IT capabilities and firm performance: An empirical research from the perspective of organizational decision-making

Based on resourced-based theory, this study tries to examine how IT capabilities affect firm performance. In contrast to past studies that have assumed that IT capabilities have direct effects on firm performance, this study argues that a firm’s performance can be explained by how effective the firm is in using IT to support organizational decision-making. A conceptual model is developed to explain the influencing mechanism of IT capabilities on firm performance. Several hypotheses are formulated to show the relationship among IT capabilities, organizational decision-making, and firm performance. Above model is empirically tested using data collected from 178 manufacturing firms in China. The results show that IT capabilities have positive effects on organizational decision-making, and organizational decision-making has positive effects on firm performance, and organizational decision-making has significant mediating effects on the relationship between IT capabilities and firm performance.