Impact of IT governance mechanisms on IT-enabled dynamic capabilities to achieve firm performance: role of moderators

Abstract

Purpose Although information technology (IT) governance and IT capability have been extensively examined, the impact of IT governance mechanisms on IT-enabled dynamic capability (ITDC) with moderators has received less attention. This study investigates how the impact of IT governance mechanisms on firm performance is achieved through an ITDC through the moderating role of IT governance decentralization and a turbulent environment.

Design/methodology/approach This study extends from the traditional view of IT capabilities and integrates dynamic capability theory to propose that IT governance is vital for the ITDC. Path analysis, hierarchical regression analysis and moderation analysis were performed using partial least squares (Smart PLS 3.0) as the data analysis methods. This study empirically tests the proposed mediated moderation model by using data collected from 254 firms in China to test the hypotheses.

Findings Significant and impactful relationships are found in the model that includes turbulent environment moderating effects. Contrary to expectations, IT governance decentralization is also significant but not very strong.

Research limitations/implications This study’s findings have implications for investigating IT governance, IT-enabled capabilities and moderators. Accordingly, this study has implications for board and executive management to capitalize on dynamic IT capability, to keep pace with the challenges and turbulent conditions associated with business needs and for the productivity paradox in the context of Chinese firms.

Originality/value This country-specific research study theoretically contributes to the IT governance, dynamic capabilities and turbulent environment in the information systems literature and proposes many practical guides to the board and executive management of companies in the Chinese context.