Dual Pathways of Value Creation from Digital Strategic Posture: Contingent Effects of Competitive Actions and Environmental Uncertainty

Abstract

Dual Pathways of Value Creation from Digital Strategic Posture: Contingent Effects of Competitive Actions and Environmental Uncertainty IN STOCK SKU 48.1.15 Publication History Received: October 9, 2019 Revised: December 20, 2020; February 23, 2022; November 7, 2022; June 7, 2023 Accepted: August 3, 2023 Published Online in Issue: March 1, 2024 https://doi.org/ Downloadable File Article PDF $15.00 Add to Cart Abstract Digital strategic posture (DSP) is defined as a firm’s overall strategic stance toward investing in information technology (IT) initiatives relative to that of rival firms. This study examines how a firm’s DSP affects firm performance. Drawing on the competitive dynamics perspective and contingency view, we demonstrate that DSP influences competitive actions through dual pathways. First, DSP enables firms to take competitive actions that are more appropriate given the level of environmental uncertainty (captured by industry dynamism). In particular, our findings suggest that a proactive DSP enables relatively more innovation-oriented actions in dynamic industries while enabling relatively more operations-oriented actions in less dynamic industries. Second, DSP plays a facilitating role in firms’ execution of competitive actions such that a firm’s value from its proactive DSP is enhanced when there is a fit between the type of the firm’s competitive actions and its level of environmental uncertainty. Specifically, we find that firms with a more proactive DSP achieve superior firm performance from innovation-oriented actions in dynamic industries and from operations-oriented actions in less dynamic industries. Taken together, our findings suggest that a proactive DSP not only allows firms to take appropriate competitive actions that fit their environmental conditions but also contributes to firms’ performance by facilitating the execution of these appropriate actions, thus enhancing their efficacy. Additional Details Author , , , and Year 2024 Volume 48 Issue 1 Keywords Digital strategic posture, competitive actions, innovation-oriented actions, operations-oriented actions, competitive dynamics, contingency view, business value of IT, IT strategy, industry dynamism Page Numbers 409-426