EFFECT OF INFORMATION TECHNOLOGY CAPABILITY ON COMPETITIVE ADVANTAGE OF THE KENYAN BANKING SECTOR
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Keywords:
Information Technology Capability, Commercial Bank and Competitive AdvantageAbstract
Purpose: The study sought to establish the effect of Information Technology Capability on competitive advantage of the banking sector in Kenya.
Methodology: The study is anchored on the McKinsey 7S Framework Model and the dynamic capability Theory. A positivist research philosophy was adopted for the study. Focusing on 39 operational commercial banks in Kenya, a descriptive survey design was adopted. Primary data was collected and applied in the study.
Findings: The relationship between the variables was tested using ordinary east square regression model. The study findings revealed that strategic capabilities, that is information technology capability have a positive and significant effect on competitive advantage of commercial banks in Kenya.
Unique contribution to theory, practice and policy: The study findings led to the recommendation that the commercial banks should enhance the practices that improves their strategic capabilities.
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References
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Aduda, J. & Kingoo, N. (2012). The relationship between electronic banking and financial performance among Commercial Banks in Kenya. Journal of Finance and Investment Analysis, 1(3), 99-118
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Pan, S., Pan, G., & Hsieh, M. H. (2006). A dual‐level analysis of the capability development process: A case study of TT&T. Journal of the Association for Information Science and Technology, 57(13), 1814-1829.
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Pavlou, P. A. (2011). Understanding the Elusive Black Box of Dynamic Capabilities. Decision Sciences Journal, 5(6), 12-23
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Roberts, N., & Grover, V. (2012). Leveraging Information Technology Infrastructure to Facilitate a Firm’s Customer Agility and Competitive Activity: An Empirical Investigation. Journal of Management Information Systems,28(4), 231-269
Sambamurthy, V., Bharadwaj, A., & Grover, V. (2003). Shaping agility through digital options: Reconceptualizing the role of information technology in contemporary firms. MIS quarterly, 237-263.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students (5th ed.). Harlow, United Kingdom: FT Prentice Hall.
Seethamraju, R., & Sundar, D. K. (2013). Influence of ERP systems on business process agility. IIMB Management Review, 25(3), 137-149.
Senaji, T., & Nyaboga, A. B. (2011). Knowledge management process capability: operations strategy perspective. International Journal of Management and Information Systems, 15(3), 147.
Sullivan, G.M. (2011). A Primer on the Validity of Assessment Instruments. Journal of Business Research
Tallon, P. P., & Pinsonneault, A. (2011). Competing perspectives on the link between strategic information technology alignment and organizational agility: insights from a mediation model. Mis Quarterly, 463-486.
Tanriverdi, H. (2005). Information technology relatedness, knowledge management capability, and performance of multibusiness firms. MIS quarterly, 311-334.
Trinh-Phuong, T., Molla, A., & Peszynski, K. (2012). Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework. Communications of the Association for Information Systems, 31.
Trinh-Phuong, T., Molla, A., & Peszynski, K. (2012). Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework. Communications of the Association for Information Systems, 31.
Waterman Jr, R. H., Peters, T. J., & Phillips, J. R. (1980). Structure is not organization. Business horizons, 23(3), 14-26.
Wendler, R. (2013). The structure of agility from different perspectives. In Computer Science and Information Systems (FedCSIS), 2013 Federated Conference on (pp. 1177-1184). IEEE.
Yaghoubi, N. M., Kord, B., & Azadikhah, O. (2011). Assessing organizational agility via fuzzy logic. International Business Research, 4(3), 135.
Yauch, C. A. (2011). Measuring agility as a performance outcome. Journal of Manufacturing Technology Management, 22(3), 384-404.
