Impact of Competitive Strategy and Information Technology Maturity on Firms’ Strategic Response to Globalization

Abstract

:Recently the globalization of competition has caused many firms in the financial services industry to integrate their information systems. Based on a selective review of literature from strategic and information management disciplines, a model is developed to study the finns' strategic response to Europe 1992 and Canada-U.S. Free Trade Agreements. According to a survey of 213 managers, this study finds that competitive strategy, infonnation technology (IT) maturity and size influence: firms' perceived increase in IT investment. Further, this study fInds that the degree of IT integration within finns is a primary detenninant of finns' willingness to use IT as part of their strategic response to globalization. It suggests that the new competitive strategies will be increasingly technology-based global initiatives that are affected by the finns' IT maturity.