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Innovation and information technology capability as antecedents of firms' success

Author

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  • Lejla Turulja

    (The School of Economics and Business Sarajevo, City of Sarajevo, Bosnia and Herzegovina)

  • Nijaz Bajgoric

    (The School of Economics and Business Sarajevo, City of Sarajevo, Bosnia and Herzegovina)

Abstract

The primary aim of this article is to identify antecedents of firm's success in specific circumstances of the New economy. Many researchers have tried to answer the question "Why do some firms persistently outperform others?". One of the most dominant view on this issue is a resource based view (RBV) or resource-based theory (RBT). According to this theory, sources of competitive advantage begin with the notion that differences in performance are fundamentally due to the distinctive resources and capabilities that are valuable, rare, inimitable and non-substitutable. Information technology as a resource of the company has the increasing importance for the researches and managers. Research on the information technology (IT) value within organizations and firms' IT capabilities have expanded over the past decade. IT capability is defined as the existence of IT infrastructure, IT knowledge and IT operations within company. The purpose of this paper is to analyse the interaction impact of IT capability and firms' innovation on business performance. The study uses survey data from managers and structural equation modelling to assess the relationships between IT capability, firm's innovation and business performance. This study finds that both IT capability and innovation capability play important role in achieving greater business performance. The findings indicate that managers should focus on development of the IT function within company, taking into account importance of IT investment as well as IT knowledge, and promotion of innovativeness.

Suggested Citation

  • Lejla Turulja & Nijaz Bajgoric, 2016. "Innovation and information technology capability as antecedents of firms' success," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 14(2), pages 148-156.
    • Handle: RePEc:zna:indecs:v:14:y:2016:i:2:p:148-156
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    References listed on IDEAS

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    Cited by:

    1. Zhuquan Wang & Memon Rafait Mahmood & Hafeez Ullah & Imran Hanif & Qaiser Abbas & Muhammad Mohsin, 2020. "Multidimensional Perspective of Firms’ IT Capability Between Digital Business Strategy and Firms’ Efficiency: A Case of Chinese SMEs," SAGE Open, , vol. 10(4), pages 21582440209, December.

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    More about this item

    Keywords

    information technology capability; innovation; resource based view; business performance;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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