的 business system ,使得預測業務需求比其他競爭對手都來的快。 根據 RBV 的觀點來看, IT business experience 是很難被競爭對手所模仿的,所以一間具有卓越的 IT business experience 的公司將會獲得優勢 所以 Hypothesis 2 是: Higher quality 的 IT business experience 將會對公司的競爭優勢有 positive effect
  • 接下來是 Relationship Infrastructure 的部分: 作者認為透過 relationship infrastructure 可以反映出: IT 團隊瞭解 business 程度,以及和 business 團隊建立 partnership 的能力為何 Barney 以及 Hansen 這兩位學者直接說 relationship infrastructure 就是公司競爭優勢的來源!! 因此,作者假設:當公司內的 IT 部門與 business 部門之間可以建立起信任,就可以讓 knowledge 在公司內部通行無阻,也可以彼此互相體諒與監督對方。 所以 Hypothesis 3 是: Higher quality 的 relationship infrastructure 將會對公司的競爭優勢有 positive effect
  • 接下來是第三類的 Capability 是 Dynamic Capabilities : Dynamic capabilities 的概念是,可以 renew 組織的能力,讓組織可以適應一直改變的商業環境 另外有其他文獻表示,如果公司能夠 involve 知識活動,以及可創造或者是 renew 組織的能力,這樣就是競爭優勢的來源 所以作者就用組織學習的強度來表示 dynamic capability !!
  • 作者也認為,學習的強度是考量到組織問題解決的能力,以及,具有較強學習能力的公司可以更有效率地利用經驗,所以: Hypothesis 4 是:高度的組織學習有助於提升 IT infrastructure, IT business experience 以及 relationship infrastructure Hypothesis 5 是:具有高度的學習強度將會與競爭優勢有 positive effect
  • 接下來就是 Research Model 與 Methodology 的部分,先來看他們的 Data Collection : 作者認為資深的 IT 人員是很適合作為受訪者,因為他們對於組織內部與 IT 相關的流程或是技術都是熟悉的 所以作者從 3000 個製造公司中,隨機選 1200 個資深的 IT 人員,像是 CIO 或是副總裁之類的角色 最後只有 202 個有效的回應,回收率大約 17%(202 / 1200) ,回收率不高的現象,其實就是反映出要獲得高階管理者的回應是種挑戰
  • 採集到的樣本分佈大概是像這樣子, 25% 是電腦 / 電子、 25% 重機械 / 汽車、 17% 生藥 / 化學、 13% 農工設備,剩下的 20% 是森林木材 / 皮革製造等 公司的年收入介於 5000 萬 ~1 億 4000 萬美元 因為他們採用 知覺測量 (perceptual measures) 作為企業績效的衡量,所以 接著對這些回應的年收入做 chi-square 檢定,結果是落在 0.05 ,所以沒有顯著的差異, 也就是說這 202 筆資料在 IT 能力與競爭力的 知覺測量 (perceptual measures) 是沒有 biased 的
  • 然後再來看變數的操作性定義: 1. 第一個 construct 是 IT capability ,他有三個 Dimensions ● IT infrastructure 所考量的 indicators 有: compatible 、 modular 、 scalable 、 transparent 、系統可以 handle multiple applications 的程度,以及使用公認的 IT standards 的程度 ● IT business experience 所考量的 indicators 有: business strategy 、 competitive priorities 、 business policies 、 business opportunities ,以及組織的 initiate change ● Relationship infrastructure 所考量的 indicators 有: trust 、 appreciate( 欣賞 ) 、 consult with( 諮詢 ) 、 account for( 交待 ) ,以及在 setting business 和 IT strategy 時的彼此尊重 2. 第二個 construct 是公司的競爭優勢 Dimensions 是過去三年與競爭對手的相對表現,簡單的說就是過去三年的 performance , 所考量的 indicators 是:財務上的 performance 以及銷售成長 3. 最後一項是有關組織學習的強度,他也有三個 Dimensions Knowledge Exploration ( 知識的探勘 ) ,所考量的 indicator 是:一個公司 search 以及獲得新知識的能力 Knowledge Exploitation ( 知識的開採 ) ,所考量的 indicator 是:一個公司吸收以及應用相關知識的能力 focus ,所考量的 indicator 是:在探勘與開採新知識所花的 effort 有多少
  • 整個 conceptual model 就像是這樣 特別一提的是,這裡的 control variable 是 size ,而 size 所用的單位是:公司員工的人數
  • 接下來是信度分析的部分: 透過驗證性分析來 verify 這個 model ,作者使用 LISREL 這套工具來做 data analysis 最終的結果為: CFI ( 比較適配指標 ) 介於 0.9~0.95 之間 RMR ( 均方根殘差 ) 介於 0.01~0.03 之間 有關收斂效度的部分,我們可以看到這張表 ( 表 4) , composite reliability 介於 0.72~0.86 之間,算是很高!!所以代表 constructs 的收斂效度是 OK 的!!
