IT Resources, Organizational Capabilities, and Value Creation in Public-Sector Organizations: A Public-Value Management Perspective

Abstract

What value does information technology (IT) create in governments and how does it do so? While business value of IT has been extensively studied in the information systems field, this has not been the case for public value. This is in part due to a lack of theoretical bases for investigating IT value in the public sector. To address this issue, we present a conceptual model on the mechanism by which IT resources contribute to value creation in the public-sector organizations. We propose that the relationship between IT resources and organizational performance in governments is mediated by organizational capabilities and develop a theoretical model that delineates the paths from IT resources to organizational performance, drawing upon public-value management theory. This theory asserts that public managers, on behalf of the public, should actively strive to generate greater public value, as managers in the private sector seek to achieve greater private business value. On the basis of the review of public-value management literature, we suggest that the following five organizational capabilities mediate the relationship between IT resources and public value - public service delivery capability, public engagement capability, co-production capability, resource-building capability, and public-sector innovation capability. We argue that IT resources in public organizations can enable public managers to advance public-value frontiers by cultivating these five organizational capabilities and to overcome conflicts among competing values.