Research On Influencing Mechanism Of IT Capability On Firm Performance Based On RBV

With the development the information technology(IT), more and more firms have realized the increasing important strategic value of IT, and invested a lot in IT. However, the performance effects of IT are often inferior to the anticipation. To explain"IT productivity paradox"(Brynjolfsson 1993), since the early 1990s, scholars abroad have begun to conduct some related study of the firm performance caused by IT application from IT capability perspective, and they all tend to emphasize that IT capability is not a specific set of sophisticated technological functionalities.How IT capability can improve firm performance? Which sub-capability is more important? In China context factors may affect the dependent and independent variables? Above all, to explore the underlying mechanism linking IT capability to firm performance in China has not been specified. From the theoretical and empirical analysis to solve these key problems, viz. to explore the nature of IT capability, to reveal the role of internal mechanism and restrictive conditions to firm performance is of far-reaching significance. In recent years some scholars have discussed the impact of IT capability on firm performance, however, the influencing mechanism of IT capability on firm performance is fuzzy. As discussed by Ravichandran and Lertwongsatien:"although previous IS research has examined the contributions of IS resources and capabilities to firm performance, the research is fragmented, and key gaps exist in the literature..."[136, p.242].Based on the research background and survey, the core research is proposed, namely the influencing mechanism of IT capability on firm performance, further, including the relationship between constituent elements of IT capability and different dimensions of firm performance, viz. to solve the"black-box"problems between IT capability and firm performance. This paper focuses on three aspects: first of all, which related firm resources should be combined with IT resources formatted into IT capability, viz. the concept and construct of IT capability. Second, research on the firm performance evaluation system based on IT capability. Third, how IT capability can improve firm performance? viz. to explore the internal linkage and relating framework of IT capability and firm performance. Through theoretical analysis and a survey of previous literature, the concept of resource, capability, IT resource and IT capability is defined at first. Referenced by the mode of "quasi-rent" value creation, the value created by some resources and complementary resources is more than its independent role, this study brings forward the common feature of enhanced performance caused by IT capability and "quasi-rent". IT resources and other related resources can be complementary to each other to produce greater value, and IT capability is a "quasi-rent" capability. This study defines IT capability as a firm's capability, which is sustainable and dynamic, to mobilize and deploy IT resources, and in combination with other complementary resources effectively to acquire the enhancement of performance. Then the paper discusses the several features of IT capability.Exploratory research is to explore the issue for the purpose of insight or understanding, which is regarded as the first step in the research process, and its role is to help researchers find and understand the situation.This study focuses on the short-term and long-term performance effects of IT capability. A matched-sample comparison group methodology is used to assess IT capability and firm performance.The source of data of this paper samples was collected from the"China Informatization Power 500"(IPower 500) and annual financial reports of listed companies. The results indicate that short-term operational performance of firms that have superior IT capability are higher when compared to the matched firms, while growth and profitability performance are not. And the results also show that the long-term operational, growth and profitability performance of firms that have superior IT capability are higher than firms that have not superior IT capability.The substance of capability in a broad sense is business process. Capability is an abstract concept, and may be specific through business process, viz. business process is the cornerstone of capability. The paper brings up the business process transform mode as mediator, model of influencing mechanism of IT capability on firm performance, which is tested and amended by empirical study.Specifically, the innovation point of this dissertation can be concluded as:1. Puts forward the quasi-rent perspective of IT capability, and reveals the definition and features of IT capability by this perspective, which is the theoretical foundation to analyze the relationship between IT capability and firm performance.2. Puts forward of the construct of IT capability, including IT infrastructure, collaboration capability of IT and organizational resources and alignment capability of IT and strategy, which is tested by empirical study. Analyze the inherent relationship of IT capability empirically, viz. (1) There is a positive relationship between alignment capability of IT and strategy and collaboration capability of IT and organizational resources; (2) There is a positive relationship between alignment capability of IT and strategy and IT infrastructure; (3) There is a positive relationship between collaboration capability of IT and organizational resources and IT infrastructure.3. Brings forward the "process and results" perspective of firm performance. Refine the firm performance evaluation system, including operational performance, growth performance and financial performance, and analyze the relationship of different dimensions of firm performance, viz. (1) Firm operational performance will have a positive effect on growth performance; (2) Firm operational performance will have a positive effect on financial performance; (3) Firm growth performance will not be related to financial performance. Thus establishing operational performanc as the theoretical foundation contribution to growth and financial performance.4. Tests the positive relationship between IT capability and different dimensions of firm performance based on objective and subjective measurement methods, and finds the characteristics of how IT capability affects different dimensions of firm performance.5. Brings forward the business process transform mode as mediator, model of influencing mechanism of IT capability on firm performance, which is tested and amended by empirical study, viz. (1) Efficient improvement of business process will have a positive effect on operational performance; (2) Quality of business process change will have a positive effect on operational performance.6. Find key element of IT capability which affects firm performance through qualitative and Quantitative research, viz. (1) IT infrastructure will have a positive effect on process efficiency, while will not be related to the whole firm performance; (2) Collaboration capability of IT and organizational resources will have a positive effect on firm performance; (3)Alignment capability of IT and strategy will have a positive effect on firm performance. And case study is used to further validate the model.The paper finds the characteristics of how collaboration capability of IT and organizational resources, alignment capability of IT and strategy affect firm performance. The paper also tested operational performance as mediator, the internal channels of influencing mechanism of collaboration capability of IT and organizational resources, alignment capability of IT and strategy on growth performance by empirical study.