scholarly journals The Resource-Based View of IT Business Value: Complementary Investments or Embedded Knowledge?

2012 ◽  
Vol 11 (01) ◽  
pp. 1250005 ◽  
Author(s):  
Vishnu Vinekar ◽  
James T. C. Teng
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Business Value ◽  
Direct Effects ◽  
Firm Level ◽  
Resource Based View ◽  
It Business Value ◽  
It Investments ◽  
It Systems ◽  
Embedded Knowledge

This paper tests a primary postulate of the Resource-Based View (RBV) of Information Technology (IT) business value. From this perspective, IT is not rare but pervasive, and it is only the combination of investments with other resources that makes the investment inimitable. Therefore, the effect of IT on firm performance cannot be direct effects, but rather firm performance can only be affected when IT expenditures are combined with other investments. This study tests this theory using panel data of large firms spanning seven years. Firm-level data is gathered from Compustat and matched to Information Systems (IS) Budget data. The results do not support the RBV postulate that IT Expenditure cannot have direct competitive advantage but must be combined with expenditure on other assets to effect firm performance. Instead, the results support the opposing hypotheses: IT expenditure and capital expenditures have independent, direct effects on firm revenue as well as firm profit, even in the presence of the interaction variable. The results imply that IT investments may be a source of direct competitive advantage, unlike the postulate of the RBV theorists. This may be because an IT system has embedded knowledge and creates knowledge, making it rare and imperfectly imitable. Rather than investing in generic IT systems and trying to obtain uniqueness from investments in complementary resources, firms can try embedding firm-specific knowledge when designing or modifying their systems and using their systems to create knowledge. This is the first study to test the RBV postulate that value from IT comes only with the combination of IT investments and investments in other assets and not from direct effects. By disproving this postulate, this study opens the door to new hypotheses based on knowledge in and from IT systems.

The Impact of IT Resources on the IT Business Value

2011 ◽  
Vol 2 (2) ◽  
pp. 48-62
Author(s):  
Janusch Patas ◽  
Jens Bartenschlager ◽  
Matthias Goeken
Keyword(s):  
Competitive Advantage ◽  
Theoretical Foundation ◽  
Empirical Studies ◽  
Business Value ◽  
Systematic Research ◽  
Research Gaps ◽  
Resource Based View ◽  
It Business Value ◽  
It Resources ◽  
The Impact

Recently, the Resource-based View (RBV) attracts more attention in IT business value research, as it serves as a theoretical framework for the identification of IT resources impacting firm performance. Although numerous empirical studies applying the RBV can be found, systematic research structuring the obtained knowledge is hardly available. Therefore, the authors conduct an evidence-based literature review to structure and consolidate empirical evidence from studies using the RBV as a theoretical foundation. The authors illustrate how different IT resources can be distinguished and classified by considering their operationalization. With the means of a research map, they illustrate the findings and evidence, pointing out contradictory results of how different classes of IT resources affect the IT business value in terms of the competitive advantage. The authors then discuss direct effects of IT resources on the competitive advantage as well as research gaps. Finally, they present implications regarding the RBV in IT business value research.

Exercising Due Diligence in Studies of Duration of Competitive Advantage Due to Emerging Technology Adoption

2017 ◽  
Vol 14 (1) ◽  
pp. 27-35 ◽  
Author(s):  
Theophanis C. Stratopoulos
Keyword(s):  
Technology Adoption ◽  
Competitive Advantage ◽  
A Priori ◽  
Emerging Technology ◽  
Business Value ◽  
Due Diligence ◽  
Resource Based View ◽  
It Business Value ◽  
Future Studies ◽  
Potential Source

ABSTRACT Motivated by the study of Reinking et al. (2015), the study proposes a due diligence process for future studies aiming to investigate the duration of competitive advantage due to emerging technology adoption. The proposed process is based on the following premise: Predictions related to rate of adoption are useful to IT business value researchers because technology adoption remains a potential source of competitive advantage until adoption rate has reached approximately 50 percent. Based on a comparison of two technologies (ERP and e-commerce), the study provides the following three recommendations for researchers interested in productivity and financial performance-related payoffs due to emerging technology adoption: (1) apply the resource-based view analysis on the emerging technology to see if the duration of competitive advantage is worth exploring; (2) leverage the synthesis done by Stratopoulos (2016) to develop an a priori testable benchmark duration; and (3) contrast adopters with a matched sample of non-adopters or late adopters to establish a duration advantage.

