Resource Co-Specialization, Firm Growth, and Organizational Performance: An Empirical Analysis of Organizational Restructuring and it Implementations

46 Pages Posted: 20 Feb 2008

Date Written: February 19, 2008

Abstract

This paper examines the effects of co-specialized information technology (IT) on the growth and performance of IT-investing firms as a driver of competitive advantages. By adopting resource-based and dynamic-capability perspectives on firm-specific IT systems, we first identify the mechanisms of resource co-specialization strategy in the process of IT implementation as organizational restructuring and adaptive customization of IT applications into the context of adopting firms. Then, we examine the impacts of resulting co-specialized IT system on organizational performance. Testable hypotheses are developed to investigate how the co-specialization mechanisms of organizational restructuring and IT customization influence firm growth - in terms of the number of employees, value-added, and revenue. We also examine how co-specialization mechanisms of organizational restructuring and IT customization influence project outcomes - in terms of project reference - ability and license extension measures. These empirical tests control for other contextual factors and the endogeneity of decision variables. Using a unique panel data on 334 firms adopting Advanced Planning and Scheduling (APS) applications, we find strong empirical support for the co-specialization hypothesis that strategic choices of using IT co-specialization mechanisms are positively associated with firm growth and with superior project outcomes in the sample firms.

Keywords: Resource co-specialization, organizational restructuring, adaptive customization, information technology

JEL Classification: M10

Suggested Citation

Mahoney, Joseph T., Resource Co-Specialization, Firm Growth, and Organizational Performance: An Empirical Analysis of Organizational Restructuring and it Implementations (February 19, 2008). Atlanta Competitive Advantage Conference Paper, Available at SSRN: https://ssrn.com/abstract=1095547 or http://dx.doi.org/10.2139/ssrn.1095547

Joseph T. Mahoney (Contact Author)

University of Illinois ( email )

1206 South Sixth Street
339 Commerce West
Champaign, IL 61820
United States
217-244-7969 (Phone)
217-244-4102 (Fax)

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