Configuring Capabilities for Integrated Solutions: Evidence from the IT Sector

Abstract

This paper investigates the way that firms' environmental context and organizational structure influence their strategic choices and lead to different capabilities configurations. Drawing on contingency theory and the resource‐based view, we explore integrated solutions—an emerging business model in which firms bundle products and services—in the IT sector, which is a particularly appropriate context due to its novelty, high‐technology characteristics and implications for capabilities development. This study contributes to research and practice by identifying how organizational and environmental/market factors co‐evolve with firms' strategy and how firms' distinct strategic decisions lead to differences in capabilities configurations.