Strategic role of information, knowledge and technology in manufacturing industry performance
| Pages | 1259-1278 |
| Date | 11 July 2016 |
| Published date | 11 July 2016 |
| DOI | https://doi.org/10.1108/IMDS-07-2015-0297 |
| Author | Purnendu Mandal,Kallol Bagchi |
| Subject Matter | Information & knowledge management,Information systems,Data management systems |
Strategic role of information,
knowledge and technology
in manufacturing
industry performance
Purnendu Mandal
College of Business, Lamar University, Beaumont, Texas, USA, and
Kallol Bagchi
College of Business Administration, University of Texas at El Paso,
El Paso, Texas, USA
Abstract
Purpose –The purpose of this paper is to study how knowledge management strategy (KMS),
technology management strategy (TMS), and information management strategy (IMS) influence an
organization’s performance.
Design/methodology/approach –The authors use manufacturing data and employ causal
modeling, with structural equation modeling, which will enable managers to understand the
interrelationships among the use of information, knowledge management, and technology strategy in
manufacturing enterprises.
Findings –There are two major findings of the research: first, an organization’s financial performance
(FINP) is directly dependent on its information management and TMSs, and second, KMSs indirectly
influence FINP via mediation.
Practical implications –Managers should be aware of various roles that TMS, IMS, and KMS play
on an organization’s performance. The model analysis provides a direction to decision makers in
understanding various intricate relationships through which information, technology, and KMSs could
impact corporate sustainability.
Originality/value –First, the authors present a specific approachto capture and model information-
related strategiesin a powerful decisions support systemframework. Second, the modeling environment
provides examinationof non-linear relationships among latentvariables, as well as examining additive,
moderating, and mediating relations so that other modelers could replicate the experiment in other
sectors or enterprises. Last, this work addresses one of the major problems in manufacturing research:
the lack of empirical research in sustainability development. The paper shows empirically that both
TMS and IMS impact organization’s performance directly and KMS doesso indirectly.
Keywords Organizational performance, Mediating effect, Information management strategy,
Knowledge management strategy, PLS analysis, Technology management strategy
Paper type Research paper
1. Introduction
The pace of development in information technology (IT) and its diffusion in the
twenty-first century businesses is likely to accelerate. Organizations with ability to
capture intelligence, transform it into usable knowledge, and diffuse it rapidly will be
positioned well competitively in this changing environment (Zhou and Li, 2012;
Hitt et al., 2015). For strategic competitive positioning, it is imperative that managers
develop IT-based capabilities in organizations: capturing and use of information,
managing knowledge, and building IT infrastructure.
Another critical consideration for managers is that they actively get involved and
align IT capabilities with corporate profitability. There is no doubt that information
Industrial Management & Data
Systems
Vol. 116 No. 6, 2016
pp. 1259-1278
©Emerald Group Publis hing Limited
0263-5577
DOI 10.1108/IMDS-07-2015-0297
Received 21 July 2015
Revised 8 November 2015
24 January 2016
Accepted 23 February 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
1259
Role of
information,
knowledge and
technology
and associated technologies are exerting ever increasing influences on corporate
growth and profitability (Pearlson and Saunders, 2010; Hao and Song, 2016). Pearlson
and Saunders (2010) observe “shouldn’t managers rely on experts to analyze all the
aspects of IS and to make the best decisions for the organization? The answer to that
question is no.”Thus managers will have to get involved and participate in the design
of IT strategies. Hao and Song (2016) observed that technology-driven strategy is
positively related to technology capabilities and IT capabilities in US new ventures.
Further, technology-driven strategy is important because it can exert great impact on
firm performance through strategic capabilities. IT strategies consist of information,
technology, and knowledge strategies (referred to in this paper as information
management strategy (IMS), technology management strategy (TMS), and know ledge
management strategy (KMS), respectively). As information is an asset to grind prices of
things lower and slash the work time, organizations stand to improve both operational
profitability and long-term growth with building compatible IT capabilities.
Unfortunately, the li terature is limited on ou r understanding on mana gerial
approach to IT capability development and alignment to corporate financial returns.
The motivation for this study is to increase the understanding of managers ab out
the role TMS, IMS and KMS plays on financial performance (FINP) of a firm and how
these roles are related. Business managers are often unsure about how the mechanisms
of information, knowledge, and IT, as well as the relationships among them, impact
long-term organizational profitability. These relationships essentially being non-linear
in nature, put extra barrier for managers first to understand the mechanics of
interactions and second to predict the intended and unintended consequences of
interactions. Kock (2013) observes that “many relationships in nature, including
relationships involving behavioral variables, are nonlinear.”We argue that non-linear
relationship exists in interactions between IMS, TMS, KMS and FINP, and an
appropriate modeling approach is needed for better understanding of role of IT in
organizations. The main aims of this work are to:
•investigate how strategies based on information management (IM), technology
management, and knowledge man agement (KM) influence organiza tional
performance;
•find empirical evidence of this influence in a manufacturing environment using a
structural equation modeling (SEM) framework; and
•examine the possible direct or indirect effects of KMS on organizational
performance.
The resource-based view (RBV) theory of firm (Liang and You, 2009; Pe arlson and
Saunders, 2010; Hitt et al., 2015) has been applied in this research. RBV can help us in
understanding how the IT strategies gain and maintain competitive advantages.
Resources that are rare, inimitable, have low mobility, low substitutability and add
value can help to obtain and sustain competitive advantage (Wade and Hulland, 2004;
Liang and You, 2009). Walmart’s logistic management system is an example of a good
resource. IMS resources on which some IMS strategies are built are unique to the
company but used somewhat less effectively and are less substitutable, imitable, and
transferable. Resources such as information repository pose moderate difficulties to
imitate. TMS strategies include choice of hardware and software both of which are
easily replicated but another component “technical knowledge”is hard to copy and
transfer. Knowledge in a firm is inherently difficult to imitate, substitute, or transfer.
1260
IMDS
116,6
To continue reading
Request your trial