How Information Management Capability Influences Firm Performance

By Sunil Mithas, Narayan Ramasubbu, V. Sambamurthy. MIS Q., 2011

982 citations recorded by the source corpus.

How do information technology capabilities contribute to firm performance? This study develops a conceptual model linking IT-enabled information management capability with three important organizational capabilities (customer management capability, process management capability, and performance management capability). We argue that these three capabilities mediate the relationship between information management capability and firm performance. We use a rare archival data set from a conglomerate business group that had adopted a model of performance excellence for organizational transformation based on the Baldrige criteria. This data set contains actual scores from high quality assessments of firms and intraorganizational units of the conglomerate, and hence provides unobtrusive measures of the key constructs to validate our conceptual model. We find that information management capability plays an important role in developing other firm capabilities for customer management, process management, and performance management. In turn, these capabilities favorably influence customer, financial, human resources, and organizational effectiveness measures of firm performance. Among key managerial implications, senior leaders must focus on creating necessary conditions for developing IT infrastructure and information management capability because they play a foundational role in building other capabilities for improved firm performance. The Baldrige model also needs some changes to more explicitly acknowledge the role and importance of information management capability so that senior leaders know where to begin in their journey toward business excellence.

Subfields: Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/59d55c766fbf3249e40ac0476272f131cf231d85

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Citations in the corpus

The impact of IT capabilities on firm performance: The mediating roles of absorptive capacity and supply chain agility (2013, neutral): “[45] further argue that IT capabilities normally affect firm performance by enabling higher-order business capabilities.”
Big data analytics and firm performance: Effects of dynamic capabilities (2017, background): “(Tippins and Sohi, 2003, Mithas et al., 2011)) We continuously examine innovative opportunities for the strategic use of business analytics.”
Leveraging Digital Technologies: How Information Quality Leads to Localized Capabilities and Customer Service Performance (2013, background): “Digital technologies are known to be a key enabler of organizational capabilities (e.g., Banker et al. 2006; Mithas et al. 2011; Pavlou and El Sawy 2011; Tanriverdi 2005).”
Revisiting IS business value research: what we already know, what we still need to know, and how we can get there (2013, background): “Mithas et al (2011) find empirical evidence that all three capabilities are positively correlated with IS capabilities (more specifically, with information management capabilities).”
How a Firm's Competitive Environment and Digital Strategic Posture Influence Digital Business Strategy (2013, background): “Researchers can use or build on conceptualizations of IT resources and capabilities (Bharadwaj et al. 2002; Mithas et al. 2011; Rai et al. 2006) and competitive actions (Smith et al. 2001) to undertake such studies.”
How Does IT Ambidexterity Impact Organizational Agility? (2015, methodology): “Administrative operations, such as accounting, human resources, and productivity management, are also enhanced by better information processing enabled by the development of appropriate IT resources and practices (Mithas et al. 2011).”
An investigation of the cross-national determinants of customer satisfaction (2011, background): “Finally, there is a need to conduct cross-national studies for customer satisfaction at the firm level, incorporating the effect of other relevant variables such as IT investments and information management practices which have been shown to influence customer satisfaction and firm performance in si”