Organizational Assimilation Capacity and IT Business Value

2011 ◽  
pp. 2929-2933
Author(s):  
Vincenzo Morabito ◽  
Gianluigi Viscusi
Keyword(s):  
Information Systems ◽  
Competitive Advantage ◽  
Large Scale ◽  
Top Management Teams ◽  
Business Value ◽  
Organizational Assimilation ◽  
It Business Value ◽  
Business Executives ◽  
Is Integration ◽  
Assimilation Capacity

IT business value represents important outcomes in firms (Banker & Kauffman, 2004; Gable, Darshana, & Chan, 2003; Ravichandran & Chalermsak Lertwongsatien, 2005) whereas information systems (IS) integration represents a relevant amount of the IT spending. Notwithstanding, while most firms are making major investments in information technology, particularly in information systems integration (e.g., ERP and data warehouse solutions), not all of them apply IT effectively in their business activities (Brynjolfsson, McAfee, Zhu, & Sorell, 2006; Dehning & Stratopoulos, 2003; Jason, Vijay, & Kenneth, 2003) obtaining IT business value and organizational competitive advantage. This research is based on an integrative model of IT business value, aiming to evaluate the mediating effect of an “IT organizational assimilation capacity” between IS integration and organization competitive advantage. Taking into account the theoretical premises that IT business value is generated by the exploitation of both IT and organizational resources, we develop a research model and propose two research hypotheses. The model and the related hypotheses are based on a large-scale sample survey (Francalanci & Morabito, 2006). The responses were obtained from 466 CIOs and senior business executives, who were members of the firms’ top management teams in Italian companies.

Assessing the Value of Information Technology Investment to Firm Performance

2002 ◽  
pp. 257-278
Author(s):  
Qing Hu ◽  
Robert T. Plant
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Financial Performance ◽  
Capital Investment ◽  
Large Scale ◽  
Performance Data ◽  
It Investment ◽  
Firm Level ◽  
It Investments ◽  
And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

Impact of IT practices and business value of IT measurement

2019 ◽  
Vol 69 (4) ◽  
pp. 774-793
Author(s):  
Sunil Pathak ◽  
Venkataraghavan Krishnaswamy ◽  
Mayank Sharma
Keyword(s):  
Business Value ◽  
Business Value Of It ◽  
Firm Level ◽  
Content Type ◽  
Study Approach ◽  
It Systems ◽  
Firm Data ◽  
Value Of It ◽  
The Relationship ◽  
It Practices

Purpose The purpose of this paper is to measure the business value of IT (BVIT) and illustrate the relationship between IT practices and BVIT. Design/methodology/approach The paper uses a case study approach to collect the subject firm data over a period of one year. The data are about various IT systems used in the firm and their associated capital and operational cost components. The derived data are then compared with industry benchmarks. Findings The IT practices employed by the firm enable it to achieve a BVIT which is higher than the industry norm, from both strategic and operational perspectives. Research limitations/implications In this study, a year’s worth of data from a single firm is considered. The temporal frame of the research data limits the generalization of the results. To improve the generalizability, data from many years and across many firms may be used. Practical implications The paper provides insights to managers to identify the measures of BVIT. Further, managers can make necessary interventions based on IT practices to derive IT capabilities which, in turn, impact the firm’s performance. Originality/value The contribution of the work is manifold: illustration of the relationship between IT practices and BVIT; illustration of a methodology to evaluate firm-level BVIT; and an approach to collect IT expenses – both capital and operational level.

