HEC Research Papers Series,
HEC Paris

Abstract: Contingency theory suggests that the selection of coherent combinations of organizational capabilities and operational environments has important performance implications. This paper builds upon this perspective to analyse the emergence of a new business model that is modifying the structure of many industries: the provision of integrated solutions. The aim of the paper is to examine the strategic decisions behind the adoption of a business model based on integrated solutions and to understand how internal firm capabilities must be modified to match the external environment. Relying on primary data from 102 European IT firms, the authors discuss the value of specialized capabilities, and we analyze their degree of fit with the operational environment in which they are applied. Results show that solution providers that possess specialized capabilities obtain greater benefits when they operate in homogeneous environments.

Keywords: contingency theory; integrated solutions; IT sector; capabilities

21 pages, January 1, 2013

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