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http://dx.doi.org/10.9716/KITS.2015.14.2.195

How Should Service Innovation Strategy be Aligned with Business Strategy? : Focused on the Moderating Effect of IT Capability  

Ryu, Hyun-Sun (고려대학교 경영학과 정보통신전략센터)
Lee, Jae-Nam (고려대학교 경영대학)
Publication Information
Journal of Information Technology Services / v.14, no.2, 2015 , pp. 195-229 More about this Journal
Abstract
Service innovation is considered a new way to gain competitive advantage and enhance firm performance. However, service innovation does not always guarantee the desired outcome. The effective organization and management of well-planned service innovation practices, which are consistent with the firm's business environment, become a critical challenge for service innovation success. In addition, an increasing number of studies have focused on the role of information technology (IT) capability in service innovations. Most studies on service innovation have focused on the influences of the strategic alignment and IT capability separately. In contrast, the current study combines them by investigating the positive moderating effect of IT capability on the alignment between business strategy and service innovation strategy. Based on data collected from 183 service firms in Korea, we first explore the effect of service innovation strategies when coupled with different business strategies on better firm performance. We then investigate the moderating effect of IT capability on the relationship between strategic alignments and firm performance. Empirical evidence indicates that a synergistic effect between alignment and IT capability on firm performance exists. Firms that have aligned service innovation strategy with business strategy should consider improving their organizational IT capability to ensure substantial leverage.
Keywords
Service Innovation Strategy; Business Strategy; Information Technology Capability; Moderating Effect; Alignment;
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