The link between information processing capability and competitive advantage mediated through decision-making effectiveness |
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| Institution: | 1. Department of Business Systems and Operations, University of Bedfordshire Business School, Park Square, Luton LU1 3JU, UK;2. University of Bedfordshire Business School, Park Square, Luton LU1 3JU, UK;3. Ulster Business School, University of Ulster, Newtownabbey, BT37 0QB, UK;1. Instituto Universitário de Lisboa (ISCTE-IUL), ISTAR-IUL, Lisboa, Portugal;2. Instituto Universitário de Lisboa (ISCTE-IUL), IT-IUL, Lisboa, Portugal;3. Intelligent Systems Research and Innovations (IISRI), Deakin University, Waurn Ponds, VIC, 3216, Australia;1. School of Management, Swansea University Bay Campus, Fabian Way, Swansea, SA1 8EN, UK;2. Department of Management Information Systems, Faculty of Economics and Administration, King Abdulaziz University, Jeddah 21589, Saudi Arabia;1. Newcastle University Business School, Newcastle University, United Kingdom;2. Faculty of Economics and Business Studies, Department of Marketing and Market Research, University of Zaragoza, Gran Vía 2, 50005, Zaragoza, Spain;1. Universidade Federal de Uberlândia, Brazil;2. DePaul University, USA & Kyung Hee University, Republic of Korea |
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| Abstract: | While research underpinned by the resource-based view (RBV) appears to suggest that IT-enabled capabilities are positively linked to competitive advantage, such a link is often seen as a black box as the processes through which competitive advantage can be gained appears unclear. In particular, research appears to suggest that information processing capability is linked to decision-making effectiveness and competitive advantage; however, little research appears to examine the interrelationship among them. This study, drawing on the RBV, develops a mediation model to examine the link between competitive advantage and the key tenets of value, rarity, inimitability and non-substitutability of information processing capability in the context of business analytics; and whether this link is mediated through decision-making effectiveness. Based on data collected from 633 UK companies, this study shows that there is a positive link between the value, rarity and inimitability characteristics of information processing capability and competitive advantage, which is partially mediated by decision-making effectiveness. The findings contribute to the theoretical development of the RBV by developing a mediation model that looks inside the black box. They also contribute to managers’ knowledge and understanding of the mechanism through which the strategic value of information processing capability can be maximized. |
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| Keywords: | Information processing capability Decision-making effectiveness Competitive advantage Resource-based view Business analytics Mediation |
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