Information technology as a source of sustained competitive advantage*

The field of strategic management focuses on understanding sources of sustained competitive advantages for firms (Porter 1980, 1985; Rumelt, Schendel, and Teece 1991). A variety of factors have been shown to have an important impact on the ability of firms to obtain sustained competitive advantage. Some of these have been discussed in previous chapters of this book—including organizational culture, trust, and human resources. Information technology (IT) has also been mentioned for its possible role in creating sustained competitive advantages for firms (Clemons 1986, 1991; Clemons and Kimbrough 1986; Clemons and Row 1987, 1991a; Feeny 1988; Feeny and Ives 1990; Barney 1991a; Powell and Dent-Micallef 1997; Bharadwaj 2000; Ray 2000). While the assertion that IT might be able to create sustained competitive advantage for firms is provocative, work in this area is relatively underdeveloped, both empirically and theoretically (Jarvenpaa and Ives 1990; Powell and Dent Micallef 1997). Research on IT and competitive advantage has predominantly emphasized ‘describing how, rather than systematically why’ IT can lead to such an advantage (Reich and Benbasat 1990: 326). Accordingly, the IT literature contains case studies of spectacular IT successes, but few conceptual frameworks designed to encourage and assist IT managers with IT implementation (Powell and Dent Micallef 1997).