Configuring Capabilities for Integrated Solutions: Evidence from the IT Sector

Abstract

This paper investigates the way that firms' environmental context and organizational structure influence their strategic choices and lead to different capabilities configurations. Drawing on contingency theory and the resource‐based view, we explore integrated solutions—an emerging business model in which firms bundle products and services—in the IT sector, which is a particularly appropriate context due to its novelty, high‐technology characteristics and implications for capabilities development. This study contributes to research and practice by identifying how organizational and environmental/market factors co‐evolve with firms' strategy and how firms' distinct strategic decisions lead to differences in capabilities configurations.

Keywords:

• Capabilities
• integrated solutions
• IT sector
• contingency theory
• resource‐based view

Notes

1. Organization theorists have considered other factors when analyzing firms' strategic decisions. However, we did not take these into account in order to simplify the analysis and interpretation of our model by limiting the number of independent variables. A partial list of these variables includes bureaucracy; flexibility; communication flows; technology adopted; dimension of work units; characteristics of productive processes; relationships with suppliers, clients and other firms; and control and decision‐making processes (Burns and Stalker, 1961; Pugh et al., 1969; Duncan, 1972; Miles and Snow, 1978; Siggelkow, 2002).

2. Kappa's integration with its suppliers is very strong: for example, the contractual agreement with the supplier performing hardware maintenance requires that the supplier's employees, while working with Kappa's customers, must wear a uniform bearing the Kappa name.