IT-Based Knowledge Capability and Commercialization of Innovations: Modeling the Impacts of Ambidexterity and Absorptive Capacity

Introduction

In order to extract strategic value from information technologies (IT), firms have to apply IT capabilities to harness and exploit their knowledge capabilities to continually innovate their business products, services, and processes. Knowledge management researchers have been trying to link investments on information technology for knowledge management with firm performance. The current knowledge management literature shows mixed results in establishing a relationship between IT investment on firm performance, which has been attributed to factors such as sample size, data sources, and industry type (Devaraj & Kohli, 2003; Kohli & Devaraj, 2003). However, we argue that central problem is that the relationship has not been conceptualized through the lens of three aspects of firm innovations: IT-Based Knowledge Capabilities (IT-KC), Absorptive Capacity, Ambidexterity and Commercialization of Innovations (CI).

In this study, we examine the knowledge capabilities that are supported and/or enabled by information technology (IT) and posit a theoretical model that establishes a link between IT and innovation derived through IT-based knowledge capabilities. We draw on knowledge-based view of the firm and argue that IT-KC better enable firm innovation by enabling new idea generation and facilitating the conversion of these ideas into new products and services that can be introduced into the market. In addition we argue that link between IT-KC and CI are mediated by Ambidexterity and Absorptive Capacity.