Effects of technical IT capabilities on organizational agility. The moderating role of IT business spanning capability

DOIhttps://doi.org/10.1108/IMDS-08-2019-0433
Pages941-961
Publication Date09 Apr 2020
AuthorPeiran Gao,Jinlong Zhang,Yeming Gong,Haitao Li
SubjectInformation & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems
Effects of technical IT capabilities
on organizational agility
The moderating role of IT business spanning
capability
Peiran Gao and Jinlong Zhang
School of Management, Huazhong University of Science and Technology,
Wuhan, China
Yeming Gong
EMLYON Business School,
Ecully, France, and
Haitao Li
School of Management, Huazhong University of Science and Technology,
Wuhan, China
Abstract
Purpose The purpose of this research is to investigate how critical managerial IT capabilities, such as IT
business spanning capability, interact with two pivotal types of technical IT capabilities (i.e. IT flexibility and
IT integration) to affect organizational agility. Especially, the authors mainly examine a positive synergy or
complementary relationship between IT business spanning capability and IT flexibility and a negative
synergy or substitution relationship between IT business spanning capability and IT integration.
Design/methodology/approach The authors develop a research model that integrates IT flexibility, IT
integration, IT business spanning capability and organizational agility. Based on a matched-pair, cross-sectional
field surveyof IT and business managers, they usepartial least squares(PLS) to analyze thisresearch model.
Findings IT flexibility and IT integration have been empirically proven to be positively associated with
organizational agility. Furthermore, the research results indicate a positive synergy or complementary
relationship between IT business spanning capability and IT flexibility, whereas they indicate a negative
synergy or substitution relationship between IT business spanning capability and IT integration with regard
to organizational agility. This finding demonstrates that IT business spanning capability can differentially
influence organizational agility depending on its interaction with specific technical IT capability types. In
addition, the effects of IT flexibility on organizational agility are high, whereas the effectiveness of IT
integration decreases in the presence of high IT business spanning capability. Each type of technical IT
capability displays different effectiveness under high IT business spanning capability. Thus, appropriate
technical IT capability types should be carefully deployed, and highly effective technical IT capability types,
such as IT flexibility, should be prioritized under high levels of IT business spanning capability.
Originality/value This research highlights the joint effects of IT business spanning capability and two
pivotal types of technical IT capabilities (i.e. IT flexibility and IT integration) on organizational agility,
ultimately contributing to OM theories and practices.
Keywords Information technology, Organizational agility, Technical IT capabilities, Managerial IT
capabilities, IT business spanning capability
Paper type Research paper
1. Introduction
Faced the impacts of globalization, hypercompetition and time-to-market pressures,
organizational agility has been considered as one of the most critical issues of contemporary
IT capability
effects on
organizational
agility
941
The authors appreciate the Youth Innovation Team of Shaanxi Universities Big data and Business
Intelligent Innovation Team.
Funding: This work was supported by the National Social Science Foundation of China (16ZDA013),
the National Natural Science Foundation of China (71722014, 71661017, 71801104, and 71531009).
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0263-5577.htm
Received 12 August 2019
Revised 4 December 2019
Accepted 18 January 2020
Industrial Management & Data
Systems
Vol. 120 No. 5, 2020
pp. 941-961
© Emerald Publishing Limited
0263-5577
DOI 10.1108/IMDS-08-2019-0433
organizations (Gligor et al., 2016). Organizational agility is the capability of an organization to
sense market changes quickly and respond effectively and efficiently to enhance competitive
advantages (Zhang and Sharifi, 2000;DeGroote and Marx, 2013). The benefits of organizational
agility have been addressed by a variety of previous studies (e.g. Swafford et al.,2006;Zhan g,
2011;Gligor et al.,2015). For example,the report releasedby a Project Management Institute has
indicated that projects in organizations with high agility are more successful than those in low-
agile organizations (Mao et al., 2015). In the current turbulent environments, organizations are
required to be agile and be able to deal with rapidly changing business requirements to achieve
business success. Given that organizational agility is important, how to develop organizational
agility has garnered considerable attention of researchers and practitioners.
With the embeddedness of information technologies (ITs) into business practices, some
scholars in the field of operations management (OM) attempt to explore how to develop
organizational agility from the perspective of IT (e.g. Bharadwaj, 2000;Huang et al., 2012;
Chen et al., 2014). Nevertheless, to develop organizational agility, different organizations
display significant disparities in their ITs. For example, although both Carrefour and
Walmart in China achieve business success owning to their agile operations, Carrefour and
Walmart show great disparities in ITs (Liu et al., 2019). While Carrefour does not depend on
any advanced ITs to manage its operations, Walmart develops its satellite communication
systems with great data analysis capabilities. Yet, Carrefours agility has been as high as
Walmarts in China. Therefore, to clarify the role of ITs in the development of organizational
agility, this study focuses on how to leverage ITs to develop organizational agility.
Recently, two research streams have emerged on the influence of ITs on organizational
agility (Appendix 1). The first stream states that technical IT capabilities significantly affect
organizational agility and that the effective deployment of IT infrastructure contributes to
organizational agility. The second stream argues that managerial IT capabilities significantly
affect organizational agility and that managers can take advantage of IT skills, assets and
managerial stances to develop organizational agility. Although previous studies in these two
research streams have examined the influence of technical and managerial IT capabilities on
organizational agility, three research gaps have been identified in the extant literature.
First, numerous studies have focused on the identification of technical IT capability types
(Bardhan et al., 2010;Saraf et al., 2007;Rai and Tang, 2010). However, the relationship
between technical IT capability types and organizational agility should be further examined.
Prior studies have presented two pivotal types of technical IT capabilities, namely, IT
flexibility and IT integration (Saraf et al., 2007). IT flexibility, also referred to as IT
reconfiguration (Duncan, 1995;Byrd and Turner, 2000), is an organizations ability to
recombine IT infrastructure for business purposes with minimal penalty to current cost,
effort, time or performance (Conboy, 2009), whereas IT integration represents the extent to
which IT infrastructure is linked and information in business processes is shared among
different department (Rai et al., 2006). In literature, IT flexibility and IT integration can be
considered as representing flexibility and efficiency (Adler et al., 1999). Although IT
flexibility and IT integration conceptually are viewed as at odds, previous studies
demonstrate that appropriate IT designs (e.g. cloud computing) can facilitate both IT
flexibility and IT integration in organizations (Liu et al., 2018). Therefore, IT flexibility and IT
integration can be achieved at the same time. Although Ngai et al. (2011) have examined the
impacts of both IT flexibility and IT integration on organizational agility by employing a
multicase study method, there is little empirical evidence on how these two technical IT
capability types simultaneously affect organizational agility. In addition, contradictory
findings on the relationship between technical IT capabilities and organizational agility have
been obtained by prior studies. For example, some studies have examined that technical IT
capabilities positively affect organizational agility (Overby et al., 2006;Fink and Neumann,
2007), whereas other studies have found that technical IT capabilities might play a mixed role
IMDS
120,5
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