Journal of Business Research 70 (2017) 379–390

Contents lists available at ScienceDirect

Journal of Business Research

Assessing business value of Big Data Analytics in European firms☆

Nadine Côrte-Real ⁎, Tiago Oliveira, Pedro Ruivo
NOVA IMS, Universidade Nova de Lisboa, 1070-312, Lisboa, Portugal

a r t i c l e i n f o a b s t r a c t

Available online 9 August 2016 In the strategic management field, dynamic capabilities (DC) such as organizational agility are considered to be
paramount in the search for competitive advantage. Recent research claims that IT business value research
Keywords: needs a more dynamic perspective. In particular, the Big Data Analytics (BDA) value chain remains unexplored.
Big Data Analytics (BDA) To assess BDA value, a conceptual model is proposed based on a knowledge-based view and DC theories. To
IT business value empirically test this model, the study addresses a survey to a wide range of 500 European firms and their IT
Knowledge Based View (KBV)
and business executives. Results show that BDA can provide business value to several stages of the value chain.
Dynamic capabilities (DC)
Organizational agility
BDA can create organizational agility through knowledge management and its impact on process and
Competitive advantage competitive advantage. Also, this paper demonstrates that agility can partially mediate the effect between
knowledge assets and performance (process level and competitive advantage). The model explains 77.8% of
the variation in competitive advantage. The current paper also presents theoretical and practical implications
of this study, and the study's limitations.
© 2016 Elsevier Inc. All rights reserved.

1. Introduction if organizations use the appropriate technology and organizational

resources to achieve competitive advantage (Manyika et al., 2011a).
In the era of Big Data, firms in every sector are required to deal with a In response to the scarcity of research on this subject, this study
huge amount of data. Data in vast amounts can offer invaluable insights examines the impact of BDA on the business value chain in a
and competitive advantage if the right technological and organizational European context by empirically testing a new theoretical frame-
resources support them (Morabito, 2015). Recently, several academics work that merges two strategic management theories (Knowledge
and practitioners have stressed the need to understand how, why, and Based View (KBV) and dynamic capabilities (DC)) at firm-level. Not
when Big Data Analytics (BDA) applications can be a valuable resource only does this paper extend BDA research by transposing, merging,
for companies to gain competitive advantage (Abbasi, Sarker, & and examining hypotheses in IT innovations and management fields,
Chiang, 2016; Agarwal & Dhar, 2014; Corte Real, Oliveira, & Ruivo, but also contributes to DC research by empirically assessing the ante-
2014; LaValle et al., 2011). Although BDA technologies have been cedents and impacts of a specific dynamic capability (organizational
recognized as the “next big thing for innovation” (i.e., a potential source agility), when using BDA technologies. This is the first paper that
of business value and competitive advantage), the BDA value chain studies the entire BDA value chain at firm-level, linking concepts of
remains relatively unexplored and needs further investigation. No knowledge management, agility, and performance (process-level
empirical research exists assessing how BDA can bring business value and competitive advantage). To clarify the role of agility on perfor-
(Abbasi et al., 2016), establishing a linkage between knowledge assets, mance, this papers tests if agility is a mediator of knowledge assets
organizational agility, and performance (process-level and competitive on performance (process-level performance and competitive
advantage) (Corte Real et al., 2014). Firms that inject BDA in their advantage). The study explores the following three research ques-
business operations can surpass their peers by 5% in productivity and tions (RQs):
6% in profitability (Barton, 2012). For that reason, European firms are
investing heavily in BDA technologies (SAS, 2013; Sharma, Mithas, &
Kankanhalli, 2014). Nevertheless, this investment can only be valuable RQ1 – What are the BDA enablers for the creation of organizational
agility?
RQ2 – What are the impacts of this dynamic capability created by
☆ The author is grateful for the comments by anonymous reviewers, on earlier drafts of BDA on sustainable competitive advantage?
this article.
⁎ Corresponding author. RQ3 – Is agility a mediator of knowledge assets on performance
E-mail address: [email protected] (N. Côrte-Real). (process-level performance and competitive advantage)?

http://dx.doi.org/10.1016/j.jbusres.2016.08.011
0148-2963/© 2016 Elsevier Inc. All rights reserved.
380 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390

