Toward a Fitness Landscape Model of Firms' IT-Enabled Dynamic Capabilities

Introduction

Scholars posit that information systems and information technology (IS/IT) are capable of revolutionizing the way firms operate, and hence drive a firm’s performance under rapidly changing conditions (Agarwal & Selen, 2009; El Sawy, Malhotra, Park, & Pavlou, 2010; Kohli & Grover, 2008; R. Van de Wetering, Mikalef, & Pateli, 2017b). In understanding this particular role of IS/IT within the turbulent business ecosystem and landscape, previous studies have emphasized the importance of IS/IT in enabling organizational capabilities (Kohli & Grover, 2008). Organizational capabilities represent firms’ potential to achieve specific business strategies and management objectives using focused deployment and are considered the building blocks on which firms compete within the business ecosystem (Barney, 1991). Firms that are capable of targeting and deploying IS/IT initiatives in support of these organizational capabilities are more likely to realize business value from their IT resource and IT competencies inventory (Sambamurthy, Bharadwaj, & Grover, 2003; R. Van de Wetering, Mikalef, & Pateli, 2017a). The extant literature refers to this specific capacity to effectively use IT functionalities to support IT-related activities as an IT leveraging competence (Pavlou & El Sawy, 2010).

The core principle of examining the particular value of IS/IT in enterprise processes it is embedded, i.e., IT-enabled capabilities is also highly encouraged in contemporary IS literature (Grover & Kohli, 2012; Kohli & Grover, 2008; Mikalef, Pateli, & van de Wetering, 2016). IT-enabled capabilities gained considerable as they collectively create business value and drive a firm’s competitive edge (El Sawy & Pavlou, 2008; Mithas, Tafti, Bardhan, & Goh, 2012; Roberts, Galluch, Dinger, & Grover, 2012).

The capabilities we address in this current study constitute the dimensions of IT-enabled dynamic capabilities (ITDC). We define ITDCs as a firm’s ability to leverage its IT resources and IT competencies, in combination with other organizational resources and capabilities, to address rapidly changing business environments (Mikalef et al., 2016). Based on the notion that firms must be able to be stable enough to continue to deliver value in their distinctive way, and agile and adaptive enough to restructure their value proposition when circumstances demand it, there is a well-documented distinction between ordinary (operational or zero-order) and these ITDCs (Drnevich & Kriauciunas, 2011; Mikalef et al., 2016; Pavlou & El Sawy, 2011; Winter, 2003). Ordinary capabilities enable a firm to make a living in the present, while ITDCs act as a continuous driver of evolution to changing business requirements (Winter, 2003). Thus, ITDCs help firms decision-makers in practice by extending, modifying, and reconfiguring existing operational capabilities into new ones that better match the environmental conditions.

There is overwhelming evidence concerning the impact of ITDCs on firm performance at an aggregate level (Mikalef & Pateli, 2017; Rai & Tang, 2010). However, there is still little consensus on how specific interrelations (e.g., too many or too little epistatic links and interdependency among individual capabilities) result in the achievement toward higher levels of performance and evolutionary fitness. Moreover, the extant literature has predominantly focused on the aggregate construct level of ITDCs.