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Q1. Why are the authors studying information technology strategy and investments to influence firms performance?
Q2. Describe why the authors claim that IT Strategic Emphasis moderates the relationship between IT investments and firm performance?
Q3. Discuss the main findings of the study?
The empirical study for the pieces of evidence of IT strategy’s effect on performance is a new area when studied together with IT investments. This article is published in MIS quarterly stating the moderating effect of IT strategy on the association linking IT Investments and firm performance. This is an empirical study done for firms in the USA, which clearly differentiates that firms playing the dual-emphasis role have high profitability and the market value (Tobin's Q) as compared to firms with a focus on either cost reduction or revenue expansion. This assignment provides an answer to the three questions based on the paper. These questions are related to the motivation, relevance of dual emphasis strategy, and findings of the paper.
Q1. Why are the authors studying information technology strategy and investments to influence firms' performance?
MOTIVATION/OBJECTIVE OF RESEARCH: WHY THIS RESEARCH
There can be several reasons for studying information technology and investment’s impact on firm performance. Given below reasons support that why IT strategy and IT investments taken together are justifiable.
This study refers to a number of previous research focusing only on the association linking IT Investments and firm performance (Hoadley and Kohli, 2014; Kohli et al. 2012). Further, this relationship is rooted in three different ways, i.e. cost reduction, revenue increase and both ways. The focus on the simultaneous effect of reducing cost and increasing revenue is known as the dual effect and is the main focus of the paper. The author(s) is clueless regarding the extent to which the IT investment affects the performance through dual emphasis, i.e. simultaneity is not evident in the literature. At the beginning of the introduction, authors have clearly stated that there is no study that explains how IT strategy acts as a moderating variable linking IT investments and performance. Also with the help of literature, the author emphasizes that IT investment is related to cost reduction and revenue increase but, none has considered all these together to establish the relationship with performance. This is a clear research gap…….
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