Global Business and Management Research: An International Journal

Vol. 10, No. 1 (2018, Special Issue)

The Impact of Information Technology Capability,

Business Intelligence Use and Collaboration
Capability on Organizational Performance among
Public Listed Companies in Malaysia
Teoh Ai Ping *
Graduate School of Business, Universiti Sains Malaysia
Email: apteoh@usm.my

Chong Voon Chinn

Graduate School of Business, Universiti Sains Malaysia

Lim Yu Yin
Graduate School of Business, Universiti Sains Malaysia

Rajendran Muthuveloo
Graduate School of Business, Universiti Sains Malaysia

* Corresponding Author

Abstract
Purpose: In today’s dynamic business environment, organizations face new issues and
challenges which increase the needs to utilize organizational capabilities in ensuring sustainable
performance. This study examines the impact of key organizational capabilities of information
technology (IT) capability, business intelligence (BI) use and collaboration capability on
organizational performance among Public Listed Companies (PLCs) in Bursa Malaysia. In the
context of today’s business dynamism, the moderating role of environmental volatility and the
mediating role of strategic agility are also investigated.
Design/methodology/approach: A total of 103 usable responses were collected via mailed
questionnaires addressed at Chief Executive-level officers of the companies in Bursa Malaysia.
The responses were subsequently analyzed using SmartPLS software to test the hypotheses.
Findings: The findings indicate that business intelligence use and collaboration capability are
crucial predictors affecting organizational performance among PLCs in an emerging market,
Malaysia. However, information technology capability does not impact organizational
performance. Interestingly, strategic agility mediates the relationship between information
technology capability, business intelligence use on organizational performance, but
environmental volatility does not moderate the relationships.
Research limitations/implications: The response rate was relatively low as only about 13% of
the population responded. However, this is the common response rate for studies undertaken
questionnaires surveys to obtain responses from Malaysian PLCs. This study selected only PLCs
from Main Board of Bursa Malaysia as the targeted respondents. Thus, caution is needed when
applying the findings to other types of organizations such as public sector, Small Medium Size

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Enterprises and Multinational corporations. Nevertheless, this study has significant research
implications in contributing to the body of knowledge in organizational performance.
Practical implications: The results from this study contributes practically to the management of
PLCs in Malaysia and other emerging countries as it promotes greater insights into the crucial
organization resources and capabilities of information technology, business intelligence use and
collaboration on organizational performance. Furthermore, this study reminds the practitioners of
the strategic element of agility which mediates IT capability and Business Intelligence use to
organizational performance.
Originality/value: This study integrated and empirically tested the impact of fundamental
organizational capabilities namely IT capability, BI use and collaboration capability on
organizational performance. Furthermore, this study incorporated the role of strategic agility as a
mediator and environmental volatility as a moderator in the same framework to put the research
in the context of current dynamism of business environment. This study employed both financial
and non-financial indicators in measuring organizational performance which provides holistic
and balanced view on the performance of PLCs.

Keywords: Organizational Performance, Business Intelligence Use, Collaboration Capability,

Strategic Agility, Malaysia

Introduction
In today’s dynamic business environment, organizations are facing new encounters, such as
intense competition, technological change, and economic downturn which challenge top
management to create value for shareholders. Organizational performance has been identified as
an important criterion in evaluating results of the organization’s operation utilizing rare resources
and unique capabilities in responding to market opportunities and detecting threats (Thomas,
2014).
Financial crisis has shattered the Malaysia’s economy and required few years to recover
economy of Malaysia. Malaysia economy rebounded strongly with growth rates of between 4.1%
and 7.1% in 2000 after the financial crisis in 1997 and 1998 but contracted 1.7% in 2009 after
economy downturn between 2007 and 2008 (PricewaterhouseCoppers, 2013). Economy
recovered in 2010 to 2012 with growth rates between 5.0% and 7.0%. The Malaysian capital
market grew from a total size of RM717.5 billion in 2000 to RM2.0 trillion in 2010. From 2000,
the stock market’s capitalization grew by 11.1% on average annually and reach about RM1.3
trillion at the end of 2010, the stock market capitalization was 165% of nominal GDP
respectively (Securities Commission, 2013). Stock market performance for public listed
companies (PLCs) in Malaysia was positive in 2013 and expanded by 14.4% from RM1.67
trillion in 2016 to RM1.91 trillion in 2017 (Securities Commission, 2017). PLCs play an
important role to contribute major part of economy in Malaysia as the nation’s economy
expanded and reached 5.6% in 2012 compared with 5.2% in 2011 (Yeap, 2013). In Forbes
Global ranking 2013, 20 Malaysian listed companies become top 2,000 companies in the world
based on four criteria which are sales, profit, assets and market value. PLCs has contributed
significantly to the Malaysian economic growth (Sabariah & Norhafiza, 2013). Thus, it is
important to study on the crucial factors that affect the organizational performance of Malaysian
PLCs.
Malaysia is one of information technology (IT) hubs in the Asia region as the government
announced to invest and develop Digital Malaysia Master Plan for Malaysia’s ICT sector

