«Researchers have endeavored to increase understanding of the relationships between investments in information systems (IS), competitive advantage, ...»
areas of information systems and firm performance, strategic management and competitive dynamics, and interpretive sociology are reviewed. Chapter three presents the research methodology. To address the complexity of the research question, Grounded Theory is adopted as the research methodology in Study I of this dissertation. The process of theoretical relevance, site selection, data sources, data collection, data analysis, and validation are the main foci of the chapter. Chapter four presents the graphical depictions of the grounded theory-based model derived through Study I of this dissertation. Additionally, the model‘s concepts and categories as well as representative codes are presented in tabular format, explained in the context of the grounded theoretical findings, and examined in the milieu of relevant literature and theory. The fifth chapter provides a discussion of the results and findings of Study I. Implications of the study to both academia and practice are presented.
Chapters six through eight describe a second study entitled Social Computing, Competitive Dynamics and Firm Performance: A Social Network and Centering Resonance Analysis. This second study builds upon the findings in Study I, and addresses the role of information systems, competitive dynamics and firm performance within a social network context. The second study in this dissertation examines the role that intrafirm informal (not found on any organizational chart) managerial social networks, configured through social computing and communications technologies, play in conceiving, enacting and executing firms‘ competitive actions and responses and resulting impacts upon firm performance.
following areas of research are reviewed: information systems and firm performance, competitive dynamics and firm performance, the awareness-motivation-capability framework, social computing, social networking, social network theory, organizational communication, and distributed cognition. Chapter seven presents the research methodologies, including a rationale for the methods employed, and a detailed description of each method used, Social Network Analysis and Centering Resonance Analysis. Chapter eight provides a detailed discussion of findings and implications for research and practice.
Chapter nine synthesizes the two studies to present implications and contributions of the overall dissertation, limitations, and possibilities for future research.
1.2. Research Motivation The following two sections present the motivations for the research in the two studies in this dissertation.
1.2.1. Study I Research Motivation. Academics and practitioners alike have long sought to understand the relationships between investments in information systems (IS), competitive advantage and firm performance (Chi, Holsapple & Srinivasan, 2007).
Significant progress has been made through rigorous research investigating the returns of IS investment on firm performance (Brynjolfsson 1993; Brynjolfsson & Hitt, 1998;
Although prior research has demonstrated that IT investments do have beneficial performance and productivity impacts (for example, Bharadwaj et al. 1999; Hitt &
investments enhance firm performance (Sambamurthy, Bharadwaj & Grover, 2003). Past studies have often made simplistic assumptions about the direct relationship between information systems, firm performance and competitive advantage (Fairbank et al., 2006;
Hitt et al, 1996; Rai et al., 1997). Fairbank et al. (2006) suggest that the IT-firm performance relationship is so complex that the answer may well hinge upon microexaminations of practices and procedures within certain companies.
Recently, there have been calls for research to examine the role of information systems in the context of competitive actions and responses and firm performance (Ferrier, Holsapple & Sabherwal, 2007; Smith et al., 2001). Ferrier et al. (2007) suggest that ―Understanding the impacts of digital systems on competition could benefit from the adoption of a competitive dynamics perspective‖ (p.1). In this study, such a perspective is adopted.
The research question that drives Study I is as follows: 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?
1.2.2. Study II Research Motivation. The role of information systems in facilitating interaction and forming collectivities of managerial participants exemplified in the results from Study I lead toward a social computing network theoretical perspective, which is employed in Study II in this dissertation.
Organizational social networks are networks of communication and interpersonal relationships that develop within the organizational structure, and form channels for the
McKeen, 2007). Such networks can promote collective and distributed cognition (Boland, Ramakrishnan, & Te‘eni, 1994; Ellsbach, Barr & Hargadon, 2005; Weick & Roberts, 1993) among organizational participants and enhance information and knowledge sharing (Granovetter, 1973; 1985) and organizational memory and learning (Borgatti & Cross, 2003; Croasdell, 2001; Floyd & Woolridge, 1999). Organizational social networks have also been identified as being significant sources of knowledge that can lead to innovation (McEvily & Marcus, 2005; Tsai 2001) and serve as the conduit whereby fragments of information can be rapidly transmitted and assimilated (Borgatti & Cross, 2003; Granovetter, 1973; Hatala & Lutta, 2009; Haythornthwaite, 1996).
Innovations in information and communications technologies are bringing deep change to the way in which organizational participants communicate, share knowledge and exchange information (Parameswaran & Whinston, 2007a, 2007b; Smith & McKeen, 2007). In the context of organizational social networks, the emergence of a nascent phenomenon known as social computing, or the use of information technology as the conduit in social structures (Schuler, 1994; Vannoy & Palvia, Forthcoming), has augmented traditional organization of human behavior in the formation and facilitation of social networks, bringing new types of interconnectivity across temporal and spatial boundaries, and among organizational participants (Smith & McKeen, 2007).
The results from Study I along with a review of extant literature in the context of those findings lead to the following research question which is addressed in Study II in this dissertation: How do managers in a dominant firm utilize intrafirm social computing
competitive actions and responses to improve relative firm performance?
1.3. Research Gap The following two sections provide an overview of the gaps in extant research addressed by Studies I and II of this dissertation.
