Impact of IT Intellectual Capital on IT Explorative-Exploitative Innovation Strategy and Performance

Abstract

In turbulent business environments, firms are increasingly relying on information technology (IT) to enhance their agility to meet multiple market demands. IT departments then play an important role in maintaining an appropriate balance between explorative and exploitative IT innovation strategies to enable the agility. This study contributes to the information systems (IS) literatures by gaining a broader understanding of how the intellectual capital of IT departments can influence the IT explorativeexploitative innovation strategies, and the impact of these strategies on organizational performance. The empirical data collected from 122 IT managers in Taiwan's manufacturing firms show that human capital positively affects the two innovation strategies, structural capital has significant positive effect only on explorative innovation strategy, relational capital has positive moderating effect on the relationship between human capital and explorative innovation strategy, and both the two innovation strategies positively influence the IT department performance, which in turn facilitates the organization performance.

Big Data Capability and Sustainable Competitive Advantage: The Mediating Role of Ambidextrous Innovation Strategy

“…Market-oriented theory suggests that companies use EIIS to integrate and utilize existing knowledge and resources; improve organizational processes and structures in order to adapt and improve innovation practice; optimize and upgrade existing products and services; and respond to the needs of existing customers and markets in a timely manner [25,26,40]. Rialti et al's [41] study, which is based on the big data context, shows that firms can drive exploitative innovation and improve organizational performance by building BDC.…”

“…Technology-oriented theory establishes that ERIS helps enterprises break the original technical barriers and gain a competitive advantage by engaging with new knowledge and fields [25,30]. The implementation of ERIS can help companies target a unique market niche and build a competitive advantage based on new products or services [26].…”

“…This finding of the research suggests that when the level of BDCs is higher, a firm will be more inclined to build SCA by implementing EIIS. EIIS adapts innovation practice on the basis of existing knowledge and learning about how to respond to user needs [25,26]; while ERIS breaks down old technological barriers to gain a competitive advantage by experimenting with new knowledge and fields [25,27]. In initially engaging with the strategy formulation stage, businesses should focus on the logic of exploitation and exploration in the development of innovation practice activities.…”

“…From a single perspective, exploitation and exploration represent two opposite modes of innovation strategy based on differences in the magnitude of innovation [24]. Exploitative innovation strategy (EIIS) is market-oriented and adapts innovation practice on the basis of existing knowledge and learning about how to respond to user needs [25,26]; exploratory innovation strategy (ERIS), meanwhile, is technology-oriented and breaks down old technological barriers to gain a competitive advantage by experimenting with new knowledge and fields [25,27]. Although there are logical differences between the two, they complement each other.…”

The study of the communication of intellectual capital

“…Employees generate IC through their competence, attitude and intellectual agility. In addition to know-how, expertise and tacit knowledge, human capital includes individual problem-solving capability, creativity and entrepreneurial spirit (Nelson & Winter, 1982;Roos et al, 1997;Wang et al, 2015). Human capital is thus a source of innovation and strategic renewal (Bontis, 1998;Subramaniam & Youndt, 2005).…”