  • 在 202 個有效的回應中,可以辨識出 61 家公司,然後再根據這 61 加公司的 SIC code 去 Hoover’s DB 中找出所有屬於這類型產業的公司,去算出他們的平均 ROA ( 總資產報酬率 ) 以及 ROS ( 銷售報酬率 ) ,作為 industry-normalized ROA 與 ROS 。 在剛剛有提到,在做企業績效衡的衡量,同常都會採用 知覺測量 (perceptual measures) 的方式來評估企業的營運與財物績效, 所以,接下來就是拿 industry-normalized ROA 與 ROS 跟每一家公司去算,我們可以看到結果: normalized ROA 與 知覺測量 (perceptual measures) 的 Pearson correlation 為 0.638 normalized ROS 與知覺測量 (perceptual measures) 的 Pearson correlation 則是為 0.660 這樣的結果表示:競爭優勢的 客觀測量 (objective measure) 與 知覺測量 (perceptual measures) 有顯著的收斂
  • 接下來是區別效度的部分, 我們可以看到 chi-squares 在 original model 以及 constrained models 是明顯的不同,這也顯示了不同的 constructs 之間是有鑑別力的!!
  • 因為只用單一個回應者的資料同時來評估 predictor variable 以及 criterion variable , 所以作者也有考量到是否會有潛在 common-method bias 的問題,作者用兩種方式來探討: 第一種是採用 Harmon 的 single factor 做檢測,發現 unrotated factor 不只出現一個而是出現了四個 factors ,所 common-method bias 不存在 第二個是,從先前的效度分析中來看, objective measure 與 perceptual measure 之間有高度的 correlation ,所以似乎不會有 common-method bias 的 issue
  • 最後做出來的結果是: Hypothesis 1 ~ 4 都是成立的,只有 Hypothesis 5 不成立
  • 接下來就是 Discussion 的部分: 根據 Ross 這個學者的研究,他認為 IT infrastructure, IT business experience, 以及 relationship infrastructure 這三者的關係是緊緊相連的,而且公司是需要這三者一起來維持競爭優勢,但是根據做出來的結果顯示:在 IT infrastructure 與競爭優勢上是沒有顯著的影響,這代表 IT infrastructure 的 quality 是不會直接影響到差異化 ( differential ) 的 performance 。 但是先前的一些普遍研究認為 high quality IT Infrastructure 是會提供先發制人的優勢, 作者認為而做出來的結果卻是沒那麼顯著的原因是在於,目前資訊這麼發達,公司已經具備完善的 IT 設備,例如: ERP 或是 TCP/IT 通訊,所以大家都一樣啦~~ 就這方面而言,是符合 Carr 的理論,也就是說:大家都有 IT Infrastructure ,所以就沒有什麼獨特性了,換句話說 IT infrastructure 已經是必備的。
  • 接下來看看其他兩項 IT Capabilities ,我們會發現 Carr 的理論就有問題了!! 第一個是 IT business experience ,根據結果這個 capability 對於競爭優勢是有顯著 effect 的, 所以作者認為:一個有能力的 IT 人可以成為競爭優勢的來源,因為他們必須要能夠熟知 business ,才可以開發出符合 business 或 IT 的 strategy system 。 另一方面,如果一間公司 hire 較具有商業頭腦的 IT 人員,讓他們使用 IT Infrastructure 積極為公司取得市場優勢,所以 IT business experience 會是競爭優勢的來源
  • 另外,在 relationship infrastructure 的部分,根據結果發現 relationship infrastructure 對於競爭優勢也是有顯著的影響, 這表示了在公司 IT 與 business 部門之間建立起信任與合作的關係,這樣可以提昇工作效益。 或許這樣的合作機制是對手很快就可以複製或是模仿的,但是他們很快就會發現 很難快速複製 Knowledge sharing 的 engineering , 所以 relationship infrastructure 是競爭優勢的來源!!