This study offers guidance for executives and managers to assess the 2.2.1. Knowledge Based View theory
conditions under which BDA can add business value to organizations. KBV states that a firm's knowledge resources are unique and
Managers and IT executives can benefit from an evaluation instrument inimitable and that the firm's primary function is to leverage them
to assess the impact of BDA. Also, this paper provides valuable support into productive outcomes (Grant, 1996; Nonaka, 1995). The possession
to justify BDA investments and initiatives. Firms that have not yet of knowledge resources gives the firm basic foundations to renew or re-
decided to adopt these technologies can obtain a view of potential configure its resource base and to build dynamic capabilities (Wu,
gains from adopting and effectively using BDA. This research demon- 2006), such as organizational agility. Companies that have high levels
strates how best to leverage the knowledge embedded in BDA systems, of staff knowledge and involvement can more skillfully identify the
acquiring organizational agility capabilities that lead toward competi- need to make changes to existing resources and decide about the ac-
tive advantage. tions necessary to implement these changes (Nieves & Haller, 2014).
The remainder of this paper has the following structure: Section 2 KBV theory can help to conceptualize the performance effects of IT in-
provides an introduction to the BDA concept and a theoretical vestments (Pavlou et al., 2005). Management studies use this theory
background to assess BDA initiatives; Section 3 presents the conceptual (e.g., (Nieves & Haller, 2014)), as do studies in IT fields (e.g., (Sher &
model and the hypotheses; Section 4 outlines the methodology; and Lee, 2004)) to understand the role of knowledge management in the
Section 5 shows the empirical results. Finally, the paper presents a creation of DC. In BDA technologies, Xu, Frankwick (Xu et al., 2016)
discussion and the conclusions from the findings. seek to understand the relationships among traditional marketing
analytics, BDA, and new product success. The current paper is the first
2. Background that empirically tests KBV to understand the role of BDA in the creation
of agility.
2.1. Big Data Analytics
2.2.2. Dynamic capability theory
Chen, Chiang (Chen, Chiang, & Storey, 2012) coined the term Big In the past decade the DC perspective arose as one of the most
Data Analytics (BDA) as a related field of business intelligence & effective theoretical lenses for the strategic management field
analytics (BI&A), referring to the BI&A technologies that mostly concern (Schilke, 2014), attracting the interest of scholars not only in business,
data mining and statistical analysis. Authors define BDA as “a new but also in the IT management field (Helfat et al., 2009; Protogerou,
generation of technologies and architectures, designed to economically Caloghirou, & Lioukas, 2012). Rooted in RBV and KBV, DC argues that
extract value from very large volumes of a wide variety of data, by enabling the dynamic capabilities enable firms to modify their resource to
high velocity capture, discovery and/or analysis.” (IDC, 2011). BDA tech- adapt rapidly to changing conditions, helping them to sustain their
nologies allow firms to improve existing applications by offering competitive advantage over time (Helfat & Peteraf, 2009; Teece,
business-centric practices and methodologies that provide a competi- Pisano, & Shuen, 1997). Although the literature has a broad range of
tive advantage (Chen et al., 2012; Davenport, 2006). The latest literature definitions for DC, one of the seminal papers defines DC as “the ability
indicates that there is much room for further BDA research (Abbasi to integrate, build, and reconfigure internal and external competencies to
et al., 2016; Agarwal & Dhar, 2014; Erevelles, Fukawa, & Swayne, address rapidly-changing environments” (Teece et al., 1997). DC
2016). There are already academic studies that reflect the adoption disaggregates into “the capacity (1) to sense and shape opportunities
and use of BDA (e.g., (Malladi, 2013; Xu, Frankwick, & Ramirez, 2016; and threats, (2) to seize opportunities, and (3) to maintain competitive-
Kwon, Lee, & Shin, 2014)). Regarding value, most BDA academic studies ness through enhancing, combining, protecting, and, when necessary,
focus on analyzing business value from a data or system perspective reconfiguring the business enterprise's intangible and tangible assets”.
(e.g., (LaValle et al., 2011; Kwon et al., 2014)). From the strategic Some authors argue that agility is an organizational dynamic
management perspective only one conceptual paper explores how capability (Blome, Schoenherr, & Rexhausen, 2013; Sambamurthy
BDA affects several marketing activities (Erevelles et al., 2016). The et al., 2007; Zhou & Wu, 2010). Teece (Teece, 2007) defines agility as a
remaining literature addresses industry primarily (LaValle et al., 2011; higher-order dynamic capability that emerges over time, generally
Russom, 2011). As firms do not know how to capture business value defining agility as a capability with which firms can identify and re-
(Barton, 2012; LaValle et al., 2011), some scholars (Corte Real et al., spond to environmental threats and opportunities and quickly adjust
2014; Malladi, 2013) argue that BDA value research is scarce and their behaviors (Goldman, Nagel, & Preiss, 1995; Sambamurthy,
needs to extend beyond post-adoption stages toward competitiveness Bharadwaj, & Grover, 2003). This concept also relates to the operational
(Erevelles et al., 2016; Xu et al., 2016). Although numerous approaches flexibility of organizational processes and IT systems to support
assess IT Value at the process and firm levels (see Schryen (Schryen, structured or unstructured changes (Chen et al., 2014). Achieving agility
2013) for a review), this study extends IT business value research demands processing a large and varied amount of information
from the strategic management perspective, by empirically assessing (Goldman et al., 1995). This process is possible with BDA applications.
the BDA business value chain in European firms. However, like IT applications (Sambamurthy et al., 2003; Weill,
Subramani, & Broadbent, 2002), BDA tools cannot automatically
2.2. Theoretical foundation improve agility. In fact, under certain conditions BDA tools can impede
agility (Chen et al., 2014). For this reason, the need exists to understand
Many studies in recent decades investigate IT business value and how BDA applications can create agility.
competitive advantage using the resource-based view (RBV) (Barua, Several recent studies in the business management field apply DC
Kriebel, & Mukhopadhyay, 1995; Bharadwaj, 2000; Mata, Fuerst, & theory to measure the influence of DC in the creation of competitive ad-
Barney, 1995; Melville, Kraemer, & Gurbaxani, 2004; Ruivo, Oliveira, & vantages (e.g., Schilke, 2014; Zott, 2003; Drnevich & Kriauciunas, 2011).
Neto, 2015; Soh & Markus, 1995; Zhu & Kraemer, 2005). The limitations In the IT management field, few empirical studies use this theory.
of RBV encourage the use of other theories such as DC and KBV (Arend & Analyzing the IT influence on DC generically, (Chen et al., 2014; Sher
Bromiley, 2009; Wang & Ahmed, 2007). As DC theory constitutes the & Lee, 2004), researchers conclude that IT is an enabler of DC in
second foundation that supports knowledge-based thinking (Pettigrew, organizations. Regarding agility, several studies assess the impact of IT
Thomas, & Whittington, 2001), this study combines these theories. KBV on organizational agility (e.g., Sambamurthy et al., 2007; Chen et al.,
explores a firm's potential to acquire competitiveness in a dynamic 2014; Cai et al., 2013; Tallon & Pinsonneault, 2011; Liu et al., 2013; Lu
market context, but only DC theory can solve the problem of sustaining & Ramamurthy, 2011). These studies demonstrate a positive relation-
competitive advantage in turbulent environments (Grant, 1996; ship between IT and agility. Chen (Chen et al., 2014) recently concludes
Volberda, 1996). that the IT business value essentially depends on how agile a firm is
 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390 381

