Competitive Advantage in a Digital World: Toward an Information-Based View of the Firm
25 Pages Posted: 5 Dec 2015
Date Written: May 3, 2014
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
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