The dynamic IT capabilities and firm agility: A resource-based perspective

Agility is particularly important in an increasingly volatile business environment characterized by intense, global competition, short product life cycles, increased technological innovation, and time-sensitive customer demand. Environment turbulence compels firms to become more agile in terms of the speed and flexibility with which they adapt their business models and objectives. The purpose of this paper is to develop the theoretical links between information technology capabilities and the agility of manufacturing firms. With a resource-based view, this study found that IT capability is the underlying factor to support the agilities in the firm. Firstly, it is argued in this paper that IT capabilities evolve from low level to high level to support firm agility, which is divided into two types in this study: operational agility and strategic agility. Secondly, through developing agility above the industry average, firm can create a competitive advantage and achieve superior performance. Finally, based on RBV, a model linking the level of IT capability with the type of agility is built in this paper. In order to get the higher performance, firms must cultivate and advance its IT capability dynamically to achieve agility. Through putting forward five hypotheses in this paper, the potential mechanism of influence on firm performance from IT capability is also understood and constructed.