with regard to managing business processes. Although the literature relationship exists between KM and BDA. Both deal with intangible
addresses the impact of IT on the creation of organizational agility, no assets such as data, knowledge, and intelligence (Erickson & Rothberg,
study links BDA with this specific DC. Apart from some qualitative stud- 2015). BDA is a source of knowledge management, allowing firms to
ies in the area of business analytics (BA) (Shanks & Bekmamedova, add value primarily at the beginning of the information value chain
2013; Shanks & Sharma, 2011), only conceptual papers use DC theory and helping knowledge to flow to achieve business excellence (Chau
to study BDA value (Corte Real et al., 2014; Erevelles et al., 2016). & Xu, 2012; Popovič et al., 2012).
Firms that do not develop the resources and capabilities to use BDA Big data is a potential knowledge asset, contingent upon the proper
applications will struggle to develop a sustainable competitive advan- use of that knowledge (Erickson & Rothberg, 2015). BDA represents
tage (Erevelles et al., 2016). Given that agility is vital for companies´ technologies drivers of a strategic knowledge asset (big data). BDA
survival, and that BDA can support organizational business processes, applications have the potential to add value by providing more
this study fills this academic gap and links the two concepts empirically. transparent and accurate results to support decision-making in several
business areas (Manyika et al., 2011a).
3. Conceptual model BDA strategy requires the capacity to sense, acquire, process, store,
and analyze the data and convert that data into knowledge (Rajpathak
With recourse to the two strategic management theories (KBV and & Narsingpurkar, 2013). Several empirical studies state that the knowl-
DC) discussed above, this section explains the conceptual model and edge processes are antecedent dimensions of successful DC, by allowing
the specific hypotheses (Fig. 1). firms to continually renew their knowledge base and deliver business
Rooted in an earlier conceptual model (Corte Real et al., 2014), this performance (Ambrosini & Bowman, 2009; Sher & Lee, 2004; Zheng,
research model empirically tests 12 propositions. The study assesses Zhang, & Du, 2011). As DC are information-intensive (Pavlou & El
the entire value chain starting with how BDA can leverage different Sawy, 2011), BDA may help in the creation of DC and organizational
forms of knowledge to create organizational agility (H1, H2, H3). BDA agility specifically. Using BDA technologies helps to store and share
technologies can provide organizational agility to the firm by using knowledge, thereby allowing for an improvement of organizational
effective knowledge management. Firms owning this type of dynamic knowledge by promoting efficiency within an organization, particularly
capability can achieve competitive advantage directly (H4a) or indirect- by data integration and the use of analytical tools (Russom, 2011). Some
ly through business processes (H4b). Results obtained by using business authors argue that firms must combine endogenous and exogenous
processes will impact the overall organization (H5). Agility can also knowledge to achieve DC (Sher & Lee, 2004). Zhao (Cai et al., 2013)
mediate the relationship between knowledge assets and performance argues that IT capability and KM capability are important in fostering
(H6a,b,c-H7a,b,c). BDA uses some controls such as country, industry, organizational agility. Agility is promoted through knowledge manage-
technological turbulence, and time. ment by improving innovative responses, and can improve through the
use of IT and automated business processes (Cai et al., 2013). In the
3.1. Hypothesis same way, organizations should be able to use BDA technologies to
convert knowledge into new routines and enhance organizational
3.1.1. Knowledge assets agility. Based on these findings, the hypotheses are:
Organizational knowledge such as operational routines, skills, and
know-how constitutes a key source of competitiveness (Grant, 1996). H1. BDA technologies allow an effective endogenous knowledge
Knowledge management plays a critical role in proficiently managing management that positively influences dynamic capabilities such as
data and delivering it to the end users to support business processes organizational agility.
(Rajpathak & Narsingpurkar, 2013). Knowledge management repre-
sents a dimension supported by KBV (Ruggles, 1998) and enables H2. BDA technologies allow an effective exogenous knowledge
dynamic capabilities by offering specific functional competences that management that positively influences dynamic capabilities such as or-
can improve business performance (Teece et al., 1997). A natural ganizational agility.

Fig. 1. Proposed conceptual model.

382 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390

Knowledge sharing with key channel partners refers to the extent to performance (process-level performance and competitive advantage).
which a firm shares insights and know-how about its business context Thus, additional hypotheses are:
with its partners (Saraf, Langdon, & Gosain, 2007). Channel partners
are considered to be tactically and strategically important for H6a. Agility positively mediates the relationship between endogenous
companies. They can help to collect crucial market-related information knowledge management and competitive advantage.
with which to fine tune the strategy to meet customer needs, resulting
H6b. Agility positively mediates the relationship between exogenous
in long-term financial performance (Lorenzoni & Lipparini, 1999).
knowledge management and competitive advantage.
Literature points out that the collaborative knowledge sharing capacity
provides an opportunity to increase value (e.g.,(Saraf et al., 2007)) and H6c. Agility positively mediates the relationship between knowledge
enable DC (e.g., (Della Corte & Del Gaudio, 2012)). Considering that sharing with partners and competitive advantage.
DC theory encompasses several levels of analysis, it is important to
consider the relational view, including the ability to collaborate with H7a. Agility positively mediates the relationship between endogenous
channel partners (Teece, 2007). Literature shows that agility needs the knowledge management and process-level performance.
support of effective knowledge sharing (Liu, Song, & Cai, 2014). Some
H7b. Agility positively mediates the relationship between exogenous
studies link the knowledge sharing capability through IT with agility
knowledge management and process-level performance.
(e.g., (Cai et al., 2013; Liu et al., 2014)). Such interactions can also
benefit from the use of BDA technologies, consequently enhancing H7c. Agility positively mediates the relationship between knowledge
organizational agility by influencing the capabilities to sense opportuni- sharing with partners and process-level performance.
ties and threats, shape them, and seize them (Della Corte & Del Gaudio,
2012). Therefore, another hypothesis is:

H3. BDA technologies allow an effective knowledge sharing with 3.1.4. Competitive advantage
partners that positively influences organizational dynamic capabilities Competitive advantage exists when a firm reveals having greater
such as organizational agility. success compared with its current or potential competitors (Peteraf &
Barney, 2003). To be consistent with this conceptualization, superior
firm performance relative to that of competitors constitutes an empiri-
cal and common indicator of competitive advantage. (Barnett, Greve, &
3.1.2. Organizational agility Park, 1994; Schilke, 2014). Based on Schilke's construct (Schilke, 2014),
DC can play a key role in determining a firm's competitive advantage competitive advantage was operationalized as reflective-reflective type
(Teece et al., 1997; Zott, 2003). Agility is the “capacity of an organization (Ringle, Sarstedt, & Straub, 2012), with the first-order dimensions of:
to efficiently and effectively redeploy/redirect its resources to value cre- (1) strategic performance (qualitative dimension) and (2) financial per-
ating and value protecting (and capturing) higher-yield activities as in- formance (quantitative dimension), both in comparison to competition.
ternal and external circumstances warrant” (Teece, Peteraf, & Leih,
2016). In the management field several researchers recognize that DC
does not lead directly to sustainable competitiveness, and that this 3.1.5. Controls
value derives from improved business processes (e.g., (Schilke, 2014; As literature widely supports, this study uses the industry and the
Drnevich & Kriauciunas, 2011)). Some authors conclude that agility country in which a firm competes as predictors of competitiveness
can influence organizational performance (Cai et al., 2013; Liu et al., (Schilke, 2014). BDA may be particularly useful to firms operating in
2013; Tallon & Pinsonneault, 2011). Hence, additional hypotheses are: turbulent technological environments (Wade & Hulland, 2004), and
consequently, following the approach of Menguc and Auh (Menguc &
H4a. Organizational agility is a dynamic capability leveraged by BDA
Auh, 2006) and Drnevich and Kriauciunas (Drnevich & Kriauciunas,
that positively affects the creation of competitive advantages.
2011), the study includes turbulent technological environment as a con-
H4b. Organizational agility is a dynamic capability leveraged by BDA trol. A turbulent technological environment makes current technology
that positively influences the process-level performance. obsolete and requires the development of new advances (Menguc &
Auh, 2006). Finally, we use the variable “time since adoption of BDA”
By engaging the business activities (e.g., sense customer needs, mar- to control for the knowledge and experience that organizations gain
ket research, R&D) companies can increase the possibility of achieving by using BDA over time (Elbashir et al., 2013). These controls explain
process innovation success (Zollo & Winter, 2002). In the IT field some all dependent variables (agility, process-level performance, and
authors focus on the importance of assessing how business processes competitive advantage).
can bring value to firms (e.g., (Chen et al., 2014; Tallon, 2007)). Recent
conceptual considerations are that BDA is a source of DC (organizational
agility, specifically) and that BDA are a way to provide business value to 4. Research design
firms (Erevelles et al., 2016). Therefore, the hypothesis is:
4.1. Measurement
H5. Process-level performance has a positive effect on competitive
advantage.
To test the model (Fig. 1) and the related hypotheses, the study per-
forms a multi-country survey of European organizations from several
industries. Following the recommendations of Moore and Benbasat
3.1.3. The mediating role of agility on the relationship between knowledge (Moore & Benbasat, 1991), the study uses a survey instrument drawing
assets and performance upon a comprehensive literature review. Regarding content validity,
Earlier IT literature considers that dynamic capabilities can establish five established academic IS researchers and two language experts
a link between knowledge assets and firm performance (Sher & Lee, review each item on the questionnaire, assessing its content, scope,
2004; Wang, Klein, & Jiang, 2007). In the management field some and purpose (Brislin, 1970). To test the difficulty of the questions, to-
authors examine agility as a mediator between the management of gether with the reliability and validity of the scales, a pilot study uses
knowledge assets and performance (Chung, 2010; Liu et al., 2014). a sample of 30 executives from firms not part of the main survey.
Also, the proposed model suggests a potential mediating role of agility Removal of some items reduces ambiguity and simplifies interpretation.
in the relationship between knowledge assets and two types of The survey instrument and measurement items are in Appendix A.
 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390 383

