Moderating Effect of Firm Size on the Relationship between IT Orientation and Business Performance

Information Technology (IT) orientation is the firm's capability to effectively manage and use information. This study examines moderating role of firm size in the relationship between IT orientation and business performance. This firm level study has been conducted on a cross sectional purposive sample of managers from manufacturing and service organizations based in the National Capital Region (NCR), India. Data was collected through self-developed non-disguised questionnaire. The survey questionnaire was administered on 240 managerial level employees (CXO's, top level and middle level managers who were key decision makers in the organizations). The hypotheses were tested using Structural Equation Modeling (SEM). The findings provide support for a significant positive relationship between IT orientation and business performance. The study also provides empirical evidence that firm size moderates the relationship between IT orientation and business performance. The study recommends greater emphasis on improving the IT orientation of larger firms to enhance the capability for superior business performance. It also gives specific suggestions for improving the IT orientation of the firms. The study contributes to the business strategy literature by providing empirical support to the Resource-Based View (RBV) of the firm