The Role of IT in Competitive Dynamics: Applying Awareness-Motivation-Capability Framework

Abstract

This study investigates how firms initiate its competitive actions using information technologies (IT). Drawing upon the awareness-motivation-capability (AMC) framework, we examine IT as a firm’s information processing infrastructure that enhances its awareness of market changes and rivals’ strategic actions. We also investigate entrepreneurial strategic posture as a driving force of a firm’s motivation to respond or react to market dynamics, and operational capabilities for actual implementation and execution of strategic movements. To empirically test the relationships, we conducted a large-scale field survey with top managers in an emerging and dynamic economy. Empirical results support that information processing infrastructure, along with top management’s entrepreneurial posture and superior operational capabilities of a firm, facilitates competitive actions of the firm. We also find that IT enhances firm performance through the improved competitive positions resulting from the competitive actions.