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(Market Research, 2013). Malaysia IT spending is expected to reach US$5.6 billion in 2013, up
7% compare to the year of 2012 (Trading Economics, 2014). The plan stimulate organizations
to focus ICT development for business expansion, indicating vital role of IT to enhance
organizational performance. The growth of IT and business intelligence (BI) becomes central in
business operating in fast-changing environment alongside Industrial Revolution 4.0.
Information technology capability integrates with BI use to enable IT flexibility and competitive
information towards enhancing performance (Ravichandran & Lertwongsatein, 2005; Teoh,
Muthuveloo & Lim, 2014). The ability of organizations to exchange information is viewed as a
key to survive in global business environment. Hence, collaboration has been a capability to
achieve business goals when working across boundaries (Eisenhardt & Martin, 2000; Allred,
Fawcett, Wallin & Magnan; 2011). Public listed companies are recognized as the backbone of
the country’s globalized economy, hence organizations are eagerly and actively seeking
resources and capabilities to sustain competitive advantage (Ogunsiji & Akanbi, 2013).
This study incorporated the role of strategic agility as the mediator as it is the ability of the
organizations to move quickly and continuously adapt and adjust the changing circumstances for
business sustainability (McCann, Selsky & Lee, 2009; Ofoegbu & Akanbi, 2012). Agility has
been regarded as a necessary way in changing environment for organizational performance
(Yang & Liu, 2012). If organizations need to survive in the complex environment, agility is
necessity compared with a traditional strategy (Alavi & Wahab, 2013) due to organizations with
agility can achieve the goals (Fateme et al., 2013) by contributing to economic growth (Ofoegbu
& Akanbi, 2012). Using contingency theory as foundation, this study included environmental
volatility, which is the degree of instability and unpredictability that arising from unexpected
changes of organization’s environment (El Sawy & Pavlou, 2008) as moderator to investigate the
relationship between strategic agility, collaboration capability on organizational performance.
This study argues that IT capability, BI use and collaboration capability are rare, valuable,
inimitable and non-substitutable capabilities that influence the financial and non-financial
performance of the organization with strategic agility as mediator.
The objectives of this study are:
(1) To examine the relationship between IT capability and organizational performance
among public listed companies on main board of Bursa Malaysia.
(2) To determine the relationship between BI use and organizational performance among
public listed companies on main board of Bursa Malaysia.
(3) To determine the relationship between collaboration capability and organizational
performance among public listed companies on main board of Bursa Malaysia.
(4) To determine the relationship between IT capability and strategic agility among public
listed companies on main board of Bursa Malaysia.
(5) To determine the relationship between BI use and strategic agility among public listed
companies on main board of Bursa Malaysia.
(6) To determine the relationship between strategic agility and organizational performance
among public listed companies on main board of Bursa Malaysia.
(7) To examine the moderating effect of environment volatility on the relationship between
strategic agility and organizational performance among public listed companies on main board of
Bursa Malaysia.
(8) To examine the moderating effect of environment volatility on the relationship between
collaboration capability and organizational performance among public listed companies on main
board of Bursa Malaysia.

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(9) To examine the mediating effect of strategic agility on the relationship between IT
capability and organizational performance among public listed companies on main board of
Bursa Malaysia.
(10) To examine the mediating effect of strategic agility on the relationship between BI use
and organizational performance among public listed companies on main board of Bursa
Malaysia.

