The Impact of Dominant IT Infrastructure in Multi-Establishment Firms: The Moderating Role of Environmental Dynamism

Abstract

Multi-establishment firms (MEFs) rely on digitized processes enabled by advanced IT infrastructure; however, environmental dynamism is a major influence on their operations. Environmental dynamism threatens the efficacy of current operations, requiring firms to evolve their processes. Firms’ IT infrastructure may catalyze or hinder their endeavors and performance as they respond to environmental dynamics. Little previous research has examined which IT infrastructure types are high-performing and whether their effects vary across environments. We investigate the impacts of IT infrastructure, examining microlevel implementation—the constitution of technical and human assets—across the establishments of a multi-establishment firm (MEF). Specifically, we use the notion of a dominant IT infrastructure to unravel the heterogeneity of IT infrastructure across establishments. We explore dominant IT infrastructures—technology, human, or both—and assess their impacts across environmental conditions. To test our hypotheses, we used a panel dataset from 2007 to 2009 comprising 355 unique firms. Our findings reveal that the impact of establishment-level IT infrastructure types on MEF performance is contingent on environmental dynamism. A technology-dominant IT infrastructure leads to greater MEF performance in less dynamic environments, while a human-dominant IT infrastructure leads to greater MEF performance in more dynamic environments. The MEF performance is enhanced through a combination of technology- and human-dominant IT infrastructures in more dynamic environments. We conclude by discussing the theoretical insights and managerial implications of our findings.