Research Article
A Study on Improving Organizational Performance through Organizational Strategy and Information Technology Utilization
Published: January 1997 · Vol. 26, No. 1 · pp. 173-194
Full Text
Abstract
The purpose of this study is to empirically examine the linkage between organizational strategy and the utilization of information technology, how competitive advantage achieved through information technology utilization ultimately affects organizational performance improvement, and what impact information technology utilization has on the relationship between organizational strategy and performance. Additionally, the study aims to empirically validate the operational definition for measuring organizational competitive advantage through information technology utilization developed by Sethi and King (1994). A survey was conducted on 150 randomly selected manufacturing firms in the Seoul metropolitan area. The research findings revealed that information technology provides organizations with competitive advantage across the dimensions of efficiency, threat, functionality, preemptiveness, and integration, thereby contributing to organizational performance. The operational definition of organizational competitive advantage through information technology utilization developed by Sethi and King was found to possess considerable reliability and validity. However, competitive advantage in the threat and integration dimensions showed little relevance to organizational strategy, which can be attributed to the limited nature of this study's sample and the fact that top management in Korea does not consider information technology particularly important when formulating corporate strategy. Therefore, the competitive advantage of information technology in the threat and integration dimensions requires re-examination. The organizational competitive advantage achieved through information technology utilization was demonstrated to exert a partial moderating effect on the relationship between organizational strategy and performance. Moreover, high-performing firms showed close relationships between organizational strategy and information technology utilization, and between information technology utilization and organizational performance, whereas low-performing firms did not exhibit consistent relationships. Consequently, the conclusion is that successful firms seize the competitive advantages or opportunities to overcome competitive disadvantages offered by information technology, recognize these as important elements in organizational strategy formulation, incorporate them into organizational strategy, and thereby appropriately respond to competitive forces such as competitors, potential entrants, substitutes, suppliers, and buyers, ultimately enhancing organizational performance.