Literature Review
Theoretical Background
Previous studies on organizational strategic development have been emphasized on resources
and capabilities (Barney, 1991; Bhatt, 2000; Bharadwaj, 2000; Ravichandran & Lertwongsatein,
2005). Based on the dynamic capability view which is an extension of resource-based view,
capability is strategic routine to adjust existing resources in order to renew competences to
achieve competition advantage (Grant, 1996). Araya, Chaparro, Orero, and Joglar (2007) define
resources as tangible and intangible elements which can be utilized effectively according to the
current organizational capabilities, whereas capabilities refer to the group of intangible factors
that organizations possess to utilize the existing resources to achieve objectives (Grant, 2001).
Through inimitability, rareness, valuable, and non-substitutability resources, organizations can
improve performance, in particular via IT (Liu, Zhao, Wang & Xiao, 2013). Contingency theory
involves match and fit context setting with organizational setting (Hambrick, 1983), how the
match between strategy and environment can influence organizational performance based on the
integration of prior theories (Lee & Miller, 1996) and has been applied in information systems
(Bechor, Neumann, Zviran & Glezer, 2010). The success depends on the nature of the
organization’s task environment such as level of environmental uncertainty (Volberda, Weerdt,
Verwaal, Stienstra & Verdu, 2012).

Information Technology Capability

Ross, Beath, and Goodhue (1996) defined IT capability as the ability of organization to
assemble, integrate, and deploy IT-based resources. Gheysari, Rasli, Roghanian and Jebur (2012)
address IT capability consisting IT technology capability and IT management capability in
examining the impact of IT capability on organizational performance. McLaughlin (2017)
suggested dynamic technology enabling capabilities that organizations should consider
developing in attaining competitive advantage. Many organizations utilize IT capabilities as
valuable and inimitable resources that help the organization to gain the competitive advantage
(Luftman, Lyytinen & Zvi, 2017; Mikalef & Pateli, 2017; Queiroz, Tallon, Sharma & Coltman,
2018).

Business Intelligence (BI) Use

Business intelligence became popular in business and IT industry since 1990 whereby data
empowers business decisions (Chen, Chiang & Storey, 2012). Gartner (2013) defines BI as an
umbrella term that consists of applications, infrastructures and tools, and enables access to and
analyses information to improve business decisions and performance. Uppatumwichian (2013)
explains the fundamental information system tools behind BI encompass online analytical
processing, data mining and, data warehousing that allow organizations to make various analysis
for making better decision. A successful organization integrates vast amount of accumulated data
across the business processes and producing useful information (Sahay & Ranjan, 2008) to

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support business decision-making. Integration and use of BI tools allows organisations to

achieve sustainable performance (Zimmer, Baars & Kemper, 2012; Teoh, Muthuveloo & Lim,
2014; Delen, Moscato & Toma, 2018).

Collaboration Capability
In this globalization era, collaboration is viewed as a valuable organizational capability as
organizations cannot stand alone to manage the business (Lee, Olson & Trimi, 2012). Oh, Yang,
and Kim (2013) define collaboration as the ability of organization to work cooperatively between
suppliers, customers, business partners and employees. External collaboration focuses on tight
coordination and sharing information effort with the outsiders such as suppliers, customers and
business partners, while internal collaboration focuses on how well employees communicate
across departments work together in order to develop effective solution for operating the
business (Oh et al., 2013). Value co-creation provides a resource to firm to create value through
interaction between consumers and firms towards establishing deep engagement and
collaboration (Salam, 2017; Janteng, Tan & Fernando, 2017).

Strategic Agility
The concept of agility was conceived after the “lean” approach (Putnik & Putnik, 2012).
Strategic agility was first utilized by Doz and Kosonen (2008) who found successful business
model renewal and transformation being main outcomes of strategic agility; based on strategic
sensitivity, leadership unity and resource fluidity (Franken & Thomsett, 2013). The purpose of
the strategic agility concept is to encourage organizations think forward and proactive in their
approach (Ismail, Poolton & Sharifi, 2011) operating in the current business complexity (Doz &
Kosonen, 2008). Strategic agility is crucial in order to maximize strengths and provide what it
necessary for the organization’s survival (Idris & AL-Rubaie, 2013; Teoh, Lee & Muthuveloo,
2017).

Environmental Volatility
Environmental volatility is a major contributor to uncertainty in business environment
(González-Benito, González-Benito & Muñoz-Gallego, 2014). Previous studies indicate
environmental volatility consists of market turbulence (Ogunsiji & Akanbi, 2013; González-
Benito et al., 2014), and technological turbulence (Boon-itt & Wong, 2011; Terawatanavong et
al., 2011; Hung & Chou, 2013). Hence, the more complex the environment is, the higher the
external unexpected that need organizations to cope with the uncertainties in order to sustain the
business.

