Information Technology and Strategy: Two Camps, Four Perspectives, One Elusive Goal

A central argument in strategic management is that a firm’s resources or capabilities can be sources of competitive advantage, which may lead to superior firm performance. Investments in Information Technology (IT) resources and capabilities represent one of the largest recurring expenditures made by firms. However, despite the magnitude of these investments and their presumed strategic importance to firms, demonstrating a definitive link between IT resource investments and firm-level performance has remained elusive. A review of the last 25 years of the MIS and Strategy literatures, indicates that each of these ‘two camps’ has contributed important insights and a strong co-evolutionary relationships, yet the strategic importance of IT lacks clear theoretical grounding and consistent empirical support. To address this deficiency, in this paper we review the theoretical bases for economic value creation to develop taxonomy for the roles and performance implications of IT, which integrates strategic management theory to offer a contingency perspective for how the roles and value of IT will vary in different strategic and environmental contexts. We apply the taxonomy as a lens through which to examine a sample of prominent prior research on the topic. The authors conclude with a discussion highlighting directions for future research.