Application of latent moderated structuring (LMS) to rank the effects of intervening variables on the IT and firm performance relationship
Computing, Health and Science
Computer and Security Science, Centre for Security Research
The effects of intervening variables such as business process reengineering (BPR) and organisational infrastructures (OIS) on the relationship between information technology (IT) and firm performance have been investigated in several research efforts during recent years. However, none of the previous efforts considered the effects of simultaneously intervening variables. Using latent moderated structuring (LMS) technique, we have analysed both the mediating role of BPR and the moderating role of OIS on the relationship between IT and firm performance, when considered simultaneously. One of our main contributions was in the ranking of the effects of different aspects of intervening variables on the relationship between IT and firm performance. Using the reference model and data set of a previous work and based on a LMS model, we found that in Iran's car industry the most important aspect of IT is in the usage of IT in planning and that IT can help to achieve higher firm performance when strategic and sales and marketing processes of the firm are reengineered according to IT. We also found that IT can help the firm achieve higher performance when the firm has stronger interactions with suppliers using IT.