4.2. Data Table 2

Testing possible response bias: early vs. late respondents.

The survey was conducted in 2015 using an online survey tool. To Constructs Full sample Early Late Kolmogorov-
guarantee the quality of the data, the respondent profile uses the N = 175 respondents respondents Smirnov test
following three criteria: deep knowledge of the organization strategy, N = 92 N = 83

more than five years of experience in BI&A/BDA initiatives, and holding Mean S.D. Mean S.D. Mean S.D. p-Value
an IT/business executive or management position in the company. The ENKM 5.9 0.71 5.9 0.67 5.9 0.75 0.65
mailing database comes from Dun & Bradstreet, one of the world's lead- EXKM 5.8 0.86 5.9 0.85 5.7 0.86 0.07
ing firms for commercial information and business insight. The initial KSP 4.8 0.89 4.8 0.80 4.7 0.98 0.30
sample of 500 firm executives from European firms receives an email AG 6.1 0.93 6.1 0.78 6.0 1.07 0.72
PLP 6.1 0.81 6.1 0.78 6.0 0.83 0.23
to participate in the survey. CA 5.9 0.82 6.0 0.72 5.8 0.92 0.34
Ninety-two valid responses were received in the first month. To SP 6.0 0.81 6.0 0.72 6.0 0.89 0.76
increase the response rate a follow-up email was sent. During the FP 5.9 0.96 6.0 0.81 5.7 1.09 0.16
following months 83 additional valid responses were received from
late responders, totaling 175 usable responses (overall response rate
of 35%). As seen in Table 1, the sample comprises different industries
research purpose by examining the validity of the constructs, without
of which almost half are financial firms (40.5%). Regarding firm size,
requiring normal distributions for the variables. PLS requires a sample
the sample is equally distributed between mid-size and large compa-
size of ten times the number of the largest number of structural paths
nies. Business (41.4%) and IT executives (58.6%) are well represented.
directed at a particular construct (Gefen & Straub, 2005). In the
Non-response bias was assessed using the sample distributions of the
conceptual model the largest number of structural paths directed to a
early and late respondent groups compared with the Kolmogorov-
particular construct is three, which means that the minimum sample
Smirnov test (Ryans, 1974) (see Table 2). The early respondents were
size should be 30. The sample is larger (n = 175), meaning that it is ad-
identified by selecting the respondents in the first month. The test
equate for PLS. Before testing the structural model, the study analyzes
shows that the two groups do not differ statistically (5% significance
the measurement model in order to assess reliability and validity.
level, p N 0.05), demonstrating the absence of non-response bias
(Ryans, 1974). Due to the fact that the study collects data simultaneous-
ly from a single source, for the sake of validity, common method bias 5.1. Measurement model
needs to be assessed. The study uses Harman's post hoc single-factor
analysis for this purpose. A factorial analysis of all indicators was con- The study examines indicator reliability, construct reliability, con-
ducted and the first extracted factors explain 36.9% of variance. This vergent validity, and discriminant validity in order to assess the mea-
means that common method bias is unlikely to be an issue in the data surement model. Tables 3 and 4 show the results of the measurement
Podsakoff et al., 2003. model. Regarding indicator reliability, only loadings above 0.7 were
considered. Hence, four items (ENKM5, DC1, PLP3-4) were eliminated.
As Table 3 reveals, the instrument presents good indicator reliability,
5. Results
as the loadings are above 0.70. The composite reliability coefficient as-
sesses the construct reliability because construct reliability takes into
To estimate the conceptual model, the study uses the partial least
consideration indicators having different loadings (Hair et al., 2011;
squares (PLS) method (Hair, Ringle, & Sarstedt, 2011). PLS fulfills the
Henseler, Ringle, & Sinkovics, 2009). Table 4 shows that all constructs
have composite reliability above 0.7, which suggests that the constructs
are reliable. To test convergent validity, the study uses average variance
Table 1 extracted (AVE). The AVE should be higher than 0.5, (i.e., the latent var-
Sample profile. iable explains more than half of the variance of its indicators (Henseler
Sample characteristics (n = 175) Obs. (%) et al., 2009; Fornell & Larcker, 1981)). Table 4 shows that all constructs
meet this criterion. Regarding discriminant validity, the study uses two
Respondent position
IT executive
measures: the Fornell-Larcker criterion and cross-loadings. First, ac-
Chief Information Officer (CIO) 22 12.5% cording to Fornell and Larcker (Fornell & Larcker, 1981), the square
IT Director 26 14.8% root of AVE should be greater than the correlations with other latent
IT Manager 32 18.2% variables. Table 4 shows that the square roots of AVEs (in bold) are
Other IT executive 23 13.1%
higher than the correlation between constructs. All the constructs
Business executive show evidence of acceptable discrimination. Second, the loading of
Chief Financial Officer (CFO) 19 10.9% each indicator should be greater than all cross-loadings (Chin, 1998a)
Business Manager - Strategic Planning 18 10.3%
(see Table 3). Overall, the model has good indicator reliability, construct
Central Operations Officer (COO) 14 8.0%
Other Business executive 21 12.0% reliability, convergent validity, and discriminant validity. As these
criteria are met, the constructs can test the structural model.
No. of employees
b50 14 8.0%
50–250 76 43.4% 5.2. Structured model
N250 85 48.5%

