Effects of Employee Satisfaction on the Relationship between IT Capability and Firm Performance

Taeuk Kang, Monty Clint Taylor, Hui-Chuan Chen


It has been widely accepted that Information Technology (IT) within an organization plays a determinant role of positively influencing the firm’s market performance. As technology becomes cheaper and more standardized, entry barriers to adopting advanced technology have been reduced. The adoption of such standardized and homogenous IT systems has lowered expectations of the competitive benefits resulting from the adopted IT. Thus, previous studies have shown mixed results in assessing the relationship between the adoption of IT and a firm’s market performance.

Regarding the process of the adoption and use of IT, the skill level of employees has been argued as one of the key inputs to determine the relationship between IT and a firm’s market performance. Employees may resist the changes resulting from modification of current IT or the adoption of new IT. In order to lower such resistance, firms should provide organizational environments which allow associated employees to be comfortable when changing IT systems.

Regarding the relationship between the IT resource and employees, previous studies have primarily focused on IT users. However, non-IT users are often affected by the use of IT. In this present study, we argue that all employees including both IT-users and non-IT users must be simultaneously considered in order to fully understand the relationship between IT capability and a firm’s performance. Such a relationship is the result of a comfortable and cooperative environment, which is linked to employee satisfaction. Thus, we propose in this study that employee satisfaction including non-IT-users within the firm’s environment positively affects the relationship between IT capability and firm market performance.


IT Capability;Employee Satisfaction; Firm’s Performance.

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