Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Drawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.     

信息技术、核心能力和企业绩效的实证研究

信息技术增强企业竞争力的机理是有效提升企业信息技术应用水平的重要前提。基于核心能力理论构建信息技术资源和信息技术应用能力通过企业核心能力这一中介变量影响企业绩效的理论模型,并考虑环境动态性在信息技术增强企业竞争力过程中的调节效应,应用偏最小二乘法的结构方程模型,对中国296家企业的问卷调查数据进行分析。研究结果表明,在不考虑环境动态性的情况下,无论是信息技术资源还是信息技术应用能力都无法直接影响企业绩效,信息技术必须通过支持企业核心能力间接影响企业绩效;环境动态性在信息技术增强企业竞争力过程中有显著的调节作用,不同环境下信息技术影响企业绩效的机理是不同的,在稳定环境下企业信息技术应用的重点是获取支持核心能力的信息技术资源,在动态环境下企业更应该构建信息技术应用能力,才能实现对不断变化的核心能力的持续支持,进而提升企业绩效。     

The Effect of Board of Directors’ IT Awareness on CIO Compensation and Firm Performance

Chief information officers (CIOs) play increasingly strategic roles in firms in this competitive global economy, which is now largely powered by information technology (IT). However, research has shown a lack of board of directors’ oversight on CIO‐ and IT‐related issues. Drawing on agency, resource dependence, and alignment theories, we investigate the effect of board of directors’ IT awareness on CIO compensation structure and firm performance. We conduct cross‐sectional time series analyses of data collected from various sources. Our study underlines three important findings. First, we show that some commonly known executive compensation determinants, such as individual characteristics and governance structure, do not have significant effects on CIO compensation structure. Second, with regard to CIO compensation structure, firms respond to increasing information asymmetry differently according to the level of IT awareness of their boards. Finally, firms perform better when their boards have higher levels of IT awareness, and this positive effect of IT awareness is considerably larger in IT intensive industries. Overall, our study provides empirical support for the important role of boards’ IT awareness in shaping CIO compensation and improving firm performance. Our results suggest that boards with functional area knowledge—or higher IT awareness in this case—can more effectively monitor and better incentivize executives, and consequently lead to better firm performance.     

Single‐ and Multiple‐Informant Research Designs to Examine the Human Resource Management−Performance Relationship

During the last decades, many empirical studies have analysed the relationship between human resource management and firm performance. Despite the call for multiple‐rater designs, a relatively large number of researchers still rely on survey responses provided by a single informant in each organization. Single‐informant designs suffer from a number of problems, especially when the responses provided by different types of raters across firms are pooled into a single dataset prior to assessing their equivalence across raters. Using an illustration of the relationship between high performance work systems and firm performance, in this paper we observe that responses provided by managers holding different positions (human resource managers and sales managers) differ significantly and therefore pooling their responses into a single dataset may result in confusing conclusions. Furthermore, we demonstrate that differences arise in the estimated parameters when a multiple‐key‐informant approach, compared to a single‐informant design, is adopted. For these reasons, data collection using multiple key informants is recommended, based on the assumption that some raters in the firm will be more knowledgeable about the variables of interest than others.     

Knowledge Management Using Information Technology: Determinants of Short‐Term Impact on Firm Value*

The importance of knowledge management (KM) processes for organizational performance is now well recognized. Seeking to better understand the short‐term impact of KM on firm value, this article focuses on public announcements of information technology (IT)‐based KM efforts, and uses cumulative abnormal return (CAR) associated with an announcement as the dependent variable. This article employs a contingency approach, arguing that the KM announcement would have a positive short‐term impact on firm value in some conditions but not in others. Thus, it pursues the following research question: What are the effects of contextual factors on the CAR associated with the announcement of an IT‐based KM effort? Specific hypotheses are proposed based on information‐processing theory, organizational learning theory, the knowledge‐based theory of the firm, and the theory of knowledge creation. These hypotheses link CARs to alignment between industry innovativeness and the KM process, alignment between firm efficiency and the KM process, firm‐specific instability, and firm diversification. The empirical study utilizes secondary data on 89 KM announcements from 1995 to 2002. The results largely support the hypotheses. Overall, this article provides empirical support for the theory‐based arguments, and helps develop a contingency framework of the effectiveness of KM efforts.     