  • 最後一個就是 dynamic capability ,根據實驗的結果發現,組織學習強度 (dynamic capability) 會和 IT infrastructure , IT business experience , 以及 relationship infrastructure 有顯著的關係,這也表示公司需要透過不斷地學習來讓 IT infrastructure, IT business experience, 以及 relationship infrastructure 可以快速地來 match 到 business application 。
  • 這項研究有一個限制,就是使用相同的受訪者作答結果作為 dependent 以及 independent variable ,但就統計上看來, common-method bias 的問題似乎不是那麼的嚴重,在未來作者會希望採用多種方法來測量,以減少 potential bias 因為這個研究是以三年內的資料進行,作者未來會以更長的時間 ( 比方說 7 年之類的 ) ,一旦時間拉長了,就可以觀察出更多的因素,這有助於瞭解如何利用和創造競爭優勢 另一方面,作者在未來也會針對不同的 capability 去探討,比方說像是: marketing capabilities
  • 最後做個總結: 這是第一個做 large-scale empirical 的 studies ,這項研究讓我們對於 IT 與競爭優勢之間的關係有更進一步的瞭解 透過 RBV 的觀點,我們可以發現,雖然 IT infrastructure 的 quality 不會直接帶來差異化,但是有效地利用這些 infrastructure 的能力是會有差異化的, 所以公司如果具有 business strategy 以及 business opportunities 知識的 IT 人員,無論是透過「邊學邊做」的方式或是組織的流程來建立能力, 這樣的能力是很難觀察與模仿的,因為這是透過長時間的演進所產生的能力,所以這就是競爭優勢 透過本研究的實證與分析,證明了這一點,並且提供公司他們競爭優勢的來源在哪裡!!

Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study Presentation Transcript

  • Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study Yung-Chun Chang d98725007 Ganesh D. Bhatt and Varun Grover, “Types of Information Technology Capabilities and Their Role in Competitive Advantage: An Empirical Study” Journal of Management Information Systems, vol. 22, issue. 2, pp. 253-276, 2005.
  • Outline
    • 1. Abstract and Motivation
    • 2. Perspectives on IT and Competitive Advantage
    • 3. Research Model and Methodology
    • 4. Results
    • 5. Limitations and Future Research
    • 6. Concluding Comments
    06/13/11
  • 1. Abstract and Motivation
    • This study contrasts the traditional thinking about competitive advantage with the resource-based view. Specifically, it is argued that by demarcating specific types of capabilities, we can contribute to better understanding of the sources of IT-based competitive advantage.
    • Conceptually, we distinguish here between value, competitive, and dynamic capabilities as three distinct types of capabilities. Within each type, we identify specific capabilities, such as quality of the IT infrastructure , IT business experience , relationship infrastructure , and intensity of organizational learning , and present a model that describes relationships between these capabilities and competitive advantage.
    • We then empirically test the model using data collected via a national mail survey from chief IT executives from 202 manufacturing firms.
    06/13/11
  • 1. Abstract and Motivation (cont.)
    • While the quality of the IT infrastructure is hypothesized as a value capability and expectedly did not have any significant effect on competitive advantage, the quality of IT business expertise and the relationship infrastructure (competitive capabilities) did .
    • The results of the study also indicate that the intensity of organizational learning (dynamic capability) was significantly related to all of the capabilities . These results point to the importance of delineating capabilities such as relationship infrastructure that can facilitate differentiation in the marketplace, and dynamic capabilities such as organizational learning as an important antecedent to IT capability building.
    06/13/11
  • 1. Abstract and Motivation (cont.)
