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Digital Strategies for Engendering Resilient, Adaptive, and Entrepreneurial Agility: A Configurational Perspective

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Abstract

This study examines how different digital strategies influence agility in managing customer demand. We test the effects of digital strategies on three types of digitally-enabled demand management agility–adaptive, resilient, and entrepreneurial. Using a configurational perspective, we conceptualize digital strategies as the synergistic use of IT-driven and business-driven initiatives in selective or collective value chain domains. Configurations are used to outline three digital strategies: supply chain-oriented, marketing-oriented, and value chain-wide. Using data from a survey of 200 firms, we use configurational analysis to test the hypotheses. The results indicate that specialized–supply chain or marketing-oriented–digital strategies may be sufficient to create adaptive and resilient agility. However, a value chain-wide digital strategy is necessary to facilitate entrepreneurial agility. Results also indicate that a specialized digital strategy may suffice in less turbulent environments, but a value chain-wide digital strategy is required to manage demand management disruptions in highly turbulent environments.

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Data Availability

The original survey data is accessible via open request. We also agree to submit our dataset when requested by the review team or the publisher.

Notes

  1. Process level spillover effects are a significant contributor to firm performance, enabling the benefits of alignment to cascade and remain for a long time (Tallon & Pinsonneault, 2011).

  2. As argued by other IS researchers, the configurational approach is more suitable to unravel the complex, asymmetric, and equifinality dynamics existing here (Park & Mithas, 2020; Park et al., 2020).

  3. Supply chain orientation is required for growth. For instance, in 2018, Adidas was hit by the Brexit phenomenon; while a demand growth rattled its operations, production was challenging due to a less responsive supply chain (Cosgrove, 2019). At times, firms may use a digital strategy with superior marketing orientation to manage changes in customer demand disruptions. For example, the launch of iPhone by Apple was a disruptive shock to its competitors who lacked the appropriate data and insights to assess the effects on the demand for their own phones. Lacking digital strategies engendering marketing orientation, these competitors struggled. The launch disrupted current and future consumer demand for products of Apple’s competitors, who had to adjust their demand plans quickly and effectively (Elmer-DeWitt, 2010).

  4. Association for Operations Management (APICS) framework.

  5. Note that an ideal configuration may not exist in the practical world, in its purity. Therefore, we assess the distance from the ideal to assess the impact of digital strategy on the three agility types.

  6. This item was retained because of its theoretical significance, and to avoid ad hoc use of data analysis to define construct composition.

  7. Each of the type of demand management agility–adaptive, resilient and entrepreneurial, was run through a factor analysis. One factor was extracted for each of the factor runs. Variance extracted for adaptive agility is 59% and all items have communalities greater than 0.5 (0.75, 0.76, 0.80, 0.77), resilient agility 70% (0.69, 0.74, 0.76, 0.64), and entrepreneurial agility 77% (0.83, 0.86, 0.87, 0.80). KMO test of sampling adequacy is found to be greater than 0.5 for three (0.75, 0.79, and 0.83 respectively), and Bartlett’s test for sphericity is significant at p < .001 for all three dimensions of agility.

  8. Prior research uses the agility construct as a unidimensional construct (e.g., Chakravarty et al., 2013; Lu & Ramamurthy, 2011; Overby et al., 2006; Roberts & Grover, 2012; Sambamurthy et al., 2003).

  9. Internal-oriented and external-oriented strategies are critical to enhancing coordination and collaboration across the supply chain (e.g., Rai et al., 2006; Roberts & Grover, 2012; Saraf et al., 2007). Similarly, previous research on marketing and supply chain IT competencies focuses on their effects on collaborative real-time information dissemination and acquisition across the marketing or supply chain functions, thereby improving outcomes such as operational integration, process alignment, supply chain integration (e.g., Jaworski & Kohli, 1993; Malhotra et al., 2005; Patnayakuni et al., 2006).

  10. Organizations are often constrained by limitations of inflexible legacy IT systems, rigid IT architectures, or complex nexus of disparate technology silos so much so that IT becomes a disabler for agility (Van Oosterhout et al., 2006). For example, tightly coupled linkages of IT competencies between supply chain partners can potentially impede supply chain flexibility (Malhotra et al., 2005; Grover & Malhotra, 1999). Organizations frequently fall into situations where inflexible links between IT and business initiatives can impede a firm’s ability to quickly respond to market dynamics (Benbya & McKelvey 2006; Tallon & Pinsonneault 2011).

  11. Previous research across other contexts has used the proposed configurational approach. This includes contexts such as supplier integration (Das et al., 2006), advanced manufacturing technologies (Dı́az et al., 2003), supply chain integration (Flynn et al., 2010), manufacturing strategies (Zhao et al., 2006), and manufacturing processes (Heim & Peng, 2010).

  12. The paper offers a unique lens to study ways to build digitally enabled agility beyond the variance theories, which assume that each element (i.e., predictor) has a distinct effect on the outcome. Although our understanding of IS strategy and business value of IT has been informed by variance theories, our use of configurational perspective offers a complementary understanding of the complexity involved in building organizational capabilities (e.g., Fiss, 2007; Meyer et al., 1993). Variance theories assume that each predictor element may have its own independent and linear effects. On the other hand, configurational theories do not assume the independent effects, and highlight complex nonlinearities in effects, helping combine the influence of multiple predictors. Each element by itself is not sufficient to be the cause of outcome; rather, it is a necessary condition for the cause to happen (Markus & Robey 1988). We extend similar arguments from previous research (e.g., Malhotra et al., 2005; Pavlou & El Sawy, 2006).

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Authors and Affiliations

  1. Institute Chair Professor, Information Systems and Strategy Area, Centre for Digital Transformation, Indian Institute of Management Ahmedabad (IIMA), Ahmedabad, India

    Pankaj Setia

  2. School of Accounting and Business Information Systems, Collins College of Business, The University of Tulsa, Tulsa, OK, 74104, USA

    Kailing Deng

  3. Information Systems Area, Indian Institute of Management Ahmedabad (IIMA), Ahmedabad, India

    Shreya Pandey

  4. Wisconsin School of Business, University of Wisconsin-Madison, Madison, WI, 53706, USA

    Vallabh Sambamurthy

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The first draft of the manuscript was written by the first author, Pankaj Setia, and all authors commented on previous versions of the manuscript. Pankaj Setia contributed to the study conception and design. Material preparation, data collection and analysis were performed by the first author, Pankaj Setia. Kailing Deng, the corresponding author, contributed to the write-up and theorization in previous versions. Shreya Pandey contributed to the review and editing. Vallabh Sambamurthy supervised the first draft. All authors read and approved the final manuscript.

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Setia, P., Deng, K., Pandey, S. et al. Digital Strategies for Engendering Resilient, Adaptive, and Entrepreneurial Agility: A Configurational Perspective. Inf Syst Front (2024). https://doi.org/10.1007/s10796-023-10448-9

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