Are Dynamic Capabilities the Missing Link Between the IS Strategy and Performance Relationship? A Model and Exploratory Test at Three Levels of Environmental Dynamism

This study examines two dynamic capabilities which are possible intervening mechanisms by which an information systems strategy relates to information systems performance. It also explores the relevance of the dynamic capabilities absorptive capacity and agility at three different levels of environmental dynamism. Responses from a sample of over 200 CIOs suggest that absorptive capacity and agility are indeed intervening mechanisms by which information systems strategy is linked to performance, particularly for innovative strategies and in environments that are highly dynamic. It suggests that pursuit of the strategy that is able to develop and maintain the highest levels of dynamic capabilities would be the one to likewise gain the most ground on performance. The findings also bring to light the fact that even in relatively stable environments, dynamic capabilities still play major roles in effectuating performance.