Extent of managerial IT use, learning routines, and firm performance a structural equation modeling of their relationship

• Organizations increasingly rely on information technology (IT) to improve performance. Yet, there is debate about the pay-off of the IT revolution, and empirical evidence suggests that investments in IT do not guarantee enhanced performance. Drawing from accounting, marketing, management and information technology literature, this study uses structural equation modeling to assess the extent to which managerial use of IT is intertwined with control issues including learning routines (internal and external), product quality, cost improvement, customer satisfaction and firm profitability. The conceptual framework builds on knowledge- and resource-based views and return on quality perspectives. The results indicate support for the theoretical framework. Extent of managerial IT use influences internal and external learning routines that influence quality and cost improvement. Quality improvement significantly impacts customer satisfaction and cost improvement that significantly impact firm profitability. The non-hypothesized paths are not significant, indicating that learning routines, quality improvement, cost improvement and customer satisfaction are intervening variables between extent of managerial IT use and firm profitability. Further, the sample is split into two industry subgroups, durable and nondurable goods subgroups, and the two-group analysis reveals that industry moderates the relationship among the variables under study. The effects are in general more pronounced for durable goods firms.

Subject headings

Social Sciences  (hsv)

Economics and Business  (hsv)

Business Administration  (hsv)

Samhällsvetenskap  (hsv)

Ekonomi och näringsliv  (hsv)

Företagsekonomi  (hsv)

Redovisning och styrning  (ltu)

Accounting and Control  (ltu)

Keyword

Business / Economics - Business studies

Ekonomi - Företagsekonomi