Organizations are increasingly engaged in competitive dynamics that are enabled or induced by information technology (IT). A key competitive dynamics question for many organizations is how to build a competitive advantage in turbulence with digital IT systems. The literature has focused mostly on developing and exercising dynamic capabilities for planned reconfiguration of existing operational capabilities in fairly stable environments with patterned “waves,” but this may not always be possible, or even appropriate, in highly turbulent environments with unexpected “storms.” We introduce improvisational capabilities as an alternative means for managing highly turbulent environments; we define this as the ability to spontaneously reconfigure existing resources to build new operational capabilities to address urgent, unpredictable, and novel environmental situations. In contrast to the planned role of dynamic and operational capabilities and the ambidexterity that they jointly offer, improvisational capabilities are proposed to operate distinctly as a “third hand” that facilitates reconfiguration and change in highly turbulent environments. First, the paper develops the notion of improvisational capabilities and articulates the key differences between the two “reconfiguration”—improvisational and dynamic—capabilities. Second, the paper compares the relative effects of improvisational and dynamic capabilities in the context of new product development in different levels of environmental turbulence. Third, the paper shows how IT-leveraging capability in new product development is decomposed into its three digital IT systems: project and resource management systems, organizational memory systems (OMS), and cooperative work systems—and how each of these IT systems enhances improvisational capabilities, an effect that is accentuated in highly turbulent environments. The results show that although dynamic capabilities are the primary predictor of competitive advantage in moderately turbulent environments, improvisational capabilities fully dominate in highly turbulent environments. Besides discriminant validity, the distinction between improvisational and dynamic capabilities is evidenced by the differential effects of IT-leveraging capability on improvisational and dynamic capabilities. The results show that the more the IT-leveraging capability is catered toward managing resources (through project and resource management systems) and team collaboration (through cooperative work systems) rather than relying on past knowledge and procedures (through organizational memory systems), the more it is positively associated with improvisational capabilities, particularly in more turbulent environments. The paper draws implications for how different IT systems can influence improvisational capabilities and competitive advantage in turbulent environments, thereby enhancing our understanding of the role of IT systems on reconfiguration capabilities. The paper discusses the theoretical and practical implications of building and exercising the “third hand” of improvisational capabilities for IT-enabled competitive dynamics in turbulence.

Faced with the challenge of multifaceted digital phenomena, researchers in IS and related fields have increasingly adopted qualitative comparative analysis (QCA). However, in the absence of explicit guidelines for how to use QCA for theory development, the popularity and proliferation of QCA possibly amplifies the risk of using QCA in an atheoretical manner, hindering theoretical advancement. In this paper, we offer a conceptual framework and prescriptive guidelines for applying QCA to develop causal recipes that account for complex digital phenomena marked by theoretical and configurational multiplicity. Causal recipes are formal statements explaining how causally relevant elements combine into configurations associated with outcomes of interest. We describe these causal recipes in terms of which causes matter (i.e., factorial logic) and how these causes combine into configurations (i.e., combinatorial logic) to produce target outcomes, and propose an ecology of configurations that elucidates the explanatory power of multiple configurations as well as their explanatory overlap. Further, we offer two illustrative empirical examples to demonstrate the usefulness of our framework and step-by-step guidelines for applying QCA to deductive theory testing as well as inductive theory development on phenomena marked by multiplicity.

This paper defines an information system design theory (ISDT) to be a prescriptive theory which integrates normative and descriptive theories into design paths intended to produce more effective information systems. The nature of ISDTs is articulated using Dubin's concept of theory building and Simon's idea of a science of the artificial. An example of an ISDT is presented in the context of Executive Information Systems (EIS). Despite the increasing awareness of the potential of EIS for enhancing executive strategic decision-making effectiveness, there exists little theoretical work which directly guides EIS design. We contend that the underlying theoretical basis of EIS can be addressed through a design theory of vigilant information systems. Vigilance denotes the ability of an information system to help an executive remain alertly watchful for weak signals and discontinuities in the organizational environment relevant to emerging strategic threats and opportunities. Research on managerial information scanning and emerging issue tracking as well as theories of open loop control are synthesized to generate vigilant information system design theory propositions. Transformation of the propositions into testable empirical hypotheses is discussed.

Over the last three decades, the prevailing view of information technology strategy has been that it is a functional-level strategy that must be aligned with the firm’s chosen business strategy. Even within this so-called alignment view, business strategy directed IT strategy. During the last decade, the business infrastructure has become digital with increased interconnections among products, processes, and services. Across many firms spanning different industries and sectors, digital technologies (viewed as combinations of information, computing, communication, and connectivity technologies) are fundamentally transforming business strategies, business processes, firm capabilities, products and services, and key interfirm relationships in extended business networks. Accordingly, we argue that the time is right to rethink the role of IT strategy, from that of a functional-level strategy—aligned but essentially always subordinate to business strategy—to one that reflects a fusion between IT strategy and business strategy. This fusion is herein termed digital business strategy. We identify four key themes to guide our thinking on digital business strategy and help provide a framework to define the next generation of insights. The four themes are (1) the scope of digital business strategy, (2) the scale of digital business strategy, (3) the speed of digital business strategy, and (4) the sources of business value creation and capture in digital business strategy. After elaborating on each of these four themes, we discuss the success metrics and potential performance implications from pursuing a digital business strategy. We also show how the papers in the special issue shed light on digital strategies and offer directions to advance insights and shape future research.

Information technology has arguably been one of the most important drivers of economic and social value in the last 50 years, enabling transformational change in virtually every aspect of society. Although the Information Systems community is engaged in significant research on IT, the reach of our findings may be limited. In this commentary, our objective is to focus the IS community’s attention on the striking transformations in economic and social systems spawned by IT and to encourage more research that offers useful implications for policy. We present examples of transformations occurring in four distinct sectors of the economy and propose policy-relevant questions that need to be addressed. We urge researchers to write papers based on their findings that inform policy makers, managers, and decision makers about the issues that transformational technologies raise. Finally, we suggest a new outlet to publish these essays on the implications of transformational informational technology.