Effect of Information Systems Resources and Capabilities on Firm Performance: A Resource-Based Perspective
Abstract
We draw on the resource-based theory to examine how information systems (IS) resources and capabilities affect firm performance. A basic premise is that a firm's performance can be explained by how effective the firm is in using information technology (IT) to support and enhance its core competencies. In contrast to past studies that have implicitly assumed that IS assets could have direct effects on firm performance, this study draws from the resource complementarity arguments and posits that it is the targeted use of IS assets that is likely to be rent-yielding. We develop the theoretical underpinnings of this premise and propose a model that interrelates IS resources, IS capabilities, IT support for core competencies, and firm performance. The model is empirically tested using data collected from 129 firms in the United States. The results provide strong support for the research model and suggest that variation in firm performance is explained by the extent to which IT is used to support and enhance a firm's core competencies. The results also support our proposition that an organization's ability to use IT to support its core competencies is dependent on IS functional capabilities, which, in turn, are dependent on the nature of human, technology, and relationship resources of the IS department. These results are interpreted and the implications of this study for IS research and practice are discussed.
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Technical and business skills necessary for each of the roles are two crucial components to drive AI adoption in organisations.
“The technical and business skills necessary for each of the roles outlined above are two crucial components to drive AI adoption in organisations (Bharadwaj, 2000;Ravichandran et al., 2005).”
From Unlocking the value of artificial intelligence in human resource management through AI capability framework (2023) · cites this paper as Ravichandran et al., 2005
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- Authors
- RAVICHANDRAN, T., LERTWONGSATIEN, C., & LERTWONGSATIEN, C.
- Affiliations
- Rensselaer Polytechnic Institute (US)
- ORCID
- RAVICHANDRAN, T.
- Venue
- Journal of Management Information Systems
- Publisher
- Informa UK Limited
- Published
- 2005-04
- Volume
- 21
- Issue
- 4
- Pages
- 237-276
- ISSN
- 0742-1222 (ISSN-L)
- 1557-928X
- OpenAlex
- W1919895648
- Cited by
- 1,238
- References
- 3
- Citations by year
- 2026: 23 · 2025: 32 · 2024: 51 · 2023: 55 · 2022: 60 · 2021: 76 · 2020: 74 · 2019: 75 · 2018: 64 · 2017: 65 · 2016: 50 · 2015: 73 · 2014: 91 · 2013: 80 · 2012: 80
- FWCI
- 52.66
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Management Information Systems (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Management Information Systems › Information Technology Governance and Strategy
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Social Sciences › Business, Management and Accounting › Management Information Systems › Outsourcing and Supply Chain Management
- Keywords
- information systems resources, information systems capabilities, firm performance, resource-based view, core competencies, resource complementarity
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