It competency and firm performance: The role of organizational learning capability in Indonesian manufacturing firms
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Date
2008-10
Authors
Hasan, Alizar
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
To date, the impact of information technology (IT) on finn performance remains
debatable, because some results of previous studies have high variations. The variations
of result are caused by diversities in the conceptualization of the key constructs and
their interrelationship and the exclusion of intangible effect of IT on performance. The
multiple theoretical paradigms have also been employed by researchers in investigating
the relationship between IT and firm perfmmance and they caused the problem of
linking IT to firm performance to become rather complex.
Scholars argued that the unified theoretical framework based on the resource-based
view (RBV) should be developed in order to integrate the various elements of research
into a single framework. Further, IT alone may not generate a sustainable advantage,
because it can be easily imitated by competitors. However, the advantages should be
protected by embedding it in an organization through complementary and co-specialized
resource.
Since studies on the impact of IT on finn perfonnance by using indonesian firms
are few in the literature, this study is very timely, as such infom1ation is lacking in the
Indonesian enviroment.
This research developed a framework in which firm perfonnance is the dependent
variable, IT competency is an independent variable with the co-specialized resources
(IT object, IT knowledge, and IT operations) and the organizationalleaming capability
is the complementary resource (mediate the relationship between IT competency and
firm performance). This research also investigated the role of the knowledge strategy
(codification and personalization) as moderating variable.
This research used the quantitative approach (the positivism paradigm), and data was
collected through mailed questionnaires to CEOs of large manufacturing firms in
Indonesia. Finally, a total of 192 responses were used for this study. Multivariate data
analyses were then conducted. The findings revealed:
1. IT competency positively and significantly influences overall firm performance
(profitability, ROI, customer retention, and sale growth) and organizational
learning capability.
2. Organizational learning capability is an important determinant of overall firm
performance whereby it positively and significantly influences overall
performance. Each of the four dimensions of organizational learning capability
fully and partially mediates the relationship between IT competency and overall
firm performance. The mediating effect of knowledge transfer and integration is
the highest variance, followed by openness and experimentation, managerial
commitment, and systems perspective.
3. The impact of IT competency on the organizational learning capability is
moderated by both codification and personalization strategy. The moderating
effect of the codification strategy is higher than the moderating effect of
personalization strategy.
Description
Keywords
Information technology (IT)