Toward a Perspective on R&D Outsourcing: RBV and Firm Performance

2018 ◽  
Vol 15 (05) ◽  
pp. 1850040 ◽  
Author(s):  
Anne W. Fuller
Keyword(s):  
Decision Making ◽  
Firm Performance ◽  
Research And Development ◽  
Competitive Advantage ◽  
Industrial Research ◽  
Vital Role ◽  
Decision Making Process ◽  
Resource Based View ◽  
The Impact

This paper looks at the vital role of industrial research and development (R&D). The increased outsourcing of industrial R&D is contrasted with a resource-based view of competitive advantage which maintains capabilities that are valuable, rare, imitable, and non-substitutable (VRIN), and should be internalized in the firm. Traditional business formation literature is also supportive of keeping R&D “inhouse”. R&D outsourcing research is leveraged to posit possible reasons for the increased amount of outsourced R&D. Testable propositions are included that look at factors for R&D outsource decisions and also the impact of these decisions on firm performance. An R&D entropy statistic is introduced as well as several R&D characteristics useful in the decision-making process to create R&D.

scholarly journals Assessing The Performance Impacts of Information Systems From The Resource-Based Perspective: An Empirical Test of The Indirect Effect of IS

1970 ◽  
Vol 24 (2) ◽  
pp. 141-164
Author(s):  
Michael Zhang
Keyword(s):  
Information Systems ◽  
Firm Performance ◽  
Competitive Advantage ◽  
Indirect Effect ◽  
Empirical Test ◽  
Organizational Resources ◽  
Specific Knowledge ◽  
Resource Based View ◽  
Related Diversification

Research into the strategic impacts of information systems (IS) from the resource-based view of competitive advantage has increasingly embraced the indirecteffect of IS on firm performance; that is, IS interact with other complementaryorganizational resources in influencing firm performance. Using both survey andarchival data, this study set out to test the indirect effect of IS and determine thecomplementary organizational resources contributing to IS impacts on firm performance.The results provide additional evidence in support of the indirect performanceeffect of IS. Specifically, the study found that the performance impacts ofIS arose from their interactions with firm-specific knowledge, information, verticalintegration and related diversification that complemented IS.

scholarly journals Does the ‘Process’ of Process Capital Matter to Performance? Evidence from Kenyan Commercial Banks

2019 ◽  
Vol 5 (1) ◽  
pp. 105-114
Author(s):  
Peter Nderitu Githaiga ◽  
Joyce Kiomosop Komen ◽  
Josephat Cheboi Yegon
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Panel Data ◽  
Competitive Advantage ◽  
Commercial Banks ◽  
Product Life Cycle ◽  
Dynamic Environment ◽  
Resource Based View ◽  
Customer Expectation ◽  
And Performance

Globalization, changing customer expectation and shrinking product life-cycle depict process capital as a source of competitive advantage in modern economies. Consequently, organizations are gradually becoming more process oriented to cope with a dynamic environment. However, the process capital and performance causality is scanty in extant literature. Besides, previous studies overlooked the process aspect of process capital. Thus, the objective of this study was to determine whether the “process” of process capital matters to firm performance. The hypothesis was tested using panel data for the years 2008-2017 extracted from 31 commercial banks in Kenya. The findings showed that process capital had a positive and significant effect on performance (β = 0.275, ρ-value 0.000<0.05). Consistent with the resource based view theory; the study concluded that the process of process capital influences firm performance.

Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view

2001 ◽  
Vol 27 (6) ◽  
pp. 643-650 ◽  
Author(s):  
Jay B. Barney
Keyword(s):  
Firm Performance ◽  
Competitive Advantage ◽  
Evolutionary Economics ◽  
Resource Based View ◽  
Empirical Implications

The resource-based view can be positioned relative to at least three theoretical traditions: SCP-based theories of industry determinants of firm performance, neo-classical microeconomics, and evolutionary economics. In the 1991 article, only the first of these ways of positioning the resourcebased view is explored. This article briefly discusses some of the implications of positioning the resource-based view relative to these other two literatures; it also discusses some of the empirical implications of each of these different resource-based theories.

Towards a Contingency Resource-Based View of IT Business Value

2010 ◽  
Vol 24 (1) ◽  
pp. 85-106 ◽  
Author(s):  
Guangming Cao ◽  
Frank Wiengarten ◽  
Paul Humphreys
Keyword(s):  
Business Value ◽  
Resource Based View ◽  
It Business Value
Sign in / Sign up

Export Citation Format

Share Document