Research Issues of the IT Productivity Paradox: Approaches, Limitations, and a Proposed Conceptual Framework

Research Issues of the IT Productivity Paradox: Approaches, Limitations, and a Proposed Conceptual Framework

Chuck C.H. Law (Chaoyang University of Technology, Taiwan) and Eric W.T. Ngai (The Hong Kong Polytechnic University, PR China)
Copyright: © 2007 |Pages: 43
DOI: 10.4018/978-1-59904-477-4.ch002
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Although corporations in the western world, especially those in the United States, have spent generously on information technology (IT) and information systems (IS) in recent decades, many empirical studies have found limited evidence for the payoffs of surging IT expenditures. In some cases, measures of IT spending were found to be either uncorrelated, or negatively associated, with the productivity or financial performance of the sample firms. To the dismay of the researchers and business executives, the phenomenon of the IT productivity paradox lingers on to this day. A review of the literature on this subject has pointed out several possible reasons underlying such inconsistencies, which include data and methodological problems and limitations of research models. Moreover, many of these studies have been criticized as weak in theoretical underpinning when they simply fed data into statistical models for the independent (IT spending), and dependent (productivity or financial performance) measures in order to empirically ascertain the relationships that might exist. In this chapter, a research model is proposed. With expectation to mitigate the shortcomings of some of the prior studies, this model incorporates improvements in business process as an independent construct in parallel to the capabilities of IT and enterprise systems. Competitive capabilities are included as an intermediate construct to help conceptualize the linkage between the independent constructs and the dependent construct of organizational performance. Theories and empirical evidence are drawn from associated management disciplines such as operations management and from a resources-based view of the firm to illustrate and explain that investment in IT and business processes will eventually contribute to organizational performance through the creation and enhancement of competitive capabilities. Finally, the theoretical and managerial implications of this research model are highlighted.

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Table of Contents
Angappa Gunasekaran
Chapter 1
Girish H. Subramanian, Christopher S. Hoffer
Enterprise resource planning (ERP) systems are a growing area of research in business information systems. The primary purpose of this research is... Sample PDF
Implementation of Enterprise Resource Planning (ERP) Systems: Issues and Challenges
Chapter 2
Chuck C.H. Law, Eric W.T. Ngai
Although corporations in the western world, especially those in the United States, have spent generously on information technology (IT) and... Sample PDF
Research Issues of the IT Productivity Paradox: Approaches, Limitations, and a Proposed Conceptual Framework
Chapter 3
S. C. Lenny Koh, Angappa Gunasekaran
The use of enterprise resource planning (ERP) is becoming increasingly prevalent in many modern manufacturing supply chains. However, knowledge of... Sample PDF
The Effects of Uncertainty on ERP-Controlled Manufacturing Supply Chains
Chapter 4
Dirk Baldwin, Suresh Chalasani
Many businesses obtain feedback by surveying customers and business partners. Increasingly, these surveys are conducted via the Web. This chapter... Sample PDF
Software Architectures and Requirements for a Web-Based Survey System
Chapter 5
Alan D. Smith, Allen R. Lias
Fraud and identity theft have been increasing with the use of e-commerce. In the U.S. alone, it has been estimated that victims may spend on average... Sample PDF
Identity Theft and E-Fraud Driving CRM Information Exchanges
Chapter 6
Farooq M. Sheikh, M. Ruhul Amin, Nafeez Amin
In this chapter, the authors first study the pricing strategies of a monopolist selling a product through stores in two channels, but under single... Sample PDF
Pricing Outcomes in Dual-Channel Monopoly and Partial Duopoly
Chapter 7
C. Richard Baker
While the overall investment in information technology (IT) decreased somewhat during the first several years of the 21st century, B2B e-commerce... Sample PDF
Enterprise Information Systems and B2B E-Commerce: Enhancing Secure Transactions Using XM
Chapter 8
Charles Møller
This chapter argues that with the present state of enterprise resource planning (ERP) adoption by the companies, the potential benefits of supply... Sample PDF
Unleashing the Potential of SCM: The Adoption of ERP in Large Danish Enterprises
Chapter 9
Dothang Truong
Reluctance of organizations to invest in electronic data interchange (EDI, Internet based EDI, and XML/EDI) is largely due to their inability to... Sample PDF
Using Simulation to Evaluate Electronic Data Interchange
Chapter 10
Nigel J. Lockett, David H. Brown
Against a background of the low engagement of small to medium-sized enterprises (SMEs) in e-business, this chapter investigates the impact of... Sample PDF
Vertical Application Service Provision: An SME Perspective
Chapter 11
Alexander Y. Yap
The planning and development of an enterprise-wide electronic database system for e-business usually calls for the re-engineering of information... Sample PDF
Planning and Designing an Enterprise-Wide Database System for E-Business
Chapter 12
Nijaz Bajgoric
Significant changes in information technology (IT), the Internet, and e-business technology have increased the need for continuous and agile data... Sample PDF
Toward Always-On Enterprise Information Systems
Chapter 13
Frank Lefley, Joseph Sarkis
Enterprise-wide information systems adoption by organizations has become common place. Even with the benefits offered by such systems, there have... Sample PDF
The Financial Appraisal Profile (FAP) Model for Evaluation of Enterprise-Wide Information Technology: A Case Example
Chapter 14
Delvin Grant, Qiang Tu
A primary objective of ERP is to integrate the various parts of a company. The chapter discusses six levels of enterprise integration and the... Sample PDF
An Investigation of the Existence of Levels of Enterprise Integration
Chapter 15
Sue Newell, Jay Cooprider, Gary David, Linda Edelman, Traci Logan
The literature on enterprise systems (ES) adoptions suggests that companies use different strategies; some opting to re-engineer business processes... Sample PDF
Analyzing Different Strategies to Enterprise System Adoption: Re-Engineering-Led vs. Quick Deployment
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