IT Impacts On Performance Of Service Firms Through Operation-Level Dynamic Capability

Abstract

This study focuses on the strategic value of information technologies in the service industry and examines the relationship between information technology (IT) service competence and firm performance. The proposed relationship is further augmented by investigating the mediating role of operation-level dynamic capability particularly for the service setting. Survey data of medium to large-size enterprises in service industries in the United States were used to validate the proposed model. The results indicate that operational reconfigurability as an operation-level dynamic capability is a significant IT-enabled mediating driving force of firm performance in the service setting. This study is an early attempt to examine the strategic value of information technologies to lead to service firms’ business performance, particularly through the dynamic capability at the operation level.