    • THE ROLE OF INFORMATION TECHNOLOGY (IT) in creating corporate value has been the subject of much research over the past decade.
      • Earlier research findings “productivity paradox”: indicated a weak relationship between IT investment and productivity .
      • More recent studies have found positive and stronger linkages, and have attributed these to the improvement in business processes, practices, and structures needed to leverage technologies and better metrics to assess intangible IT benefits.
    • However, although the macro-level effect of IT is undisputed, a question remains on whether IT can provide differential benefits to individual firms.
    06/13/11
  • 1. Abstract and Motivation (cont.) 06/13/11 V. S. IT Doesn’t Matter (2003) IT is ubiquitous, increasingly inexpensive, and accessible to all firms. IT is following the pattern of railroads and telegraphs , its benefits are accessible to all and cannot create competitive advantage. Such a position is dangerous, because reduce their IT investment and innovation, will could have profound implications for IT governance. Managing IT is a capability that can create uniqueness and provide organizations a competitive advantage [8, 26, 48, 66]. Nicholas G. Carr Ganesh D. Bhatt Varun Grover
  • 2. Perspectives on IT and Competitive Advantage 06/13/11
  • 2. Perspectives on IT and Competitive Advantage (cont.)
    • It is our contention that the resource-based view (RBV) provides a powerful framework for assessing Carr‘s assertions of IT and competitive advantage. Unlike many of the earlier strategic systems, today's modular and interoperable IT makes it difficult to establish switching costs based solely on idiosyncratic protocols.
    • The RBV emphasizes the importance of building unique, inimitable, and heterogeneously distributed capabilities as the source of competitive advantage. Whereas Carr asserts that there is no uniqueness, inimitability, or heterogeneity possible with regard to IT assets, we argue that the ability to leverage these assets is indeed a strategic differentiator.
    06/13/11
  • 2.1 IT-Related Capabilities
    • The question now becomes: What IT-related resources are important? Although there are a number of ways to categorize IT resources, distinctions based on the basic tenets of the RBV are most appropriate.
    • What IT-based capabilities are valuable (i.e., have an effect on performance), heterogeneously distributed across companies (i.e., are not the same across companies), and imperfectly mobile (i.e., are difficult to acquire in resource markets or develop internally)? The latter factor is concerned with sustainability of competitive advantage, whereas the first two are necessary conditions for any advantage.
    06/13/11
  • 2.1 IT-Related Capabilities (cont.) 06/13/11
  • 2.1 IT-Related Capabilities (cont.)
    • In this study, we empirically assess distinct IT capabilities and their relationship with competitive advantage of the firm.
      • First, we distinguish between three sets of IT capabilities using the well-known edicts of the RBV—and argue that some IT capabilities will not be a source of competitive advantage as argued by Carr.
      • Second, we draw from contemporary perspectives of the RBV by incorporating dynamic capabilities in the form of organizational learning.
      • Third, we use primary data from a large sample of CIOs to assess the relationship between IT capabilities and competitive advantage.
      • Fourth, we use both primary and secondary data to cross-check our assessment of the dependent variable.
    • Below, we develop our hypotheses for three sets of capabilities, which we call value capabilities , competitive capabilities , and dynamic capabilities .
    06/13/11
  • 2.2 Value Capabilities
    • There has been significant research on IT value—with numerous studies examining and finding a relationship between IT investments and business performance [13]. We would classify these as "value capability" studies and argue that investments in IT infrastructure fall in this category. IT infrastructure has been described as an important organizational capability that can be an effective source of value [8, 12, 63, 64, 78].
    • In today‘s environment, a quality IT infrastructure can provide firms with the ability to share information across different functions, innovate, and exploit business opportunities, and the flexibility to respond to changes in business strategy [79].
    • Therefore, despite some contrary evidence [18] from data in the early 1990s, IT infrastructure is argued to be valuable but not a source of competitive advantage.
    06/13/11 Hypothesis I: The quality of the IT infrastructure will not be related to the competitive advantage of the firm.
  • 2.3 Competitive Capabilities
    • The second category, which we call "competitive IT capabilities," includes IT management capabilities. We include two capabilities here: the IT business experience and the relationship infrastructure .
