The Influence of Technology on Organizational Performance: The Mediating Effects of Organizational Learning

Abstract

Organizations depend upon ever greater levels of information technology (IT), such as big data and analytics, a trend which shows no sign of abating. However, not all organizations have benefited from such IT investments, resulting in mixed perceptions on the value of IT. Organizations must be knowledgeable in order to properly utilize IT tools and be able to apply that knowledge to create unique competencies in order to gain sustained advantage from IT investments. Organizational learning (OL) has been proposed as the mechanism to accomplish this task. Existing empirical research demonstrates that OL may indeed act as a mediator for the effect of IT on organizational outcomes. Yet, these studies are not consistent in their conceptualizations of the relationships involved, nor in their definitions and measurement of OL. Many use a descriptive measure of OL despite theory suggesting that a normative measure may be more appropriate. This study aims to address these concerns in a Canadian setting by using structural equation modelling (SEM) to compare the effectiveness of descriptive and normative measures of OL as mediating variables in knowledge-intensive organizations. Survey results support OL as a mediator between IT and organizational performance in addition to normative measures of OL outperforming descriptive measures. Implications for research and practice are discussed.