Research Article
The Relationship among Environmental Uncertainty, Decision-Making Process, and Firm Performance
Published: January 2010 · Vol. 39 No. 5 · pp. 1363-1387
Full Text
Abstract
This study examines the impact of organizational information system implementation and utilization on decision-making processes and firm performance. According to prior research, corporate information systems have been discussed as playing an important role in organizational decision-making processes. However, existing studies have failed to provide clear conclusions regarding the specific role information systems can play in various forms of decision-making processes and how they affect firm performance. Accordingly, this study aims to demonstrate that the implementation and utilization of information systems can enhance the quality of decision-making and consequently contribute to improving firms' financial performance. Additionally, this study seeks to show that the impact of information system implementation and utilization on decision-making quality and financial performance becomes greater as environmental uncertainty increases. To achieve these research objectives, a sample of 129 firms was obtained from the textile, machinery, automobile parts, and electronics industries. The analysis results indicate that the interactions between decision-making processes—such as information processing, mutual cooperation, and proactiveness—and information systems have a significant positive effect on return on assets (ROA). Furthermore, it was observed that as environmental uncertainty increases, the interactions between the three types of decision-making processes and information systems have a greater impact on firms' financial performance.
