Deriving Business Value from IT Applications in Product Development: A Complementarities-Based Model - Information Technology and Product Development - page 28

cited earlier), but these variables are specifically excluded from the scope of our
model.
Second, for each higher-order factor in our model we suggest a representative
typology of its potential sub-factors. Our suggestions are not meant to be the only
or the “best” typology for each factor, rather just a typology that is representative
enough to support more concrete theoretical arguments.
As a third and final caveat, our use of the economic logic of complementarities
should not be taken to imply that we have adopted a pure rational-choice perspec-
tive on organizational decision making. Our model only requires that when certain
organizational elements are present, innovation deployment and business value will
be enhanced due to complementarities. While our model does not specify any par-
ticular mechanism for how these elements come to be present, we briefly comment
on a few possibilities. One mechanism could be an explicit rational-choice process
of considering the firm's strategy, IT capabilities, etc., as exemplified in implemen-
tation methodologies such as the matrix of change (Brynjolfsson, Renshaw, & Van
Alstyne, 1997).
Alternatively, organizational behavior that resembles a rational-choice process
could result from implicit assumptions and routines that determine an organization's
general innovation posture (more aggressive and less aggressive) toward IT innova-
tion. These implicit assumptions and routines should be more likely in organizations
with favorable positions on organizational complements. As a third possibility, it
could be assumed that most organizations do little in the way of preplanning, but
rather, obtain a fit between technology and organization through cycles of adap-
tation and learning (Leonard-Barton, 1988). Even so, organizations whose cycles
bring them to more favorable systems of complements will be more likely to sustain
deployment and will be more likely to gain business value from any given level of
deployment. Those that do not will be more likely to have low levels of deployment
and business value.
So, our model does not require rational choice. However, there are reasons to
believe that a rational-choice process is more likely to maximize business value.
A key point made by Milgrom and Roberts (1995) is that partial systems of com-
plements can be sub-optimal or even dysfunctional, and so there is no guarantee
that an organization will evolve in an unguided fashion to the best or even a good
configuration of complements.
With these caveats out of the way, we now proceed with a detailed development
of our model. We begin with the micro-level of the model, and then proceed to the
macro-level.
2.5 The Micro-level of the Model: Initiative-Specific
Organizational Complements
The micro-level of our model specifies that organizations will obtain greater
business value from innovative IT when technology deployment is joined with
complementary positions on related organizational elements, including strategies,