    • We argue that such capabilities are not only valuable but heterogeneously distributed and difficult to transfer. Mata et al. [48] provide two reasons why such managerial IT capabilities are likely to be the major source of competitive advantage.
      • First, they evolve through history and "learning by doing," making these experiences very heterogeneous across firms.
      • Second, the relationship between IT managers and those in other business functions develop over years, are socially complex, and involve a number of minor decisions over time.
    • This makes it difficult to observe and imitate causal influences that might lead to positive outcomes.
    06/13/11
  • 2.3.1 IT Business Experiment
    • Sambamurthy and Zmud [65] argue that IT business experience allows a firm the ability to integrate IT strategy and business strategy, develop reliable and cost-effective systems for the business, and anticipate business needs sooner than the competitors.
    • Keen [41] views the competitive advantage of firms as largely attributable to the business judgment and technical skills of IT groups and top management.
    • Kearns and Lederer [40] found that the extent to which the IT plan reflects the business plan is a significant antecedent to competitive advantage.
    • Thus, based on the RBV of the firm, IT business experience is inimitable to competitors; therefore, a firm that possesses superior IT business experience will likely gain the advantage.
    06/13/11 Hypothesis 2: Higher quality of the IT business experience will have a positive effect on the competitive advantage of the firm.
  • 2.3.2 Relationship Infrastructure
    • Relationship infrastructure reflects the ability of the IT group to understand business needs and create a partnership with business groups to work together to meet them and exploit new business opportunities. The ability of a company to leverage IT resources critically depends on the interaction of the IT function with the business units [7].
    • One major component of the relationship infrastructure is the trust that is developed between IT groups and business units [50].
    • According to Barney and Hansen [6], the relationship infrastructure constitutes a source of competitive advantage for the firm.
    • We posit that once an organization succeeds in forming trust between IT groups and business units, their interaction enables knowledge flow and knowledge diffusion throughout the organization, which is likely to bring a greater appreciation for each unit's work, expertise, and roles in the organization [50].
    06/13/11 Hypothesis 3: Higher quality of the relationship infrastructure will have a positive effect on the competitive advantage of the firm.
  • 2.3.3 Dynamic Capabilities
    • The concept of dynamic capabilities reflects the importance of renewal of organizational capabilities "so as to achieve congruence with the changing business environment" [73, p. 515].
    • Firms that are involved in such knowledge activities have greater absorptive capacity [23] and can build and renew organizational capabilities, which could be a source of competitive advantage [38, 44].
    • Research has also shown that development of IT skills, embedded into specific business practices, requires knowledge assimilation over time [7, 48]. Sambamurthy and Zmud [65] argue that technical and business skills evolve through learning by doing.
    • We frame this construct as the intensity of organizational learning , which involves accumulation, sharing, and application of knowledge [23; 36, p. 90; 81]. Learning is a dynamic concept and its use in theory emphasizes the continually changing nature of organizations [70, 81].
    06/13/11
  • 2.3.3 Dynamic Capabilities (cont.)
    • Often, IT projects that are delivered quickly to meet the business needs require continuous interaction and communication between IT groups and other functional groups. Therefore, firms that have strong learning capabilities can leverage feedback cycles of experience more effectively, thereby building stronger IT capabilities.
    • The intensity of learning is considered to increase an organization‘s problem-solving capacity and its behavior in ways that lead to improved performance at the individual, team, and organizational levels. Mabey and Salaman [45] have shown that the intensity of organization learning is a key variable in determining profitability.
    06/13/11 Hypothesis 4: Higher level of the intensity of organizational learning will have a positive effect on the quality of (a) the IT infrastructure, (b) IT business experience, and (c) the relationship infrastructure Hypothesis 5: Higher level of the intensity of learning will have a positive effect on the competitive advantage of the firm.
  • 3. Research Model and Methodology – Data Collection and Sample
    • UNLIKE PRIOR WORK THAT HAS MOSTLY RELIED on secondary data, this study used survey data.
    06/13/11 1,200 senior IT executives (CIO, vice president of IT, director of IT) 3,000 manufacturing firms 202 usable responses received, resulting in about a 17 percent response rate.
