Assessing the Impacts of IS Strategy through the Development of Dynamic Capabilities

Of central importance to the functioning of the IT department is its information systems strategy. While research attention has been copiously given to other areas relating to the strategic value of IS, fewer studies have assessed the impact of the IS strategy itself, which can be an important avenue through which firm performance may be realized. As such, drawing upon the dynamic capabilities perspective, we propose a model of IS strategy and its impacts. Responses from 271 CIOs were collected via an online-based survey to test the proposed model. Results suggest that while innovative strategies reinforce dynamic capabilities development, undefined strategies tend to prove detrimental to development, and conservative strategies tend to neither help nor hurt. The impact of strategy on performance is mediated through dynamic capabilities, with the IS Innovator leading in performance, followed by the IS Conservative, and lastly the IS Undefined, whose lack of strategy proves harmful.