Discovering the Multifaceted Roles of Information Technologies with a Holistic Configurational Theory Approach

This study empirically investigates configurations of high and low firm performance and explains the opposing roles of IT as either an enabler or an inhibitor for competitive firm performance using a set-theoretic configurational theory approach.

Abstract

Information technologies enable organizations to successfully sense and manage market opportunities and threats in turbulent environments and therefore can enhance firm performance. On the other hand, IT can inhibit organizations from achieving high performance due to its inflexibility and the high cost of system implementation. This study explains the multifaceted roles of information technologies in enhancing firm performance by using a set-theoretic configurational theory approach. It investigates the holistic nature of the fused dynamic interactions among IT, organizational agility, and environmental turbulence. Specifically it focuses on explaining the opposing roles of IT as either an enabler or an inhibitor for competitive firm performance. Using field survey data from 106 Korean companies, this study empirically investigates configurations of high and low firm performance. By comparing similarities and differences between multiple configurations, we extract several patterns in a way that explains the different roles of IT in achieving competitive firm performance. We end by providing explanation for why this holistic approach is especially helpful in drawing new insights.