Organizational Performance and Sustainability: Exploring the Roles of IT Capabilities and Knowledge Management Capabilities

Abstract

This study explores the effects of organizational information technology (IT) capability in determining organizational performance and sustainable competitive advantage. Building on the resource-based and knowledge-based views of a firm, the study proposes a theoretical framework. In this framework, organizational IT capability is theorized to strengthen organizational performance and sustainable competitive advantage, directly and indirectly, through organizational knowledge management capabilities. Data collected from the middle and senior managers of diverse organizations in an emerging economy have been used to test the relationships in the framework. To estimate the proposed relationships in the conceptual model, we use structural equation modeling through SmartPLS 3.2. The results confirm that organizational IT capability significantly impacts organizational performance and sustainable competitive advantage. Additionally, organizational knowledge management capabilities partially mediate the relationship between IT capability and the outcomes (i.e., organizational performance and sustainable competitive advantage). The study concludes with a discussion of the implications for academicians and managers.