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Path Analysis of the Relationship between Competitive Strategy, Information Technology, and Financial Performance

Steven. W. Floyd and Bill Wooldridge
Journal of Management Information Systems
Vol. 7, No. 1 (Summer, 1990), pp. 47-64
Published by: Taylor & Francis, Ltd.
Stable URL: http://www.jstor.org/stable/40397935
Page Count: 18
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Path Analysis of the Relationship between Competitive Strategy, Information Technology, and Financial Performance
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Abstract

This study evaluates the impact of competitive strategy on information technology (IT) and of it on organizational performance. In addition, the research model incorporates indirect performance effects from strategy and it alignment. Data is drawn from the survey responses of 127 banks and interviews with 68 bank CEOs. Path analysis separates direct, indirect, and spurious effects. Interview data support the quantitative analysis. The results lend statistical support to the strategy-it relationship described in case studies, and in addition, provide an explanation for inconsistent findings in previous it performance research.

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