Page 12 - TWIMS Posters 2023

IMPACT OF INFORMATION Background
TECHNOLOGY (IT) Organizational agility (OA) has been signaled as a significant business capability to
remain competitive in the current dynamic and complex business environment.
Although IT capabilities have been identified as an incipient source of OA, there is
AMBIDEXTERITY AND pursuit of IT exploitation and IT exploration. Drawing on the dynamic capability view
limited literature on the agility-enabling role of IT ambidexterity (ITA), which is the dual
(DCV) and the IT-enabled agility literature, this study examines the relationship
between ITA and OA, and proposes that organizational change capacity (OCC) mediates
ORGANISATIONAL CHANGE this relationship.
Many organizations find fostering IT-enabled OA challenging, since several IT-associated
capabilities are required. With the increasing trend in digital transformation, emerging
business models require IT functions to adeptly manage traditional systems while fostering
CAPACITY ON AGILITY innovative digital capabilities (Burström et al., 2021; Del Giudice et al., 2021). This
necessitates balancing the reliable and stable exploitation of existing IT resources with the
exploration of new IT opportunities. Organizations resolve these tensions by developing IT
ambidexterity (ITA), referring to, “the dual capacity to explore and exploit IT resources and
practices” (Lee et al., 2015, p. 398).
Although ITA has been identified as an emerging capability that can support agility,
research exploring this connection is still at an early stage (Syed et al. 2020b). Some studies
suggest that IT capabilities directly enable OA, while others highlight negative or
AUTHORS: impeding impacts (Ghasemaghaei et al., 2017; Ravichandran, 2018). These contradictory
findings have led to a perspective that emphasizes the role of intermediary organizational
capabilities to enable organizations to enhance existing competencies and develop new
ones for diversification and longevity (Liang et al. 2017; Liu et al. 2020).
Waseem Rawat and This research investigates the role of organizational change capacity (OCC) as an
Professor Justin Barnes intermediary in translating ITA into OA. OCC is a comprehensive organizational capability
that enables the initiation and execution of strategic-aligned change initiatives, allowing
organizations to refresh and upgrade existing competencies while fostering new ones
for survival and growth (Supriharyanti & Sukoco, 2023). To advance the understanding of
The authors would like to thank Toyota South Africa the relationships between ITA, OA, and OCC, the dynamic capability view (DCV) was
Motors for funding participation at PACIS2023. adopted as the theoretical lens as this view focuses on a firm's ability to adapt resources
and capabilities for competitiveness (Steininger et al., 2022; Teece, 2018). While the DCV
has been applied to elucidate the relationships between lower-order IT capabilities and
higher-order dynamic capabilities (DCs), its application in explaining the interaction
between ITA, OA, and OCC remains unexplored.
PUBLISHED: Objective
2023
The study addresses the following research question by proposing two hypothesis:
Published in the Conference Proceedings
§ Research Question: How does OCC impact the relationship between ITA and OA?
Pacific Asia Conference on Information Systems § Hypothesis 1: ITA will have a positive effect on OA
(PACIS) § Hypothesis 2: OCC mediates the relationship between ITA and OA
Methodology
The question was tested using a nomological model that integrated the constructs and
employed rigorous empirical analysis on 173 online survey responses. The survey used
a 7-point Likert scale and was administered to senior technology officials, responsible
for either hardware or software IT infrastructures and systems, or data synthesis for
business analytics in their respective organizations. Established statistical protocols
were conducted to test reliability and validity of constructs. Model fit was also
measured, and mediation tested. The out-of-sample predictive capability of the model
was tested and shown to be high.
Findings
The findings show that there is a significant direct relationship between ITA and OA and
that this relationship is partially mediated by OCC, leading to the acceptance of both
Hypothesis 1 and Hypothesis 2 as reflected in the model below:
Figure 1: Summarizes the theoretical model and the associated relationships
Organizational
between ITA, OCC, and OA.
H2 Change Capacity H2
Exploitation Ambidexterity H1 Organizational Adjustment Agility
IT
Operational
IT
IT
Market
Exploration Agility Capitalizing Agility
Lower-Order Capability Generic Capability High-Order Capability
Conclusion
This study makes three key contributions to IS and organizational change research. Firstly,
the finding that 42% of ITA’s role in enabling OA, can be explained by the mediator OCC,
indicates early support for OCC as a generic DC that can influence other specific higher-order
DCs (Andreeva & Ritala, 2016). This result is important, as OCC has the potential to improve
firm performance and long-term competitiveness by refreshing and upgrading existing
competencies and fostering new ones (Judge et al., 2015). Moreover, the study answers the
recent call to empirically test the mediating role of the construct on performance and
non-performance based organizational outcomes (Supriharyanti & Sukoco, 2023).
Secondly, this study advances empirical research on the direct impact of ITA on organizational
capabilities such as operational agility (Syed et al., 2020b), operational ambidexterity (Lee et
al., 2015), and firm performance (Mithas & Rust, 2016). While research on IS- enabled
organizational transformation is still developing (Besson & Rowe, 2012), this study highlights
the strategic potential of ITA in driving organizational change and fostering an agile approach,
which can lead to improved performance and enhanced competitiveness (Lee et al., 2015;
Mithas & Rust, 2016).
Finally, from a theoretical perspective, underpinned by the DCV (Steininger et al., 2022),
the study contributes to a better understanding of the role of lower-order IT capabilities
and generic DCs in the organizational capability hierarchy (Ayabakan et al., 2017).
Specifically, the findings suggest that ITA as a lower-order functional capability is a
promising mechanism that can contribute to the development of OCC, a generic DC
(Supriharyanti & Sukoco, 2023), and OA, a specific higher-order DC (Park et al., 2017).
Overall, this study unveils promising opportunities for further research, delving into the
intricate role of IT capabilities in influencing the fluidity and overall effectiveness of DCs
within dynamic organizational contexts.
These findings are relevant to strategists and managers responsible for developing
organizational capabilities and initiating change. For instance, managers can use the
measures of the OCC construct as a self-assessment instrument to evaluate organizational
readiness for change, which is important to ensure that change initiatives are successful
(Weiner, 2009). The empirical validation done in this study demonstrates the pragmatic
importance of fostering a balance between IT exploration and exploitation when developing
organizational capabilities, which in turn can foster organizational competitiveness.
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