Clarifying the Effect of Intellectual Capital on Performance: The Mediating Role of Dynamic Capability

Recent studies suggest a potential relationship between intellectual capital and dynamic capability in achieving performance. This is unsettling for managers because these studies contain little effort to develop a framework for understanding the relationship. To examine this unnerving potential, we develop and test a theoretical model that explains how dynamic capability mediates the impact of intellectual capital on performance. In this study, the scope of intellectual capital includes human capital, relational capital and structural capital. This study examines the pooled data of 242 high‐technology firms from 2001 to 2008. Results from Bayesian regression analysis suggest that the effect of structural capital on performance is completely mediated by dynamic capability. Furthermore, the findings show that dynamic capability does not completely mediate the respective effects of human capital and relational capital on performance, but does so only partially. These results provide convincing support for the importance of dynamic capability through accumulating R&D and marketing capability over time, thereby enhancing firm performance. The empirical findings and the ensuing discussion will be of interest to managers and practitioners.     

Market Impact on IT Security Spending

Traditionally, IT security investment decisions are made in isolation. However, as firms that compete for customers in an industry are closely interlinked, a macro perspective is needed in analyzing these decisions. We utilize the notions of direct‐ and cross‐risk elasticity to describe the customer response to adverse IT security events in the firm and competitor, respectively, thus allowing us to analyze optimal security investment decisions. Examining both symmetric and asymmetric duopoly cases using a continuous‐time Markov chain (CTMC) model, we demonstrate that optimal IT security spending, expected firm profits and willingness of firms to cooperate on security improvements are highly dependent on the nature of customer response to adverse events. We also examine the investment problem when security attacks on different firms are correlated.     

Examining the Antecedents and Consequences of CIO Strategic Decision‐Making Authority: An Empirical Study*

Despite the strategic importance of information technology (IT) to contemporary firms, chief information officers (CIO) often still have varying degrees of strategic decision‐making authority. In this study, we apply the theory of managerial discretion to define CIO strategic decision‐making authority and argue that the CIO's level of strategic decision‐making authority directly influences IT's contribution to organization performance. We also draw on the power and politics perspective in the strategic decision‐making literature to identify the direct antecedents to the CIO's strategic decision‐making authority. A theoretical model is presented and empirically tested using survey data collected from a cross‐industry sample of 174 matched pairs of CIOs and top business executives through structural equation modeling. The results suggest that organizational climate, organizational support for IT, the CIO's structural power, the CIO's level of strategic effectiveness, and a strong partnership between the CIO and top management team directly influence the CIO's level of strategic decision‐making authority within the organization. The results also suggest that the CIO's strategic decision‐making authority in the organization directly influences the contribution of IT to firm performance and that effective CIOs have a greater influence on IT's contribution when provided with strategic decision‐making authority.     

A Comprehensive Model for Measuring the Potential Impact of Information Technology on Organizational Strategic Variables*

The existing literature on the impact of information technology (IT) does not include rigorous theory building or empirical studies. This research seems to be the first comprehensive investigation towards the development of an empirically validated comprehensive model for understanding the potential impact of IT on organizational strategic variables. More specifically, organizational and industrial variables that appeared to be affected by IT are identified, measured, and operationalized in the form of a comprehensive model. This study is based on structured interviews with a carefully selected sample of 31 strategic managers who had experience using IT for strategic decisions. In addition, the variables included in the model are well grounded in the information systems literature. The variables are then empirically validated and their reliabilities critically tested. A comprehensive model is derived from these validated variables. The model is a first step towards measuring the overall potential impact of IT on an organization. The model can also be used to gauge IT's potential impact on individual strategic variables. A set of hypotheses is also presented for future research. The hypotheses primarily relate to the impact of IT on organizational strategic performance. The model provides an empirically validated foundation for testing of such hypotheses.     

Performance effects of IT capability, service process innovation, and the mediating role of customer service

Few academic studies have investigated how information technology (IT) capability and service process innovation can create performance gains for firms through customer service. We propose that customer service is a significant mediator through which IT capability and service process innovation influence the performance of a firm, and that IT capability is also a critical factor that facilitates service process innovation. Empirical support for our argument was derived from data collected from 174 firms in the Taiwan IT industry. The results suggest that managerial initiatives should be directed at developing IT capability and service process innovation and leveraging them to facilitate customer service to attain superior firm performance. Furthermore, greater IT capability would lead to a higher degree of service process innovation.     

企业信息技术能力及其对信息化成功影响的实证研究——基于RBV理论视角

本文研究目的是探讨企业信息技术能力的构成维度、概念测量以及其实现信息化成功的影响机制.基于我国信息化的实践,作者以企业资源理论(RBV)与以往文献为基础,研究并建立了信息技术能力及其对信息化成功影响的理论模型,认为IT基础设施、IT管理技能以及业务/IT之间关系能力三者共同交互并影响了信息技术在企业中的扩散与吸收.作者通过问卷调查法收集数据,运用结构方程模型进行实证分析,分步骤验证了信息技术能力的概念测量模型以及对信息化成功影响的结构关系模型.本研究将有助于指导企业识别和培育核心信息技术能力.从而实现信息化成功及其推动的持续竞争优势.     