Industry To evaluate the structured model, we followed Hair's five-step

Manufacturing 23 13.1% approach (Hair et al., 2013): (1) collinearity assessment, (2) structural
Electricity, gas and water supply activities 11 6.2% model path coefficients, (3) coefficient of determination (R2 value),
Wholesale and retail trade 19 10.8%
(4) effect size f2, and (5) predictive relevance Q2 and blindfolding.
Transports and telecommunications 18 10.2%
Financial intermediation 71 40.5% Regarding collinearity (1), the results suggest minimal collinearity
Others 33 18.8% among the constructs (the highest VIF among the explanatory variables
Notes: (1) The firm size is categorised based on European enterprises size classification
is 2.95), which means the predictors in the structural model do not
[104]; (2) The industries of activity are in accordance with NACE (European standard clas- suffer from this issue. To empirically assess the hypotheses postulated
sification of productive economic activities). in Section 3, the study examines the level of significance in path
384 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390

Table 3
Loadings and cross-loadings for the measurement model.

Construct Item ENKM EXKM KSP AG PLP FP SP

Endogenous knowledge management ENKM1 0.715 0.171 0.270 0.264 0.240 0.266 0.180
ENKM2 0.796 0.092 0.393 0.184 0.094 0.331 0.190
ENKM3 0.915 0.317 0.294 0.450 0.322 0.476 0.371
ENKM4 0.826 0.313 0.135 0.374 0.331 0.508 0.365
Exogenous knowledge management EXKM1 0.086 0.797 -0.183 0.390 0.365 0.328 0.345
EXKM2 0.214 0.899 -0.136 0.495 0.477 0.446 0.403
EXKM3 0.397 0.775 0.057 0.444 0.636 0.515 0.434
Knowledge sharing partners KSP1 0.383 −0.012 0.873 −0.125 −0.140 −0.167 −0.156
KSP2 0.324 −0.058 0.939 −0.145 −0.185 −0.116 −0.192
KSP3 0.210 −0.140 0.960 −0.245 −0.276 −0.199 −0.300
Agility AG2 0.395 0.453 −0.182 0.860 0.576 0.586 0.729
AG3 0.397 0.482 −0.189 0.931 0.604 0.619 0.665
AG4 0.402 0.538 −0.085 0.905 0.608 0.607 0.627
AG5 0.327 0.494 −0.263 0.928 0.590 0.640 0.682
Performance at process level PLP1 0.315 0.629 −0.231 0.676 0.951 0.571 0.563
PLP2 0.308 0.533 −0.204 0.558 0.939 0.525 0.552
Competitive advantage Financial performance FP1 0.445 0.501 −0.238 0.675 0.571 0.950 0.728
FP2 0.531 0.496 −0.071 0.594 0.487 0.949 0.665
FP3 0.477 0.518 −0.199 0.657 0.594 0.950 0.704
Strategic performance SP1 0.343 0.363 −0.134 0.615 0.507 0.584 0.840
SP2 0.327 0.445 −0.298 0.683 0.499 0.719 0.932
SP3 0.321 0.485 −0.230 0.715 0.590 0.681 0.927

The figures in bold represents the cross-loadings for the measurement model.

coefficients (2) by means of a bootstrapping technique (Hair et al., ^ = 0.371; p b 0.001)

two levels: Process-level Performance (PLP) ( β
2011; Henseler et al., 2009) with 5000 iterations of re-sampling, with ^
and Competitive Advantage (CA) (β = 0.204; p b 0.01), which confirms
each bootstrap sample constituted by the number of observations H4a and H4b. H5 is not supported, as the effect is statistically not signif-
(i.e., 175 cases). To have more conservative outcomes, the study uses icant (PLP- N CA). The conceptual model explains 77.8% of the variation
the no sign change option (Hair et al., 2013). Fig. 2 shows the estimated in Competitive Advantage (CA). The conceptual model substantially ex-
model (path coefficients, R2 and Q2), and Table 5 summarizes the plains the variation of all three dependent variables (Chin, 1998b;
results. Concerning R2 values (3), all dependent variables present rea- Henseler et al., 2009).
sonable values. In addition, this study calculates the f2 and q2 effect
sizes (4). Most of the values of f2 effect size are small, with the exception
of agility in process-level-performance and exogenous knowledge
5.3. Mediating effect testing
management in agility (moderate effects). Last, based on a blindfolding
procedure, all Q2 values are above zero, which means the model has
Based on the guidelines of Hair (Hair et al., 2013), Preacher
predictive power concerning the dependent variables (see Fig. 2).
(Preacher & Hayes, 2008), and Nitzl (Nitzl, Roldán, & Cepeda,
Fig. 2 summarizes the analysis results as follows: the conceptual
2016), the study evaluates the significance of the mediating effects
model explains 61.8% of the variation in organizational agility. Endoge-
of organizational agility. Mediation analysis is eligible if the indirect
nous Knowledge Management (EnKM) (β ^ = 0.155; p b 0.01) and Exog-
effect is significant. Table 6 presents the results, which fulfill the nec-
enous Knowledge Management (ExKM) ( β^ = 0.248; p b 0.001) are essary conditions to perform the mediator assessment. Also, the
statistically significant in explaining organizational agility (AG). Thus, study calculates variance accounted for (VAF) to determine the size
H1 and H2 are confirmed, whereas knowledge sharing partners (KSP) of the indirect effect in relation to the total effect (Hair et al.,
(H3) is not confirmed. Organizational agility (AG) ( β ^ = 0.371; 2013). The results show that agility can partially mediate the
p b 0.001) is statistically significant in explaining Process-level Perfor- relationship between knowledge assets (endogenous and exogenous
mance (PLP), and consequently H4b is supported. The conceptual knowledge) and performance (process-level performance and
model explains 57.8% of the variation in Process-level Performance competitive advantage), thereby supporting H6a,b and H7a,b. No
(PLP). Agility (AG) contributes significantly to explain performance at mediating effects were found between knowledge sharing with

Table 4
Correlation matrix, composite reliability (CR), and square root of AVEs.

