Leveraging Customer Involvement for Fueling Innovation: The Role of Relational and Analytical Information Processing Capabilities
Forthcoming in MIS Quarterly
Posted: 3 Dec 2015
Date Written: December 1, 2015
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).
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