Information systems maturity, knowledge sharing, and firm performance

• Published date: 05 May 2015
• Date: 05 May 2015
• Pages: 106-127
• DOI: https://doi.org/10.1108/IJAIM-11-2013-0060
• Author: Yanchao Rao,Ken H Guo,Ye Chen

Information systems maturity,

knowledge sharing, and rm

performance

Yanchao Rao

School of Accountancy, Shanghai University of Finance and Economics,

Shanghai, China

Ken H. Guo

Accounting Department, California State University, Fullerton,

California, USA, and

Ye Chen

BearingPoint, Shanghai, China

Abstract

Purpose – The purpose of this paper is to investigate how and why information systems (IS) enhance

rm performance (FP) from a knowledge management perspective. Drawing upon the knowledge-view

of the rm and organizational learning theories, we develop and empirically test a theoretical model

where knowledge sharing (KS) plays a mediating role between IS maturity (ISM) and FP.

Design/methodology/approach – Data were collected through a survey of business managers in

China. The model was tested by using the partial least squares structural equation modeling approach.

Findings – The results provide support for the propose research model and conrm that ISM is

positively associated with FP, and KS partially mediates the effects of ISM.

Originality/value – This study contributes to the IS literature by reconceptualizing the ISM construct

and testing the mediating effect of KS and, thus, offers some answers to the “how-and-why” question

about the value of IS.

Keywords Knowledge sharing, Balanced scorecard, Firm performance,

Information systems maturity

Paper type Research paper

1. Introduction

Researchers have long been trying to understand the relationship between information

systems (IS) and rm performance (FP). Prior studies have largely focused on the direct

link between IS and FP. In the IS literature, some studies investigated IS – the input –

from various perspectives such as information technology (IT) investment (Bharadwaj

et al., 1999;Weill, 1992), rm-wide IT capability (Bharadwaj, 2000), information

processing design choices (Fairbank et al., 2006), IT-business alignment (Chan et al.,

1997) and chief information ofcer reporting structure (Banker et al., 2011). Other

studies, on the other hand, focused on FP – the output. For example, a study takes a

process-oriented view to measure both the low/intermediate level performance and

higher level FP, and suggests that IS have a signicant positive impact on the

intermediate level (Barua et al., 1995). In the accounting IS literature, some studies

focused on the value relevance of IT capability in terms of whether IT capability is

The current issue and full text archive of this journal is available on Emerald Insight at:

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IJAIM

23,2

106

Received 3 November 2013

Revised 10 January 2014

Accepted 4 February 2014

InternationalJournal of

Accounting& Information

Management

Vol.23 No. 2, 2015

pp.106-127

©Emerald Group Publishing Limited

1834-7649

DOI 10.1108/IJAIM-11-2013-0060

positively valued by investors (Dehning and Stratopoulos, 2002;Muhanna and Stole,

2010;Wang and Alam, 2007) and the relationship between IT [e.g. enterprise resources

planning (ERP) systems] and a rm’s competitive advantage (Hunton et al., 2003).

Although these studies have advanced our understanding of the value of IS for business,

more research is still needed to examine how and why IS investments enhance FP

(Sambamurthy et al., 2003).

There has been some initial research that focused on the “how-and-why” question. In

particular, some recent studies examined how IS inuence FP through intermediate

factors. Examples of these intermediate factors include the digitization of customer and

supplier relationship management (Barua et al., 2004), IT support for core competences

(Ravichandran and Lertwongsatien, 2005), process coupling with business partners

(Saraf et al., 2007), coordination and control across diversied business units (Chari et al.,

2008), customer, process and performance management (Mithas et al., 2011) and rm

agility (Tallon and Pinsonnault, 2011). These studies generally focus on IS-supported

business processes and overall rm capabilities, through which IS inuence FP. In the

accounting IS literature, the IT concept is often operationalized as the ranking by

professional magazines (Chen et al., 2011;Dehning and Stratopoulos, 2002;Muhanna

and Stole, 2010;Wang and Alam, 2007).

While these studies have built a solid foundation for answering the question of

“how-and-why”, diverse IT concepts have been proposed and studied in a piecemeal

matter. There is a need for theoretical integration and synthesis. There is apparently

broad recognition of the importance of IT (IT capability in particular), but precise

measures of that remain elusive (Masli et al., 2011). Thus, in the present paper, we aim to

address the above research gap by reconceptualizing the IT construct as “information

system maturity (ISM)” and examine the effects of ISM on business performance

through Knowledge sharing (KS). The concept of ISM can serve as an overarching

construct that synthesize the diverse conceptualizations in the IS and accounting

literature. While ISM is not a new concept, its effects on business performance have been

under-researched.

The remainder of the paper proceeds as follows. In the next section, the research

model is developed. The method section presents construct operationalizations, data

collection procedures and instrument validation procedures. This is followed by the

data analysis and results section, which discusses the testing of the proposed research

model. The paper then concludes with the discussion of ndings and implications for

research and practices.

2. Conceptualization of is maturity

There have been divergent conceptualizations of IS-related constructs in recent studies

(see also Melville et al., 2004 for a review). These constructs focus on one or more

dimensions of IS. For example, prior studies have examined the effect of IT competency

(Tippins and Sohi, 2003), IT capability (Mithas et al., 2011), functional capabilities

(Ravichandran and Lertwongsatien, 2005), online information capability (Barua et al.,

2004), relatedness (Tanriverdi, 2005), integration with customers and suppliers (Saraf

et al., 2007), IT infrastructure integration for supply chain management (Rai et al., 2006),

strategic IT alignment (Tallon and Pinsonnault, 2011) and exibility (Saraf et al., 2007;

Tallon and Pinsonnault, 2011), among others.

107

Information

systems

maturity