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Development of Measures to Assess the Extent to Which an Information Technology Application Provides Competitive Advantage

Author

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  • Vijay Sethi

    (Division of Management, College of Business Administration, University of Oklahoma, Norman, Oklahoma 73019)

  • William R. King

    (Katz Graduate School of Business, University of Pittsburgh, Pittsburgh, Pennsylvania 15260)

Abstract

In order to measures the extent to which information technology provides competitive advantages, the construct "Competitive Advantage Provided by an Information Application" (CAPITA) was operationalized. A field survey gathered data from 185 top information systems executives regarding information technology applications which had been developed to gain competitive advantage. A confirmatory analysis revealed that CAPITA may be conceptualized in terms of nine dimensions which satisfy key measurement criteria including unidimensionality and convergent validity, discriminant validity, predictive validity, and reliability. The nine dimensions from the basis of a preliminary multidimensional measure or index of competitive advantage which has practical uses for competitive assessment. These include justifying and evaluating applications and acting as dependent variables in empirical competitive advantage research. Extensions entail formulating alternative measures of CAPITA to clarify the theoretical foundations of the construct, validating the latent-structure model on another data set, use of multiple informants for data collection, and exploring complex factor structures for the construct.

Suggested Citation

  • Vijay Sethi & William R. King, 1994. "Development of Measures to Assess the Extent to Which an Information Technology Application Provides Competitive Advantage," Management Science, INFORMS, vol. 40(12), pages 1601-1627, December.
    • Handle: RePEc:inm:ormnsc:v:40:y:1994:i:12:p:1601-1627
    DOI: 10.1287/mnsc.40.12.1601
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