A Study Of Alignment Of Firm IT Capability Based On Network Externalities And Comparability

Information Technology (IT) capacity alignment is more novel research task. In a long trem, academe and Enterprises decided IT capacity can provide competition advantage to firms, and IT capacity is restricted with IT strategy which can support strategy of firms. So IT capacity, IT strategy is subordinate to strategy of firms respectively. Strategy of firms decides IT strategy, and IT strategy decides IT capacity. In this situation, IT capacity alignment is the relationship of IT capacity, IT strategy and strategy of firm essentially, and it is coordination process of the relationship among them.Essence of IT capacity can decides characters of IT capacity alignment. According to"IT productivity paradox", lots of scholars provided almost same explains, and they brought IT capacity concept on account of IT management factor. They extended these problems of IT capacity structure, the relationship between IT capacity and performance of firms. Now academe is accustomed to research IT capacity in the frame of enterprise endogenous theory, e.g. RBV, Capacity theory. Researchers consider that IT capacity could provide sustained competition advantage for firms based on VRIN characters of IT capacity. In fact, enterprise endogenous theory considered that IT capacity emerged in the firms, which is restricted with strategy of firms, and structrue of IT capacity is also built up based on strategy, tasks of firms. So this IT capacity is tools of strategy of firms, and IT capacity mainly raises productivity of firms. According to above, IT capacity alignment is alignment between IT capacity and strategy of firms essentially.Internet and ecommerce popularizing, IT capacity based on enterprise endogenous theory emerged contradiction, because enterprise endogenous theory cannot explain the characters of IT capacity in the Internet situation. Based on this, research of IT capacity, IT capacity structruer and IT capacity alignment has the improtant meaning to theories and actual. In this doctoral dissertation, essence of IT capacity already changeed than traditional IT capacity, which can promote strategy paradigm to reform so that IT capacity can alert competition advantage of firms, and also alert essence of IT capacity alignment.Based on enterprise endogenous theory, according to knowledge management theory, author redefined IT capacity concept, builded structruer of IT capacity with knowledge characters of IT capacity, that is basic IT capacity and core IT capacity. According to technology capacity evolution path and Nonaka(1994) SECI model, author researched IT capacity evolution path, and decided that initial IT capacity can decompose tacit knowledge and explicit knowledge with socialization and externalization, and explicit of initial IT capacity transmit signal between different industry. Accepted firm can transform explicit knowledge to core IT capacity himself with combination and internalization. IT capacity evolution path is alternation evolution between basic IT capacity and core IT capacity essentially. According to above, basic IT capacity can bring about network externalities, and core IT capacity can make progressive evolution in the same technology paradigm, so that IT capacity technology criterion will be emerged in the industry. IT capacity technology criterion can alert strategy paradigm of firms, and also alert competition rules between firms. In the industry of IT capacity technology criterion, core IT capacity provides not only support effect for basic IT capacity, but also restrain effect for basic IT capacity, which can affect competiton advantage of firms. So this paper plan IT capacity alignment to realize equilibrium of all firms in the industry.The creative points of this paper are as follow:(1) Based on knowledge management and essence of knowledge, IT capacity will be decomposed basic IT capacity and core IT capacity. Basic IT capacity has codified character, and basic IT capacity can diffusion, transmit in the industry, and basic IT capacity also bring about network externalities. According to technology capacity evolution path, this paper researched IT capacity evolution path, and considered network externalities of basic IT capacity and IT capacity technology criterion are certainty results of IT capacity evolution. From IT capacity structure, IT capacity has two kinds of confilict characters that are tacit knowledge character and diffusion character. So IT capacity uncertainty provides competion advantage to firms. This paper considered it is impossible that firms achieve sustain competition advantage depending on basic or core IT capacity, but both basic IT capacity and core IT capacity. Firms must depend on IT capacity alignment to coordinate the relationship of basic and core IT capacity. Based on above, this paper defined IT capacity concept, and analyzed how to realize IT capacity alignment between basic and core IT capacity to achieve the equilibrium in the industry.(2) When there is initial IT capacity in the industry, there exists signal relationship among initial IT capacity, IT operational cost index and strategy of firms. In traditional supply chain, equilibrium IT capacity of manufacturer and distributor are monotone decreasing, convex functions, which proved that IT operational cost index of firms can signaling about equilibrium IT capacity himself. As a leader, manufacturer could select equilibrium IT capacity freely, and realize signaling between IT operational cost index and equilibrium IT capacity. As a follower, distributor can realize signaling between IT operational cost index and equilibrium IT capacity himself depanding on marginal profit and market situation. Based on above, manufacturer and distributor could realize transmit signal of equilibrium IT capacity each other depanding on codified IT operational cost index respectively, which is the benefit of decomposition of initial IT capacity.(3) Network externalities and compatiblity of basic IT capacity can alert the relationship of competition and cooperation of firms. Because core IT capacity has restrict effect to network externalities of basic IT capacity, advantage of core IT capacity of leader is more notable, effect of network externalities of basic IT capacity is weaker in Stackelberg price game. Network externalities of basic IT capacity can produce positive feedback to market demand, equilibrium profit of leader, so that competition advantage origin of leader is demand economy of scale. When comparatibity of basic IT capacity rose, competitor will locate advantage situation, and market share of leader will cut down. In this situation, leader will exert his horizontal advantage of basic IT capacity and vertical advantage of core IT capacity to rasie equilibrium price to make up loss of market share. If leader has advantage of core IT capacity, he has also control power of network of basic IT capacity, no matter what comparability of basic IT capacity.In modularity value chain, core firm and complement firm both have IT capacity technology criterion, and core firm is responsible for designing relation rules, so the basic and core IT capacity of core firms can affect complement firms. When network externalities of basic IT capacity of core firms raised, the equilibrium output and profit of the incumbent complement firms will also raise depending on advantage of the incumbent core firm. And the competitive complement firm will be in trouble. When comparability of basic IT capacity of core firms raised, variation of competition advantage of two complement firms both will be uncertain, but only one in the comlement industry will achieve competition advantage. Based on this contradiction, this paper researched the process of adjust IT capacity alignment between two complement firms to realize equilibrium in the complement industry.