1.3.1. Study I Research Gap. To date, few studies have investigated information systems, competitive actions and firm performance. Chi, Holsapple and Srinivasan (2007a) examine the growing reliance of firms on information technology in formulating and enacting competitive actions in a global and digitized competitive environment. They found a strong link between inter-organizational systems (IOS) use and three measures of competitive action: action volume, complexity of repertoire, and action heterogeneity. They contend that the identification of this link is ―especially meaningful for IS research‖ (p. 343). In a separate study, Chi et al. (2007b) examine the linkage between inter-organizational systems and competitive action and resulting firm performance using a social network perspective. In this study, they provide a rich account and a new theoretical integration of three research streams namely inter-organizational systems, social network analysis and competitive dynamics.
While these studies provide important insights and establish a link between IOS systems and competitive actions, the answer to the broader question of how information systems contribute to specific competitive actions initiated by a dominant firm remains unclear.
enactment and execution of competitive actions will vary across firm type in the same industry (Schumpeter, 1934, 1950). Strategic management literature classifies organizations in an industry as leaders or dominant firms (White, 1981) and followers or laggards, depending upon various characteristics such as market share and market position, diversity and volume of competitive actions or responses initiated by the firms (Porter 1980; MacMillan et al. 1985; Smith et al. 1989 and 1991; Chen et al. 1992).
Interestingly, the extant IS literature is silent on the role of information systems in the conception, enactment and execution of competitive actions or responses by dominant firms. The issue is important given that dominant firms have the ability and resources to change and influence industry dynamics in comparison to follower or laggard firms (White, 1981).
Dominance can be defined as the observed pattern on the part of the firm to develop and maintain a strong and clear lead in market share over all competitors for a prolonged period of time (Shamsie, 2003). Such a definition of dominance suggests that its occurrence would indicate the ability of the firm to develop and to sustain key advantages over all others within its industry. This study should be useful to researchers and managers who are interested in developing a better understanding of how managers within a dominant firm interpret the role of information systems in conceiving, enacting and executing competitive actions to improve or maintain relative performance.
A key objective of strategy research is to examine various forms of advantages that a dominant firm may be able to develop and hold over its competitors for some
enacting and executing competitive actions that result in dominant market position by a firm should be of interest to both researchers and practitioners. The critical aspect of dominance seems to lie in the capability of a firm to both develop and maintain a leading position over an extended period of time. Dominance must be tied to some form of enduring and clear-cut advantage (Shamsie, 2003). Information systems and their role in providing specific but unique and non-imitable capabilities in conceiving, enacting and executing competitive actions by a firm may be such a resource. But the way in which information systems can become such a source of advantage for a dominant firm has not been examined and thus, remains unclear. Although, secondary and industry level data can be used to posit that a link exists between information systems, competitive actions and firm performance (Chi et al, 2007a, 2007b), this approach cannot provide the richer perspective (Fairbank, et al, 2006) needed to understand the role of information systems in conceiving, enacting and executing competitive actions or responses in a dominant firm.
1.3.2. Study II Research Gap. Given the recent acknowledgement of the growing importance of social networks in the organizational context (Parameswaran & Whinston, 2007a, 2007b; Smith & McKeen, 2007), it appears that very little has been done to examine intrafirm social computing networks, and no studies have been identified which examine the way in which intrafirm managerial social networks facilitate or influence competitive dynamics in the context of the organizational competitive environment (e.g., Tsai, 2001; Wasko, Faraj, & Tiegland, 2004). Most extant
Ahuja, 2000; Chi, Holsapple, & Srinivasan, 2007a, 2007b; McEvily & Marcus, 2005;
Powell, Koput, & Smith-Doerr, 1996; Walker, Kogut, and &, 1997), and generally examines social networks that have been formed through careful planning.
Study II of this dissertation examines intrafirm managerial social computing networks from a novel perspective. The findings from Study I suggest that managerial intrafirm social networks are largely supported by information and communication technologies. It is important to examine the formation of these social computing networks and determine their role in the context of firms‘ competitive dynamics. The findings will be of great relevance to decision-makers to help them recognize that such networks can be used toward maximum effectiveness and purposefully engaged toward greater competitive advantage. Furthermore, the intrafirm inquiry is significant and largely missing from extant research. If intrafirm social computing networks can be used as a platform to facilitate information flow and enable collective decision-making en route to competitive actions such as new product and services development, new market entry, new customer acquisition, price changes, or toward responses to competitors actions, there are significant opportunities for organizations to build competitive flexibility and responsiveness toward market changes and opportunities.
Information systems researchers have used various theoretical bases such as the resource-based view of the firm (e.g., Barney, 1991; Bharadwaj, 2000; Grimm, Lee & Smith, 2006; Sambamurthy, Bharadwaj, & Grover, 2003),the knowledge-based view of the firm (e.g., Alavi & Leidner, 2001; Grant, 1996; Kearns & Sabherwal, 2007), and the
Gattiker & Goodhue, 2004; Kim, Umanath, & Kim, 2006; Premkumar, Ramamurthy, & Saunders, 2005) to understand the relationship between information systems and firm performance. However, while many studies find that investments in information systems do have performance and productivity impacts, these theoretical frameworks have yet to explain how and why investments in information systems enhance firm performance (Sambamurthy, Bharadwaj & Grover, 2003).