Firm Boundaries, Information Processing Capacity, and Performance in Manufacturing Firms

Author List: G—mez, Jaime; Salazar, Idana; Vargas, Pilar;

Journal of Management Information Systems, 2016, Volume 33, Issue 3, Page 809-842.

We analyze the alignment between information processing needs and capacities. First, we explore the relationship between firms' vertical and horizontal boundaries and information technology (IT) capabilities. The literature postulates that less internalization leads firms to invest more in information technology. However, we argue that the use of taper integration and diversification increases the demand for IT-based resources such as IT infrastructure and IT human resources. Second, we propose that the fit between information processing needs and capacity has a positive effect on performance. Our hypotheses are tested on a panel of Spanish manufacturing firms, and the results provide general support for our arguments. One advantage of the data is that they include not only large firms but also small and medium-size manufacturers. From a theoretical perspective, the study contributes to the literature by providing novel insights on how decisions on the vertical dimension condition investments in IT capabilities. It also adds new evidence on the diversificationÐIT capabilities relationship and studies the consequences of alignment of corporate strategies and IT capabilities on firm performance. From a managerial perspective, our study suggests that changes in the vertical and horizontal limits should be followed by changes in IT capabilities to improve performance. > >

Keywords: diversification; information processing capacity; information processing needs ;information technology capabilities; ISÐorganization fit; taper integration

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List of Topics

#59	0.326	capabilities capability firm firms performance resources business information technology firm's resource-based competitive it-enabled view study value infrastructure results organizational model
#285	0.159	effects effect research data studies empirical information literature different interaction analysis implications findings results important set large provide using paper
#170	0.128	information processing needs based lead make exchange situation examined ownership analytical improved situations changes informational examine developed receive perceptions facilitates
#271	0.098	technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry payoff return findings decisions greater
#237	0.091	boundary practices capacity new boundaries use practice absorptive organizational technology work field multiple study objects actors actor theory practical spanning
#256	0.060	coordination mechanisms work contingencies boundaries temporal coordinating vertical associated activities different coordinate suggests dispersed coordinated horizontal relative demand spatial hours
#229	0.058	alignment strategic business strategy performance technology value organizational orientation relationship information misalignment matched goals perspective fit firms executives argue need