The purpose of this paper is to highlight a precise investigation of the relationship between information technology (IT) capability and organizational agility along with the moderating impact of environmental factors on this association.
Pre-tested structured questionnaires were administered during a matched-pair field survey to collect primary responses from 300 business and IT personnel working in various public and privately owned banking groups functioning in India. The structural equation modeling approach has been used for data analysis.
The two-folded research findings are first, IT capability enables organizational agility (studied as business process and market responsive agility), while IT capability has more effect on market responsive agility. Second, the environmental factors (studied as environmental diversity and hostility) possess a significant effect on the IT-agility relationship and, thereby, suggest that a more diverse and less hostile environment is required for the firms to build up superior IT capability for realizing enhanced agility.
The authors have studied IT capability as a first-order factor, organizational agility and environmental factors as second-order factors and by meticulously examining their critical dimensions this study greatly contributes to the existing IT-agility literature. The derived inferences provide various implications for the bank and IT managers to emphasize on superior IT capability for generating enhanced organizational agility.
