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The IUP Journal of Knowledge Management :
Moderating Effect of Firm Size on the Relationship Between IT Orientation and Business Performance
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Information Technology (IT) orientation is the firm’s capability to effectively manage and use information. This study examines moderating role of firm size in the relationship between IT orientation and business performance. This firm level study has been conducted on a cross-sectional purposive sample of managers from manufacturing and service organizations based in the National Capital Region (NCR), India. Data was collected through self-developed non-disguised questionnaire. The survey questionnaire was administered on 240 managerial level employees (CXO’s, top level and middle level managers who were key decision makers in the organizations). The hypotheses were tested using Structural Equation Modeling (SEM). The findings provide support for a significant positive relationship between IT orientation and business performance. The study also provides empirical evidence that firm size moderates the relationship between IT orientation and business performance. The study recommends greater emphasis on improving the IT orientation of larger firms to enhance the capability for superior business performance. It also gives specific suggestions for improving the IT orientation of the firms. The study contributes to the business strategy literature by providing empirical support to the Resource-Based View (RBV) of the firm.

 
 
 

A major challenge to managers is to train and assist users in acquiring, organizing and applying information constructively. Information technologies have the potential to enable organizational learning (Robey et al., 2000). It is important that employees recognize the value of IT systems and IT tools in the organization’s capacity to learn (Janson et al., 2007). IT can play a substantial role in processing, storing and retrieving data, information, explicit knowledge and in some cases tacit knowledge (Coff et al., 2006; and Al-qdah and Salim, 2013).

Information Technology (IT) orientation construct, defined as the tendency of the organization to provide for and use IT to support communication, capture and share knowledge and increase the speed of learning, measures the firm’s capability to effectively manage and use information (Farooq, 2012).

 
 
 

Knowledge Management Journal, Moderating Effect, Firm Size, IT Orientation, Information Technology (IT), Resource-Based View (RBV), Structural Equation Modeling (SEM), Formulation of Hypotheses, Business Performance.