Does IT Capability Facilitate Technology Agility?: Empirical Research From South Korea

Introduction

Since the emergence of the Worldwide Web and its worldwide adoption, an increasing number of accompanying technologies (e.g., big data, block chain, cloud computing, and industrial internet) have advanced that enable enterprises to enter the stage of digital development. On the one hand, digital information is becoming a new vital resource in production and operation. On the other hand, the competitive environment of enterprises has become more sensitive, and enterprises face progressively more complex operating environments and increasingly individualized market demands. Questions of obtaining and selecting valuable digital information to make market judgments, adjust operation plans, update the technology, and maintain a competitive position in such a complicated and changeable demand environment are of increasing concern to many enterprises. Moreover, even well-established market leaders feel threatened by agile start-ups located around the world (Craig, 1996) that seek to gain a sustainable competitive advantage by quickly perceiving and seizing opportunities (Sambamurthy et al., 2003). To address these problems, scholars have proposed the concept of ‘agility,’ which refers to the ability to quickly identify and exploit market opportunities. Agility, which allows firms to address increasingly complex and dynamic business environments, is considered a necessary precondition for enterprise success (Brown & Eisenhardt, 1995; D’Aveni, 1994; Goldman et al., 1995).

A few scholars have proposed the concept of ‘agility,’ which refers to the ability to identify and exploit market opportunities quickly. Given its crucial role in enabling business success, organizational agility has garnered considerable research and business attention over the past twenty years. The majority of agility research focuses on three aspects: understanding organizational agility, the antecedents of operational agility, and the empirical effects of agility on firm performance (Lu & Ramamurthy, 2011; Roberts & Grover, 2012;Tallon, 2008). The understanding of agility, in general, can be viewed through two lenses. Viewed through one lens, agility is an externally focused generic capability that enables a firm to quickly adjust its operations to cope with volatile market conditions and changes to requirements (Braunscheidel & Suresh, 2009). Through the other lens, agility is an integrated strategy, paradigm, system, or management practice built upon multifaceted capabilities (Yusuf et al., 1999; Shin et al., 2015). Sambamurthy et al. (2003) argue that organizational agility includes three interrelated capabilities: customer agility, partnering agility, and operational agility and that each impacts firm performance. El-Ghareeb (2009) and Dunlop-Hinkler et al. (2011) suggest that technological agility, which is the firm’s ability to quickly respond to the type and flow of information and rapid technological changes within an organization, should also be one of the critical organizational factors. So firms should be technologically agile to continuously modify and reconfigure existing invisible assets and capabilities (Eggers & Park, 2018; Lavie, 2006) to respond to technological transformation and changes.

In turbulent environments in which technological innovations frequently emerge, firms face pressure to maintain enough agility to sense and adapt to technological changes and assemble the resources necessary to take advantage of these changes. We argue that sustained organizational competitive advantage also depends on how a firm effectively reacts to technological changes, especially when firms take advantage of IT changes to remain agile (Dunlop-Hinkler et al., 2011). From a theoretical view, we propose that firms’ IT capability is a significant antecedent to the two anticipated results of technological agility: technological sensing and technological adoption. Then we investigate two primary questions: how does IT capability influence technological agility, namely, how it affects technology sensing and adoption? Furthermore, will technological agility influence the firm’s performance?