IT-Enabled Organizational Agility and Sustainable Competitive Advantage

Abstract

Organizational agility has recently received a great deal of attention as a significant business capability for competing in the current dynamic business environments. Further, researchers have hypothesized that information technology management enables organizational agility and competitive success. However, few large scale empirical efforts have yet been conducted to examine the hypothesized nomological networks surrounding IT capabilities, organizational agility, and competitive performance. This research utilizes data from a large-scale field survey and archival performance data to test a model of the relationships among IT capabilities, organizational agility, and firm performance. The results of a structural equation model analysis indicate that IT capability enables operational innovation capability and operational excellence capability, which in turn affect the development of two types of agility. These two types of agility, entrepreneurial and adaptive agility, are found to be associated with firms' sustainable competitive advantage. These findings provide a better understanding of the strategic role of IT in contemporary businesses. The study benefits both academics and practitioners by providing conceptual advancements of research constructs and theoretical extension of IT-enabled organizational agility.