CR ENKM EXKM KSP AG PLP FP SP

Endogenous knowledge management (ENKM) 0.89 0.82

Exogenous knowledge management (EXKM) 0.87 0.30 0.83
Knowledge Sharing with Partners (KSP) 0.95 0.31 −0.09 0.93
Agility (AG) 0.95 0.42 0.54 −0.20 0.91
Process level performance (PLP) 0.94 0.33 0.62 −0.23 0.66 0.95
Financial performance (FP) 0.97 0.51 0.54 −0.18 0.68 0.58 0.95
Strategic performance (SP) 0.93 0.37 0.49 −0.25 0.75 0.59 0.74 0.90

(1) First column are CR (composite reliability).

(2) Diagonal elements are square root of average variance extracted (AVE).
(3) Off-diagonal elements are correlations.
The bold figures represent the square roots of AVEs.
 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390 385

Fig. 2. Estimated model. Note: ns = non-significant. ** |t| N =1.96 at p = 0.05; *** |t| N = 2.57 at p = 0.01 level; **** |t| N =3.29 at p = 0.001 level.

partners and performance (process-level performance and competi- services more efficiently). This finding is consistent with earlier literature
tive advantage), which means H6c and H7c are not confirmed. (Chen et al., 2014; Liu et al., 2014; Sher & Lee, 2004).
Regarding the antecedents, the results demonstrate that BDA can
support organizational knowledge management, allowing the crea-
6. Discussion tion/enhancement of dynamic capabilities such as organizational agility.
This finding is consistent with earlier studies applied to IT innovations
As BDA can generate value in several ways, the need exists to under- and organizational management (e.g., (Nieves & Haller, 2014; Sher &
stand the entire chain. This study fills the research gap by assessing not Lee, 2004; Cai et al., 2013; Liu et al., 2014; Cepeda & Vera, 2007)). The
only the antecedents but also the effects of BDA initiatives in European results suggest that exogenous knowledge management deserves
firms. more attention, which was considered more important than endoge-
The results strongly support the claim that BDA applications can nous knowledge management. This outcome suggests that BDA
allow an effective internal and external knowledge management which technologies can provide business value by facilitating the acquisition
can help firms to create organizational agility. This agility exists in several of supply chain and marketing knowledge. While knowledge manage-
ways: (1) by sensing opportunities and threats (e.g., reacting to new ment is important to explain BDA value creation, the way of sharing
products or services of competitors); (2) by seizing possible chances this strategic asset among business partners is not statistically signifi-
(e.g., expanding into new regional or international markets), and cant in this study. Although the hypothesis related to the knowledge
(3) by adjusting to the technological environment to attain competitive shared with partners (H3) seems plausible and consistent with earlier
advantage (e.g., adopting new technologies to produce products and studies for other IT innovations (e.g., (Zhu & Kraemer, 2005; Zheng

Table 5
Significant testing results of the structural model path coefficients.

Structural path Path coefficient (t-value) Effect size (f2) Effect size (q2) 95% confidence interval Conclusion

EndKM → AG 0.155⁎⁎ 0.038 0.024 [0.032; 0.268] H1 supported

(2.562)
ExKM → AG 0.248⁎⁎⁎⁎ 0.120 0.074 [0.149; 0.364] H2 supported
(4.556)
KSP → AG 0.010 ns 0.000 0.000 [−0.145; 0.169] H3 not supported
(0.121)
AG → CA 0.204⁎⁎⁎ 0.064 0.021 [0.065; 0.351] H4a supported
(2.786)
AG → PLP 0.371⁎⁎⁎⁎ 0.125 0.080 [0.173; 0.544] H4b supported
(3.969)
PLP → CA 0.106 ns 0.021 0.007 [−0.030; 0.234] H5 not supported
(1.579)

Note: ns = non-significant.
The values of f2 and q2 effects can be considered weak (0.02). moderate (0.15) and strong (0.35).
Confidence level:
⁎⁎ |t| N =1.96 at p = 0.05 level.
⁎⁎⁎ |t| N = 2.57 at p = 0.01 level.
⁎⁎⁎⁎ |t| N =3.29 at p = 0.001 level.
386 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390

Table 6
Mediation test by bootstrapping approach.

Effect of Direct effect (t-value) Indirect effect (t-value) Total effect VAF (%) Interpretation Conclusion

EnKM → AG → CA 0.137⁎⁎ (2.317) 0.053⁎⁎ (2.156) 0.190⁎⁎⁎⁎ (3.577) 27.89% Partial mediation H6a supported
ExKM → AG → CA 0.081 ns (1.506) 0.097⁎⁎⁎ (2.617) 0.178⁎⁎⁎⁎ (4.037) 54.49% Partial mediation H6b supported
KSP → AG → CA 0.026 ns (0.464) −0.014 ns (0.607) 0.012 ns (0.199) na No mediation H6c not supported
EnKM → AG → PLP 0.141⁎⁎ (1.988) 0.057⁎⁎ (2.212) 0.198⁎⁎⁎ (2.813) 28.79% Partial mediation H7a supported
ExKM → AG → PLP 0.344⁎⁎⁎⁎ (5.412) 0.092⁎⁎⁎ (3.041) 0.436⁎⁎⁎ (7.219) 21.10% Partial mediation H7b supported
KSP → AG → PLP −0.157⁎⁎ (2.408) 0.003 ns (0.119) −0.154⁎⁎ (2.172) na No mediation H7c not supported

Note: VAF = variance accounted for. The VAF N 80% indicates full mediation. 20% ≤ VAF ≥ 80% show partial mediation. VAF b 20% indicates no mediation. ns = non-significant. na = not
applicable.
⁎⁎ |t| N =1.96 at p = 0.05 level.
⁎⁎⁎ |t| N = 2.57 at p = 0.01 level.
⁎⁎⁎⁎ |t| N =3.29 at p = 0.001 level.

