THE EFFECT OF IT CAPABILITIES ON CROSSFUNCTIONAL CAPABILITIES

Research in both the strategy and information systems (IS) areas has identified capabilities as key to competing effectively in dynamic and turbulent environments. Firms realize benefits by adopting complementary combinations of capabilities. We draw on Grant’s hierarchy of capabilities to develop a model that explains how a firm’s information technology (IT) capabilities can enhance the intangible value of the firm through their effect on a set of cross-functional capabilities. Using a sample of 394 firms drawn from industry ranking surveys, our preliminary results suggest that some cross-functional capabilities have a positive impact on the long term, intangible performance of a firm as measured by Tobin’s q