The dynamics of opportunity and threat management in turbulent environments: the role of information technologies
Young Ki Park · University of Southern California Digital Library · 2015
This study explains the role of information technologies in enabling organizations to successfully sense and manage opportunities and threats and achieve competitive advantage in turbulent environments. I use two approaches, a set-theoretic configurational theory approach and a variance theory approach, which are theoretically and methodologically different but complementary to each other for developing a more complete understanding of complex phenomena in digital ecodynamics. Digital ecodynamics is defined as fused dynamic interactions among IT, organizational agility and environmental turbulence. ❧ Using a set-theoretic configurational theory approach, this study explores the holistic nature of digital ecodynamics in a way that describes how IT, organizational agility and environmental turbulence simultaneously and systemically combine to result in competitive performance. At the same time, this study develops a variance theory that explains how IT is “mechanically” related with organizational agility and environmental turbulence to result in competitive performance. ❧ By comparing similarities and differences between multiple configurations that result in the same outcome, this study extracts several patterns that explain IT plays a core role in achieving a high level of agility and competitive performance, and can be either an enabler or an inhibitor for organizational agility depending on the context. The PLS results show that IT enables organizations to enhance agility and indirectly influences firm performance and innovation leadership through organizational agility. By investigating the detailed relationships between three types of IT systems (i.e., business intelligence, communication & collaboration, and business process & resource management) and three types of agility (i.e. sensing, decision-making, and acting agility), this study shows that different types of IT systems play different roles in enabling different types of organizational agility. Lastly, this study shows a contingency effect of environmental turbulence: IT-enabled organizational agility is positively related with innovation leadership and firm performance only in hyperturbulent environments. In stable environments, a high level of IT capability should be absent to enhance firm performance. These insights developed from two theoretical approaches together better describe the multifaceted roles of information technologies in digital ecodynamics, and suggest that IT-enabled agility is one of the best ways to survive and thrive in hyperturbulent environments where competitive advantage cannot be sustained for a long time. ❧ The findings from two approaches also practically contribute to managerial knowledge by showing how organizations transform to the IT-enabled agile organization with the most affordable costs and risks through multiple alternative paths. By comparing the causal structures of high performing configurations with those of low performing configurations, this study suggests the best transformational path to competitive performance. Then, the findings from a variance theory approach show the levels of key constructs for competitive agile organizations, guiding successful transformation. ❧