Strategic alignment between IT flexibility and dynamic capabilities: an empirical investigation

TL;DR

This paper develops and empirically validates a strategic alignment model linking IT flexibility and dynamic capabilities, demonstrating that their synergy significantly enhances firm performance in changing environments.

Contribution

It introduces a novel framework for assessing and aligning IT flexibility with dynamic capabilities to improve competitive performance.

Findings

Significant positive relationship between strategic alignment and firm performance.

Alignment of IT flexibility and dynamic capabilities enhances adaptability.

Framework helps firms improve maturity and strategic alignment.

Abstract

Dynamic capabilities theory emerged as a leading framework in the process of value creation for firms. Its core notion complements the premise of the resource-based view of the firm and is considered an important theoretical and management framework in modern information systems research. However, despite DCTs significant contributions, its strength and core focus are essentially in its use for historical firm performance explanation. Furthermore, valuable contributions have been made by several researchers in order to extend the DCT to fit the constantly changing IT environments and other imperative drivers for competitive performance. However, no DCT extension has been developed which allows firms to integrally assess their current state of maturity in order to derive imperative steps for further performance enhancements. In light of empirical advancement, this paper aims to develop a strategic alignment model for IT flexibility and dynamic capabilities and empirically validates proposed hypotheses using correlation and regression analyses on a large data sample of 322 international firms. We conjecture that the combined synergetic effect of the underlying dimensions of a firms IT flexibility architecture and dynamic capabilities enables organizations to cope with changing environmental conditions and drive competitive firm performance. Findings of this study suggest that there is a significant positive relationship between the firms degree of strategic alignment defined as the degree of balance between all dimensions and competitive firm performance. Strategic alignment can, therefore, be seen as an important condition that significantly influences a firms competitive advantage in constantly changing environments. The proposed framework helps firms assess and improve their maturity and alignment of IT flexibility and dynamic capabilities.