Organizational Performance
Organizations’ financial performance and operational processes are linked and measured through
many ways (Qin, Atkins & Yu, 2013; Serai, Johl & Marimuthu, 2017). Financial performance is
often operating effectiveness of an organization which explains how organizations transform
products for market into profitable products (Akça, Esen & Özer, 2013) and involves return on
investment, market share, return on sales growth, profit margin on sales, growth on sales and
market share (Jacobs, Droge, Vickery & Calantone, 2011; Qi, Zhao & Sheu, 2011; Wieland &
Wallenburg, 2012). Non-financial indicators such as customer related explains customers
satisfaction; market related measures organization’s success in the market and operational
performance illustrates the competitive position in term of delivering the right quantity and

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quality products, service level performance and flexibility (Akça et al., 2013; Blome, Schoenherr
& Rexhausen, 2013; Thomas, 2014). A holistic Balanced Scorecard (BSC) measurement by
Kaplan and Norton (1992) incorporates of four perspectives namely financial, internal business
process, learning and growth and customer to measure organizational performance based on
vision and strategy.

Literature Gap
Based on the literature synthesized, there are lack of empirical evidences which test the holistic
framework of crucial organizational capabilities and the impact on performance within the
current business dynamism that involves the role of strategic agility in emerging economies. In
this study, strategic agility is applied as a mediation to examine the relationships between IT
capability and organizational performance, and BI use to organizational performance which has
not been examined in such integrated manner before. Previous studies (Yang, & Liu, 2012;
Salam, 2017; Teoh, Lee & Muthuveloo, 2017) revealed agility mediate the relationship between
organizational capability and organizational performance, but are still lacking in examining its
mediating effect in IT as capability (Luftman et al., 2017). The critical role of strategic agility in
enhancing performance has become more crucial in the dynamism of business environment
(Ivory & Brooks, 2018). Recently, the term of agility is used in the application of cloud
computing (Thomson & Van der Walt, 2010), development process models and software Lee &
Xia, 2010). There is limited studies focus on strategic agility which is relevant in the extent of BI
use and imply agility is important for business context and the user to further exploit business
intelligence (Delen, Moscato & Toma, 2018). Several studies have been carried out to examine
the environmental turbulence and dynamism (Fartash & Davoudi, 2012). However, there is
blurry discussion about environmental volatility as moderator to examine the relationship
between collaboration capability and organizational performance in business context. Many
empirical studies have investigated such relationships and almost all the studies were conducted
internationally. Thus, this study investigates the relationships in the context of public listed
companies on main board of Bursa Malaysia.

Theoretical Framework and Hypotheses Development

Figure 1 depicts the framework of this study that addresses the literature gaps. The growth of IT
has a significant influence on organizational performance (Oh et al., 2013) as previous studies
found IT capability improves organizational performance. Pebrianto, Suhadak, Kertahadi and
Djamhur (2013) found IT capability has positive significant impact on organizational
performance. Ong, and Chen (2014) discovered the effects of IT capability on firm performance.
Mazidi, Amini, and Latifi (2014) implied the positive relationship between the IT capability and
organizational performance, whereas Teoh, Muthuveloo and Lim (2014) found the same. Thus,
H1: Information technology capability has a positive impact on organizational performance.

Business intelligence (BI) use is a key to increase the organizational value (Duan & Xu, 2012).
Bose (2009) found predictive analytics help turn operational data into strategic information
which is used for decision making to gain competitive advantage while Teoh, Muthuveloo and
Lim (2014) found significant relationship between BI use and performance of organization.
Notably, Vukˇsi ´c, Bach and Popoviˇc (2013) showed significant relationship of BI systems in
achieving firm performance. Thus,
H2: Business intelligence use has a positive impact on organizational performance.

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Figure 1: Theoretical Framework

Collaboration is a main key to enhance performance and growth due to globalization (Burkel,
Arora & Raisinghani, 2012). Burkel et al. (2012) explained that the greater of collaboration, the
organizational performance will be higher, consistent with Sanders, and Premus (2005) who
expect high level of internal and external collaboration that can increase coordination of
operations to improve performance. Sanders (2007) established that internal collaboration has a
direct impact on organizational performance which is conformed to the study of Sanders and
Premus (2005). Lew, Ong and Eze (2013) found significant direct relationship between
collaborating capability and competitive advantage. Thus,
H3: Collaboration capability has a positive impact on organizational performance.

