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Abstract
The business value of information technology (IT) has been one of the top concerns of both practitioners and scholars for decades. Numerous studies have documented the positive effects of IT capability on organizational performance but our knowledge of the processes through which such gains are achieved remains limited due to a lack of focus on the business environment. Such a linkage therefore remains the subject of debate in the information systems literature. In this study, we fill this gap by investigating the mediating role of business process agility and the moderating roles of environmental factors. On the basis of matched survey data obtained from 214 IT and business executives from manufacturing firms in China, our analyses show that even though firm-wide IT capability presents the characteristics of rarity, appropriability, non-reproducibility, and non-substitutability, its impact on organizational performance is fully mediated by business process agility. Our results also show that the impact of the environment is multifaceted and nuanced. In particular, environmental hostility weakens the effect of IT capability on business process agility, while environmental complexity strengthens it. The theoretical and practical implications of this study, and its limitations, are also discussed.
Acknowledgements
The authors are grateful for financial support from Humanities and Social Sciences Foundation of the Ministry of Education of China (No. 10YJC630258, No. 10YJC630102), National Natural Science Foundation of China (No. 71273160) and Social Science Research of China (No. 12CGL053) for this project.
Additional information
Notes on contributors
Yang Chen
Dr. Yang Chen is an associate professor in School of Business Administration, Southwestern University of Finance and Economics in China. He has published research papers in Journal of Business Ethics, Human Resource Management, International Journal of Human Resource Management, and Journal of Computer Information Systems. His current research interests include corporate sustainable development, IT business values, human resource management, and so on.
Yi Wang
Dr. Yi Wang is an associate professor in Business School, Shantou University in China. She has published research papers in International Journal of Electronic Business, Journal of Shantou University (Humanities Edition), Journal of Systems and Information Technology. Her current research interests include IT diffusion and adoption and IT business value.
Saggi Nevo
Dr. Saggi Nevo is an assistant professor in the Information Technology Management Department at the University at Albany. His work has been accepted or published in journals such as MIS Quarterly, The DATA BASE for Advances in IS, Communications of the AIS, International Journal of Electronic Commerce, and Journal of Strategic Information Systems. His current research interests include open source software, social computing, and virtual worlds.
Jiafei Jin
Dr. Jiafei Jin an associate professor in School of Business Administration, Southwestern University of Finance and Economics in China. He has published research papers in Journal of Business Ethics, Human Resource Management, and International Journal of Human Resource Management. His current research interests include work-family-conflict, human resource management, and so on.
Luning Wang
Mr. Luning Wang is a Ph.D. student in Department of Management, Hong Kong University of Science and Technology. His current research interests include strategic human resource management, strategic management, and so on.
Wing S Chow
Dr. Wing S. Chow is an associate professor of MIS in the School of Business, Hong Kong Baptist University. Dr. Chow published more than 70 papers in the journals and conference proceedings. He has published research papers in journals such as Journal of Business Ethics, OMEGA, European Journal of Operational Research, and Journal of Computer Information Systems. His current research interests include corporate information systems, e-commerce, and so on.