Aduda, J. & Kingoo, N. (2012). The relationship between electronic banking and financial performance among Commercial Banks in Kenya. Journal of Finance and Investment Analysis, 1(3), 99-118
Almahamid, S., Awwad, A., & McAdams, A. C. (2010). Effects of organizational agility and knowledge sharing on competitive advantage: an empirical study in Jordan. International Journal of Management, 27(3), 387.
Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson Higher Ed.
Chan, W. S., & Tong, H. (1986). On tests for non‐linearity in time series analysis. Journal of forecasting, 5(4), 217-228.
Chung, T., Liang, T. P., Peng, C. H., & Chen, D. N. (2012). Knowledge creation and financial firm performance: Mediating processes from an organizational agility perspective. In System Science (HICSS), 2012 45th Hawaii International Conference on (pp. 3622-3631). IEEE.
Cohen, L., Manion, L., Morrison, K., & Morrison, R.B. (2007). Research Methods in Practice. Mc Graw-
Cooper, D. R., & Schindler, P. S. (2014). Business Research Methods.9th Ed. New Delhi, India: McGraw-Hill Publishing, Co. Ltd
Cooper, D.R., & Schindler, P.S. (2009). Business Research Methods. 9th Edition, Mc Graw-
De Groote, S. (2011). An empirical investigation of the impact of information technology on supply chain agility and firm performance among U.S. Manufacturers. PH.D. Thesis, Lawrence Technological University, College of Management, USA.
Dunlop-Hinkler, D., Parente, R., Marion, T. J., & Friar, J. H. (2011). The role of technology agility on business processes and organizational agilities. In Technology Management Conference (ITMC), 2011 IEEE International (67-75). IEEE.
Ganguly, A, Nilchiani, R & Farr, J. (2009). Evaluating agility in corporate enterprises. International journal of production economics, 118 (2), 410-23.
Gathungu, J. M & Mwangi, J. K. (2012). Dynamic Capabilities, Talent Development and Firm Performance. DBA Africa Management Review journal, 2(3), 83-100.
Gitonga, C. G. (2012). Factors influencing competitive advantage among commercial banks in kenya (Masters dissertation, University of Nairobi).
Huang, P. Y., Ouyang, T. H., Pan, S. L., & Chou, T. C. (2012). The role of IT in achieving operational agility: A case study of Haier, China. International Journal of Information Management, 32(3), 294-298.
Kamhawi, E.M. (2012). Knowledge management fishbone: a standard framework of organizational enablers. Journal of Knowledge Management, 16 (5), 808-828.
Kamukama, N., Ahiauzu, A., & Ntayi, J. M. (2011). Competitive Advantage: Mediator of Intellectual Capital and Performance. Journal of Intellectual Capital, 12 (1), 152 – 164.
Kraaijenbrink, J, Spender, J-C.& Groen, A. J. (2011). The Resource-Base View: A Review and Assessment of its Critiques. Journal of Management, 36 (1), 349-372.
Kretzer, M., Maedche, A., & Gass, O. (2014). Barriers to BI&A Generativity: Which Factors impede Stable BI&A Platforms from Enabling Organizational Agility?.
Lu, Y., & Ramamurthy, K. (2011). Understanding the link between information technology capability and organizational agility: An empirical examination. Mis Quarterly, 931-954.
Mugenda, O. M. (2008). Research Methods: Quantitative and Qualitative Approaches, Acts Press, Nairobi, Kenya
Nafei, W. A. (2017). The Mediating Role of Organizational Identification in the Relationship between Quality of Work Life and Organizational Agility: A Study on Menoufia University Hospitals. International Business Research, 11(1), 184.
Ngai, E. W. T., Chau, D. C. K., & Chan, T. L. a. (2011),"Information technology, operational, and management competencies for supply chain agility: Findings from case studies", The Journal of Strategic Information Systems, 20(3), 232–249
Nyangosi, R. (2011). E-Banking: An Integration Technology in Kenya. Guru Nanak Dev University, Amritsar (India).
