Balancing exploration and exploitation of IT resources: the influence of Digital Business Intensity on perceived organizational performance

Abstract

Facing a barrage of novel information technology (IT), organizations must invest on the basis of the impact of IT capabilities on the organization's performance. This research extends Bharadwaj's (MIS Quarterly 169-196, 2000) resource-based view of the relationship between IT capability and performance by introducing both the mediating and moderating effects of Digital Business Intensity (DBI). Empirical data collected from CIO's from US firms reveal that although IT capability positively influences organizational performance, this relationship may differ in strength at different levels of DBI. Our study also finds that IT capability is important in determining DBI, which in turn influences organizational performance. Findings highlight tensions between DBI exploration and IT capabilities exploitation. Results also suggest that companies that leverage their existing IT capabilities to drive DBI are more adept at securing performance returns. However, when DBI investments do not complement existing IT capabilities, DBI appears to dampen performance, further accentuated for high-DBI firms.

How the Interaction of Big Data Analytics Capabilities and Digital Platform Capabilities Affects Service Innovation: A Dynamic Capabilities View

“…Given the striking characteristics of the ease of connectivity to other technologies, a large amount of data or information and autoanalysis needed for a few specialized skills may minimize the necessity of human resources for market change-sensing [45]. Moreover, the introduction of digital platforms may change the way people think or work and fail to initiate synergies with people [58], [59]. Consequently, any established strategy or plan may encounter implementation problems because of the intimidating nature of collaboration.…”

Digital innovations

“…Accordingly, a third group of studies focuses on the enablers of digital innovations. This research stream investigates, inter alia, the contribution of organizational capabilities (Alt and Zimmermann 2014;Levallet and Chan 2018;Nwankpa and Datta 2017;Stoeckli et al 2018) and the relevance of digital resources (Nambisan 2013;Nwankpa and Datta 2017;Wiesböck 2019;Yoo et al 2010) such as digital infrastructures (Bañares and Altmann 2018;Blaschke et al 2016;Henfridsson and Bygstad 2013) or digital platforms and ecosystems (Karimi and Walter 2015;Lyytinen et al 2016;Parker et al 2017) as a basis for digital innovations.…”

“…Finally, organizations need to develop the necessary organizational capabilities to realize and embed digital innovations (Li et al 2018;Stoeckli et al 2018;Wiesböck 2018). Initially, organizations need sufficient levels of IT capabilities that allow them to handle digital technologies as the basis for digital innovations (Nwankpa and Datta 2017). In addition, organizations need dedicated digital capabilities (Li et al 2018;Wiesböck 2018).…”

“…In addition, organizations need dedicated digital capabilities (Li et al 2018;Wiesböck 2018). Such digital capabilities allow organizations to use digital resources for innovation purposes Lyytinen et al 2016;Nwankpa and Datta 2017;Wiesböck 2019). To develop these capabilities, organizations can resort to different means.…”

Digital Entrepreneurship and its Role in Innovation Systems: A Systematic Literature Review as a Basis for Future Research Avenues for Sustainable Transitions

“…Schallmo et al (2017) applied several categories in their work that outlined the preconditions for the development and implementation of a digital business model and combined them in a transformation roadmap. Several researchers consider, in addition, IT capability [75] and internal IT infrastructure maturity [65] as other important preconditions in an intensification of business digitalization and organizational performance during business transformations [85].…”