Impact of IT Governance Mechanism on IT-enabled Dynamic Capabilities to Shape Agility and Firm Innovative Capability: Moderating Role of Turbulent Environment

Abstract

This study examines how IT governance mechanism and IT-enabled dynamic capability impact on firm performance through agility and firm innovative capability. This study hypothesized that IT governance mechanism positively affects IT-enabled Dynamic Capability (ITDC), that in turn positively impacts on business process agility and firm innovative capability subsequently; these positively impact on firm performance. The primary survey data from 188 senior IT and business executives in Sri Lanka, shows positive and a significant relationship in the proposed model. The findings suggest that IT governance mechanism and IT-enabled dynamic capabilities together drive firm performance, while turbulent environment failed to show significant moderating effects. The theoretical and practical implications are also discussed.