High unpredictable events in business environment requires businesses to be agile while IT is

viewed as a way to respond faster under the changing environment. Lu, and Ramamurthy (2011)
found IT capability strongly relates to agility. The relationships between IT capability and agility
have been supported by Tallon (2007). Mao, Liu and Zhang (2014) discovered that IT capability
is required to enhance agility in the organizations. Zimmer, Baars, and Kemper (2012) implied
agility is vital for business context and the user to further exploit BI, as reinforced by White
(2009) as BI can improve speed due to up-to-date data warehouse, reduce analytical processing
times and use automated alerts to make faster decisions. Therefore,
H4: Information technology capability has a positive impact on strategic agility.
H5: Business intelligence use has a positive impact on strategic agility.

Strategic agility is a strategic weapon in copying with hostile and ever-changing business
environment (Almahamid, Awwad & McAdams, 2010). Studies indicate strategic agility can
stimulate performance of organizations (Fartash & Davoudi, 2012; Ofoegbu, & Akanbi, 2012;
Blome et al., 2013; Ogunsiji, & Akanbi, 2013; Teoh, Muthuveloo & Lim, 2014). Oyedijo (2012)

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found that strategic agility has impacted on performance. Besides, Yang and Liu (2012) indicate
agility has influenced on firm performance. Thus,
H6: Strategic agility has a positive impact on organizational performance.

To control the uncertain events in an unpredictable environment, organizations must have agility
(Fateme et al., 2013) and close collaborate (Burkel et al., 2012) to improve performance. Fartash,
and Davoudi (2012) found environmental changes provide significant relationship between
strategic agility and performance. Tallon and Pinsonneault (2011) found that agility has a greater
impact on firm performance in more volatile markets. Boon-itt and Wong (2011) found that the
moderating role of uncertainties are affected the relationship between internal and supplier
collaboration and customer delivery performance, while Burkel et al. (2012) found that supply
chain collaboration has influenced on operational and relational performance. Thus,
H7: Environmental volatility moderates the relationship between strategic agility and
organizational performance.
H8: Environmental volatility moderates the relationship between collaboration capability and
organizational performance.

Agility is a higher-order capability to enhance the relationship between the IT and organizational
performance (Fartash & Davoudi, 2012). Cai et al. (2013) found IT capability has positive
influence on agility and agility has influenced firm performance. Vickery et al. (2010) indicate
agility as a mediator and shows agility fully mediates between IT and firm performance. BI is a
powerful decision making solution to increase the value of organizations through quick response
and actions (Mircea et al., 2010), as supported by Stiffler (2012) which BI can help organizations
increase agility and ultimately attain superior performance. Thus,
H9: Strategic agility mediates the relationship between information technology capability and
organizational performance.
H10: Strategic agility mediates the relationship between business intelligence use and
organizational performance.

Method
Quantitative research technique via survey questionnaires was used in this cross sectional study.
All the variables were selected and adapted from the literature review. Therefore, reliability, and
validity were known and acceptable. In this study, unit of analysis is organization, namely public
listed companies that are listed on the main board of Bursa Malaysia.
The target population of this study was 818 companies listed on the main board of Bursa
Malaysia in January 2014. The sampling frame was based on the public listed companies only
because according to the size of the firms, the greater ability of responding and dealing with
unpredictable circumstances in business operation and the more information could be provided to
this study. Therefore, questionnaires were mailed to all public listed companies on the main
board of Bursa Malaysia to minimize the insufficient response rate. In this study, non-probability
sampling design and purposive sampling was adopted as the targeted respondents are selected in
a non-random manner.
Data was collected from the respondents consisting Chief Executive Officer, Chief Operation
Officer, Chief Information/Technology Officer, IT Senior Manager working in these companies.
The target respondents have vast experiences in organizational and information technology
background. Hence, the sample is representative of the whole population, the findings from the

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survey can be generalized. Furthermore, the ability of the IT officers to distinguish how well IT
impact on performance of organizations based on the annual report, weekly meeting, annual
bonus and audit report. Sample size between 30 and 500 could be acceptable and effective for
data collection (Sekeran & Bougie, 2010), while Hair, Hult, Ringle, and Sarstedt (2014)
suggested that the sample size should be between 100 and 400 and rule of thumb from Roscoe
(1975) require 1 to 10 for each variable tested. Therefore, a minimum of 100 responses are
deemed sufficient.
The measurement instrument is based on constructs validated in prior research, standardized and
adapted to the context of this study. The constructs comprised 52 items which included IT
capability (9 items), BI use (10 items), collaboration capability (8 items), strategic agility (6
items), environmental volatility (7 items) and organizational performance (12 items). A 5-point
Likert-type scale with items that ranged from ‘1 = strongly disagree’ to ‘5 = strongly agree’ were
used to measure the items. Likert scale rating was used as it is most universal method for survey
collection, therefore they are easily understood. Since it does not require the participant to
provide a simple and concrete yes or no answer, it does not force the participant to take a stand
on a particular topic but allows them to respond in a degree of agreement. The use of 5-point
likert scale or 7-point likert scale or others will not show any difference in improving the
reliability of the ratings (Sekaran, 2010).
Structural Equation Modelling (SEM) approach and Partial Least Squares software version
2.0.M3 was used to analyse the data collected. The reliability and validity of data is checked by
the construct of measurement model and hypotheses testing are tested by assessment of structural
model. The moderating, mediating and the overall fit of model were checked.

