From IT Leveraging Competence to Competitive Advantage in Turbulent Environments: The Case of New Product Development

Information Systems Research (2006), 17 (3), 198-227, doi 10.1287/isre. 1060.0094

30 Pages Posted: 7 Mar 2016

See all articles by Paul A. Pavlou

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Omar A. El Sawy

University of Southern California - Marshall School of Business

Date Written: 2006

Abstract

A burning question for information systems (IS) researchers and practitioners is whether and how IT can build a competitive advantage in turbulent environments. To address this question, this study focuses on the business process level of analysis and introduces the construct of IT leveraging competence — the ability to effectively use IT functionalities. This construct is conceptualized in the context of new product development (NPD). IT leveraging competence is shown to indirectly influence competitive advantage in NPD through two key mediating links: functional competencies (the ability to effectively execute operational NPD processes) and dynamic capabilities (the ability to reconfigure functional competencies to address turbulent environments). Environmental turbulence is also shown to moderate the process by which IT leveraging competence influences competitive advantage in NPD. Empirical data were collected from 180 NPD managers. Through the construct of IT leveraging competence, the study shows that the effective use of IT functionalities, even generic functionalities, by business units can help build a competitive advantage. The study also shows that the strategic effect of IT leveraging competence is more pronounced in higher levels of environmental turbulence. This effect is not direct: It is fully mediated by both dynamic capabilities and functional competencies. Taken together, these findings suggest that IS researchers should look beyond the direct effects of firm-level IT infrastructures and focus their attention on how business units can leverage IT functionalities to better reconfigure.

Keywords: IT competence, information systems strategy, environmental turbulence, dynamic capabilities, functional competencies, IT-enabled business processes, new product development

Suggested Citation

Pavlou, Paul A. and El Sawy, Omar A., From IT Leveraging Competence to Competitive Advantage in Turbulent Environments: The Case of New Product Development (2006). Information Systems Research (2006), 17 (3), 198-227, doi 10.1287/isre. 1060.0094. Available at SSRN: https://ssrn.com/abstract=2742332

Paul A. Pavlou (Contact Author)

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Omar A. El Sawy

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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