Understanding the Link Between Information Technology Capability and Organizational Agility: An Empirical Examination1
Abstract
Information technology is generally considered an enabler of a firm’s agility. A typical premise is that greater IT investment enables a firm to be more agile. However, it is not uncommon that IT can also hinder and sometimes even impede organizational agility. We propose and theorize this frequently observed but understudied IT–agility contradiction by which IT may enable or impede agility. We develop the premise that organizations need to develop superior firm-wide IT capability to successfully manage their IT resources to realize agility. We refine the conceptualization and measurement of IT capability as a latent construct reflected in its three dimensions: IT infrastructure capability, IT business spanning capability, and IT proactive stance. We also conceptualize two types of organizational agility: market capitalizing agility and operational adjustment agility. We then conduct a matched-pair field survey of business and information systems executives in 128 organizations to empirically examine the link between a firm’s IT capability and agility. Business executives responded to measurement scales of the two types of agility and organizational context variables, and IS executives responded to measurement scales of IT capabilities and IS context variables. The results show a significant positive relationship between IT capability and the two types of organizational agility. We also find a significant positive joint effect of IT capability and IT spending on operational adjustment agility but not on market capitalizing agility. The findings suggest a possible resolution to the contradictory effect of IT on agility: while more IT spending does not lead to greater agility, spending it in such a way as to enhance and foster IT capabilities does. Our study provides initial empirical evidence to better understand essential IT capabilities and their relationship with organizational agility. Our findings provide a number of useful implications for research and managerial practices.
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Heightened IT capability levels empower greater organizational agility through dynamic knowledge management and collaborative structures.
“Heightened IT capability levels empower greater organizational agility through dynamic knowledge management and collaborative structures (Lu and Ramamurthy 2011).”
From How Do Digital Capabilities Affect Organizational Performance in the Public Sector? The Mediating Role of the Organizational Agility (2024) · cites this paper as Lu and Ramamurthy 2011
Empirical works have confirmed the mediated pathway from advanced capabilities enabling greater agility, which then manifests in positive performance outcomes across governmental entities.
“These empirical works have confirmed the mediated pathway from advanced capabilities enabling greater agility, which then manifests in positive performance outcomes across governmental entities (Lu and Ramamurthy 2011).”
From How Do Digital Capabilities Affect Organizational Performance in the Public Sector? The Mediating Role of the Organizational Agility (2024) · cites this paper as Lu and Ramamurthy 2011
Investments in integrated data architectures, automation workflow tools, and real-time dashboarding capabilities can provide flexible digital infrastructure, thereby enabling greater adaptability.
“This affirms the conceptual premise that investments in integrated data architectures, automation workflow tools, and real-time dashboarding capabilities can provide flexible digital infrastructure, thereby enabling greater adaptability (Lu and Ramamurthy 2011).”
From How Do Digital Capabilities Affect Organizational Performance in the Public Sector? The Mediating Role of the Organizational Agility (2024) · cites this paper as Lu and Ramamurthy 2011
Improved organizational agility can be conceptualized as an intermediary competence unlocked by sophisticated data analytics and flexible infrastructure, underscoring the interconnected nature of technical and social dimensions of digital transformation.
“Conceptualizing improved organizational agility as an intermediary competence unlocked by sophisticated data analytics and flexible infrastructure underscores the interconnected nature of technical and social dimensions of digital transformation (Lu and Ramamurthy 2011).”
From How Do Digital Capabilities Affect Organizational Performance in the Public Sector? The Mediating Role of the Organizational Agility (2024) · cites this paper as Lu and Ramamurthy 2011
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- Authors
- Lu, Y., & Ramamurthy, K. (.
- Affiliations
- School of Business, Pfeiffer University, Misenheimer, NC 28109 U.S.A.
- University of Wisconsin–Milwaukee (US)
- ORCID
- Ramamurthy, K. (Ram)
- Venue
- MIS Quarterly
- Publisher
- MIS Quarterly
- Published
- 2011-12-01
- Volume
- 35
- Issue
- 4
- Pages
- 931-954
- ISSN
- 0276-7783 (ISSN-L)
- 2162-9730
- OpenAlex
- W2155516490
- Cited by
- 1,309
- References
- 9
- Citations by year
- 2026: 96 · 2025: 127 · 2024: 154 · 2023: 155 · 2022: 142 · 2021: 113 · 2020: 104 · 2019: 73 · 2018: 87 · 2017: 62 · 2016: 46 · 2015: 57 · 2014: 46 · 2013: 35 · 2012: 11
- FWCI
- 60.96
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- MIS Quarterly (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Management Information Systems › Information Technology Governance and Strategy
- Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Collaboration in agile enterprises
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Keywords
- IT capabilities, organizational agility, IT spending, IT resource management
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