Findings
Assessment of Measurement Model and Structural Model
Item reliability, convergent validity and discriminant validity serve to evaluate measurement
model in PLS. Results of measurement model shows that all the item loadings and AVE were
greater than 0.5 (Hair et al., 2011) and composite reliability (CR) were exceeds 0.70 (Hair et al.,
2010), while the Cronbach’s alpha coefficient of 0.8 or higher is accepted (Cavana, Delahaye &
Sekaran, 2001). Hence, convergent validity is achieved. Discrminant validity needs to be tested
after the convergent validity of constructs. The diagonal elements in the matrix showed the value
of square roots of the AVE would be compared squared correlations to the each construct. It was
found that all AVE square root values were greater than any squared correlation between
constructs. Thus, the measurement model was satisfactory in view of the evidences of adequate
reliability, convergent validity and discriminant validity.
The t-values were generated by using the bootstrapping with re-samples of 500 as recommended
(Chin, Marcolin & Newsted, 2003). This allowed measuring the statistical significance of the
path coefficients. Table 1 presented the results of the hypotheses testing.

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Table 1: Path coefficients and hypothesis testing

Hypotheses Relationships Beta Standard t-value Result
Value Error
H1 IT Capability -> 0.006 0.114 0.053 Not
Organizational Performance Supported
H2 BI use -> Organizational 0.248 0.098 2.527** Supported
Performance
H3 Collaboration Capability -> 0.270 0.093 2.893** Supported
Organizational Performance
H4 IT Capability -> Strategic 0.331 0.105 3.163** Supported
Agility
H5 BI use -> Strategic Agility 0.397 0.091 4.343** Supported
H6 Strategic Agility -> 0.253 0.087 2.894** Supported
Organizational Performance
H7 Strategic Agility * 0.145 0.140 1.030 Not
Environmental Volatility - Supported
>Organizational Performance
H8 Collaboration Capability * -0.272 0.227 1.198 Not
Environmental Volatility -> Supported
Organizational Performance
H9 IT Capability -> Strategic 0.103 0.044 2.342** Supported
Agility -> Organizational
Performance
H10 BI use -> Strategic Agility -> 0.124 0.043 2.877** Supported
Organizational Performance

Discussion and Conclusion

Discussion
Hypothesis 1 (H1) proposed positive relationship between IT capability and organizational
performance. However, H1 is not supported as β value was 0.006 with p > 0.05 and t–value
0.053. Past studies (E.g. Chae, Koh, and Prybutok, 2014) found no significant link between IT
capability and firm performance. IT capability is required to combine infrastructure,
organizational structure, culture and IT skills to have a good result to improve firm performance
(Mithas et al., 2011). Jin, Vonderembse, Ragu-Nathan and Smith (2014) found capability does
not relate to maintain performance as IT infrastructure does not differentiate other organization’s
due to information technology tools and applications are becoming standardized for large firms
(Zhang & Dhaliwal, 2009). Public listed companies are viewed as mature and well-establishment
in the industry as over 50% of respondents answered the organization has been establishment
more than 21 years; implying IT capability is no longer perceive as a weapon to enhance the
performance of organizations.
Hypothesis 2 (H2) proposed BI use has a positive impact on organizational performance. H2 is
accepted with β value of 0.248, p < 0.01 and t-value 2.527. This is consistent with Bose (2009),
Barone et al. (2010) and Vukˇsi ´c, et al., (2013) who found importance of BI systems in
achieving firm performance. BI is becoming popular in Malaysia as it enhances business
efficiency and accomplishes business objectives (Ong & Siew, 2013). The use of BI is predicted
to reach 50% by 2014 and the figure will be raised to 75% in 2020 (Pook, 2014). With proper

