A strategic alignment model for IT flexibility and dynamic capabilities: Towards an assessment tool

Abstract

The Dynamic Capabilities View (DCV) has emerged as an influential theoretical and management framework in modern IS research. However, despite the view's significant contributions, its strength and core focus are essentially in its use for historical firm performance explanation. Furthermore, valuable contributions have been made by several researchers in order to extend the DCV to fit the constantly changing IT environments and other imperative drivers for competitive performance. Nevertheless, to our knowledge, no DCV extension has been developed which allows firms to assess their current state of maturity and to derive imperative steps for further performance enhancement. To fill this gap, this article develops a strategic alignment model for IT flexibility and dynamic capabilities and empirically validates proposed hypotheses using correlation and regression analyses on a sample of 322 international firms. Findings suggest that there is a positive relationship between a firm’s degree of alignment of IT flexibility and dynamic capability dimensions – defined as the degree of balance between all dimensions – and competitive firm performance. Alignment can, therefore, be seen as an important condition that significantly influences a firm’s competitive advantage in constantly changing environments. The proposed framework helps firms assess and improve their IT flexibility and dynamic capabilities. Results are discussed, while theoretical and practical implications are highlighted, concluding with suggestions for future research.