Moderating role of turbulent environment between IT dynamic capabilities, business agility, and innovative capabilities: Empirical evidence from Sri Lanka

Abstract

Drawing on the resource-based theory and dynamic capability theory this study examines how IT-enabled dynamic capabilities impact on business capabilities (business process agility and firm innovative capability) with moderating role of turbulent environment. The purpose of this study is to test the impact of ITenabled dynamic on business process agility and innovative capability that in turn drive firm performance under turbulent environment. This study conceptualizes that IT governance mechanism positively effect on ITDC, that in turn positively impact on business process agility and firm innovative capability to achieve firm performance. Data were collected in offline and online by using convenient and snowball sampling technique from the senior IT and business managers in Sri Lankan. Using the partial least squares (Smart PLS 3.0) hierarchical regression analysis for various model were performed. The finding from 188 senior IT and business manager’s responses from Sri Lanka reveals the strong and positive relationship in the hypothesized relationship. In contrary to the expectation, the turbulent environment’s both hypotheses (H6a and H6b) failed to show a significant moderating effect. This study adds to the existing literature and extends the managerial practice by focusing on the key constructs such as IT governance mechanism, ITDC, turbulent environment, and firm performance.