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business intelligence system, decision makers can make a better decision and avoid threats that
can harm the business.
Hypothesis 3 (H3) proposed collaboration capability has a positive impact on organizational
performance. H3 is supported as results show β value of 0.270 with p < 0.01 and t-value 2.893.
This is consistent with Lew et al. (2013), Sanders (2007) and Sanders and Premus (2005) who
found internal collaboration has direct impact on firm performance. Collaboration also implies
positively significant impact on manufacturing firm performance (Cao & Zhang, 2011). The
greater the results of the collaboration, the higher will be the performance of the organizations
(Burkel et al., 2012) such as increase market share, asset utilization, decrease production cost and
enhance skills/knowledge (Amin et al., 2014). Respondents of this study were from PLCs on
main board in Bursa Malaysia, such large organizations have to communicate and integrate with
the internal and external people to operate the business effectively and efficiently. Majority of
respondents answered their organizations hired the employees in the range of 1,000 to 1999
employees (32%). To strengthen the position in competition environment, collaboration is
necessary to connect among employees, suppliers, customers, business partners and competitor
to enhance the performance which stated in various studies (Lew et al., 2013; Burkel et al.,
2012).
Hypothesis 4 (H4) sought to examine the relationship between IT capability and strategic agility.
H4 is accepted as β value was 0.331 with p < 0.01 and t-value 3.163. This is supported by Tallon
(2007), Lu and Ramamurthy (2011) and Mao et al. (2014) who found IT capability significant on
strategic agility. Fink and Neumann (2007) found IT as an enabler of agility for organizations
due to IT can help create strategic values. In this study, over 50% of PLCs have well-established
IT department of more than 10 years, indicating more experiences and ability to leverage the IT
infrastructure to respond quickly in the rapid change environments.
Hypothesis 5 (H5) proposed that BI use has influence on strategic agility. H5 is accepted with β
value of 0.397, p < 0.01 and t-value 4.343. This is consistent with Ong and Siew (2013) who
found the use of BI to achieve agility and flexibility due to the rapid changes in the industry and
White (2009) confirms BI improves speed due to up-to-date data warehouse, access data through
advanced technology, calculate performance metrics to reduce analytical processing times and
use automated alerts to make faster decisions.
Hypothesis 6 (H6) sought to investigate the relationship between strategic agility and
organizational performance. H6 is supported with β value of 0.253, p < 0.01 and t-value 2.894.
This is consistent with findings from previous studies (such as Blome et al., 2013; Fartash &
Davoudi, 2012; Ofoegbu, & Akanbi, 2012; Teoh, Lee & Muthuveloo, 2017). Ogunsiji, and
Akanbi (2013) found strategic sensitivity, leadership unity, and resource fluidity have impact on
organizational performance while Yang and Liu (2012) proved that enterprise agility and firm
performance is significant. Tallon and Pinsonneault (2011) revealed agility has a positive
influenced on firm performance and agility has influenced operational performance (Blome et
al., 2013). Zafar, Rajpoot, and Khalid (2014) explained ability of an organization to react to the
unpredictable environment through strategic agility has a positive relationship with
organizational performance.
Hypothesis 7 (H7) proposed that environmental volatility moderates the relationship between
strategic agility and organizational performance. H7 was not supported as the β value was 0.145,
p > 0.05 and t-value 1.030. Previous studies such as Lee, Xu, Kuilboer and Ashrafi (2013) found
volatility of environment based on market competition has developed to moderate the
relationship between agility and firm performance which reveals the relationship between

