Role of IT executives in the firm's ability to achieve competitive advantage through IT capability

Contrary to prior studies that have tried to examine the role of IT capabilities (ITC) on firm performance in isolation from the role of senior IT executives, we propose that the two are linked. More specifically we argue that there is a positive relationship between the structural power of senior IT executives and the likelihood that the firm will develop superior ITC. Furthermore, the contribution of ITC to a firm's competitive advantage is much stronger in firms with powerful senior IT executives as they are the driving force that may ensure the continuous renewal of ITC. We develop a two-stage econometric model designed to test this chain hypothesis that the structural power of senior IT executives will affect a firm's ability to achieve superior ITC, in turn driving firm performance. Empirical evidence based on a sample of large US firms strongly supports both of our hypotheses.

► Prior studies examined role of IT capability on firm performance in isolation from role of senior IT executives
► Produced mixed results for role of IT capability. There is no evidence regarding the contribution of incumbent IT executives
► We propose a chain effect from power of IT executives to firm's IT capability and ability to gain competitive advantage
► Use two-stage regression analysis on data set developed by combining IW500 data from 1997–04 with our own Lexis-Nexis search
► Results strongly support our position