Supplier integration,operational capability and firm performance: an investigation in an emerging economy environment

Abstract

The literature on supplier integration’s (SI) impact on firm performance is intertwined with mixed findings in terms of definitional differences, study context, specific integration components, and the types of relationships examined. This study contributes to the supplier integration and firm performance (SI-FP) literature by investigating how and when supplier integration influences firm performance. Drawing on the relational view, the resource-based view, and the Dynamics Capability theories, we suggest that improvements in firm performance from the supplier integration perspective are dependent on gains in operational capabilities. We test this dependency with survey data from firms in Ghana, a developing economy. The results show positive significant relationships between supplier integration and competitive operational capabilities and between supplier integration and firm performance. Our results highlight the importance for managers in developing economies and elsewhere to improve their firms’ operational capabilities and competitiveness by investing in supplier integration. We also discuss implications of these findings for research.     

信息技术资源和信息技术能力的互补性及其绩效影响

信息技术资源和信息技术能力之间的关系是明确信息技术价值实现机理的基础。本文基于资源基础理论、竞争战略理论和核心能力理论,构建了信息技术资源、信息技术能力、信息系统支持企业竞争战略、信息系统支持企业核心能力和企业绩效之间关系的理论模型,研究信息技术资源和信息技术能力在信息技术价值实现过程中的互补性以及其对企业绩效的影响机理。利用层次回归分析方法对296份中国企业的实际调查数据进行了数据分析和模型拟合。研究结果表明信息技术资源和信息技术能力在信息技术价值实现过程中具有互补性,而且两者之间的互补性通过信息系统支持企业竞争战略和信息系统支持企业核心能力等中介变量间接影响企业绩效。     

Managing Enterprise Risks of Technological Systems: An Exploratory Empirical Analysis of Vulnerability Characteristics as Drivers of Exploit Publication*

Enterprises experience opportunistic exploits targeted at vulnerable technology. Vulnerabilities in software‐based applications, service systems, enterprise platforms, and supply chains are discovered and disclosed on an alarmingly regular basis. A necessary enterprise risk management task concerns identifying and patching vulnerabilities. Yet it is a costly affair to develop and deploy patches to alleviate risk and prevent damage from exploit attacks. Given the limited resources available, technology producers and users must identify priorities for such tasks. When not overlooked, vulnerability‐patching tasks often are prioritized based on vulnerability disclosure dates, thus vulnerabilities disclosed earlier usually have patches developed and deployed earlier. We suggest priorities also should focus on time‐dependent likelihoods of exploits getting published. We analyze data on software exploits to identify factors associated with the duration between a vulnerability discovery date and the date when an exploit is publicly available, a time window for patching before exploit attack levels may escalate. Actively prioritizing vulnerability patching based on likelihoods of exploit publication may help lessen losses due to exploit attacks. Technology managers might apply the insights to better estimate relative risk levels, and better prioritize protection efforts toward vulnerabilities having higher risk of earlier exploitation.     

Mexican and Swedish Managers' Perceptions of the Impact of EIS on Organizational Intelligence,Decision Making,and Structure*

Although information technologies in business organizations around the world may be very similar, the meanings conveyed through the technologies may be dependent on managerial values and national culture. Cultural differences need to be understood before information technology developed for organizations in one country can be effectively implemented in organizations in another country. Drawing on survey responses from managers using Executive Information Systems (EIS) across many organizations in Mexico, Sweden, and the United States, the current study examined whether cultural differences influence perceptions of the relationship between Executive Information Systems' use and various outcomes related to decision-making behaviors and processes. The study found significant differences, predicted by cultural factors, in the impact of EIS use on senior management decision making. The findings confirm the notion that IT is used by executives to reinforce the decision-making behaviors valued in their culture.     

