The Role of Alignment between IS Strategy and Social Capital on the IS Capability and Business Performance Relationship: A Cross-Sectional Survey

Abstract

This study explored the relationship between the information system (IS) capability with the alignment of IS strategy and social capital and the relationship between the alignment of IS strategy and social capital with business performance. Moreover, this study also aimed to investigate the mediating role of the alignment of IS strategy and social capital in the relationship between IS capability and business performance. A cross-sectional field study (i.e. questionnaire survey) was conducted on 179 national scale bank branches across Indonesia. Partial least square (PLS) is utilized to test all of the research hypotheses. The result of the study showed that there are significant relationships between IS capability with the alignment of IS strategy and social capital and significant relationships between the alignment of IS strategy and social capital with business performance. Besides, this study also proved that the alignment of IS strategy with social capital has a significant role in mediating the relationship between IS Capability and Business Performance. This study contributes to the theory development by analyzing the research gap from the previous researchers considering social capital as the strategic factor in the relationship between IS capability and business performance. The findings of this study can provide a reference for companies (i.e. board of directors) in determining investment and information system use policy.