Contributions of information technology and organisational capabilities in Malaysian public sector

Abstract

The main purpose of this study is to add to the body of knowledge on the Resourcebased View (RBV) of public organisation‘s information technology management by developing and testing the causal relationship model. The underlying theory was grounded in the RBV of the organisation. In order to have better understanding in public organisation behaviour, an exploratory study was conducted, which interviewed academicians and managers. A research model was then developed based on the findings of the exploratory study and an extensive review of previous literatures. By using the structural equation model (SEM), the proposed model was tested on a sample of 118 Malaysian public agencies. The causal relationship between organisational, information technology (IT) capability and IT effects of organisational performance was examined, in the context of the Excellence Model of organisational Performance-based approach, based on viewing the concept of strategic resources from the RBV and the concept of complementary resources from Complementarity Theory. Initially, the three sets of independent models were tested for their impacts and then found that the organisational and IT capability were both empirically good models, respectively. The study incorporated the three independent models into a causal model and the findings showed that the model had a good fit. Subsequently, it was also shown that IT capability partially mediated the relationship between organisational capability and organisation performance. Theoretically, this study integrated multiple disciplines, besides the underlying theory of RBV, to provide a comprehensive view of the success of IT transformation in public organisation. This study also provides public managers with strategic thinking on mobilisation of organisational and IT capabilities in becoming successful.