Abstract:
Purpose – With the ever-growing turbulent business setting, there is a great interest to study how a firm
tailors information technology (IT) capability to shape agility and innovation capability to stay ahead of the
competition. This study examines how IT governance and IT capability can be tailored to achieve firm
performance through agility and innovative capability in a turbulent environment.
Design/methodology/approach – Drawing on the dynamic capability theory, this study based on the
primary survey data of 253 responses from senior IT and business executives in China proves the hypothesized
relationship in the proposed model.
Findings – This study shows that the IT governance mechanism positively impacts on IT-enabled dynamic
capabilities. Further, IT-enabled dynamic capabilities positively impact on agility and innovative capability
that in turn support to achieve firm performance. The environmental uncertainty is only significant in the ITenabled
dynamic capabilities–business process agility relationship.
Research limitations/implications – This study suggests corporate leaders and executives to better
exploit their resources and tailor IT capabilities in the turbulent environment. Further, this study offers
theoretical and practical implications.
Originality/value – This study proposes ways for executives to examine the multifaceted nature of
environmental uncertainty to achieve agility, innovation and firm performance rather than simply investing
in IT.
