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To conceptualize the indirect causal impact of IT capability on organizational performance, this paper first posits that managerial IT capabilities and technical IT capabilities are the dimensions of IT capability construct. Then, using structural equation modeling with data collected from IT and business executives in 250 firms, we empirically validate the conceptual relationship model between IT capability and organizational performance. The results reveal that business process agility is a mediator and environmental uncertainty is a moderator when determining organizational performance impacts of IT. Further, we also find that managerial IT capabilities have a positive impact on technical IT capabilities.
Date of Conference: 28-29 Sept. 2008