  • 3. Research Model and Methodology – Data Collection and Sample (cont.)
    • We conducted a chi-square test to determine whether responses varied by the manufacturing sectors and their revenues. No significant differences in chi-square at the 0.05 level were noted, which suggests that perceptual measures of IT capabilities and competitiveness are not biased by variations in the manufacturing sectors and their revenues.
    06/13/11 annual revenues: $50 million ~ $140 billion
  • 3. Research Model and Methodology – Operationalization 06/13/11
  • 3. Research Model and Methodology – Operationalization (cont.) 06/13/11 Number of employees
  • 3. Research Model and Methodology – Reliability Analysis
    • The items used for measuring the intensity of organizational learning, IT infrastructure, IT business experience, relationship infrastructure, and competitive advantage were theoretically selected a priori. The verification of this model was done through confirmatory analysis.
    • LISREL was used for data analysis because of its advantages over other techniques. The final value of comparative fit index (CFI) and root mean square residual (RMR) for the measurement model ranged from (0.90 to 0.95) and (0.01 to 0.03), respectively.
    06/13/11
  • 3. Research Model and Methodology – Reliability Analysis (cont.) 06/13/11 Hoover’s DB Industry normalized ROA and ROS : Average return on assets (ROA) and return on sales (ROS) within the same SIC code SIC1 SIC2 SIC3 SICn … Pearson correlation between industry normalized ROA and the perceptual measures was 0.638 {p = 0.000) and for ROS it was 0.660 {p - 0.000). 61 companies were identifiable from 202 usable responses
  • 3. Research Model and Methodology – Reliability Analysis (cont.) 06/13/11
  • 3. Research Model and Methodology – Method Bias
    • One potential issue in having a single respondent assess both predictor and criterion variables is common-method bias.
    • Two tests were conducted to check whether common-method bias was an issue of concern:
      • First, Harmon's single-factor test was conducted using exploratory factor analysis [54]. The unrotated factor solution did not exhibit a single factor, but four factors, indicating that a high level of common-method variance is not present.
      • Second, as described earlier, the correlation analysis between the objective measures of performance of the respondent company obtained from secondary sources with the scaled (perceptual) measures of financial performance was conducted. A high degree of correlation (p < 0.00) between these measures indicates that independent measures of the criterion variable exhibit convergence.
    06/13/11
  • 4. Result
    • Overall, the model demonstrated an excellent fit (CFI = 0.98). With regard to the specific hypotheses, we found:
      • Hypothesis 1: Our results supported the hypothesis that higher quality of the IT infrastructure would not have a significant positive effect on the competitive advantage of the firm {t = 0.20, p > 0.10).
      • Hypothesis 2: As expected, higher level of IT business experience had a significant but weak positive effect on the competitive advantage of the firm {t = 1.66, p<0.10).
      • Hypothesis 3: As expected, higher quality of the relationship infrastructure had a significant positive effect on the competitive advantage of the firm {t = 2.82, p<0.01).
      • Hypotheses 4a, 4b, and 4c: As predicted, higher levels of the intensity of organizational learning had a strong significant positive effect on (a) the quality of the IT infrastructure, (b) the level of IT business experience, and (c) the quality of relationship infrastructure ([a] t = 5.63, p < 0.001; [b] / = 6.77, p < 0.001; [c] t = 3.83, p < 0.001).
      • Hypothesis 5: Our results failed to support that higher level of the intensity of organizational learning would have a significant positive effect on the competitive advantage of the firm
      • {t = -0.53 , p > 0.10).
    06/13/11
  • 4. Result (cont.) 06/13/11 H4a H1 H4b H2 H5 H4c H3
  • 4. Result - Discussion
    • Ross et al. [63] argue that the IT infrastructure, IT business experience, and relationship infrastructure are tightly related, and a firm is required to have all three components in place for achieving sustainable competitive advantage. However, our results demonstrate a lack of significance between quality of IT infrastructure and competitive advantage. This suggests that the quality of the IT infrastructure may not directly contribute to differential performance.