et al., 2011; Ruivo, Oliveira, & Neto, 2014)), this construct does not con- model or by moderating existing variables. Second, although the study
tribute to creating valuable organizational agility. An earlier study con- considers constructs in the model embedding the impact of BDA at
cludes that using this type of knowledge is not always useful and can process-level, the model is firm-level. Before generalization is possible,
harm specific business processes in some situations. Moreover, this researchers should perform a longitudinal study based on the process
study shows that agility can partially mediate the positive effect of approach. Future research should use specific process constructs to
some knowledge assets (exogenous and endogenous) and performance assess the impact of BDA on several business areas in detail. Third, due
(process-level performance and competitive advantage) (H6a, H6b and to the perceptual nature of the measures used, future studies should
H7a, H6b). This finding is consistent with earlier studies (Liu et al., 2013; identify the issues associated with cross-sectional research design.
Liu et al., 2014; Pavlou & El Sawy, 2006). Although the use of objective measures to assess firm performance is
Competitive performance is not only about how much firms know, important, in this study companies were reluctant to provide them.
but how they use what they know (Haas & Hansen, 2005). A possible Fourth, although the sample size is statistically adequate, a larger
explanation for this result is that firms are reluctant to share sensitive sample could be useful to reinforce the conclusions of this study.
information that might compromise their competitive advantage. In As researchers generally accept that BDA can provide benefits to all
fact, synergies with business partners can be beneficial (e.g.,(Setia, European firms (European_Commission, 2015) across several indus-
Richardson, & Smith, 2015)), but careful attention is needed regarding tries, reinforced on a McKinsey survey (Manyika et al., 2011b) reports
the shared information. The study shows that knowledge sharing with that most industries in Europe have the capacity to store and manipu-
partners can be truly compromising in the areas of Production and Op- late big data, and consequently the potential value of using big data
erations or Product and Service enhancement, which represent the core resides mainly in developed countries. Therefore, data from five
business practices of a firm. An information sharing agreement might be European developed countries were collected. By conducting future
a solution to overcome this constraint. studies in more countries and industries, which may have different per-
Concerning the effects of agility leveraged by BDA, the results indi- ceptions of BDA and diverse external contexts, the understanding of
cate that this dynamic capability can positively impact competitive ad- BDA business value could likely improve. Due to their different cultures,
vantage in different ways (via processes or organizationally), which is research to perform a comparative study among European regions
in line with the findings of other authors (Drnevich & Kriauciunas, (e.g., Northern and Southern Europe) could be interesting.
2011; Protogerou et al., 2012) (H4a,b). Agility can also be more effective
in improving specific business processes than organizational perfor- 6.2. Theoretical implications
mance, which is consistent with Drnevich and Kriauciunas (Drnevich
& Kriauciunas, 2011).The results demonstrate that no significant link This study offers two key contributions that extend theory on BDA in
exists between process-level performance and competitive advantage technology and organizational management research:
(H5). In this sense, Drnevich and Kriauciunas (Drnevich & Kriauciunas,
2011) argue that a firm's performance depends on a set of elements (1) BDA value chain understanding - Despite the potential benefits,
that might fail due to miscommunication between the business areas some firms fail to capture value from BDA initiatives (Kaisler
and the top management. Although some business areas can behave et al., 2013). Recent papers focus on BDA research opportunities
in an efficient way, this efficiency does not necessarily have a significant (Abbasi et al., 2016; Agarwal & Dhar, 2014), claiming that there is
effect on the overall performance. a need to conduct assessments of the actual impact of BDA
Although BDA technologies are generaly associated with customer investments and use, and to understand how to achieve the
management or marketing areas, results indicate that, in general, benefits for performance. The BDA value chain remains relatively
European firms focus more on internally improving their assets unexplored and requires further investigation. The current paper
(products and services) and the way that these are being produced to responds to the calls of scholars by empirically assessing the
optimize costs. With Europe still showing signs of financial crisis, this value that BDA can bring to European firms. This study theoreti-
finding might point the way to a change of survival strategy in compet- cally proposes and empirically validates a conceptual model
itive markets. based on strategic management theories (KBV and DC), never
before combined for this purpose, to explain the full BDA value
chain. Liu (Liu et al., 2014) argues that literature about the
6.1. Limitations and further research relationship among knowledge management, organizational
agility, and firm performance is still limited. This is the first
Certain limitations apply to the interpretation of the results of this study that empirically demonstrates that BDA applications
study. First, the antecedents of agility do not extend beyond the specific based on an effective knowledge management can help firms to
knowledge resources included in the model. Other factors can also create organizational agility leading to competitive advantage.
determine the development of this dynamic capability in European Further studies could beneficially use this theoretical framework
firms. Future studies may include these resources as variables of the to assess the business value in other IT innovations at a process-
 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390 387

