Managerial Interpretations of the Role of Information Systems in Competitive Actions and Firm Performance: A Grounded Theory Investigation

Using an interpretive grounded theory research approach, we investigate the utilization of organization-wide information systems in the competitive actions and responses undertaken by top managers to sustain their firms' leading competitive position. Our central contribution is a model that explicates the role of information systems in the process by which competitive actions or responses are conceived, enacted, and executed, and resulting impacts on firm performance—issues that have been largely missing from contemporary research in both the information systems and competitive dynamics domains. This study has important implications for both research and practice. Specifically, researchers should consider organizational context; the intentions and actions of key players; and the process of conceiving, enacting, and executing competitive actions or responses carried out by the organization to account for the impact of information systems on firm performance. Findings suggest that when managers envision information systems as a resource that provides opportunities for competitive actions rather than viewing information systems in a service role, competitive advantages will evolve. Furthermore, practitioners will be better able to leverage information systems investments if they recognize the embedded role of information systems within the competitive actions or responses a firm undertakes to maintain or improve relative performance.