    • In pragmatic terms, these results challenge the commonly held view that development of a high-quality IT infrastructure is ambiguous, follows a unique (path-dependent) development, and provides first-mover advantage to the firm. The rationale for our results could be that in the present time, there might be little difference among well-established firms with regard to the quality of IT infrastructure.
    • This argument is closely aligned with Carr, who states that the ubiquity of sophisticated infrastructures is accessible to all and not a source of differentiation.
    06/13/11
  • 4. Result – Discussion (cont.)
    • The danger in Carr‘s position becomes evident when we look at the other two capabilities that allow us to leverage IT infrastructure successfully.
    • The effect of IT business experience in the present study is significant but not very strong (p < 0.10). We believe that the development of skills requires organizational time and effort; therefore, a firm that possesses highly competent IT people may be able to create and sustain competitive advantage. This leads us to believe that hiring IT people with business skills will be increasingly important.
    • Firms that develop routines to hire business- savvy IT people and develop processes to enable them to work constructively toward progressive IT solutions will be able to garner competitive advantage. Such people can leverage IT infrastructure to take advantage of market arbitrage opportunities when they arise.
    06/13/11
  • 4. Result – Discussion (cont.)
    • Even more important is the relationship infrastructure that was found to significantly affect competitive advantage. This indicates that building relations could be path-specific, complex, and internalized within the organizational practices. Relationship infrastructure is akin to “trust building” between IT groups and business units within the organization.
    • We would argue that, although competitors might easily imitate the coordination mechanisms used for the relationship infrastructure, they would still find it difficult to understand or replicate rapidly and completely the complexities involved in creating an environment of trust and knowledge sharing.
    • Both IT business experience and relationship infrastructure allow firms to effectively deploy IT resources to take advantage of business opportunities.
    06/13/11
  • 4. Result – Discussion (cont.)
    • Since learning is usually associated with absorptive capacity of the firm, it enhances knowledge exploration and exploitation. The role of intensity of learning especially becomes critical when rapidly changing environments require firms to assimilate knowledge that can be used to improve IT infrastructure quality, enhance IT business skills (learning new ways to use IT), and initiate and maintain the relational infrastructure.
    • We would also argue that a high level of learning intensity allows a firm to rapidly change its IT infrastructure , IT business experience , and the state of the relationship infrastructure to meet its future business application needs.
    • Simply searching and acquiring knowledge may not directly affect the competitiveness of the firm, unless this knowledge is assimilated with the existing knowledge. In other words, only through the mediation of path-specific knowledge would learning lead to competitive advantage.
    06/13/11
  • 5. Limitations and Future Research
    • ONE LIMITATION OF THIS STUDY is the use of the same respondent for both our independent and dependent variables. Statistically, common-method bias does not seem to be a major issue. Future studies should use multiple methods of measurement to alleviate any potential bias.
    • This makes it difficult to address the issue of how capabilities are created over a run of several years. Future study that focuses on &quot;state changes&quot; over longer periods of time can add more depth to our understanding of how to create and leverage capabilities for competitive advantage.
    • More importantly, examination of other organizational capabilities (e.g., marketing capabilities) and their internal interconnectedness can enhance our understanding of the embeddedness of IT capabilities and the importance of mutual dependence in creating new capabilities that are even more immobile.
    06/13/11
  • 6. Concluding Comments
    • THIS IS ONE OF THE FIRST LARGE-SCALE EMPIRICAL STUDIES that has over 200 senior IT executives assess their capabilities and competitive advantage. The study adds more granularity to our understanding of the IT-competitive advantage relationship.
    • Drawing from the RBV, we can argue that although the quality of IT infrastructure may not be a direct source of differentiation, the ability to effectively leverage that infrastructure is.
    • Companies that have IT personnel who are knowledgeable about business strategy, competition, and business opportunities, either through &quot;learning by doing,&quot; organizational processes, or skill sets, create a unique competence that can lead to better leveraging of &quot;commodity&quot; infrastructure, thereby leading to competitive advantage.
    • It is unlikely that these capabilities are symmetrical, because such skills evolve through history and experience, and are very difficult to observe and imitate. The empirical evidence bears this out, and provides guidance for progressive firms on where to direct their resources.
    06/13/11
  • Q & A Thanks for your listening