Leveraging Customer Involvement for Fueling Innovation: The Role of Relational and Analytical Information Processing Capabilities

Posted: 3 Dec 2015

See all articles by Terence Saldanha

Terence Saldanha

Washington State University, Carson College of Business

Sunil Mithas

University of Maryland - Robert H. Smith School of Business

Mayuram S. Krishnan

University of Michigan, Stephen M. Ross School of Business

Date Written: December 1, 2015

Abstract

How do IT-enabled capabilities influence the ability of firms to leverage customer involvement to shape amount of innovation? This study argues and theorizes that effective processing and management of customer information flows requires that organizations possess what we call as relational information processing capability (RIPC) and analytical information processing capability (AIPC). Drawing on and extending the theories of absorptive capacity and complementarities in the context of innovation, we posit that RIPC and AIPC complement product-focused customer involvement and information-intensive customer involvement practices respectively to enhance the amount of firm innovation. To test our hypotheses, we collected archival data from more than 300 large U.S. manufacturing firms and map the relational and analytical information processing capabilities to specific IT applications.

Consistent with our theorizing, we find that RIPC positively moderates the relationship between product-focused customer involvement and amount of firm innovation; and AIPC positively moderates the relationship between information-intensive customer involvement and amount of firm innovation. In further exploratory analysis, we find a positive three-way interaction between AIPC, RIPC, and product-focused customer involvement. Taken together, our results suggest that configurations of IT-enabled capabilities alone are not enough for innovation; instead firms benefit more when specific configurations of IT-enabled capabilities are leveraged in unison with specific types of customer involvement. The study contributes to theory and practice by shedding light on important complementarities between specific types of customer involvement (product-focused customer involvement and information-intensive customer involvement) and specific IT-enabled capabilities (relational information processing capability and analytical information processing capability).

Suggested Citation

Saldanha, Terence and Mithas, Sunil and Krishnan, Mayuram S., Leveraging Customer Involvement for Fueling Innovation: The Role of Relational and Analytical Information Processing Capabilities (December 1, 2015). Forthcoming in MIS Quarterly; Robert H. Smith School Research Paper No. RHS 2698499. Available at SSRN: https://ssrn.com/abstract=2698499

Terence Saldanha (Contact Author)

Washington State University, Carson College of Business ( email )

Wilson Rd.
Carson College of Business
Pullman, WA 99164
United States

Sunil Mithas

University of Maryland - Robert H. Smith School of Business ( email )

​Van Munching Hall
7699 Mowatt Ln
College Park, MD 20742-1815
United States

HOME PAGE: http://sunilmithas.com/

Mayuram S. Krishnan

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-763-6749 (Phone)

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