Delwyn D DeVries
University of Tennessee
Abstract: This study examines the relationship between a firms competitive strategy and its information system design. The purpose of the study is to determine whether firms design the functionality of their information systems to enable their chosen strategy, and if so, whether there is a performance outcome. Web site functionality data was collected from 160 national banks and matched with competitive strategy proxies from regulatory filings of financial statements. Firms pursuing a differentiation strategy utilize more web features, particularly web features for advanced functionality such as providing new on-line banking services to customers. Results suggest that firms implement web features to support their competitive strategy, which results in higher levels of web site effectiveness. While prior strategic information systems research suggests that the design of an information system enables strategy, this study directly tests the presence of this relationship and examines a performance outcome of the enabling effect.
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