企业IT绩效与组织结构维度关系的实证研究

本文在对相关领域已有研究成果作了综述的基础上,对企业信息技术(IT)绩效进行了定义,并提出了一套用于分析企业IT绩效与组织结构维度关系的评价指标体系,接着利用Kendall相关分析方法以及两步聚类分析方法结合指标体系进行了实证研究。研究结果显示,企业IT绩效与组织结构维度的相关关系是显著的,结构性维度的改善有利于IT绩效的提高,从而促进组织绩效的改善。     

Impact of Information Technology Integration and Lean/Just‐In‐Time Practices on Lead‐Time Performance*

Managers seeking to improve lead‐time performance are challenged by how to balance resources and investments between process improvement achieved through lean/just‐in‐time (JIT) practices and information technology (IT) deployment. However, extant literature provides little guidance on this question. Motivated by both practical importance and lack of academic research, this article examines empirically the relationships among interfirm IT integration, intrafirm IT integration, lean/JIT practices, and lead‐time performance using data from IndustryWeek's Census of Manufacturers ( IndustryWeek, 2006 ). The results provide several new insights on the relationship between IT integration and lean/JIT practices. First, the study confirms that implementing lean/JIT practices significantly reduces lead time. Second, lean/JIT practices mediate the influence of IT integration on lead‐time performance. This suggests that process improvements that result from lean/JIT practices are important contributors to the success of IT integration. Even companies that have experienced success in reducing lead time through lean/JIT practices may benefit from IT integration practices such as those embodied in enterprise resource planning systems. The findings provide managers with empirical evidence and a theoretical framework on the balance between lean/JIT and IT for effecting improvement in lead‐time performance, thus offering practical guidance on this important question. Future research is needed to extend the lean/JIT practices in this study to supply chain practices and explore the relationship between supply chain practices and IT integration.     

The Alignment between Organizational Critical Success Factors and Information Technology Capability in Academic Institutions*

Alignment between organizational critical success factors (CSFs) and competencies is widely believed to improve performance. This study examines the performance implications of alignment between CSFs and one source of competence, the organization's information technology (IT) capability. The effects of three antecedent factors–environmental uncertainty, integration, and IT management sophistication–are also examined. This paper uses survey data from 244 large academic institutions, along with some secondary data. Following the profile deviation approach to measure alignment, the academic institutions are divided into three clusters based on their CSFs: the academic comprehensives, the reputed giants, and the small educators. The ideal profile of IT capability is next developed for each cluster in terms of four dimensions: information retrieval, electronic communication, computing facilities for students, and computer-aided education. Alignment is then computed for each institution as the proximity of its IT capability profile from the ideal IT capability profile for the cluster to which it belongs. The results suggest that alignment facilitates both perceived IT success and organizational performance. Moreover, sophisticated IT management facilitates both alignment and perceived IT success, environmental uncertainty facilitates perceived IT success but not alignment, and integration facilitates neither alignment nor perceived IT success.     

Branch‐and‐Price Methods for Prescribing Profitable Upgrades of High‐Technology Products with Stochastic Demands*

This paper develops a model that can be used as a decision support aid, helping manufacturers make profitable decisions in upgrading the features of a family of high‐technology products over its life cycle. The model integrates various organizations in the enterprise: product design, marketing, manufacturing, production planning, and supply chain management. Customer demand is assumed random and this uncertainty is addressed using scenario analysis. A branch‐and‐price (B&P) solution approach is devised to optimize the stochastic problem effectively. Sets of random instances are generated to evaluate the effectiveness of our solution approach in comparison with that of commercial software on the basis of run time. Computational results indicate that our approach outperforms commercial software on all of our test problems and is capable of solving practical problems in reasonable run time. We present several examples to demonstrate how managers can use our models to answer “what if” questions.     

Performance Impacts of Strategy,Information Technology Applications,and Business Process Outsourcing in U.S. Manufacturing Plants

This paper develops a conceptual model to study the role of outsourcing strategies and plant‐level information technology (IT) application infrastructure in the outsourcing of production and support business processes, as well as their subsequent impact on overall plant performance. We validate this model empirically using cross‐sectional survey data from U.S. manufacturing plants. We find that some IT applications are more effective at enabling the outsourcing of business processes than others. For example, the implementation of enterprise management systems is associated with the outsourcing of both production and support processes, whereas operations management systems are not associated with the outsourcing of plant processes. Plants with a low‐cost outsourcing strategy are more likely to outsource support processes than plants with a competency‐focused outsourcing strategy. However, both cost‐ and competency‐based strategies have a positive and similar impact on the outsourcing of production processes. In terms of implications for plant performance, our findings indicate that the outsourcing of production and support processes is associated with higher gross margins. Although plant IT infrastructure is positively associated with favorable on‐time delivery rates, there is no positive association between the incidence of plant outsourcing and on‐time delivery rates. These results have implications for crafting plant‐level outsourcing strategies and for investments in IT systems to facilitate the outsourcing of business processes for enhanced plant performance.