«Researchers have endeavored to increase understanding of the relationships between investments in information systems (IS), competitive advantage, ...»
Figure 29 below depicts the Digitally-Mediated Managerial Aggregate Cognitive Map at the Firm Performance stage of the competitive dynamics process.
The impact of IT on firm performance has generated interest among researchers and practitioners. Do investments in information technology impact firm performance?
How can such effects be measured? Most existing research, being largely crosssectional, has provided at best limited insights. This research has demonstrated that information systems play a much more integral role in firm performance than projected in much current research. Put quite simply, for these managers, competitive actions are made possible by information. Once again, information and system are top concepts in the digitally-mediated aggregate cognitive map in the firm performance stage of the
system, company, product, reputation and market. At the second level of significant concepts include financial, investment and quality. At the third level concepts include revenue, profit, people, growth, forecast, and capability. Interesting associations between concepts include people and information, system and information, forecast and information, system and reputation, system and revenue, company and knowledge, company and investment, market and revenue, and market and financial. In managerial discourse surrounding the impacts of the competitive action, new product development, on firm performance, once again information systems concepts are central to the discussion. Results indicate that in managers‘ minds, information systems do play an integral role. This is a significant finding, as understanding the factors that shape how top managers interpret their strategic environment is critically important since such interpretations will ultimately affect organizational actions (Dutton, Fahey & Narayanan, 1983).
The strong influence of information can be seen in each digitally-mediated aggregate cognitive map across the four stages of the competitive dynamics process.
This indicates a social (organizational) system that places information centrally in competitive policy and practice (competitive strategy). Understood within the organization as social system, this emphasis reflects and reproduces an organizational philosophy that values information and practices that reflect that value system. We find evidence of an organizational ―information society.‖ As stated by one of FCI‘s
We find the strong presence of information systems in each digitally-mediated aggregate cognitive map across the four stages of the competitive dynamics process. Managers collectively interpret that information systems do play an integral role in competitive dynamics. This is a significant finding, as Dutton, Fahey and Narayanan (1983) remind us that understanding the factors that shape how top managers interpret their strategic environment is critically important since such interpretations ultimately affect organizational actions.
8.4. Study II Implications Study II has implications for both the academic community as well as managers engaged in competitive actions and responses. The following sections provide an overview of these implications.
8.4.1. Research Implications. Burt (1976) has suggested:
With the growth of technology and its concomitant division of labor, the determination of actors in society as a function of their relations with other actors is likely to increase rather than decrease. The problem for the social scientist then becomes one of conceptualizing the patterns of relations between an actor and the social system in which he exists in a manner optimally suited to explanation.
(p. 93) As envisioned by Burt (1976) and as provided by the evidence in this dissertation information and communication technologies have indeed become an integral part of social network infrastructures and at the competitive action level. Via technology, disparate individuals with varying expertise and organizational responsibility interact and
specific purposes with regard to the competitive dynamics process.
Burt‘s (1976) concern was that while he recognized the impending role of technology in the context of social networks, he questioned the appropriate way to study the phenomenon. By utilizing a novel research approach that uses qualitative interview data in conjunction with social network analysis and centering resonance analysis, it was possible to examine managerial social networks and aggregate cognitive maps at each stage of the competitive dynamics process: conceiving, enacting, executing, and firm performance. It was then possible to identify and evaluate the importance of the various media used in social network ties, both traditional and technologically advanced, that supports each social network infrastructure. Based upon each of these efforts, it was possible to determine the level of IT Mediation Intensity present in the social network infrastructure at each stage. Finally, it was possible to determine whether managers incorporated concepts relevant to social computing and communications technologies in their discourse about the various stages of the competitive dynamics process. By bringing together the pieces of this fine-grained and particulate research, this dissertation is able to provide rare in-depth insights into the role of social computing and communications technologies at each stage in the competitive dynamics process.
The findings of this research imply that similar to managers who rely upon their own mental schema at the individual level, managerial collectives rely upon collective cognitive structures as a heuristic aid in the process of conceiving, enacting and executing competitive actions toward the most favorable impact upon relative firm performance.
positive outcomes in organizations (Weick & Roberts, 1993); thus, this finding extends existing research. However, no research has been identified which has examined the collective cognitive structures at the informal managerial social network level and in the context of the role of technology in facilitating social networks of managers who conceive, enact, and execute competitive actions and responses. Following Boland et al.
(1994), findings of this dissertation suggest that managers, who are involved in any given stage of the competitive dynamics process think, learn and interpret independently.
However, when individuals start to take into account the interdependencies among thinking, learning and interpreting others, coordinated efforts emerge (Boland et al., 1994). It is further suggested that a Digitally-Mediated Aggregate Cognition can be used to determine concepts managers collectively consider central to the competitive dynamics process and serves as an effective and efficient pool of unique information, knowledge and expertise.
