The Roles of Information Technology in Organizational Capability Building: An IT Capability Perspective

Abstract

The objective of this study is to examine why and under what situations certain information technology resources can generate positive organizational outcomes. To achieve this, we adopt the organizational capability perspective. Based on this perspective, IT can be viewed as a functional capability that forms high- level dynamic capability in the copresence of other functional capabilities and resources. A process-oriented view is used to examine how this capability-formation process happens inside organizations. For the high-level dynamic capability, we focus on organizational agility by considering the contemporary business environment. We propose a conceptual framework regarding the roles of IT capabilities in organizational agility building. In our framework, IT capabilities can create organizational agility through two paths: (1) capability building through process improvement or innovation and (2) capability creation through innovative adoption of new IT capabilities. As part of the framework development, we suggest a method to define organizational IT capabilities in multiple levels of analysis, which allows us to evaluate IT capabilities at the information systems strategy level as well as the functional technology level. The proposed conceptual framework serves as a theoretical foundation of further empirical studies.

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