Business analytics-enabled decision-making effectiveness through knowledge absorptive capacity in health care

Purpose Drawing on the resource-based theory and dynamic capability view, this paper aims to examine the mechanisms by which business analytics (BA) capabilities (i.e. the effective use of data aggregation, analytics and data interpretation tools) in healthcare units indirectly influence decision-making effectiveness through the mediating role of knowledge absorptive capacity. Design/methodology/approach Using a survey method, this study collected data from the hospitals in Taiwan. Of the 155 responses received, three were incomplete, giving a 35.84 per cent response rate with 152 valid data points. Structural equation modeling was used to test the hypotheses. Findings This study conceptualizes, operationalizes and measures the BA capability as a multi-dimensional construct that is formed by capturing the functionalities of BA systems in health care, leading to the conclusion that healthcare units are likely to obtain valuable knowledge through using the data analysis and interpretation tools effectively. The effective use of data analysis and interpretation tools in healthcare units indirectly influence decision-making effectiveness, an impact that is mediated by absorptive capacity. Originality/value This study adds values to the literature by conceptualizing BA capabilities in healthcare and demonstrating how knowledge absorption matters when implementing BA to the decision-making process. The mediating role of absorptive capacity not only provides a mechanism by which BA can contribute to decision-making practices but also offers a new solution to the puzzle of the IT productivity paradox in healthcare settings.