level and firm-level. Academics can make use of this paper for process-level performance and competitive advantage, by merging the
pedagogical support for teaching about BDA value chain. field of information systems and strategic management. By presenting
(2) DC literature – This paper contributes to DC research by empir- and discussing strategic and organizational drivers and impacts of
ically testing agility business value in a BDA context (Drnevich BDA, guidance to business researchers, practitioners, and scholars is
& Kriauciunas, 2011). The results strongly support the belief provided. As such, this paper extends knowledge by directly evaluating
that BDA technologies can trigger agility and that agility can af- the effect of BDA on the decision-making process to support an effective
fect competiveness in two ways (via processes or globally). As IT resource management, focusing on challenges for adoption, gover-
BDA can significantly improve business processes (Davenport, nance, and evaluation.
2006), business process enhancement driven by BDA is an im- The outcomes of this paper indicate that BDA can be an effective
portant research area (Abbasi et al., 2016). Earlier studies focus aid to survival in competitive markets, particularly by supporting
only on the link between agility and firm performance (Chen Production and Operations or Product and Service enhancement.
et al., 2014; Liu et al., 2014; Tallon & Pinsonneault, 2011), while Striving to overcome damages of the financial crisis, European
this study empirically demonstrates that an effect of agility exists firms are using BDA tools to internally improve their assets (products
at the process-level, too. In addition, despite an increasing use of and services) and the way that these are being produced to optimize
mediation testing, most of the studies in PLS-SEM do not analyze costs. European firms tend to attribute greater value to external
mediation effects (Hair et al., 2013; Nitzl et al., 2016). Under- knowledge provided by BDA applications than to internal knowledge
standing mediation issues can be crucial for researchers because management. Sharing knowledge with business partners is poten-
they can better explain or hinder the influence of a third variable tially harmful to organizational productivity, so careful attention is
in the relationship between two variables in a model (Cepeda & in order when exchanging this type of core data between companies.
Vera, 2007). This study demonstrates that agility can be a Also, this study concludes that organizational agility leads directly to
mediator between external and internal knowledge assets and a better performance (process-level and competitive advantage) but
performance (process-level performance and competitive can mediate effects from knowledge assets on performance. This
advantage). means that firms must bear in mind that several paths can lead to
competitive advantage. First, managers should consider investing
in BDA technologies to take advantage of internal and external
6.3. Managerial implications knowledge resources. Second, by governing the knowledge extract-
ed by BDA, agility becomes the “ultimate” organizational capability
For practitioners (including executives and IT managers) this study that leads to sustainable competitive advantages. Firms should
demonstrates how best to leverage the knowledge embedded in BDA confidently invest in the development of agility supported by BDA
systems and initiatives and achieve capabilities that will help to main- tools.
tain competitive advantages. The paper provides support to justify
BDA investments and initiatives. The results indicate that although 7. Conclusions
BDA technologies call for substantial investment in implementation
and maintenance, European firms are aware of BDA's potential value As Big Data Analytics (BDA) can offer value to companies in
and benefits. Executives should apply these guidelines to their organiza- several ways, many scholars highlight the need to understand the
tional IT strategy. path to competitive advantage. The main outcome emerging from
BDA can provide value at several stages: (1) knowledge; (2) dynamic this paper has to do with understanding the value chain of BDA.
capability (organizational agility); (3) business process; and (4) com- Grounded on knowledge-based view (KBV) and dynamic capabilities
petitive performance. To initiate the value creation process, firms (DC), this study fills a research gap from the strategic management
should invest in an effective BDA program. First, the value that BDA perspective, by perceiving the antecedents (knowledge assets) and
can provide derives first from the way firms use the technologies the impacts (on process-level performance and competitive advan-
available to manage knowledge. An effective training program can tage) of BDA initiatives in European firms. The results show that
help to leverage the way users extract and manage knowledge. Second, the model significantly explains all dependent variables (61.8% of
by effectively using BDA, firms can acquire capabilities to innovate and agility variation, 57.8% of process-level performance variation, and
rapidly adjust to external demands (e.g., optimize business processes). 77.8% of competitive advantage variation). The major conclusions
Third, these capabilities will encourage specific business areas to of this study are:
involve the whole organization, when an effective bottom-up strategy
is followed, supported by good communication practices. By applying a) BDA can be a strategic investment for European firms to enhance or-
this framework to BDA specifically, managers and IT executives can ganizational agility and survive in competitive markets. Firms
benefit from a performance metric that uniquely specifies the impact should invest in the development of organizational agility supported
of BDA. By evaluating the organizational knowledge conversion into by effective BDA applications.
process and firm-level capabilities, practitioners can increase their b) To create agility, European firms tend to believe that the external
productivity. Software vendors of BDA can also gain a better under- knowledge deriving from BDA applications can be more effective
standing of how European firms can invest and experience the value in the creation of agility than internal knowledge. Sharing knowl-
created through BDA. They can natively embed BDA capabilities in edge with business partners is problematic, as sharing, is a potential
their solutions as a way for their customers to achieve superior financial barrier for process-level performance.
and strategic performance. Finally, firms that have not yet decided to c) Regarding the impacts of agility, this capability leads directly to a
adopt these technologies can gain a perception of what is possible by better performance (process-level and competitive advantage) but
adopting and effectively using BDA. can mediate effects from knowledge assets on performance. This
means that BDA initiatives can lead to better operational efficiency,
6.4. Business research implications but several paths can lead to competitive advantage.

The business community now sees big data as a potential tool of

business value for achieving competitive advantage. This value can Thus, a crucial need exists for firms to have an integrated view of the
only be real if companies know how to effectively manage Big Data An- BDA chain in order to be able to fully leverage the innovative power of
alytics (BDA) initiatives. This paper establishes a first link between BDA BDA capabilities to achieve competitive advantage.
388 N. Côrte-Real et al. / Journal of Business Research 70 (2017) 379–390

Appendix A. Survey questionnaire

Constructs Items Source

Knowledge assets Please indicate the extent to which these forms of knowledge are used in your organization.
BDA technologies:
Endogenous knowledge ENKM1. Reduce uncertainties of knowledge loss (Sher & Lee, 2004)
ENKM2. Reduce dependence on specific personnel
Management ENKM3. Are comprehensively utilized by members in organization
ENKM4. Are comprehensively constructed in organization*
Exogenous knowledge EXKM1. Facilitate acquisition of supply chain knowledge (Sher & Lee, 2004)
EXKM2. Facilitate processing of supply chain knowledge
Management EXKM3. Facilitate processing of marketing knowledge
Knowledge sharing with channel KSP1. We frequently share knowledge about our business environment (Liu et al., 2014)
partners (e.g., other business relationships) with our channel partners.
KSP2. Knowledge about all of our channel partners, competitors, etc., is shared with our
other channel partners.
KSP3. Business insights are exchanged between us and our other channel partners.
Organizational agility (dynamic Please indicate the degree to which the use of BDA tools in the last three years has helped to: (Lu & Ramamurthy, 2011)
capability) AG1. Respond to changes in aggregate consumer demand.*
AG2. React to new product or service launches by competitors.
AG3. Expand into new regional or international markets.
AG4. Change (i.e., expand or reduce) the variety of products/services available for sale.
AG5. Adopt new technologies to produce better, faster, and cheaper products and services.
Process-level performance To what extent has BDA been used to support critical business activities in each of the following (Peteraf & Barney, 2003)
processes in the last three years. A sampling of critical activities in each process is shown below.
PLP1. Production and operations: improve throughout, boost labour productivity, improve flexibility
and equipment utilisation, and streamline operations.
PLP2. Product and service enhancement: embed IT in products, increase pace of development/R&D,
monitor design cost, improve quality, support innovation.
PLP3. Marketing and sales: spot market trends, anticipate customer needs, build market share,
improve forecast accuracy, and evaluate pricing options.*
PLP4. Customer relations: respond to customer needs, provide after-sales service and support, improve
distribution, create customer loyalty*
Competitive advantage Please indicate the degree to which you agree with the following statements. (Schilke, 2014)
Strategic Performance
SP1. We have gained strategic advantages over our competitors
SP2. We have a large market share.
SP3. Overall, we are more successful than our major competitors.
Financial performance
FP1. Our EBIT (earnings before interest and taxes) is continuously above industry average.
FP2. Our ROI (return on investment) is continuously above industry average.
FP3. Our ROS (return on sales) is continuously above industry average.

Control variables
Time since BDA adoption Number of years since adoption (#)
Country Country
Industry Type of industry
Technological turbulence Please indicate the degree to which you agree with the following statements. (Brislin, 1970)
TT1. Extent of technological turbulence in the environment.
TT2. Leadership in product/process innovation.
TT3. Impact of new technology on operations.

Notes: (1) * items eliminated due low loading. (2) Items were measured using a 7-point numerical scale (1 is Strongly Disagree and 7 is Strongly Agree).

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