Otieno, S., Okengo, B. O., Ojera, P. & Mamati, F. (2013). An Assessment of Effect of Government Financial Regulations on Financial Performance in Savings and Credit Cooperative Societies (SACCOs): A study of SACCOs in Kisii Central, Kenya. International Journal of Business and Social Science, 4(3), 196-207
Overby, E., Bharadwaj, A., & Sambamurthy, V. (2006). Enterprise agility and the enabling role of information technology. European Journal of Information Systems, 15(2), 120-131.
Pan, S., Pan, G., & Hsieh, M. H. (2006). A dual‐level analysis of the capability development process: A case study of TT&T. Journal of the Association for Information Science and Technology, 57(13), 1814-1829.
Parahoo, K. (2014). Nursing research: principles, process and issues. Palgrave Macmillan.
Pavlou, P. A. (2011). Understanding the Elusive Black Box of Dynamic Capabilities. Decision Sciences Journal, 5(6), 12-23
Porter, M. E. (2008). Competitive advantage: Creating and sustaining superior performance. Simon and Schuster.
Portney, L. G., & Watkins, M. P. (2010). Foundations of clinical research: applications to practice. Prentice Hall.
Ramona, C.M. (2014).Strategic responses to competition by Barclays Bank of Kenya
Limited (MBA project).University of Nairobi, Nairobi, Kenya.
Roberts, N., & Grover, V. (2012). Leveraging Information Technology Infrastructure to Facilitate a Firm’s Customer Agility and Competitive Activity: An Empirical Investigation. Journal of Management Information Systems,28(4), 231-269
Sambamurthy, V., Bharadwaj, A., & Grover, V. (2003). Shaping agility through digital options: Reconceptualizing the role of information technology in contemporary firms. MIS quarterly, 237-263.
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students (5th ed.). Harlow, United Kingdom: FT Prentice Hall.
Seethamraju, R., & Sundar, D. K. (2013). Influence of ERP systems on business process agility. IIMB Management Review, 25(3), 137-149.
Senaji, T., & Nyaboga, A. B. (2011). Knowledge management process capability: operations strategy perspective. International Journal of Management and Information Systems, 15(3), 147.
Sullivan, G.M. (2011). A Primer on the Validity of Assessment Instruments. Journal of Business Research
Tallon, P. P., & Pinsonneault, A. (2011). Competing perspectives on the link between strategic information technology alignment and organizational agility: insights from a mediation model. Mis Quarterly, 463-486.
Tanriverdi, H. (2005). Information technology relatedness, knowledge management capability, and performance of multibusiness firms. MIS quarterly, 311-334.
Trinh-Phuong, T., Molla, A., & Peszynski, K. (2012). Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework. Communications of the Association for Information Systems, 31.
Trinh-Phuong, T., Molla, A., & Peszynski, K. (2012). Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework. Communications of the Association for Information Systems, 31.
Waterman Jr, R. H., Peters, T. J., & Phillips, J. R. (1980). Structure is not organization. Business horizons, 23(3), 14-26.
Wendler, R. (2013). The structure of agility from different perspectives. In Computer Science and Information Systems (FedCSIS), 2013 Federated Conference on (pp. 1177-1184). IEEE.
Yaghoubi, N. M., Kord, B., & Azadikhah, O. (2011). Assessing organizational agility via fuzzy logic. International Business Research, 4(3), 135.
Yauch, C. A. (2011). Measuring agility as a performance outcome. Journal of Manufacturing Technology Management, 22(3), 384-404.
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Published
2019-02-28
How to Cite
Kamau, J. G., R. Eng., D. T. A. S., & Nzioki, D. S. C. (2019). EFFECT OF INFORMATION TECHNOLOGY CAPABILITY ON COMPETITIVE ADVANTAGE OF THE KENYAN BANKING SECTOR. International Journal of Technology and Systems, 4(1), 1 – 20. Retrieved from https://www.iprjb.org/journals/index.php/IJTS/article/view/837
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