Factors determining company performance in the IT industry

Abstract

Abstract The dynamics of the business environment indicate that companies should become more flexible and value oriented. The competition within the IT sector leads to increased uncertainty for the players and a higher focus on the strategic direction of the company. Hence, many studies point out the significance of strategic agility as a tool of increasing company performance and achieving improved results. The paper highlights how the performance of IT companies is impacted by various factors. The main driver for company performance is strategic agility mixed with absorptive capacity. For a better understanding, the paper will analyze knowledge acquisition, knowledge assimilation, transformation and knowledge exploitation. These four dimensions represent the layers of absorptive capacity. Using as framework a survey developed based on the literature, there will be performed an analysis of the input received. The responses have been captured from stakeholders of the IT industry, who are employees of IT organizations with operations in Romania. For an enhanced output, there will be applied a regression analysis. This will contribute to the identification of factors determining company performance in the IT industry. The results of the regression analysis will demonstrate that strategic agility, knowledge acquisition and transformation have the highest impact on company performance. As only three out of the five tested dimensions are validated, further research can be grounded on understanding why knowledge assimilation and knowledge exploitation have not been confirmed as factors impacting company performance.