8.4.2. Practical Implications. Social networks formulated and served via social computing and communications technologies provide the infrastructure upon which firms‘ managers can capitalize when acting to enhance relative firm performance. Social network infrastructure built around IT intensive ties provides an important platform for searching out needed information and knowledge from others when conceiving competitive action, in the context of enacting, or engaging in decision-making about a potential action, in the execution or abandonment of action, and in the evaluation of the impacts of competitive actions on firm performance. Furthermore, the more IT intensive
effective information and knowledge acquisition and sharing, monitoring of the environment for motivation to act, and information on the firm‘s capability to take advantage of emerging competitive opportunities or respond to competitive threats. An IT-mediated social network infrastructure provides the platform for a collective understanding of both the internal and external environments, thus increasing a firm-level awareness of potential consequences of competitive activity, such as the potential gains and risks of introducing a new product, entering a new market, the reversibility or irreversibility of moves, the likelihood of countermoves from major competitors, the feasibility of possible countermoves that might be taken to retain or regain market share, whether to imitate competitors, and so forth. Greater mediation of IT in the social network infrastructure can increase, or perhaps decrease, motivation to act or respond to the competitive environment by reducing uncertainty in accomplishing actions and providing an environment for greater coordination of actions. Greater mediation of IT in the social network infrastructure not only promotes a firm‘s awareness of opportunities for undertaking competitive actions, but also enhances its capability and motivation to respond quickly to the competitive environment. Thus, greater mediation of IT in the social network infrastructure is likely to result in a greater number of successful competitive actions within a given time period. Moreover, greater mediation of IT in the social network infrastructure can provide real-time access to critical information necessary for capitalizing upon market opportunities or avoiding catastrophic mistakes.
competitive dynamics process must collaborate and communicate effectively in order to ultimately achieve positive impacts upon firm performance through their competitive activity, despite the fact that managers are geographically disbursed and have widely varied responsibilities in terms of meeting organizational goals. Study II has found that various social computing and communications technologies play essentially a role at least equal in importance to certain face-to-face interactions in the context of the social network infrastructure inherent to collaboration, communication and the transfer of information and knowledge in conceiving, enacting, and executing competitive actions en route to impacts upon firm performance.
Furthermore, Study II has found an embedded role of information technologies in managers‘ minds when they discuss the four stages of the competitive dynamics process.
Thus, it begins to make sense that firms have found it so difficult to clearly identify and pinpoint the impacts of IT upon firm performance. Managers who are involved in any given stage of the competitive dynamics process should recognize that individuals think, learn and interpret independently. However, when individuals start to take into account the interdependencies among thinking, learning and interpreting others, coordinated efforts emerge (Boland et al., 1994). It is through these coordinated efforts that the firm may begin to perform effectively rather than just efficiently, and the most positive impacts upon firm performance can be achieved (Weick and Roberts, 1993). Thus, the more IT intensive the overall social network infrastructure the greater the provision for collective awareness through effective information and knowledge acquisition and
firm‘s capability to take advantage of emerging competitive opportunities or respond to competitive threats. Thus, IT directly affects the conception, the enactment, and the execution of competitive activity thereby directly impacting firm performance.
McAfee and Brynjjolfson (2008) suggest that increasing competition in today‘s business environment has coincided with a sharp increase in IT investments, as more organizations have moved to strengthen existing business models. This dissertation suggests that a competitive dynamics perspective be employed when firms are considering investments in IT. Specifically, firms should make IT investments only when such investments can be used at one or more of the four stages of the Competitive Dynamics process to increase firm-level awareness, motivation, or capability to engage in competitive actions and/or responses.
This dissertation set out to advance understanding of the relationships between investments in information systems (IS), competitive advantage and firm performance using a Competitive Dynamics perspective. Although prior IS/firm performance research has led to important insights (for example, Bharadwaj et al. 1999; Hitt & Brynjolfsson 1996; McAfee & Brynjolfsson, 2008), extant theoretical frameworks do not explain how and why such investments enhance firm performance (Sambamurthy, Bharadwaj & Grover, 2003). Many of these studies have made one-dimensional assumptions about a direct relationship between an investment in information systems, firm performance and competitive advantage (Fairbank et al., 2006; Hitt et al, 1996; Rai et al., 1997), relying upon cross-sectional research methods (Orlikowski, 1993; Orlikowski & Baroudi, 1991).
However, it has been suggested that the IT-firm performance relationship is so complex that the answer may well hinge upon micro-examinations of practices and procedures within certain companies (Fairbank et al., 2006). As conjectured by Ferrier, Holsapple and Sabherwal (2007), findings of this dissertation suggest that greater understanding of the impacts of information technology on firm performance lies within the specific competitive actions and responses engendered by firms as they strive to positively impact firm performance. In this dissertation, such a perspective was adopted.
following research question was posed: How do managers, in a dominant firm, interpret the role of information systems in the process of conceiving, enacting and executing competitive actions to improve relative firm performance? The research question in Study I was addressed through an in-depth examination of the competitive practices of one global manufacturing firm, using a grounded theory methodological approach.
Rather than arriving at research conclusions through a priori modeling and hypotheses which require the researcher‘s assumptions as to the issue(s) at hand, this study was conducted such that managers‘ interpretations were used to drive the research, and where the process itself is ―the phenomenon of interest rather than variables describing the antecedents and conditions surrounding the process‖ (Sabherwal & Robey, 1993, pp. 549 – 550).