The Optimal Configuration of IT-Enabled Dynamic Capabilities in a firm’s Capabilities Portfolio: a Strategic Alignment Perspective

Abstract

Although IT-enabled dynamic capabilities (ITDCs) add value to firms operating in turbulent and rapidly changing environments, firms face several challenges in developing, deploying, and maintaining the right portfolio of ITDCs. Since ITDCs are not uniformly advantageous, firms need to make strategic decisions in order to accomplish the complex task of achieving optimal ITDC configurations. This conceptual paper draws on the strategic alignment perspective to identify the optimal configuration of ITDCs for a firm based on its business strategy orientation indicated by the Miles and Snow typology. This paper first explicates the theoretically ideal configurations of ITDCs based on the competitive strategy patterns associated with each Miles and Snow archetype and then develops a model for measuring the strategic fit of ITDCs. This paper contributes to the literatures on ITDCs and strategic alignment by identifying optimal ITDC configurations and by conceptualizing the strategic fit of ITDCs respectively.