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sensing and firm performance do not significant after moderating effect of market competition.
Organizations do not improve the performance under environmental volatility if the strategic
agility is not renewed to fit the current situation (Doz & Kosonen, 2010; Young, 2008).
Therefore, organizations require improve capabilities regularly to implement strategic agility.
Hypothesis 8 (H8) proposed that environmental volatility moderates the relationship between
collaboration capability and organizational performance. But H8 was not supported as β value
was – 0.272, p > 0.05 and t-value 1.198. This seems consistent with Boon-itt and Wong (2011)
who examined technological uncertainty and found it does not moderate the relationship between
collaboration and customer delivery performance in automotive industry of Thailand; while
Wong, Boon-itt and Wong (2008) found environmental uncertainty not moderating collaboration
and customer delivery performance. Rosenzweig (2009) found market variability does not
influence the relationship between collaboration and operational performance. In the context of
this study, PLCs may have implemented collaboration internally and externally but not pressure
to increase learning and growth and finance under volatile environment which based on the
balanced scorecard measurement method. However, the organizations may improve other aspects
of organizational performance such as innovation and marketing under the changing
environmental (AL- Nuiami, Idris, AL-Ferokh & Joma, 2014).
Hypothesis 9 (H9) proposed that strategic agility mediates the relationship between IT capability
and organizational performance. H9 is supported with β value of 0.103, p < 0.01 and t-value
2.342. This is consistent with Vickery et al. (2010) who showed agility can fully mediate IT
capabilities and performance. Cai et al. (2013) indicate that IT capability has positively
significant influence on agility and also agility has influenced on firm performance. In this study,
IT capability does not significant influence on organizational performance. However, the
additional mediating effect has revealed IT assets can deploy effectively to improve
organizational performance due to the ability of organizations enable to sense and respond
quickly. Most of the respondents were from trading / service industry (26.2%) and followed by
consumer product (20.4%) and industrial product (15.5%) whereby these industries are more
concerned to react the variation of market, technology, customer and competitor action. The
findings from this study are evidenced by the conclusions from previous studies where strategic
agility has fully mediates the relationship between IT capability and organizational performance.
Hypothesis 10 (H10) proposed that strategic agility mediates the relationship between BI use and
organizational performance. H10 is supported with β value of 0.124, p < 0.01 and t-value 2.877.
BI is a powerful decision-making solution to increase the value of organizations through quick
response and actions (Mircea et al., 2010). Stiffler (2012) found BI use helps organizations
increase agility and ultimately leads to superior performance. The effectiveness of utilizing BI
enables improved organizational performance while identifying cost-cutting and strategic
improvement opportunities with the speed actions ability during volatile environment (Stiffler,
2012). Surveys also found organizations in Malaysia are concerned the implementation of
business intelligence system to achieve the objectives through quick response in this unstable
market (Gartner Research, 2013; Teoh, Muthuveloo & Lim, 2014).

Implications of Findings
Based on resource-based view and dynamic capabilities theory, this study argues that IT
capability, BI use and collaboration capability contribute towards organizational performance via
strategic agility. Without utilizing available resources and applying appropriate capabilities,
organizations can hardly perform well both in financial and non-financial aspects. Therefore,

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findings from this study contribute empirical evidence related to IT capability and BI integration
issues, which interplay through crucial factor of strategic agility. Furthermore, in the context of
current business environment dynamism, this study contributes to the literature through
introducing environmental volatility as a moderator in such relationships. This study uses
financial and non-financial indicators as measurements for organizational performance in a
balanced and holistic perspective. Balanced scorecard measurement method has been used is also
supported by Ebrahimi et al. (2013) which have measured information technology on
organizational performance.
This study provides practical insights to the leaders and managers of Public Listed Companies
(PLCs) in Malaysia on how IT capability, BI use and collaboration capability enhance
organizational performance. Findings from this study provide knowledge to PLCs for promoting
greater comprehensions into the organization resources of BI use dimensions and collaboration
capability on organizational performance. Moreover, this study reminds IT leaders that
technologies and information are not only a valuable platform that helps organizations enable to
connect internally and externally, and also evident as a strategic element that contributes to
organizational performance through strategic agility. Additionally, it provides the organizations
objective insights and trade-offs to have a quick response in unpredictable events in achieving
sustainable performance with capabilities that are possessed by the organizations. Organizations
should realize the importance of coordination and communication with the internal and external
stakeholders in this globalization era.

Limitations of Research
The response rate of this study is about 20%, which might seem low; nevertheless, this is
common for survey-based research among PLCs in Malaysia. A large sample size would be good
to obtain greater representation of the business community in future researches. This study
selected PLCs from only the main board of Bursa Malaysia as target population in Malaysia
context. While this ensures similar basis in terms of size, future studies could consider to include
all companies for more in-depth comparisons. Besides, this study is limited to the other sectors
such as public sector, SMEs and multinational organizations. Thus, caution is needed when
applying the study results to other types of organizations.

Conclusion
The volatile market and dynamic business environment today contain opportunities and threats
that potentially affect performance. Therefore, organizations require unique resources and
capabilities that can sense and respond the unpredictable circumstances. A well-developed IT
infrastructure and utilization of intelligence towards better decisions are crucial as these
capabilities empower strategic agility which subsequently leads to attaining business objectives
and organizational performance. The ability of coordinating people to work, build and manage
the relationship is important to obtain the information in order to seize the opportunities and
detect the threats. This study has empirically established the influence of information technology
capability, business intelligence use and collaboration capability on organizational performance,
mediated by strategic agility in the context of public listed companies in an emerging market,
Malaysia.

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