Competitive Advantage in a Digital World: Toward an Information-Based View of the Firm

25 Pages Posted: 5 Dec 2015

See all articles by Hossein Ghasemkhani

Hossein Ghasemkhani

Purdue University - Krannert School of Management

Deborah L. Soule

MIT Sloan School of Management

George F. Westerman

MIT Sloan School of Management

Date Written: May 3, 2014

Abstract

We develop an information-based perspective on organizational sources of competitive advantage, linking information quality theory to key tenets of strategic management. Competitive advantage resides in the capacity to sense and make sense of information, and to grow this capacity over time. We test the model through a global multi-industry dataset of 7501 respondents. We find that information and management processes can be considered strategic resources and capabilities with direct effects on performance. Furthermore, high-performing firms exhibit complementarities between information resources and capabilities that low performers do not, consistent with the concept of dynamic capabilities. Finally, we exploit a key design feature of the dataset to show that information resources are more important in domains high in explicit information content while capabilities are more important to domains higher in tacit information. This information-based view provides strategic guidance to organizations as they learn to address the ever-changing digital information reality.

Keywords: information based view, digitization, information quality, dynamic capabilities

Suggested Citation

Ghasemkhani, Hossein and Soule, Deborah L. and Westerman, George F., Competitive Advantage in a Digital World: Toward an Information-Based View of the Firm (May 3, 2014). Available at SSRN: https://ssrn.com/abstract=2698775 or http://dx.doi.org/10.2139/ssrn.2698775

Hossein Ghasemkhani

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Deborah L. Soule (Contact Author)

MIT Sloan School of Management ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States
617-324-9620 (Phone)

HOME PAGE: http://mitsloan.mit.edu/ide/

George F. Westerman

MIT Sloan School of Management ( email )

245 First Street, E94-1513
Cambridge, MA 02142
United States
617-253-2939 (Phone)

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